, 1872-11-20
MONEYAND COMMERCE.
MONETARY.

MONETARY.
There seems to be 70 alienation Of the etrin-
Sency III the local money market. EFentne oa'As
that are il, the best condition find It difficult to
meet the ordinary demands OF thell regular cus'
toners. and are obliged to refuse good paper
every day that they would Otherwise oe elao 10
taha. In tie open market money commands
from, Is to 1s per cent on undoubted col
lsterals and commercial paper cannot be sold
better than per cent per month. There
is also good deal OF two, three. and four
months paper, secured by mortgages On real
estate, offered at per cent per month.
Currency continues to come in from the coun-
Try pretty freely. but the high price Of New York
exchange tas caused it to be sent forward to
New York pretty steadily and there E:s not been
much accumulation here Of either currency OF
credit during the last week or two. ..-.
New York ezchsage continues firm at Duo to
15c per 81 600 premium between banks.
Tie discovery that the corn-bins IN the e!eva.
tors recently controlled by Mum 4 Scott hau
taIse bottoms, aud were really less than ha!1
full when they we're made to appear quite fuli.
shows that, 8 mouth or two ago, the banks OF
this city were advancing TO large extent On
elevator receipts issued against nothing put
emptiness; that, in fact. they were loanlne
Messrs Mum d Scott 500, 600 to $50, 600 on
no security at all Perhaps people WILL no" pe.
Gin TO sec the necessity fora radical change IN
tie whole system, that Will open the elevator
business to the purifying effects OF healthy com"
petition.
The reference made in our money article Of
yesterday to the stock Of a new National bank
which Ind not begun business yet being offered
q. beloy par was slightly incorrect in the respect
that tie tank (tle - Honey has begun bus-
ness. This correction is made IN behalf Of the
'Ceutral National, another new oank Of thls CITY
which ia the only one now organized that has
not begun business.
THE NATIONAL BANKS.
An examination Of the official tabular state
1oent, just published by the Comptroller OF the
Banks OF the United states,. showa that
their available cash means ia equal to
about so per cent Of their demand
liabilities except circulation. The true way OF
calculating the strength of our National Banks
to withstand any pressure or panic, is undoubt-
edly to throw the circulation and the bonds de-
posted to secure it entirely out Of the account.
THE bonds deposited with the United States
Treasurer are ample security for the circulation,
specie basis. The entire cash means OF the
banks is, therefore, the proper measure OF their
ability to pay depositors. This is the basis upon
which we have, for several years past, made our
Banks of Chicago, and is much more satisfacto-
II to the general public than the mere
percentage OF legal tenders on hand as
compared to circulation and deposits:
On Oct. 8. 1879, the 1919 National Banks Of
the United States owed demand liabilities as
follows: Individual deposits, $6l3, ,29o ,67l; due
to banks and bankers, 5143, 1886, ,430; United
States deposits, s7,85s, ,772; deposits OF United
States disbursing officers, So, 563: :o33; unpaid
S772 694 ass.
70 meet any pressure for liquidation Of the
foregoing they h.d cash means on hand as fol-
lows: Legal tender notes, S102, 2,074, 104 specie,
fractional currency, 81, Isl, ,747; Clearing House
checks, $40, ,086, ,3l5 due from banks and bank
ers, S128. 1870, $40; United States certificates OF
deposit, Sc, ,710 900; Clearing House certificates,
&8.6a2, 600; 3 per cent certificates, 5l,555, o0o
demand liabilities.
The amount OF United States bonds deposited
TO secure circulation is $685., ,046, 400, and the
amount of National Bank notes outstanding ls
there is q margin Of s4s 55l 900 over and above
what would be required to pay their outstanding
circulation, or enough to pay per cent more on
al their demand liabilities. AL thus leaves out
banks in their loans to the amount OF So72, 52o, !
40.
The observations made above in regard to the
security OF the National Bank circulation remind
us to say in the same connection that the
DANGER FROM DRAINS OF SPECIE,
which seems to be the great bugaboo Of all the
inhationistE, who are opposed to getting back to
specie payments, is almost nothing compared to
what it was under the old systems of banking.
Mr Boutwell,, and even so respectable an author
ity as the New York Financial Chronicle, have
assumed that If We we're q specie basls any
monetary trouble in Europe would immediately
drain away all the specie reserves OF the banks
and make a panic. Now, it must be borne
in mind that re have never had a
secured paper-money circulation before the
National Bank currency, and thatin all panics pre-
viona to 1861, the panic sVas caused mainly By q
fear thnt il considerable part Of the specie re-
the currency would not be redeemed I'd
ut all. The panics we have had in
the United States have all been attributable to
doubts about the paper money being redeemed
But with the National Bank currency there could
be no such doubts, no matter how much OF q
drain Of specie there might be to Europe. The
holders Of this currency would know that If the
National Banks could not redeem their notes II
specie, the Government would een their bonds
and redeem it for them.
But aside from the consideration OF the cur.
1ency, the idea Of preventing drain OF capital
from this country by continuance OF snspen.
zion OF specie payments is most noneenslcai
one. The most that Europe could do, in any
case, would be to draw from this country juat
what was due her, and what wes her right to
have, and there would be no artifce Of legisla-
tion or finance that could prevent the capital
going where it belonged except downright repu-
diation, which ig only nallder name for ewln-
ding. There has been q vast amount Of astute
bosh written about the danger Of drains OF specie
to Europe it We we're on specie basis. II the
specie was drained off to Europe 1t would oniy
show that We did not own it, and had no busl-
ness to hold it. The fact that Willie specie
payments are suspended we can always
retain the same nominal amount OF, say, Stoo,
600, 900 of paper money in circulation, does not
prove that ve prevent any capital from going
abroad, or that We retain a dollar more here by
that means. II there is great drain of specie,