The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1862-06-02
...sl7.4s4,s SIT 1855 ,247 Io,o77,I5o


The bank deposits will probably show an average
increase of some three to four millions tomorrow,
and the specie line an increase of some fifteen
hundred thousand dollars. The loans have been
diminished by the falling in Of mercantile paper
which has not been renewed, and increased by
purchases of government stocks. 1t is evident
that our banks, like the Bank Of England are here
after going to base their business on the proper
security-government stocks. In this country,
heretofore, mercantile paper has been the grand
basis of banking business, and loans on, or pur.
chases Of government securities incidental opera
tions. Henceforth-for some years at all events
the bulk of our banking credits will be based on
public stocks, and mercantile paper will fall
into the second rank. This is as it should be- The
best possible mercantile paper rests on basis Of
individual security which events may destroy in an
hour; whereas, government stocks, as is proved by
the crisis through which we have passed, rest
upon the ndestructible security of our national
existence, and all the property possessed by the
citizens Of the republic. Our banks have learned
q sound lesson during the past eighteen months.
They will not hereafter be so anxious as they.
have been heretofore to discount long paper based
upon the credit of merchants in distant States;
but they will be more ready than they have ever
foster investments in public securities. Mr.. Cisco
il now receiving deposits on call after ten days,
notice, for which he is directed to allow 4 per
cent per annum interest and likewise deposits Of
legal tender currency for conversion into the new
five year bonds, known as fve-twenties. The re-
cent advance in government securities will doubt.
less lead to copous conversions of currency and
will thus supply the government with large
=.
terday the deposits for conversion fell but little
short Of 5000 0o0 We look to see the bonds Of ISL
selling this summer at Ito 1l5, and the
$40 bonds selling at such premium as will
insure the immediate conversion Of all the legal
tender currency afoat. Whether Mr.. Chase will
avail himself Of the condition of the money market
to reduce the rate OF interest on all $40 bonds
issued after certain date to five per cent remains
to be seen. 1t is generally supposed that money
will not be worth over three per cent per annum
this summer and the security Of the United States
government will simultaneously be proven to be
the best possible in this country. Under these
circumstances government ought to be able to
obtain all the money it needs at or below five per
cent
The money market was extremely easy all last
week. None of the leading houses are willing to
give over 3 per cent for money. and the opinion is
confidently expressed that its value will fall still
lower. There is very little mercantile paper max
ing; good names pass readily at 4 q per cent.
Certificates Of public indebtedness are worth
1907 "a. Capitalists are sorely puzzled to
know what TO do with their means. Il ia
pretty evident that, however the war
may terminate, many months must elapse
before trade revves TO such an extent as to afford
employment to the capital which is accumuatnQ
here. In the meantime how to make this money
yield income is embarrassing problem. Most
of the first class bonds, which interest is regu.
ary paid are already above par and there is quite
aliyely competition for bonds Of the lower class,
which are in progress Of recovery from depression.
The Sub-Treasurer offers per cent for all depo-
sits on call after ten days; but this rate is so much
below the average value of money in this city that
capitalists are not Fastening to avail themselves Of
the offer, and are using their money temporarily
on the Stock Exchange.
Bankers bills on London closed yesterday al
fl4L u, having declined about "a per cent
during the week. Francs were quoted 4.9i
4.s2H, having fallen about 2L pei
cent. Gold, after having touched 104, closed
OF about 1887. There are few bills in
market; but the demand il very slack. Leading
importers, and importers on speculation, paid for
their goods In advance. A few houses are letting
their credits rum expecting to be able 70 buy bills
nj a moderate rate this summer and next fall. on
the strength Of renewed exports Of cotton. II ID
expected that cotton. sugar, &C., win 20 forward