, 1873-09-03
MONEY AND COMMERCE
MONETARY.

TUESDAY EVENING, Sept. z.
Curronoy is atill flowing In 1intlim'lsl,od vol
anlo from this city to aln.oat oyory Important
town in tho Northwest. Tho or1ora from, coun-
try banks to-day wore In tho aggrcgato equal to
any day lnst wook. Tho total amount Of currency
sent out during tho Inst tweuty days Las been
Eroator tllan wan cvor sont out In tho sumo
longtl Of timo hoforo. Tho continuance Of tho
n,oyen1ont of currency, and tho hcnyy receipts of
wheat horo nnl ut Milwaukee, Indicate, as wc
mentioned some days ago, TINT tho entire
"heat crop ID on tho nlovo. Tho foars
entertained by many 1aat week that tho avn
lanohc Of whoat would put froights up and prices
uown, and that finally tho grain would accumulate
hereto sech an extcnt as to abaorb tho loapable
funds Of tho banlsB aud nako money tight, eoonl
not unlikely to 10 realized In all pattioulars.
FroightB lavo advanced, aud prices Of both
wheat and corn llayo declined III proportion
Money is abundant enough yet, but It cannot
possibly romain 80 If tho grain accumulatos
here.
New York exchange is still fiat enough. aonac
sales were made today Mt 9125 por g, 900 dis
count; hut there wero fow transactions, and
nearly nll tho banks proror ordering currency
from Now York to selling exchange at 80 heavy
q discount.
LAM AEEElts tHs
1t appears that Romo oil tho Now York Nntionnl
Banks are ondcnyoring to convince the Comp
trollor Of tho Currency and other Washington
Dfllciala Of the necessity Of ropoaling that part
pf tho National Currency act requiring tho banks
to hold 25 per cont reservo against thor circula-
tfon and deposits. Without entering into tho
"details Of the nrgnmonts III behalf OF tho repeal,
thoy may bo stated in general terms to bo
tirs that. II tho strict letter OF the law Is COM
piled with, and tho 25 per cent is kopt at all
ies ee on t, hana tr IT is oIa practically 1saleas
tho obligation to koop tho rescryo at all,- they
could ineroaao thor loans accordingly, aud thus
have greater taoanH Of relieving the money mar
ket III times OF strlnS.orcy. Tho Nov York bank
ter ablo to prevent tic locking up Of currency.
As lar as tho requirement to hold
. RESERVE AGAINST CIRCULATION
Is concerned, We have repeatedly oppressed the
opinaon that it was nupefiluous. II tie National
Bank circulation is not sufficiently socurod by
the deposit Of United StatoH bonds to tho amount
OF u per cent par value moro than tho crcula-
tlon issued on them, 1t muet 10 confessed
that y VII ho next to impossible to doviso any
practicable Byston Of bank iaBuos. Tho roqrire-
Natfonal Bank circulation adds nothing to the
security Of tho noto-holdor. Tho Government
Y M ~ much pledged to the redemption Of the
National Bank notes as it is to The redemption
~ sAAO u A91AHAtAEa A0N kAc I0fpEulutuE lulEuE
require the National Danks to hold a reservo
ngainst its $4,000, 600 pf groenbacka with
tic eamo proprioty that it requires thom
to holl roaerve aagainht. tho. $3.50, ,000, 900
Ct National Bank circulation. baaod on the $780,
o0O, 1000 (par yalue) Of Uuited States bonds do
posisod by tho bankB with tho United States
Treasurer. Even If We sForo on specie basis,
there would not bo tho slightest necessity for
any legal requirement that Nntlonal Banks
should keep q reserve on hand to protect their
nOtAH. fThA hnN1FS Hhvn TIM 1nrrn n OH In,
their bonds deposited with the Trcasuror, ever
to permit their notes to GO to protest. Tic ro~
quiromcnt to hold q roBerVo Of legal tenders
agalnat circulation ia unnecessary, and incapable
OF boing dofondel on any reasonable ground.
Tho requirement to hold
RESERVE AGAINST DEPOSITS
Is, however, quito another matter. This III the
most important, almost the only, incroaso OF 60
fords dopositora oyor tho old State system This
additional security, however, does not 80 much
conaiat in tho proportion Of tic deposits which
tho bank 10 required to keep dlcays on hand in
losal-tende money. as it docs in tho establish
mont Of q standard condition which
may be used to compare tho management OF
uifferont banks, showing which oucu arc Offences.
above Or below tho standard. 4 common sonso
understanding Of tho requirement for rosorve il,
That 1t Ia to DO nacd in cases Of necessity, but
that, when tho emergency npast, tho bank should
recover to its normal condition. II all tho mon
who arc running National Banks in NIL parts Of
tho country woro prudent, experienced bankers,
it might not bo unsafe to repeal all legal roluiro-
ments in regard to rcsorvoB; but they aro
not and, if the country National Banks cannot
afford to conform to d standard Ii per cont re-
sorye against deposits, one-ha!f Of which they
are permitted to keep, in New York; 1t is M owl
dence Of u dangerous tendency to oxpaud their
credit too much.
Tho roRorve against circulation and deposits
is. Of COURSE. held In one common fund ii tho
case of each bnnk. Tho reserve asainst circu1a-
tion is, however, useless, and tho only uso Of
If the requirement to ilol reserve
ngaipst circulation wero abolished it Tould
be all the increased liberty tho banks
could reasonably ask +; 1t would reduce tho ag.
Fregato amount Of lega1-tonder rcsoryca ra-
quired about one-foartl Of the present average
amount. Tho movement to abolish at reserves
iB beloved to have its origin in tho Wall streot
utmost in aomard loans to tho stock spoculatora
but Wall street is the worst possible source from
Which to expect sound financial principles pr
honest arguments.
LOCAL sTooK AND DoEp MARKET.
Mossra. Preston, Kean g. Go. (Buccesaora to
Liant, Preston Hoau) quote as follows this
afternoon:
o-sv86f ~. .--.,.......,..........liG33 lit
aes " " ~ ~ !11A
b-2oa Of 'o5, Jan, n1d July. 1iG75 ii7,<
b20s Of '67, jan. a.ld July,..,..... .1l211 l13t5
oo2os Of u, Jau. aud July,........ll71 l173t
lV-tV8..- .-... .......--....+...-......li3 li3h li3I<
U. y. o. tneW issue. 114ys
1o!d ttull Te!ghD D..............." "1l6H ITO
Goi1 Coupons. ....................ll53z 1lG
Sterling Exchange. e.............. 80. ios..@aesz1
Northern pacino Gold 7-30s, .... 100 Int.
Chicago City 7s.................. -. 100 Il Int.
Cook County Is s...:.:............. 1906 4 int.