The New York herald., 1873-11-12


i. n ssss s:
s ss Ss Sn IN e Perm e Is. q ns
Ton Che and iedissrstions of single $smDsI
ssndass IL s.ias ss''7sts @s NE psSs dsS.nss
:. . ia.reSsss private sss%: 9, dealing Win
:Ss +:
%unisy 0 and public sdmin:iIsicSs srsss ntsrss!S
long experiences aSsIa s' has sss ssnctfaed. % w ~
esd ne
What are rsSa,Sd % n IN ne IS , Of
security their SSsness. and aTst and mSst PromI
srss sns Or o. upon
The requirement Of legal reserve" Is now engaging
special @ sna IL D1 y
ratio q legal tender notes 70 liabilities The practical
81 sw II s -n9 Ss ss
meeting sudden contingencIes and which therefore,
sprd,y in % Law requiring that rsseryen Y = mus; must Be
a S
S%iiissy ssn$ssSs; e asaaisIy iasssusSs$ $
@ s Ss D Ss q n
%u;t hs sS
in sa to pay was portion e. na e
in the Of any important central such
ss exists in other commercis nations the associated
financial extremity and upon their stability and sound
sisis q
apa a S ns n son nd h ns
for M sse ySur M b point t 70 the conse
portion oi that fund in actual in cash as the
n has seen that the federal prncple which
has .ppsd 70 Dsn1ns The use
used sdsetyey in regular business, BY ksspiax TIVE
sseh eaysSs Il q avcS cnf Spc
banks in times Of panic; and much speculsa, la
Question how rs idss q eiss5ng," used through
P e 60 as u s a n
S saa IL %
this important sxlgency, your committee recommend
.ns 4 s VEN .s .as ass so%
msrce universally al g 5ecognize. ,., ,..,.n. .,,
that S' Of Be IN the
y ns Hm
| to Il s Our
IN a
and legal tender notes and at the same tune compes
banks @ receive money the national banks,
teal uses rsserve we are troubled BY species Of
ary upon our present anomalous condition that the
country from be absorbed
largely prevailed. that the business this
deemabe paper. tha, therefore there can be y, no
peisd snd the E thai
IRON It's nature limited in volume subject 70 sudden
tsetIon; Recent e1peTience has shown 6ow RAPIDLY
ciatea insatoSs and, ior practical uses how mad
sauate is the reserve held by country banks That re-
may consist # deposits banks q the
thesr own ver reserves banks sy d New York.
where again It Is sablect 70 further redncton from the
sS eS a. NJ
banks M Ts sas oas Sy ny a. a mach
ten per cent Of their direct
that portion Of this anai may consist Of coin
N R I
sT
against a RgOS was or ssans the true interests Of
The abandonment Of the practice Of paying interest
upon deposits viii remove great inducement to divide
the
the e0sra Ths banks New
York, the ultimate in financial emergencies,
ss
S tie e 0S
me- might % sssy CON
Win sesssssIy re iSsssSIy xth
s
interest requires relaxation Of the rigid legal require
ment in respect to the reserve to be held by banks in
4 % a ss ss S sve4y
on to carry Its Just proportion and no bank whether
evaae its uii share Of this Sarden '"
Your therefore fore that all the as
ments Of the National Currency act BY keeping hand
than twenty per cent Of their total iabies to the
public be required always t1 noa at fifteen per
tions the Clearing House Committee may, from time
slggesion has been made. which your committee
consider worthy Of NOTES. because Il has
and i may assist n u o. ns
than two and half times its capital and surplus
Tho arfvn or anI SnIoks unon hanks
has proved great public and has
Tee approach its consideration with some embarrass
ment The custom orgnated in the natural inquiry Of
dealers and Tor many years i mad little nsnincsnse
50 marked were not resarded as bdns upon nstu
tons in the nature Of oical scccpance, and were
about year 1850 that new and influential ID;
an act taen vague and uncertain BY Charging such
checks The their since when they
the q
drawer Of the cheek the stated which il thus agreed
os
cden to human transactions and places its shareholders
under perils which they never in tended to assume.
1he power Of certifying checks is necessarily en-
trusted to clerks or subordinate officers, who
are employed 10 perform the ordinary and more
mechanical duties Of the ank, band who are sup
posed to be strictly limited In giving to every
dealer only what has before been received from him.
And the power of bestowng credit reserved for aber
and more experienced men Themselves personally iden-
asGp
flying uncovered checks, pursued III institutions,
entirely this established order and while the
responsible council is carefully celebrating smaller
credits noncommissioned ohcer is freely bestowing
them In larger volumes, without security,
comparatively irresponsible men, So extensively has
this practice been pursued by several institutions that
the amount OF such checks which have passed daily
through the Clearing House has reached in some in
stances tc twice and three times and In
four and Ave times their capital stock, and this through
long periods OF time.
the risks attending this practice 1t multplies
svely the which such institutions through the
Clearing House and the consequent balances of the
changes with their associates which the capital OF such
banks can never adequately guarantee.
The most striking commentary upon the dangers OF this
Aurtp la