, 1874-02-25
MONEY AND COMMERCE,
MONETARY,

TUESDAY EVENING, Feb. "a,
Ausinose In financial circles aul III goncra
fado Is worry dull, M is shown by tue cleariug
" tho banks, which, have dwindlol down to at
Verago OF less than 92,oo0,000 per day, ant
o.day wore only $1,000, ,000,-on1y lttlo ovo
la'f tito average daily cloaringa in tho mouth q
January. Doposita at tho hunks are very light
Honey IL abundant, md tho domand for accom-
mosiation is loBa than IL was waoh ago. There
Ii vory lltt'o preparation bong n,ado 10 pay fo
grain to como In on option contracts on tho frs
day OF March.
Now York Exchange WAS quotablo ut b0o POI
T1,0o0 discount to-day.
TIE DIVERSITY OF NOTIONS ABOUT TIE ErFEoTt
OF FREE nANKlNa.
IT ia amusing to noto tho diversity Of views
taken Of tho free banking question by different
periodicals. Some Of tlicm Chin that the
removal OF tho legal restriction Oh tho aggregate
amount OF National Bank circulation would pro-
luce cxactly tho opposite result from what othora
argue would bn experienced. For instance, tho
Boston Financial Record publishes long lottor
from Mr.. .. T. NonrBe, OF TINT city, to Col. Dar-
ton Ablo, Of St. Louis, in which hoargueB that
Th9 moro hank currency VIC have, tho less capital
10 10 deposited for an ipto Of s9oOo5 crreney aro
worth at least s. The bank Invests In bonls
900 moro tlau tho amount Of currency received
Tcil II must hold reserve against to circulation is
per cent III tho country bank per cent in tho re-
asssng 5 M efss n SSerase 81 oysr 20 Per sent Rsy
# 5ank currency thore + saa Daefs ssfsro
tho Investment only $720.oo0 ca1, 10 loanod.
:, on tlis imaginary looking up" Of capital in
eiie Unitod Statos Iroaaury, Mr.. Nourse bases
tho theory tint ''monoy would DO moro ecarco
md tue rato Of interest," higher than now. Ho
soelns to overlook tho fnct, however, that oven
If tho bonds were not "lookod up" in tho Treas
try vaults, thoro Is no plan by which tho whole
,l20, QUO of their market vnluo could be util-
ized aB Danadta capital. The bonds themselves
cannot be used to the extent Of thoir market
value as currency, and banks would not make
lontla OIL them to moro than thoir par valuo, even
n they did 30 much. Besides. banks would only
!oa1l on tho best securities FOR short timo aud
tho difficulty md dolayof continually negotiating
new loans from banks OH tho hypotlccatlon
OF bonds would bo equivalent to mora tl1ar
2AO0.000 Of "doad capital" in $1,120,000 Of
market valiie, Of Which Mr. No,ltso talks. There
must necessarily always bo Bomo "t]ead oapItal,"
aa Mr.. Nourso calls it, in any security hypothe-
cated with q bank, otherwise tho transaction
would only be the outright purchase Of tho Be-
curity by tho bank
But, on tho other band, there are many who
seem to think that FREQ banking would produce
exactly tho royerso results from those above
foared by Alr. Nourso. Horo, for instance, is
Tug Aurora Herald, Which prints nh article from
thlB column aud comments OIL it al follows:
,n 1T lHthoNE heem6 TO thihk THIS rrcc banksnB}
Nouau not increase tue currency, but to outside
tho financial ctsclca 1t nppears that Ii tho Governmout
shnu'a virtually Eay to every who haa money 10
ceiye per cont Interest Oil tho whole anoun and
have % per cont Of back ugain which yo,l may loa
dcncy would DO to mako currency moro nleusy aud
bring down tho rate OF intesogt.
Tho Herald is in error in sovoral important
points: First, we did not Say that it would not
increase the cirrcA=-. hut that it would not IN
n tntt
two terms il this: It IA possible for tho Nh
tional Bank curroucy to ihcreaso without ca11s-
ing my depreciation in the valuo Of groonbacks,
consequently there would bo no rise in tho price
legitimate, that it was not initiation. On tho
thoy vii doprecae and A'f this 'n'tsasid Sold
prove that tho increaso caused initiation.
that any increase of currency must necessarily
nom imitation, and produce that popular ab-
surdity Of "cheap money" argues that this
would bring down the rnte Of interest,"" Now,
Ill experience proves thnt intlation Of tho cur
roncy encourages speculation, anl TINT this
tanseB higher ratcs Of interest.
Tho ronl merit Of the FREQ banking proposition
10. TINT If it wero authorized it wonIl stop people
from mnddling their brains about the insolablo
problem OF how much currency we need, mud
nbout the effects OF deficient or excessive,
Eupnly OF currency, or the supply OF loanablo
funds.
Latest,
New YonK. Fob. :4.--Aloney caey at 1 and s.
Exports Of produce for the week, sc, ass, ,305.
Customs receipts, 95i7, ,000.
Sterling dull ut - 48lGD48l11 for 60 days. and
81 4@4,S8 for sight.
Gold stronger, advancing to nnd closing at 113.
Carrying rites 2 to !, and for borrow fiat.
Tho Assistant Treasurer disbuysed 1856, 900.
Clcarings, $4,000, 600.
Governments steady.
State bonds quot. Tennassoos strong.
Stocks dull aud steady, and without special
md paeiac preferred. which declined from 2OH
TO 1874. Tho principal business was confined to
Westarn Union, Lako Shore, aud Union Pacific. |
salea between 10 al,l o'clock woro $4,000 shares,
of which $500 wero Western Union. 12,000 |
Union Paciic. t. 500 Lake-Sh and 5000 At. |
antic & Pacific preferred.
49,. GOVERNMENT BONDS.
COUPONS 'Gourons, .1ooH
coupons, G3....."'.id1A Coupons, U.s. .... ..ll9A