, 1873-09-18
MONEY AND cow MERGE.
MONETARY.


WgnNEspAr EVENING, Sept II.
Affairs 1t, tho local money market to-dny wore
e,u!otor thnn yoHtcrslay. Tho domand from tho
country for currency, though still largo, was
loss than yesterday.
Now York exchange wha slill worry fiat, owing
10 tho largo amolnt oil tho marhot, md tho do.
mand for conversions into ourronoy. Thoro
xero plenty Of sellers at a1.25 por 81 900 dis-
,onnt, but fow buyers, and worry littlo was done.
ntonoy Ia growing littlo closer, though nt
Iao banRs tsso Hupply Ia amplo to all approved
borrowers at 10 per cont.
Tho heavy doclino In Northwestern and Rock
lsland stocks to-day shows TINT tho comp1ica-
lions In the oaso of tho Canada aouthern,--
whose Btockholdors aro mitch the nnnlo as In tho
Two 1rst mentioned roadB,-haro assumed \ loss
favorable aspect.
The latost aspoots OF tho European crops
shows . probability for an Increased doMnnd for
both wheae md corn from this country to supply
tho dcdcionoy Of crops in England, Francc,
Hungary, nud Italy. It IL d notable fact TINT
caygoos Of wheat havo 1atolY boon shipped from
New York to Marsollos, and alao. ports In
Italy, which havo heretofore always received any
necessary foreign aupplY from tho Black Sea.
Bat this is not all. The Indian sorn crop Of
hath Hungary and Transy1yanta Is reported to
bo failure in NIL parts Of thoso Provinces.
THIS crop, though seldom of sufficient magnitude
to furnish alarga oxportablo surplus is relied OH
forhomo consumption and to that cxteut-being
4 cheaper article than whoat-booomos subBtl-
tute FOR it. Tho uao Of corn as substitute for
wheat has increased largely in Europe In tho
paat two years, aa is shown by tho groat
incroaBo in the exports OF corn from tho
f1t,tkn E{nf,
fore. promises All increased foreign demand for
corn MS we'll as wheat. In New York also the
stock Of corn h small and II IL feared there that
the pressure Of wheat to market will block tho
movement Of corn, and thua lcayo Now York md
Now England ut tho closo Of lako navigation
with short supply Of corn. In this situation
and In Wow Of tie Insufficient means Of trans-
portasion for Western products. it becomes a
problem as to which shall hayo the preference
cut tbero la mitch loss inauoo,nent to ship corn
anwheat though, from prasont Appearances,
th,B dl11oronce may net Continue 40 great during
tho rest of che season.
In connection With tho doflcloncv Of trauspor-
tntion it IL claimed by many railroad mon thas
Lie difficulty, as far ns tho railroads aro con-
corned, Ia not 10 much tho lack of roads as it is
The lack OF storage capacity In both Now York
mud Chicago, and alao to somo o1tont, tho lack
Of butter systom Of transferring freights in
Chicago.
OPPOSITION OF TIE NATIONAL BANK MONOPOLY TO
BpEotE RESUMPTION.
Eyidonco accumulates that some docldod move
will be mado Ia tho noxt cougreas for free
banking. By this wo moan almply tho re-
1novnl Of the monopoly clauso in tho National
Cnrroncy act, which restricts It's volume to 1854,
tra 9ugoo0; n,o,nhar. l. is nov reported that
of thotna G. L. Merriam, OF Nav York, have
nvowed their inton1ton to urge the repoal Of
tho monopoly clauao III tho next Congress-. Tho
emergency that will force this iseuo upon Com
gross s tho requirement !n the aw Of July, 1870,
That after tho s54,00o,0 900 Of National Dauk cir
c,llaiion authorized by that act shall hayo been
taken up, 925,00o,o00 moro circulation shall bo
takcn from bankB in tho Eastern states and dis
trlhnted among banks III the West.
Tho National Banks that hold tho present
Sa54 4,O00,000 Of circulation are opposed to
Tho repeal OF tho monopoly clause. because
thoy arc opposed to specie resumption. They
fcar that the increase in National Bank crcula-
tion villas it should--bs accompanied by n
increase Of bank notes. This change in tho
proportion Of groonhacks to bank notes ia tho
most certain method Of getting back to specie
payments, and thln is just what tho banks do
viii be an organized opposition from tho banks
Tho Eastorn National Bants, houovor, find
themselves in q dllomma. BY. tho law OF
5a 3saSss 1S tsy e'' of fe"psss sss to
circulation to now blnka in tho
West, tho only alternative being IN increase OF
Che aggregate bank circulation over the 1884,
900, ,0uQ already authorized. To meot this ouler-
Beucy and at tho Hnmo time to preserve tltoir
monopoly Of bank circulation so as to prevent
huy progress toward specie resumption, tho
Eastern National Banks favor, and have got tho
Comptroller Of tue Currency to recommend, that
Congress shall authorize an increase Of 5a5. .OO0>-
nan 0f National Hank oirr111atinf1 n mt Ha,E
in the West aud South. Tho general argument
urged against tho repeal OF the monopoly clause
is the fear Of imitation from excessive isauoB OF
the bauks. We have. however, shown ovor and
over again that such fears A,o groundcss and
ridiculous. Tho more the banks increase their
circulation. tho moro they increase the propor-
lion Of bank notes to grccnbackB, aud, conBe-
3ucntly, diminish the lneans Of nominal rodsmp-
lions OF bank notcB in greonbackB. The logical
result Of this process would 10 to make it noe
assnry for tho banks to either retire their circuia
lion or provide tho means Of 0citdl redemption in
specie. No lnatter which they do. thore ID no
danger Of tho imitation Of tho banlk-note circuln-
tion. It is an establibhod fact in finances
that bank-noto circulation, secured by
deposit Of boudH md convertible on de-
uiand into Hpocio, cannot bo inflated. Tho
Issuing banks TINT redeem their circulation on
demand will find it impossible to put out moro
notes than are required in tho business Of tho
country; tho surplus will Immediately fow bncl1
10 tho bank for redalnptlon. The increase Of
Natlonat Bank circulation IN proportion to groom
backs Ii a stop toward this conditlon. II. in-
stead OF S354,000.00 Of National Bank crcula-
tion and s35G, 100000 Of groenbaokH, as now,
there were 5000, 900 Of National Bank uotou
and S2l0, ,Go0, ,0oo or evon $3.50 900, Of gteen-
backs, tho great bulk Of tho la.tor would bo held
as reserves by tho bauks against their circulation
and deposits. They would DO 10 scarce as to COM
mand aslight premium over bark~notos;th would
start system Of redemption Of National Dank
notce. II, then, 25 per cent Of tho customs 1u-
gold, this would DO tl,oir valuo in tho market.
This would DO specie resumption brought about
by natural and gradual process without any
shock to business. or any appgeciable shrinknge
Of values. which aoems to bo tAo great bug-bcar
iu connection with roturn to specie basis.
2, Tho hrst stop in this process IL, however, to
remove the restriction on tho aggregate volume
Of bank circulation. Lot the country have
Just as much currency as 1t can uso, just al
much Us there IL capital to take and secure by
the deposit OF bonds under the exiHting Eegula-
tions Ut tho National Currency aut. This would
eirecsaauy close tue mouths OF those who aro
infatuated with tho notion that an increase OF