Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1873-11-02

OF a large sum of money at this low rate OF
interest. Such bond would, in fact. be-
come savings bank for the people without
any necessity for the machinery of savings
institution.
Since the panic the confidence of the la
boring classes has been shaken in the sa-
wings banks, which have received their de-
posits and now refuse to return them except
upon notice of from thirty to sixty DAYS.
Those deposits are known to be called for
only in small amounts, and all that is
needed is to offer to the laboring man an
investment which is safe, and which can
be readily converted into money if required.
1t is thought that the government might
utilize such certificates, and, by the invest
ment OF half the amount received in 500
bonds, reimburse itself for the whole
amount of interest paid upon the new GER
tifcates, and, at the same time, serve the
laborlng classes in the same manner that
the laboring classes in England are served,
through the organization of Postoffice sa-
wings banks, without any of the cumber-
some machinery and risks of such institu-
lions. The Comptroller of the kCurrency,
in his last annual report, recommended the
issue of such certificates for the use of the
banks. The paragraph containing this
recommendations as follows:
'"The variations in the liabilities reouir-
ing reserve IN the banks of the city of New
\ ork are very great The banks outside of
New York, during the dull season, send
their surplus means to that city for deposit
upon interest, to await the revival of bust
ness. The banks in the city of New Y ork,
at such periods Of the year, have no legiti-
mate outlet for these funds, and are there
fore Threatened with loss. The stock board
takes advantage of this condition of affairs,
speculation is stimulated by the cheapness
OF money, and market is found for the
idle funds upon doubtful collaterals. and
the result is seen in the increased transac-
tions at the Clearing House, which. during
the past year, exceeded thirty-twothousand
millions Of dollars, or an average of more
than one hundred millions of dollars daily
not one half of which was the result of
legitimate business; the total amount of
transactions being greater than that of the
bankers Clearing House of the city of
London. The evil arises largely from the
payment, by the banks, of interest on de-
poSits-an old established custom which
can not easily be changed by legislation.
considerable portion of these deposits
would remain at home if they could be
used at low rate of interest, and made
available at any time upon the return of
the season of active business. No sure in
vestment of this kind is, however, open to
the country banks; and the universal Gus
tom is to send the useless dollars from
vaults comparatively insecure to their cor
respondents in the city, where they are sup
posed to be safer, and at the same time
earning dividends for shareholders. Agoy-
eminent issue bearing a low rate of inter
est to be counted as certain proportion of
the reserve, and an increase of the amount
which the country banks are required to
keep on hand, is the proper remedy for such
state Of things. Such an issue need not
result in initiation, for the currency invested
would be in the possession of the govern
ment. If the currency is held, the objec-
ton is the loss of interest to the govern
ment; but this loss would be no more than
a just rebate upon the six millions of dol
lars of taxation annually paid by the banks
to the government, at a time when almost
every kind of internal taxation has been
Such a reduction of taxa
ton should not be grudgingly made, if the
result shall be to give elasticity to the
to strengthen and steady the
money market, to give additional security
to seven hundred millionsTof dollars be-
longing to depositOrs by retaining in the
vaults of the banks large amount of funds
for legitimate business purposes, which
would otherwise be thrown upon the stock
board to unsettle values throughout the
country, and alternately increase and de
press the price of every commodity"