, 1872-12-31
M0NEYAND COMMERCE.
MONETARY.
MONDAY EVENING, Dec. 50.

MONDAY EVENING, Dec. 50.
In the local money market, the week opc2s
with reaction toward stringency. Owing to tho
difficulty of getting. to forward hogs, cattle,
beef, and pork to the East, shipments have fallen
of since tho closing days Of last week. Last
week the supply OF exchange Oh the market was
very large, and tho prevailing rates were 75c tc
$1.00 per $1,000 discount. To-day the su.I;
is SO scarce that the price haa suddenly whipped
around to 75c per 81 GOO premium. New York
exchange is for all practical purposes, &c equiv
silent of money, and when shipments Of products
are not large enough to meet the demand for e.;-
change bankers lave to send their currency to
New York instead. The sudden falling OF:
shipments Of products to the Last is. therefore,
i sufficient reason for the change to !. nero
stringent money market to-day.
It is now being suggested by some that tho
general expectation OF abundant money
market after the first Of January is inducing so
many to defer thoir applications for loans until
that time, that the demand, now held in abcy-
ance, and that will ccnle upon the market then,
will be moro than equal to tic illl Of moray
released by the interest and dividend disburse-
ments in eLs frzt half OF January. and that au
easy money market can scarcely bo expected
until the latter cad of tho month";
. ONE HUNDRED FER CENT rEE ASSCsI.
For about half of the time during tho last
three or four weeks money has ranged from Is
20 l25 per cant per aruunl in New York. It is
claimed by tho Financial Chronicle and some
other papers that this extra strirgency is to
great extent artificial, and that tho object in
producing it is two-fcld: The capitalists of
course reap golden harvest OF profit but it is
advocates Of currency lnHctlon anu that QUO
object in the concert Of action IN making money
stringent is to create tie Impression u:on tho
unthinEinS that there is deficiency n lie vol
u.ne Of the currency. It is altnsethor r.u:ahlo
that this is true to considerable cxteat. bu: it
seems not im7co. able that, rll1c the present
requirements of the law, the strin5cncy is moro
largely dua to
CAPITAL LOCKED rP IN NATIONAL D1SH RESERVES.
In connecAon with the question Of reserves,
which in accordance with the stree letter OF the
Law, the National Banks IN the redemption
cities :" are required TO Lere Oh hand at - all
times to the extent uf % per cent of c;1cuia-
ton and deposits. it probabl: does not occur to
many persons that more t1au one-lalf Of tho
capital in National Banks is practically locked up
in reserves and margins IL bonds deposited to
secure circulation. Let take National Bank
with sa5 500 900 capital as example such
bank would have at leas: S15o, 900 Of circulation
# twas to be had. 70 get 1lis $3.50, ,o0o of cir
culation it must buy United States bonds Of the
par value OF :155.ou0, bu: these cost d
premium Of gay Is Per cent lii the market, go
that it requires an Investment of @1S9, 900 il,
bonds deposited in the. Treasury. Here is
1000 locked up over and above the circulation
received from tie Treasury. It would be safe to
say that such bank would Lave ct least $780,
600 Of deposits and against this and its cirsula-
ton 1t must keep 25 per cent reserye, in legal
tender notes. at all times on hand. amounting to
say 7l12, 900, which, together with the $39, 600
locked up in the Treasury, makes 5151 900, or rs
per cent of its capital. 1t is true that the priv-
lego OF keeping one~haf Of the reserys'
on deposit with their redeennug agents
is made use Of by the banks to make part Of their
reserve little more available, but it is sale to
say that Of the $4so o000 900 capital stock Of tie
l,919 National Banks of the United States,
$4,000, 900 is locked up in margin on bonds de-
posted in the Treasury, aud 5I75, ,o0o, 600 moro
ls locked up in the vaults Of the banks and with
their ledeeming agents.. This is estimating that
only Is per cent OF circulation and deposits is &C
tnauy rendered unavailable BY being held at ''all
times' On hand in accordance with the
letter Of the law. Horo We hayo ct
least s25o,ooo,ooo of capital actual
y locked up and unavailable: Con-
alder1ng the fact that the aggregate OF National
Bank capital has increased about $4,000 600 in
the last two years, it is apparent that not less
than $50 900 900 Of such increase OF capital must
have been locked up in the vaults of the Treas-
N It napaS II ths e OF axe r. fo u1;
active circulation in tw~ years ono Of the causes
OF the growing stlineency Of money?
ADVANCES ON BILLS OF LADISa.
In connection with this topic, which is now
being discussed By bankers and shippers in this
country. the following case, just decided in
Scotland will have come interest:
On Friday the Lord Chancellor delivered Judgment
IN the CAUSE at Gilbert rs Gugnon, which came before
him By way OF appeal from the Judgment Of the Mas
ter Of the Rolls. The appellants the West Of
Englsnd and South Wales Danlking Company, and the
respondents Meszrs Forbes, Knight \ Co., carrying
on the business Of corn merchants at Glasgow and
elsewhere, and the Bank Of British Columbia. In
Nay, 1858, 3Iesars. Forbes consigue to extensive
miller in Deyonshire /. cargo OF California wheat,
On the terms that reimbursement to DO made
By the purchaser BY accsptanccs Of GO days sight
against the bills OF lading. While the cargo
was on the water, Mr. Kemp, the purchaser, raised
e5,625 u.s. 3d. from the West of England Bank, pedg
ing the cargo security In their letter Of advice to
Nj. Kemp, Mesers. Forbes Co. enclosed one Of 81:
Of six bills Of lading which Mr. Kemp deposited with
the bank. When the vessel arrived from California
III. Kemp w.a BANKRUPT and aessra. Forbes s Co.
seized the cargo. The West Of England Bank thereu
claimed e5 sos U.s. 81. against Mezsrs. Fo.cR, IS
having legal priority. The Master Of the Rolls de-
cded that thero sich priority, ami dismissed
the bill with costs. Oa Friday the Lord Chancellor
upheld his Lordship's decisou.-North British Agr-
culturis!, Nor. 20, 1871.
LOCAL RToCE AND Eo-7D MARKET.
MessTs. Lrut, Preston l. kcan quote us fol-
lows this afternoon: