The New York herald., 1873-11-21
THE MONETARY SIYUilI0N.
Analysis Of the Condition of Business
as II Now Stands.
A MORE CHEERFUL OUTLOOK
Bank Reform from Bank Standpoint and
Popular Standpoint.

Notwithstanding the various rumors industr-
ousiy circulated during the past couple OF days OF
failures. embarrassments in banks and other
ominous signs OF fresh disaster, the general
monetary situation continues 10 show marked i'm
provement in all departments Some effect was
produced on Wednesday by the cumulative re-
ports that were sent abroad OF another impend-
ing crisis. Statements already contradcted were
then repeated only TO be again contradcted, and
yesterday other seeds Of disrust were sown broad
cast about the street bearing unmistakaole eyi-
dence OF the source whence they came. These,
however. were but lightly regarded, the un-
doubted proof given by the Bank of England in
Its reduction OF the bank rate to eight per cent, OF
belief IN our returning convaescence ana re-
markable recuperative power serving TO neutral
iZe all the efforts OF the bears in this respect.
There are various reassuring signs in tue general
situation to warrant this result, and IT IS Freely
recognized that the outlook is clearer, better
and In many respects more satisfactory. In the
frst place. the banks although not condescending
yet to publish Official orrather formal statement
OF their condition. announce themselves as large
gamers in the item or legal tenders which go to
make up their reserve while the current money rate
SEEMS TO GIVE ASSURANCE
that this has been accomplished without undue
contraction. II would certainly be more satisiac-
tory TO the public to know exactly how each bank
stands, alike in regard TO its deposits and loans
and discounts as to its reserves but while the Bank
Examiner neglects to perform his duty in this re-
spect we must only be satisfied with such informa-
non as bank officers themselves choose to give.
This shows the aggregate condition TO be healthiy
improving, bat, with the language OF the Clearing
House Committees report in vew permits the
existence OF grave fear to the condition OF some
OF them
THE MEETING OF THE CLEARING HOUSE Assoc1A-
TON
was an important one, and although without
definite action upon the immediate subject matter
In hand-viz., the report OF the committee already
published proposing certain reforms IN the pres
ent system-was significant in the evidence it pre-.
sented OF growing disposition on the part or the
banks to accept President Grants suggestion.
which is likely to obtain a stronger recommends
tion in his message from the events OF to-day
VIZ, free banking. In other words five OF the
principal banks by their withdrawal from the
meeting and one by its absence protested against
the movement OF the Clearing House Association
TO establish itselfa a supervisory authority in the
dealings between the banks and their customers
thus putting on record their Acknowledgement OF
the fact that the people are the best judges OF
WHAT CONSTITUTES SOUND BANKING,
and neither the government nor any aggregate
number OF bank presidents has the right TO pre-
scribe rules Tor the management OF a banking
contraction, any more than to dictate what
newspaper should publish. A Tree banking sys-
TEN is as much right OF the people as Tree press:
the former being as essential TO financial liberty OF
action as the latter is to political. social and re-
iigious liberty. Tue meeting was called to order
AZ about one T. NJ, and remained in session until
fifteen minutes past three ?. NJ. All OF the banks
Of the association were represented, excepting the
Chemical Bank. motion was ma de in the early
part OF the session to lay the report on the table
which was lost, as was also q motion, which was
Immediately made thereupon, to postpone action on
"a ppTpE q n n n Tha
Bank OF Commerce, then withdrew, and was mme-
niately followed by the representatives of the
Grocers', Metropolitan and State Of New York.
Later the representatives. OF the Mercantile,
Fourth National and Bank OF New York retired
from The meeting upon the plea OF business requir-
Ing their return TO their respective banks. mo-
ton was then made Tor the acceptance or the
meeting proceeded TO consideration Of the report
by separate sections. sections TO 10 were passed
over without discussion. Article 20 was
TO read
No member of the Clearing House Association shall be
poraton Arm Of individual excepting upon regularly m
corporated banks located in the cities Of New York,
be subject to examination OF their condition BY
mittee Of The Clearing House whenever deemed neces
saTy.
Section Of article % was amended so as to read
Rs Iollows:-
That it win not receive upon deposit as cash from deal
checks otherwise than upon banks which
members OF TINS ASSOCIATION or upon such regularly in
motion then followed to allow three per cent
interest on deposits, which was voted down by a
large majority. II viii be noticed that this is also
In accordance with suggestion OF President
Grant The meeting also evlnced much feeling in
opposition to the certhcation OF cnecks-a matter,
Ii may be said, which. when practised without a
security to cover the amount OF the check is SIM
ply a fraud upon the public. and belongs rather 10
the control oi the courts than OF the associated
bank presidents.
The meeting adjourned, to meet on Tuesday
next.
This same report promises yet to furnish
some interesting developments OF an instructive,
u not sensational, nature. it Is at present sub
jected TO some very harsh CRITICISM and many of
the opinions and structures there put forth with
such dogmatic utterance are variously and indc-
nantly canVassed. 1t has brought into antagonism
the views OF men willing. anxious and determined
to realize all the pr0hts permissible under the
national banking system. with those who dread in
TINS realization the eXtingushment OF the system.
In any event. II represents only family difference,
both parties being deslrous OF perpetaating the
present system, while
rIE TRUE INTEREST OF THE PUBLIC
calls for bang reform tnat shall be national IN
Its character not mere reform IN national Dank-
Ing. Wnat Is wanted Is free banking without
government aid or interference except TO enJoin
proper security for circulation and an honest ad-
mInistraton on the part OF bank ofiicias-in other
words police supervision only. There is danger of
disagreement among the associated banks upon
this report and plan OF reorganization, with the
possibility OF two Clearing houses This would only
embarrass business, work decentralization IN bank
aims and uses, and bring discredit upon the COM
mercla metropolis Congress should look TO II,
when II comes TO deal with this feature OF the
financial problem that our banking system rest
more hrn!y with the people, on the people for the
people, and grow and flourish as 1t finds favor with
them, meets their wants and requirements, and
by honest management challenges their support.
ine present system is faulty in this respect, that IL
v haIl held out, as IT WERE to the people by the
government. benefit conferred upon them instead
OF being the simple emanallon or a public need
There much
MATTER FOR TH0UGHTFuL CONSIDERATION
Oh the part oil our legislators IN TINS examination
Di our banking system. For some years back there
mas been growing disposition to bring the gov
eminent INTO intimate relations with the business
pf the country hy imposing upon 1t duties which
more properly belong to the people themselves
This has grown 10 such dimensions that IL Is now
seriously asked of government 10 assume control
nj the railroads, in the Interest OF cheap trausport
zion, and the government itself proposes 10 run
opposition TO the many well governed, capably
managed savings institutions throughout the
States, and establish postal savings bank We
have had one United States Bank, and this ought
to DC sufficient experience IN that line. There eau
be no doubt OF the excellence OF the idea OF postal
IaYinus nank undnr certain clIcnmSlancns.