a 



ON OUR BANKING SYSTEM. 335 



nd factories diminishes the 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 



hem. 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 



n operator mobbed. The operators employ deputy sheriffs to 

 protect their property, and threaten to call on the Governor for 



he 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- 



ipulations through the banks they are kept afloat. 

 What finally happens ? The railroad company, overburdened 



ith 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 



oal 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 



otes 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 there ? 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- 



ring supplies of coal that far exceeded the demand, and the sale 



f 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- 



