Page:Popular Science Monthly Volume 49.djvu/353

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ON OUR BANKING SYSTEM.

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��and factories diminislies tlie use of coal. The traffic of the rail- roads falls off, and their locomotives do not burn so much fuel. There is an oversupply of coal, and the miners, whose wages have been reduced to a starvation basis, are without work even at those wages. All of them are poor, and the most of them are ignorant of the remote sources of the wrongs that are undoing them. Their discontent grows, and they strike. Their children are without shoes, and their stomachs are empty. Their discon- tent gives rise to mutterings. Here a coal tipple is burned, there an operator mobbed. The operators employ deputy sheriffs to protect their property, and threaten to call on the Governor for the aid of the militia in preserving peace. The miners are whipped and return to work.

The railroad company and the shipping company and the receiving company push the growing snowball of their indebted- ness before them. By juggling, twisting, scheming, and the ma- nipulations through the banks they are kept afloat.

What finally happens ? The railroad company, overburdened with debts, and robbed by its officers, goes into the hands of a receiver.

The great snowball of indebtedness rests upon the coal com- pany ; its notes are scattered far and wide in the banks that have discounted them. What can the banks do ? Get judgment on the notes and take the property of the coal company. But the coal company owns next to nothing. Its docks are leased, its cars are leased, its coal land is leased ; the lessors have the first claim, the banks would get nothing. What can the banks do ? Allow the coal company to issue bonds, take bonds to the value of the notes which they hold, and allow the coal company to con- tinue ? If it has so lamentably failed in the past, what can be expected of the future ? The banks are between the devil and the deep sea.

How did they get ther^ ? Because they discounted notes as- suring the forthcoming of the result of human effort to the extent that the signers and indorsers failed to produce. Had the banks been fully alive to the conditions of the coal markets, they certainly would not, in the first place, have discounted notes cov- ering supplies of coal that far exceeded the demand, and the sale of which affected the prosperity of other coal companies to such an extent that cutting of prices finally reacted upon the pros- perity of every community concerned in the coal industry. But, if it be urged that it is asking too much of any bank to keep track of the intricacies of every business, that a bank is safe in discounting the notes of concerns that always pay their notes, there is the reply that these concerns did not pay their notes. By manipulation they apparently paid them, and therefore the sys-

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