, 1873-10-17

may DO expected at any time. can tic up
those securities 30 TINT thoy cannot DO sold.
II this construction Of tho Bankrupt act, and
there Is no question about its correctness, could
broak up tho practice in which tho Now York
banks hayo boon extensively engaged, Of mixing
large advances Of money Oh call, and permitting
overdrafts Of accounts, on the Pledge Of Bpeou-
lativo stocks, It would DO blessing to tho couu-
try, greater than any that the Bankrupt net las
heretofore afforded. Though this much can
hardly DO expected from it, the influence Of
the injunction should call out other correctlyea
Of similar nature. Tho dangerous, porniclous,
aud almost iniquitous practice OF using tho cur
roncy OF this country to manipulate stocks, to
tho detrimont Of the mercantile clasaes to whom
it actually belongs, must be broken up by law.
The first legal step to bo taken in this dircc-
ton is In tho shape Of an amendment to the
National Currency act which shall prohibit tho
National Banks from paying intoroBta on do
posit8. Tho metropolitan banks have for many
years attracted a largo line Of country deposits
by paying tho country banks por cont intorest.
By this means m amount Of currency has boon
concentrated In New York. The bankers can
not afford to let it lie idle whio paying 4 per
cent interest on it; aud tho only way in which
1t call DO made available md profitable Is by I'D
vancing It to the stocl1-brokors on call
ut per cent. and frequently with bonus
over and above tile legal rate Of intorost accord
ing to tho necossitios Of Wall street, As this
business has been moro profitable than legiti-
mato banking, the National Banks havo gono in
to it extensively, paying per cent on Ill ooun-
try deposits they cau secure, and oven higher
rates on timo deposits from locnl customers.
Tho instances havo not boon raro in which bnnk-
stock spoculations in order to keep their fluids
employed. Moanwhile tho merchants, who aro
legitimutoly entitled to tho loan and discount
business of tho bauka, have been driven to tho
curb-stono to rase money In order TINT tho
banks should carry Vanderbilt md tho
whole tribe Of spoculatora. The most ef-
fectual way to put stop to this reckless and i'll
furious businosH Is to prohibit by Low the paying
Of intoreas on deposits, 80 far as tho National
Banks are concerned. This will DO legal no.
tce, 80 fur as tho Government has right to
givo It, that the praolco is usafe. IT, after that,
tho country banks choose to plnce their funds
on interest in the hands Of private bankers, With
tho consciousness that they will uso tho money
for speculative purposes, it is their own lookout.
They then become, as it were, partnors in tho
speculation, and they must stand tlo losses
when thoy occur. A National Banking system,
however, is defective which does not provide
depositorioa whoro ut least tho temptations to
speculation are removed.
Tho only objection that can DO urged to this
radical roform is that the stock market will be
permanently weakened. So far from this being
legitimate objection, it is one OF tho groatcst
benefits that will be derived from tho change.
Lot stocks touch bottom and stay thore. Who
will DO hurt By 1t Tho Vandorbilts, Goulds,
Drews, Tom sootts, and their pign1y imitatols
nay bo laid low. but wlat Of it? They ale a
giant spocioa Of gamblers. who have grown rich
at tle o1ponse Of tho farmers and merchants of
tho country. If thay should all go by tho board,
tho country would bo none lilo yorse for TIM
riddauco. At this time their failure, and fur
thor collapse in stocks which would be in-
cident to It, would not materially affect
the commercial classes. Tho collapse must
como, and thero could bo no bottor time for it.
Tho present Hhrinkage in valuos ia IN indication
that the funds of the mercantile classes ad-
Vancea by tho bankers havo been largely with
drawn from the speculative stocks. Let thom
60 down to what they aro actually worth on tho
basis Of tho property they represent with all
the water squeezed out Of tho1n. Tho Vague
impression TINT further shrinkage would bring
additional distress on tho country at largo IL
erroneous. Union paoilc, for instance, isquotetl
from 10 to 1G couts. This is Just 1t or 1G cents
more than 1t il worth. Tho ontiro capital stock
Of tho road is "water," and very dirty
water at that. It waB Issued without any
authority Of law. Congress- authorized MI issue
Of only what should be subscribed and paid for.
AB a mattor of fact, it WAS oithor giyon away or
Issued al dividends to tho Credit-Mobillor ring.
Tho dobt Of tic road itself represents q largo
o@eoca o'oA A"o ~1ak sAo HkooAt LuGfelDTCt CGprG-
souts nothing. So lot tho Now York Central 70
down to figure which will represent tho roal
cost of the road, aud not tho S44, ,00u, 600 of
fictitious stock which llas beon aldod to it. Let
all the rest of these stocks follow suit, aud, II
thoy paBs into tho lands Of mon buying
them for OIL Investment at their legitimate
worth, they may stay there. They certainly will
If, In the meantime. tho National Banks aro pro-
hibitod from paying interest On deposits, and
othcr economical moasuros arc adopted by tho
mercantile classes to keep coutrol Of their own
money. There will then bo no longer q periodi-
cal disturbance Of tho whole money market OF tue
country by atock-panics. Wall street will Aayo
lost its powor, which 1t maintains only on tho
money aud credit Of tho mercantile clauses, WHO
llayo to boar tho brunt OF tho troubles produced
by the flying Of itB kitos aud tho bursting Of its
bubbles.