, 1870-06-22
nft}fEfiRfaND COMMERCIAL.
::::a,M0NETARY, :,

F95, ,11O, 900 Currency hill s7ero passed. It would
bo an expansion of the currency precisely As
i e6e, ,oo0, 900 Of new ssceabacks Ind bcon rut
in circulation instead Of So, ,9u0, 900 Of bank
notes." An example uf one country hank will
sezve, however, to SHOW exactly what would
lie the elIect upon the volume Of currency
4 the bill does pass in its present ehapo.
Let Us suppose new bank organized
N 1a some ne interior town. that il haa deposited
*2I8, GOO OF United States honds, and received
F250, 600 Of circulating notes in return. The
regularly published abstracts of the condition
of the National Ranks show that tho average
OF their individual deposit. is juat about
5cuble the amount Of their circulation. II not
located IN oEe Of the redemption ctiss" il
would be required to have sat all times on
band, in lawful money Of the
United States" an amount equal to fifteen
per cent Of tho aggregate Of Its circulation aud
<lerosits. 'os in tsls csc, OF s5e 500 Ths
Currency act, however, provides. Also that
three-hiths Of this IL per cent may consist of
balances due TO tho bank from come other Ma
tioual bank in one Of the seventeen "re-
demption cities which had been selected as
tho agent for the REDEMPTION Of its notes. The
only twoafths Of the total reaerye, 1iz-: s33 e3j
IN nLegal-IendsEs in its own vaults. The oiher
thtee-hfths, however, 4449. 500, are part OF tbs
6epcHtE.of some National Bank in. SAY, Chi
cago, and AgainFt which, the hank hare being
in one Of The "1edemption cities" must keen
reserve Of lawsul money equal to 25 per cent
Of its circulation and deposits. This St9.5oJ
dne to the bank in tho country then would re-
4nlre rcsorre of Sf237 But tho law a3s7
permits the hanks in the redemption cities to
keep one-haH OF their resnrve With National
Bank in New York. 60 that the hank here
would be required to keep but 4n.iS7 in
Legal tenders in it's vault. The other a6.187,
however. becomes in tutn pa1t Of the deposits
Of ANhtional Bank in New York. against which
it must hold Is per cent. or 51.54G. reserve in
lawful money Of the United States. Here,
then, are S3S. GOO in the vaults Of the country
bank which has received the S250, ,0a0 OF nov
circulation &c, 1877 with its rodeeuEng agent
here,: and 91,5d6 with the rodemfng agent
40,7S3 OF greenbaeks that would De wi.h-
drawn from the amount now in circulation and
held Is reserve against the S2o5530 01D Of new
bank notes put IN circulation in other words
Withdrawal Of Ereenhstks equal to about
sued: Thus ne hive m addition Of So, 600
900 Of National hank notes and withdrawal
of els 200 600 OF creenbackE and if this were all
OF the *95, COO, GOO currancy bill, it would, as
the Chsorsacae saSs. make an expansion Of the
The bill provides that the =45. SAC, 600 OF 8 per
cent Certificates which are only certificates
given BY the Treasury to the banks for green
backs deposited, and are, in fact, only
an imitation Of tie volume OF green
backs from its normal volume Of 1856, l07. 600
greenbacks and cancelled, but the volume OF
greenfsackB is not to be increased ii, other
words the ai5,5I0, COO Of in1ation would be
abrogaied, and the actual amount OF govern
ment currency available for bank reserves be
reduced to ihe sa56 ,lG7 900 OF plain iegal-
tender notea. Thus We have this to deduct
from the SS0, SUI, GOO OF saccease in the Na-
tionsl Bunk notes, which would leave the total
Increase Of paper currency ahoat 5SA, 26t, ,000
:. While the foregoing is not ! doSSroe Of inta-
this partial increase Of the hank currency ia
strictly imitation, while free banking need not
be imitation at all If the retirement Of green
backs is at the rate Of about four-Afths
tho increase Of National Bank notes.
In these proportions there would bs
Ience At al bu, tie gradual retirement Of
:sraanbacas would reduce their total volume,
20 that when there was, cay, sG0Q, 600 OF Na-
fional Bank currency IN e1istanca, there would
only be GLE; ;000, 600 Of greenbacks, and these
being &t par With gold, the latter would be used
IN conjunction with Rreenbacks, as reserve.
Any Increase Of bank currency beyond this
would have to DO made exclusively on specie
basis, Bankers who had deposited securities
to tho amount OF 10 Per cent more than
.cestainly not 1,c. so; gzoat fools as
to increase their demand obligations, unlesa
they say the way 10 provide the specie to pay
them as the supply Of greenhacks waa being
Ieauced, and yet al tha ta1k about infinite in,
dation tesultiDg out Of free banking is based
upon the seBump pdon that bankers would go
deliberately to work to throw away the differ
ence OF about 20 per cent between their circu-
lstinu and the value OF bouda deposited to Sc
cure it.
The money market continues tight, and
there is good why it should be 70. It is est-
112ted that there Is nov - ,e00, 900 moro c1pl-
taI locked up in wiliskey held in store than
there VIA ut this time Last year. The amount
Of capital in gran held IN storo Is nyez s. GU.
Geo greater than at this li1ne last year Heeo
Is at least &c, GOO, coo Of property more than At
this time Last year u,at is now being carried by
the banks and the local capital OF tho city.
Whan money Was SO supetabundant, two OF
thrco montha ago, city merchants found it 90
easy to bc11ow for sixty and ninety days, that
1nnuv Of them sod largely to their country Gus
toners on credit Thus, tho country il uow
getting, IN many instances the beneft OF the
ease in the money market then, While the city
feels the stringent elect Of not akiug collec-
tions in the country. "
Of their regular cuetomers- Some banks dc
not do it, and the consequence il an lncreast
OF good paper in the open market, where unt
per cent per month, and upward, is the tatt
for mouey-
The orders from the country for currency
today, were light, hut tho supply OF cuaenc.
are yet ordering shipments Of currency from
NeM Yptk to here
Exchange vas sold between banks to-day a
from 1-l0 to 1-8 discount. At the counter
bankers sell at par, and buy at 5Loo@1-5'
--re- 41,Oo0 or
!. Al the Stock Board to-day sales were: ...
410dou American suld. ....--..--;-.--.-.1l9:s
5nl00 u. s. 1e-su bnnds--.-... ....... ;10sa
Tie following bids for, anu Oilers OF, loca
4tocks were ZnaIc:' -