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THSCOUBIHL
MONEY AND BANKS
PER CAPITA CIRCULATION
1-G0MG TO
I
Written for the Courier.
Washington D.C.Feb. 10, 1886. The
financial problems and all that per
tains thereto hare been uppermost in
the public mind since the so-called
panic or crisis of 1893. Various expe
dients have been devised for the avow
ed purpose of ameliorating the con
ditions surrounding our industrial and
commercial interests; but we seem to be
as far from the promised land as ever;
at least so far as legislative relief is
concern ed. The brilliant success of the
last bond sale will certainly stimulate
confidence, and will possibly direct pub
lic attention to the shortcomings of our
financial system.
A great deal is said about circulation,
the per capita rate, generally stated at
about $23, and silver advocates are
specially industrious in discussing this
aspect of the situation. The report of
the comptroller of the currency, juot
issued from the government printing
office, contains some interesting facts
from which a fair analysis of the cir
culation, so-called, 'can be made. The
total amount of United States money in
existence (1893) was $2396,607,420; ot
this amount the Treasury held $796,
38,917 making the total outstanding
circulation $1,001,938,473 or $2243 per
capita. Although these figures comprise
all the money of every description, a
little reflection will convlnc e most any
one that they do not represent the true
circulation at all.
In the first place the law requires
national banks to hold a cash reserve
equal to a certain percentage of their
deposits, and all other banking insti
tutions are by the exigencies ot business
subject to practically the same require
ments though not stated in express
terms. The amount held in this way
by the 9,803 banks was $631,1114290
nearly two-fifths of the amount out
standing. The whole superstructure of
the banking interests rests upon this re
serve, and it is as effectually withdrawn
from circulation as the money locked in
the vaults ot the Treasury department.
In this connection it is noted that the
banks aggregate deposits of the savings
amounted to $1,844,357,798, over $200,000
000 more than the amount of money
outside ot the .treasury vaults.
It is well known that most business
transactions are Bettled by check, but
the function of the check as an econom
ical factor may not be so universally
recognized since it is payable only in
money. In the settlement of accounts
between banks, checks offset each other,
so that only the balances are paid in
money. The recrrds of the New York
clearing house show that since 1854 the
balances settled in cash have not ex
ceeded 67-10 percent of the aggregate
transactions, and the rate is frequently
as low as 3 percent. The New York
clearings for 1895 were $28,264,379,126,
The deposits ot the -New York bankB
amounted to $497,442,000 on October 26,
1895, and the cash reserve held by the
same banks was $'23,987,000. The
clearings for the same week were $641,
621,009 or or $100,000,000 per day. In
other words if the checks did not neut
ralise each other but wee actually col
lected instead ot being deposited, one
day's transactions would nearly exhaust
the reserve of allot the banks, and five
day's transactions would about wipe
eat all ef the deposits, showing thai
every deposit account averages to be
tarasd eace every five days, a rate, of
cirealstion considerably more rapid
thaw that of most of the currency. The
movement in New York is mjre rapid
as well as more intense than at other
points, since it is the main artery of our
banking system. It is worthy of note
however that the returns from seventy
eight cities show clearings of $5,240,972,
347 for the month of October, 1895, more
than double the deposits of sill the na
tional banks in the country, which are
stated at $2,19690,8714. -
The following is an attempt to analyze
thnt indefinable something termed "cir
culation," the figures being taken from
the report above referred to:
Total deposits, nat.l banks.. $2,196,590,871
State banks 779,557.673
Trust companies 553,756.721
Savings banks 1,844.357,798
Private banks 81,824,932
Total in banks tn U S.. 85,456,087,995
Currency circulation.. 1,601468.413
$7,058,056,403
Deduct cash reserve held
bybanks. 631,111,290
Volume cirTting medium...$6.426,945,llB
Estimating the populatation ot the
United States at 70,000.000 this would
make the volume of the circulating
medium about $91 81 per capita.
A glance at the above figures will
show that the total deposits amount to
nearly four times tho currency circula
tion and as the clearings for a month
exceed the deposits by two or three
times, the financial world may fitly be
represented by a pyramid of which the
currency forms the apex, the next seg
ment being the deposits which are fol
lowed by loans and discounts, the clear
ings of banking transactions fornring
the base. This will illustrate how cur
rency derangements produced by hoard
ing or other causes, are magnified four
times in their effect upon deposits and
from twelve to twenty-five times by the
time the influence has reached the clear
ings on monthly transactions.
It would seem to be a legitimate in
ference from the above that hoarding
money out ot the banks is a crime
against sound economics which is only
equaled by the attempts too frequently
made to pollute tha source of our
financial welfare, which attempts can
have no other effect than that of a
boomerang. NIXON.
First publication Feb 22
SHERIFF'S SALE.
NOTICE IS HEREBY GIVEN, that
by virtue of an order of sale' issued by
the clerk of the district court of the
third judicial district of Nebraska,
within and for Lancaster county, in
an action wherein The BadgerLumbcr
company et al.,are plaintiffs, and Errick
V. Erickson et al.. defendant. J will, at 2
o'clock p. m., or the 24th day of March
A. D. 1896, at the east door of the court
house, in the city of Lincoln, Lancas
ter county, Nebraska, offer for sale at
public auction the following described
real estate, to-wit:
yXbe northwest quarter of southeast
;ajrtrter,and the south half of the north
west quarter and the north halt of the
southwest quarter of section twenty
one (21), in township eleven (11), range
six (6), east ot the sixth p. m., in Lan
caster cbunty.Nebraska.
Given under my hand this 20th day
of February A. D. 1896.
. John Trompen,
Sheriff.
March 21
CHICAGO.
ST. PAUL.
BLACK HILLS.
CENTRAL WYOMING,
PORTLAND,
LOS ANGELFS.
SAN FRANCISCO?
8BIM1E dO? Btinii
BC8T (8I5RVICE
(First publication Feb 22
Sale of Collateral Security.
Notice is hereby given that the
undersigned ill on the 14th day of
March, 1896, at 1 o'clock p. ui.,r ?nil day
sell for cash at public tale, to ihr high
est bidder, at the banking room of the
undersigued. being situated at the cor
ner ot O and Eleventh streets iu the
city of Lincoln, Lancaster county. Ne
braska, one certificate of stock of the
Columbia National bank of Lincoln.
Nebraska, being moro particularly de
scribed as follows: Certificate No. 91,
for 20 shares of $100 each of the Capital
stock ot the said Columbia National
bank of Lincoln.
American Exchange National bank,
Pledgee.
March 14
. vMWMvl
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Oome tmrad See Ua
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