In the case of the city bank the depositors lose 13.1 per cent of their deposits and the stockholders lose all their capital and are also assessed 100 per cent on the amount of it, and in the case of the county bank no one loses a dollar, but the stockholders lose all their capital and are assessed about 4 per cent on the amount of their capital.

FAILURES OF COUNTY BANKS.

During thirty-three years, banks of $50,000 capital have failed for $8,000,000 and paid 51 per cent dividends.

Banks with capital to above $50,000 and $100,000 capital or less have failed for $17,000,000 and paid 57 per cent dividends.

Banks of over $100,000 and $200,000 capital or less have failed for $16,000,000 and paid 61 per cent dividends.

Banks of over $200,000 and of $300,000 capital or less have failed for $18,000,000 and have paid 63 per cent dividends.

Banks of over $300,000 and of $500,000 capital or less have failed for $29,000,000, and have paid 64 per cent dividends.

Banks of over $500,000 capital have failed for $33,000,000 and paid 66 per cent dividends.

These figures show there is no material difference in the dividends paid by the different classes of banks. Under the supervision provided in the Walker bill not one small bank would probably fail where three have failed under the law as it now is.

LOW RATES OF INTEREST.

A low rate of interest all over the country, as in other countries, is not possible with separate, isolated, unsupported, and antagonistic bond currency banks, such as the Hill-Fowler bill provides. Solitary banks in any country make interest rates abnormally high in the agricultural portions of it, or even by combining them under the bond currency provision of the present law, with its prohibition of " true bank currency or under the Hill-Fowler bill, which perpetuates the embargo on banks and "true paper money" to country districts and keeps up interest.

When the Government issues paper money directly or robs the citizens of the capital they get together to form a bank and before the bank is allowed to issue currency, by compelling the bank to buy bonds to the amount of the paper money it issues, it makes it impossible for a bank to live in country districts, because to issue paper money by a country bank is the same to it as accepting deposits is to a city bank.

No one thing can be suggested that collects such an enormous tax from the people in country districts in favor of cities. It ruins enterprise in the country and drives small manufacturing into cities.

How our national banking law cruelly robs and cruelly oppresses agricultural States can only be known by the most careful and painstaking investigation.

In so far as this prevails it puts the country at a tremendous disadvantage and out of touch with cities.

THE OFFICE OF BANKING.

The existence and whole office of banking and the use of paper money is of civilized society and a contrivance to substitute the use of "credit paper obligations," which cost the people nothing in exchanging products for coin in the exchange of products, which costs 6 per cent per annum on all coin used. Using paper money reduces the neces

sity for coin to the lowest practical point, and this economizes expense by using only so much coin as it is necessary to use, thus reducing expense in exchanging products to the lowest practical point.

Banks and paper money are as necessary to modern civilization, in the transfer from man to man of the titles to products, as railways, steamships, canals, etc., are to the transfer of products themselves from place to place. Banks and paper money are only used to transfer the titles to these products. Any hindrance to or increased cost in the use of paper money, or of banks, by compelling an unnecessary amount of coin to be used, or by imposing taxes on paper money, works as much and even a greater injury to a community than a hindrance to or increased cost of the transportation of products. The small use of coin, in proportion to the use of banks and currency, by any people, is the sure evidence of its attainment in integrity, ability, acuteness-in fact, in civilization. Coin to banks and currency, in transferring titles to products from man to man, is as crude as to use the back of man and of the donkey, instead of the railways and the steamship, to transport products from place to place.

RIGHT OF THE PEOPLE TO FREELY USE WRITTEN OBLIGATIONS TO PAY.

At the very foundation of the right of men to life, liberty, and the pursuit of happiness lies the right of men to take and to give verbal and written "obligations to pay," to be satisfied on demand in the future.

To make it wholly impossible for men to exercise this right would relegate the race to barbarism. The right of man to unite with his fellows to give their joint obligation as a corporate person, to be jointly satisfied by them on demand, has become an inextricable part of and is fundamental to the continued progress of modern civilization.

The freely uniting of a certain amount of capital of five or more men and the uniting of those men into a corporate person, now called a bank, and to continue to them the right to give and to take "obligations payable on demand," has come to be recognized as a "right" of the citizen, little less sacred than the right of the "sole person" to do the same thing.

