Salt Lake Tribune | 1910-02-20 | Page 33 | Too Much Business Done on Credit Instruments, Says Expert

Too Much Business Done on Credit Instruments, Says Expert By Associated Press. WASHINGTON. Feb. 10. "Wo arc justified jus-tified iu concluding that f0 or 00 per cent of the retail trade of the country is settled by menus of checks and other credit instruments. Over 00 per cent of thc wholosalo trade is done with credit Instruments." Such are the conclusions of Dr. Davis Kinley of thc University of Illinois, expressed ex-pressed in a monograph which the National Na-tional Monetary commission Issues under un-der thc title, of "The Use of Credit Instruments In-struments in Payments in thc United States." In 1000, Dr. Kinley mado an investigation investi-gation of this subject through the instrumentality instru-mentality of the commission and thc comptroller of thc curieucy. Interrogatories Interroga-tories were sent to all kinds of banks. The aggregate retail deposits on March 6. 1 000. tho day on which tho banks were requested to ropyrt their detail deposits, showed some interesting facts, according to Dr. Kinley. Tho Inrgcr amount of deposits was In the returns of thc national na-tional banks, where tho percentage of cheeks was 74.7, thc highest .shown by any class of banks. The loan ami trust companies were next, with 73 7 per cent. but their total deposits wero only about ono-eighth of those of the. national banks. Position of State Banks. The third in order of percentage was Uie state, banks, and the percentage of credit paper In their deposits waa 70 In checks, amounting to about 10 per cent of tho national banks. The private banks, with less than a million dollars deposits, showed GS.4 per cent of checks, while thc stock savings banks, with deposits de-posits of less than $400,000. showed 64.1 nor cent In cheeks. Tho mutual savings banks snowed 12.3 per cent In checks in deposits of less than $ir,000. Tho highest percentage of checks employed em-ployed In retail deposits was in banks' In Wyoming. There tho ratio was S.'5.7 per cent. New York came noxt with SO.i) per. cent, and Oregon, third, with SO. I per et-nt. Tho only two slates thut showed a percentage of checks less than ?0 per cent, wero Maine, where the percentage- was 5S.S of deposits reports, and Rhode Island, where It was 5t.5. Dr. Kinley snys tho use of checks is promoted in a measure by tho payment of wages in checks. Of weekly payrolls reported by thc banks, 70 per cent were In checks. Element of Danger. "The transaction of so largo a volume of our business by checks Is an clement of danger In times of stringency and crises," says Dr. TCinley. "In such times I 1 V the uncanceled balances of credit trans- n , B )H actions create a larger demand for V . I S money, but the habit of settling by I am check has meant to take tho avallablo , 1 ' D fl amount of money at a minimum. IMI "Co'nscauently the,re ought to lie some I ' I fl means of supplying additional currency 1 IB when credit as a means of payment dl- S'tS mlnishes: This currency ought to bo as Riff safo and as uniform as thc ordinary cur- II "The volume of credit transactions iS very likely tends to increase as thc pop-. I ll ulatlon and business grow. It does not 1 11 Increase, uniformly, however, but by RVwJ periodic movement? that is to .say. tho lilfi rate of Increase of credit transactions. fl II as compared with the whole volume of . j In business, grows as It were, by jerks and 9 , 1 Ifi at a decreasing rate " fl 8 a