Nashville patriot. [volume] (Nashville, Tenn.) 1858-1860, 1859-04-28
Bank Deposits.

The great MYSTERY of practical banking is
TO make payments from, cOincident with pay
ments due to- banks. In other words, il the
payment Of what is due those institutions by
their debtors were made simultaneously, or
nearly so, with what is due by them To their
creditors. there could be no pecuniary embar-
easements, so far as these arise from banks
themselves. Unfortunately this is the I'M
solved problem which has confused their adj
ministrators and perplexed legislators. Banks
have two species of obligation to the public,
their notes and their deposits. There Is little
difficulty from their diffusion in adjusting the
payments OF their notes, so as TO be nearly
concdent with their receipts. But their de-
posts from their concentration, puts IL out
OF their power to effect this adjustment They
constitute an immediate demand, while their
resources to cover that demand are not
available in a less period than from siEty days
10 three and eren four months While this III
equality exists between one class OF their
obligations and their means Of meeting them.
all communities in which moneyed capital
concentrates and deposits in bank are large,
will be liable To those contractions of credit
that arise from an unusual demand for the
payment of deposits in specie.
The only bank reform that is entitled to
notice, as a relief from the occasional press
ure OF payment for Immediate obligations Is
specie liabilities by bank coincdent with
their receipts. Such an amendment has been
proposed. The work recently published by
Mr. Stephen Colwill. of Philadelphia, entitled
ways and Means Of payment, full analy-
sis of the Credit System suggests that de-
posts should not be payable in specie until
the paper has matured of which they have
been the proceeds. Much the largest portion
OF deposits arise in "A commercial city from
discounted paper, for which the party being
credited, become forthwith a deposit, paya-
BILE in specie ON demand. Now this expe'dient
would entirely preclude one source Of bank
embarrassment during a moneyed pressure.
The other source of occasional officially, bank
notes, being widely diiIused, timely prepare
| tioa can always be made for their payment in
specie.
There would appear 10 be no other device
1 10y which the debts of bank to the public in
! deposits can be made coincident with their
credits TO the public, as 10 their respective
! periods OF payment The suggestion of COM
/ peling the banks 20 keep larger specie re-
serves, cannot be brought, perhaps, within
practical regulation without a degree OF sa-
/ peryisiOR that weuld be too inquisitorial. A
/ simple legislative enactment Of the tenor in-
/ dicated by Mr. Colwill, would accomplish the
end without tnfther intertereaee. There Is
justice as we'll a. policy in such u regulation,
lor why should thr eastomeE OF bank ahe
has been accommodated with a discount,
have the privilege N converting \ claim on
the boyks OF n bs,nk, The avails OF discounted
note or bill, nos pay able. perhaps, for weeks,
into an immedlate deEnand for cola leading
10 the general contraction Of credit and em'
barrasslnent Of the Community!