In the national-bank act the Government absolutely overrides this great and fundamental right of the citizens of this country and confiscates to its use capital collected by our citizens without the aggregating of which "exchanges of products" can not be made. This proceeding is never justifiably resorted to excepting in case of war, and this is the only modern nation that has continued or made such a forced war loan during peace.

COMPARISON OF THE PRESENT LAW AND WALKER BILL.

The following in a rough way still further illustrates the workings of a small bank under the present law and a bank under the Walker bill, leaving out the confusing elements of the previous examples: The present law bank has a capital of

Buys of United States bonds

Has left of its capital

Gets of circulating notes..

Has to loan..
B&C-10

$100,000

50,000

50,000

50,000

100,000

It then discounts notes running four months for $2,000 for $40 discount each for 50 men. Each man takes a draft on New York, where he owes $1,000, for the $1,000 to pay his debt, and takes circulating notes for $1,000 to use in his neighborhood. This aggregates $100,000, all the bank has to loan.

The bank must get interest at the rate of 6 per cent per annum on the fifty notes it discounts to pay 6 per cent dividends on its stock. The Walker bank has a capital of...

It issues its own circulating notes to the amount of.

Has to loan....

$100,000 100, 000

200,000

It then discounts the notes running four months of $2,000 each for $20 each (for double the number or) for 100 men. Each man takes a draft on New York for $1,000 to pay what he owes in New York, and the circulating notes issued by the bank for $1,000 to use among his neighbors. This aggregates $200,000, all the bank has to loan.

The bank only needs to get interest at the rate of 3 per cent per annum on the 100 personal notes it discounts to pay 6 per cent on its stock.

The premium on the United States bonds, taxes, sinking fund, etc., are so much that no money can be made on currency taken out on bonds. The Walker bank does the equivalent of this, viz, it charges 6 per cent on the amount of its own capital it loans to the farmer on his $2,000 note, say, $20 on the $1,000; and on the other $1,000 it charges no interest, but exchanges its own circulating notes for the four month note of the farmer in consideration of the $20 the farmer paid him on the whole loan.

If the Government issued all the paper money we used, and all the coin money, and no checks or drafts were used, interest would have to be from one-half more to double what it would be were we to use no Government paper money and as little coin money as we can get along with, but used instead all the "bank paper money" the people were willing to use, that the banks could keep at par with coin.

Under the Walker bill interest would not be materially higher or lower in cities, so little paper money can be used in cities. City business is mostly done with checks and drafts. Country people can not use checks and drafts to any great extent. They can only use "bank circulating notes" currency, which is to them the same as transferable certificates of deposits. The longer banks exist in a town, the more checks and drafts are used. Bank notes are the "deposits" of the farmer in the banks as technical "deposits" are such to the city merchant.

Under the Walker bill 3,000 country banks would soon be established where there are no banks now. The farmers can scarcely borrow a dollar now, in many sections of the country, on their crops of hogs, corn, wheat, cotton, hay, etc., soon to be marketed. They could borrow money of Walker banks for half what it could be borrowed for now of banks under the present law, could such banks be established under the present law, which is not possible.

ISSUE OF PAPER MONEY BY GOVERNMENT AND BY BANKS.

When the Government issues the money, greenbacks, Treasury notes, etc., or requires a bank to buy bonds to get it, a bank can only get it by parting with an amount of capital equal to the amount of such

money it gets into its vaults. The rates of interest are not reduced to the people by the use of Government money, whether it be paper money, silver money, or gold money.

When all banks issue their own paper money, as under the Walker bill, and any five reputable citizens can make a bank in such a way that the Government can compel the banks themselves to keep this paper money at par with silver dollars and gold dollars, competition among banks will make interest charged by these country banks that make this money as much lower than when they use Government currency as the amount of this paper money they use bears to the total amount of the loans of these banks. That is to say, from one-third to one-half lower rates of interest, after deducting what it costs the banks to keep their paper money at par with silver dollars and gold dollars, which is only a trifle.

