[Volume XXV
THE CHICAGO BANKER
10
The Wisconsin National Bank
OF MILWAUKEE
CAPITAL	-	$2,000,000
SURPLUS -	1,000,000
OFFICERS
L. J. PETIT, President	HERMAN F. WOLF, Cashier
FRED'K KASTEN, Vice-President	L. G. BOURNIQUE, Asst. Cashier
CHAS. E. ARNOLD, 2nd Vice-President	W. L. CHENEY, Asst. Cashier
WALTER KASTEN, Asst. Cashier
DIRECTORS
L. J. Petit	Frederick Kasten	R. W. Houghton	Oliver C. Fuller
Herman W. Falk	Ceo. D.Van Dyke	Gustave Pabst	Charles Schriber
Isaac D. Adler	Frank L. Vance	Patrick Cudahy
Wisconsin Trust Company
MILWAUKEE
CAPITAL	-	$500,000
SURPLUS -	100,000
OFFICERS
OLIVER C. FULLER, President	GARDNER P. STICKNEY Treasurer
FRED’K KASTEN, Vice-President	FRED. C. BEST, Secretary
R. L. SMITH, Asst. Secretary
DIRECTORS
L. J. Petit, Chairman Frederick Kasten R. W. Houghton Oliver C. Fuller Herman W. Falk	Charles Schriber Gustave Pabst	Gardner P. Stickney
Isaac D. Adler	Frank L. Vance	Patrick Cudahy
If any of your friends or customers are coming to the Yakima Valley, a letter of introduction to us will insure them prompt and courteous attention.
C. H. ROYCE. Cashier
H. C. LUCAS, Vice-President
The bank of Central Washington for people from the Middle States.
North Yakima, Washington
G. S. RANKIN, President
tions. This use of credit keeps gold at home and leaves domestic conditions tranquil. Later, when the supply of grain and cotton bills creates balances again in our favor, exchange falls below parity, when it becomes profitable for our banks to reverse their previous transactions, buy bills and settle their obligations abroad. Thus it is that the great volume of commerce of the world is carried on by credit. Illustrations might be multiplied, but always and inevitably is involved the principle that the commodity, whether it be money or merchandise, is bought when and where it is cheap and sold when and where it is dear; credit meanwhile being used to finance the obligations created through purchases. By this rule all the sails of merchant ships on the high seas are bellied to the winds of trade.
When flowing undisturbed credit causes the great centers of population to throb with a busy tide of traffic, wealth to accumulate, and trade to prosper. Its arm is stretched from nation to nation. But let the flow of this vague and intangible thing we call credit, which depends upon a delicately poised condition of mind, be interrupted or cut off, let men not know whom to trust, and commerce is paralyzed and industry ceases. Fortunes are swept away, for things possess not the value they had. It is clear then that when one, even though it be the business of his life to buy and sell credits, undertakes to speak upon a subject involving that intricate and delicate
the use of international credit to bridge the deficit, we should witness the outflow of gold in settlement of these balances, and a possible temporary disarrangement of domestic credits with rising interest rates. When balances thus run against us and gold threatens to be exported, exchange of course is high and it becomes profitable for banks to sell. At such times our foreign banks do sell exchange drawn against actual credit balances, or in the form of their 6o or 90 day bills against their established open credit or against approved securities previously bought for that purpose and lodged with foreign correspondents. This goes on until our debit balances are settled, when exchange declines to a parity, or to a point where there is no profit in such transac-
the OLD
National Bank Spokane
CAPITAL $500,000
:;:ini I ill..... in... OFFICERS ..mi...—
O. W. TWOHY, President
T, a. HUMBIRO, Vice Pres. W. O. VINCENT, Cashier W. J. KOMMERS,	J. A. YEOMANS,
ASSISTANT CASHIERS
goods bought by American importers. On receipt of this cable the New York bank makes inquiry in the open market of brokers and ascertains that first class bills to the amount of say $150,000 American money can be bought on Germany. Cables are exchanged and the trades closed. The settlement is made at the close of the day by the German bank, placing by cable at the credit of the New York bank in London the difference between 500,000 marks it sold and $150,000 of bills bought, or say £6,000 sterling. The next day similar transactions may take place and the balance be in favor of the German bank. And so day by day the exchanges representing the legitimate commerce of the world are settled by payment in London of the differences between the amount of the bills bought and the amount sold by the trading banks. In effect it is international clearing; an exchange of debits for credits, and a settlement only of the differences in gold. This is one of the great and useful functions of an International bank.
The volume of trade between nations is not always uniform. Trade balances in a given case may be at one time favorable, at another unfavorable. This may be merely temporary and seasonal, as for instance in summer when many millions of dollars are spent by American travelers abroad, debit balances may be created against us, which later on are to be offset by our increased exports of grain and cotton. But in the meantime, were it not tor