, 1873-10-11
MONEY AND COMMERCE,
MONETARY.

in this markat. Grnu bills which for tho uaBt
fow ilays hive boon taken Mt per cont discount,
worc taken to.dny Ms high M 4 Of per cent
Discount. Bankers bills on Now York woro
quotablo at par. These rates aro, Of co,rao for
Fortified checlss, and notwithstanding that tho
certified checks arc at discount Of nor cent
ior currency, thoy answer to pay dehta iu Now
York at par. An long, therefore, an tho
aomand for Now York exchange in
sho Wcst Is equal to tho supply, the discount on
tartiiiod choeks docs not infect anythl1ig. Aa
long as tho banks In tho Wost can soil all tho
exchange thoy take, they practically do NIL their
Eastern business OH the baBiB OF certified
chOukB.
II grain shipments should increase 80 ns to
mako surplus Of Now York exchange In tho
West, and thus obligo tho Western banks to &C.
cnmulato balances in New York, thoy will change
to the legal tondor basis Of prices, and oxclange
would sell for what 1t would cost to
roplaco 1t with currency hore On tho
other hand, If grain, ellpments
continue to diminish tho demand for Now York
exchange will obligo currency shipments from
hero to Now York City. III fact, some Bhip-
monts hnve already bnon mntlc.
In Wow Of the. possibility Of a necessity for
largo shipments Of ourroucy from hore to New
York, some OF tho ballsB Of this city hnvo lnalo
arrangements with their Now York corrcspond-
ents TO open currency accounts with them. These
doroaite Of currency will bo considered special.
Under tits arrangement. If the Western bank
accumulatcs balance to itB credit with Its Now
York correspondent, such balance ia hold sul-
ioct TO payment In currency Oh demand.
What tho Western blnks desire to mako Blro Of
is TINT, IL thoy ship currency to Now York TO
lnnke exchange, tho checks drawn against it
will be paid in currency. This iH, in fact, tho
understanding with which many Of THO deposits
III the banks Gcro were nude during tho panic.
nrr tn cf inI n IF
business with tho Woat would bo eata6liBhel by
tho New York banks. This, however, would not
hoip tho New York banks out Of their trouble with
a er te 5a sS5istds od sos So na o + "9 ' Y
would admit Of tho New York banks going
on to llqtidate their old indebtedness for depoa
It's by collecting their old bills receivable, aud
thus gradually change their whole business to
by tho banks Of Chicago. The Now York banks,
however, will find it moro difficult to follow this
policy, from tho face that they aro halnperel
with thes 10 loan eortifcatsa1tea together, tho
they will find no complete solution Of thoir
trouble except for such as aro strong enough to
cut loose from tho Clearing House Association
and its loan certificates, and adopt tho above i'll
dicatod now basis Of business independent of
each Other.
While tho situation in Chicago is daily improy-
Ing, il ~ impossible to ignore the fact that in
the Southwest and South the financial condition
st. Louis, Cincinnati, aud Now Orleans the
banks have neither currency or Now York ex-
change With Which to pny clleeks, and practically
they havo suspended payment. Unlike Chicago.
provisions, that comnsnds Gu casl,, or or thnt @
Gnu DO shipped Eastward to my dobts.
Tho receipts Of new cotton in 10 South
would perhaps have effected lnis moro
largely In tho South by this time had not all
commercial aud agricultural operations boon I'D
much hludored by tho prevalence Of tho yollow
fever.
Tho Union National Bank of Chicago has
setted and cleared off something ovor ~ ,H00, 900
Of it's liabilities Bince Sept. e.
LIMITED CURRENCY THE CAUSE OF TIE PRES
ENr DIsEnEss OF DANKs.
The London Economist Of Sept. ~, Discuss
Ing the financial situation Of this country, has
the following:
Low prices, scarce money. ant depressed tralo ars
the punishment Of artifcaI Initiation aud excessive
int what IL not a. IL should 10 ts tla here should
be deficiency IN the cash basIH Ut credit No doubt,
under such circumstances that dencency IL exceed.
noles, II the banks arc allowed to issue them. aro
naturally hugmcntlng an they ought to rctain colt
credit Ind means Of iiqdatins lug thoso liabilities
required. Under metallic currency, this nugmcnt-
Ing reserve ean be rsrleata.ed from e store Of The
tenn Of iucouvertibo paper Of limited amount, there Ia
no such comprehensive field III which to aeek
the sources Of replcnshcnt. The Of augncnta-
tion nre strictly conhnel to sing1o country aud to
tho amount Of currency issued by tho Government.
The difficulty Of sound banking, therefore, is extreme
In country where p1rer currency OF fixed volume Ia
tho sole-egal tender, wI.iio trade is quickly extending
p.a 5axs IN as5 aaay t man eT ls
papor7 They must bid for It against the trading
community they mus. raise the rate Of interest
- possible md must let out IS liio as possible.
stranencl for currency, md wlero many transac-
tions, which would ordinarily bc profitable, are hin
Is agreeale e NJ banks ior i tlat NY
aro to essen their Profits q. both sides ut once-has
s IL n so fee1s ee s 0
smaller sum. Iii part this diu,inution Of banking
profit viii 10 con1iterbalaucel by increase in tle
rate which tho hanks charge for their loans. But
completely BECAUSE t.u n,nount Of the loana which
s qoss ay an With sngs ~a ss a h of @ II de-
turc to the CUSTOMERS of tho baf, and Of dHpuublo
nroht possibly even Of loss. 10 the bunk T.
full action. timo Of rapidly apprecsatiug currency
il always likely to hc Of deficient bunk reserves,
u 10 is 10 when tho currency 80 a1Irecinting is au
arf I'LL currency pecnar to tho particular country
where s aeresation hnEeps and not n1rs
tho whole world.
The foregoing, it will be Eeon, conincidos with
sho rlows expressed in this column of THE TnIu-
usE at tho begi.!'ling Of tue panic; II WIS In
tue belief that the situation demanded roleaao
OF tue financial interests Of the country from
the cast-lron bautls of circulation limited to
my amount by law, TINT VIC haye several times,
within the past few weeks, indicated tho repeal
at tho lognl-tetlier character Of greenbacks (ex-
cept for debts contracted prior to slc repoa) US
The only rudical means OF roliof. Wo are rich
in commodities but poor III cash. because
wo persist in viewing tho money used by tho
rest Of the world As 1nere commodity not ayal-
ublo for our purposes Us currency. What VIC
need il to allow all Tho Becie that comos to tB III
payment for our crops to be added to our pres-
cs,t circulation by lopoaliug tho Legal-Tenler
act as above indicated.
LOCAL STOCK AND DoSD MAHKET.
MesBrs. Preston, Kean Il Co. quote III follows
this alte1nuou:
ENying Selling.
of