When banks issue their own circulating notes the bank gets current rates of interest on all of its notes that are out of its possession and is compelled by competition thereby to charge lower rates of interest. The amount of such total lessened interest is the interest earned by its notes when out. When such notes are in its own vaults it is losing nothing by having them, for they cost nothing.

When the Government issues all money, say greenbacks, Treasury notes, etc., or silver dollars and gold dollars, the total interest on money loaned by banks that they are compelled to charge all customers is as much more than under the Walker bill as current rates of interest on the whole amount of such money. A bank can only get Government moneys by having its capital depleted by every dollar it has of it in its vaults. Therefore the current rate of interest on it is lost while it is idle in the bank. The only way the bank can stop loss of interest on it is by "unloading it" on other banks or on the borrowers of the bank. When the borrower has it the bank is making no profit on it to enable it to reduce interest rates to the farmer. This is why more and more money is being used by clearing houses in paying balances.

WALKER BILL CONFORMS TO THE SUFFOLK SYSTEM.

The Walker bill conforms to the old Suffolk system of New England from 1840 to 1864 in issuing currency by banks and to that of all other countries except the United States.

The truth of the statement made is shown by trying our system by the facts.

We have an excessive amount of coin-certainly from
$400,000,000 to $800,000,000 more than there is any
economic demand for-but putting it at the lowest
amount there is an excessive amount of coin of ...
We have paper money earning the banks nothing......

Total...

$400, 000, 000 1, 100, 000, 000

1,500, 000, 000

Interest on national-bank loans is necessarily higher than normal, provided our paper money was "true bank currency" issued against the assets of the bank as paper money is issued in every other country, as $1,500,000,000 plus $2,000,000,000 loans = $3,500,000,000 is to $1,500,000,000, or 42.8 per cent. This shows that with the banks issuing currency and submitting the volume of coin to economic laws interest rates would be reduced from 6 to 3.43 per cent. This considers only national banks.

Adding the $700,000,000 loans of State banks it makes $4,200,000,000 to $1,500,000,000 earning no income. Including these the rate of interest would be reduced 35.7 per cent, or from 6 to 3.86 per cent.

Of course this is only approximately correct, as no account is taken of "current redemption" and expenses of many kinds, or of the sums of paper money not in circulation, but these do not very materially affect the result. It still remains that by enacting the Walker bill, interest rates would be reduced in approximately the proportion indicated, and almost wholly in country districts.

LOANS TO CAPITAL AND DEPOSITS.

That the results shown in the six examples of banks under the present law, under the Hill-Fowler bill, and under the Suffolk system of the Walker bill are substantially correct is proven by the actual experience of banks in the total loans by banks in proportion to their total capital and deposits in 1896 as compared with 1856. There are only two sources of loanable "funds" to a bank when it can not issue its own currency against its assets, viz, capital and deposits. There are three sources of loanable "funds" to a bank that can issue its own currency against its assets, viz, capital, deposits, and currency. All banks before 1864 freely issued currency against their assets with like results of low interest rates in all the States.

I give only a few samples:

1896.

1856.

Per cent. Per cent.

Maine loaned to capital and deposits.
Vermont loaned to capital and deposits

New York, outside of New York City, loaned to capital and deposits.

The six New England States, including Boston, loaned to capital and deposits

North Carolina loaned to capital and deposits..

162

This is the inevitable result in all agricultural sections when a bank can issue its own currency. This shows that money can be borrowed at one-third to one-half lower rates when banks can issue currency as provided in the Walker bill.

On the other hand, the advantage given cities under the national banking law and under the Hill-Fowler bill, in oppression of farming districts, is conclusively proved by the fact that while New York City could loan only 88 per cent to her capital and deposits in 1856, she loaned 97 per cent in 1896, 10 per cent more in 1896 than in 1856; while Maine loaned 35 per cent less, Vermont, 99 per cent less; New York State outside New York City, 113 per cent less; North Carolina, 85 per cent less; and the six New England States, including the city of Boston, 43 per cent less than in 1856.

Notwithstanding these facts, which were before them when the HillFowler bill was compiled, they propose to continue their oppression of the farming communities with little or no relief for four years, and then dribble out relief for four years more, were their bill workable, which it is not.