Democratic Sentinel, Volume 2, Number 25, Rensselaer, Jasper County, 2 August 1878 — BANKS. [ARTICLE]

BANKS.

What la Their True Function, and What Are Their Abases ? The reflective reader of history will have reason to observe that the greatest agencies in the interest of mankind—the most necessary to their happiness and progress—have also been subject to the greatest abases, thns becoming the source of much misery and wrong to mankind. The church, as the chief promoter of an exalted and a pure religious life; the state, as the bulwark of life, liberty and human prosperity—the very principle of association to attain objects essential to human welfare, but impossible to the individual—have each been wrested from their proper use, and made instruments of the greatest public tyranny and wrong. To this reflection the banking systems of all countries form no exception, but a remarkable illustration. It may well be said that, next to the invention of letters and the various instrumentalities for the spread thereof, money and its instrumentalities is the greatest invention and promoter of civilized life. As one spreads the power and light of thought, which, like sunlight, gives life and fecundity to the mind and moral nature of man, so the other is the means, the stimulus and the force that spreads all physical comfort or material prosperity which mankind can communicate to each other. Civilization could not have passed the lowest state of savage life without the help of money; and its progress in “liberty and the pursuit of happiness ” depends upon the rightful administration of the institutions arising out of the use of money. Let the American people be assured that they are now fighting the last and greatest battle for natural freedom and progress against the greatest enemy of both—the moneyed institutions "of the world. The spiritual despotism of the church and the military despotism of the state have, in a great measure, passed away among civilized nations; but whatever is left of these, and whatever feudalism and slavery remains to be dispelled, is intrenched in the moneyed institutions of society. The sword and the purse have in times past ruled the world; the purse and the sword ruleitnow. Twin brothers of barbarism —like the Siamese twins—if one dies the other must also depart. The people have only to understand the theonr and the practice of the banks that administer their fiscal affairs* to perceive at once that, under great and indispensable uses, they cover great frauds and oppressions; that their whole system involves certain abuses to which poor human nature will fall inevitably, unless guarded by the provisions of law underlying the whole system of banking. As in slavery, noble and good natures caught in the meshes of a false system, yet administered the same in the spirit of truth and kindness, to the best of their ability, while the selfish and the base had every opportunity to exercise their worst passions, protected by the system itself. So the banking systems of the world and of this country; while they naturally and beaetieially arose out of a system of things in the social order, now in a great measure past, and, while they are still administered, for the most part, in the spirit of fairness and of kindness that belongs wholly to the natures of the men who control these institutions, yet they are now out of logic with the times; they are an oppression and a hindrance, as a system, and give ample opportunity to the designing and the base to work great wrongs to the people who trust them. But it is not in this latter point of view that we wish to discuss banks, for all institutions are all more or less liable to abuse. But the institutions of banking, in the fundamental principles which regulate their functions, are obnoxious to the charge of being “ remnants of barbarism and feudalism,” opposed to progress and the interests of a people aiming at the best administration of republican principles and institutions. A system of banking—not any one bank, which may only show a part of the system, but a system of banks—is analogous to a pond of water, or any natural body of water, from which is drawn the power to set some practical industry into operation. It must be a “safe deposit” of all the water that finds access to it—not liable to break and overwhelm town and country with ruin. It must have an unfailing “issue ” of water for the wants of the machinery dependent upon it, and not dry up when it is most wanted. It must be so arranged as to “ let on ” or apply its power according to the demands of the various industries that require the power. So every system of banking must furnish a “ safe deposit ” for savings, an unfailing “issue” of real money, and a judicious “ discount ” of this money to all the industries that need its use and working power. Banks of safe deposit and savings, banks of issue, and banks of discount make up this whole system. The bench of a “money changer” in old Jerusalem, Venice or London illustrates all these functions of banks, for they arose out of the use and necessary means for the distribution of money. His bench was the depository of his own and the money of his fnends; he was ready to loan on all kinds of pledges, pawns and securities of personal property, and a large part of his business soon came to be the giving of “ redeemable notes ” to traveling merchants, by which they - could carry money, in the shape of credit , to foreign countries. All this system of money exchange depended simply upon the faith and honesty of the parties concerned. There was no interference on the part of Government or the law, except to punish fraud. If the banker of olden times loaned or sold his deposits and trusts, his pledges and his pawns, so that he could not return them when called for by the owners; if he issued more “notes” than he could “ redeem,” swift punishment came upon him as a cheat and a liar. Or, suppose he extorted “ruinous usury ” out of the distress and need of his customers, there was redress in the law against usury. But suppose some tyrant of the times had connected his power and moneyed interests with one or more such bankers and brokers, and allowed them to rob and oppress the people by the very means on which they depended to carry on all the trade and commerce of the country. Would not such a tyrant be the execration of all subsequent history ? When Julius Csssar stood upon the bank of the Rubicon with his conquering army, and was deterred from crossing by the positive law and prohibition of the Senate of his country, and by his traditional respect for the republic \ylrish'he could thus overthrow, the tax-

gatherers and commissioners of the time, who were also the bankers and moneyed men of the country, to whom was sold or farmed out the privilege of assessing and gathering the Government taxes—these came to Cmsar and—having failed to get their oppressive and unjust demands from the Senate, where the “ virtuous Cato ” exposed tlieir designs—these very men offered to support the army by loans and give C»sar their immoral support, if he would grant them the privileges which the Senate had refused. He consented, and—- ‘ ‘ Home was free no more /” The enormity and wickedness of this conduct can only be measured by the greed, the selfishness, the oppression, and the traitorous spirit of these moneyed men, and much more in the miserable and unjust system of taxation under whioh these men weje acting, which placed them under every temptation and gave them every opportunity to oppress and spoliate the people. Thus has it ever been with any organization of the moneyed power, when it could ally itself with the civil power of the state; not in the interests of the people at large, but to obtain the sanction and power of the Government to grow into still greater wealth and influence at the expense, the toil and the confiscation of the property of the people. “ But these things,” you say, “are the actions of bad men. ” So they are ; but it is a bad system of administration that gives every advantage and temptation to the cupidity or bad passions of men. It is the design of these articles, not to attack men, but unwholesome systems of administration. The American people have no need to change the principles of thqir Government, for they are founded on a constitution, the sole object of which is to “ promote justice and secure the general welfare.” But they must see to it that the “administration” are not turned to the exclusive advantage of any one class while the rest of the people groan under their burdens. This is the case in reference to the whole system of banking existing in this country. That system is an exotic from England, whero it oppresses the people still more than

it does here.

Cadmus.