New-York tribune., 1874-08-17

people out of debt. The more imitation we
have. the more debt there will assuredly be.
MANY banks. we conjecture, might strengthen
themselves by scoring off bad debts and re-
ducing the dividend if needs be.
Let lis now look at the cash on hand. Ihis
consisted in June, 1873, of
Ies,I ,cnde, note. and certificates legal tender notes ~
Deposited Uatei states Treasury 3 e3 20
National Bank -o'''
r.,, ...........................s sI49 44G2I3
In June, 1874
Saroos Bank notes 23A932i@
ro,, sI7l4798l2
Under the present law seventeen million
dollars must always be locked up In the
Treasury at Washington, or III the safes OF
Adams Express Company. and, therefore,
wholly unavailable for the Transaction OF the
business of discount and deposit Deduct
81, 100000 from Sl14,OOO,OoO aud we have left
Slj700O,000 as the sum really available for
the three purposes of Q) expanding loans as
trade revives, (2) making the ordinary pay
ments over the counters of two thousand
banks, scattered from end to end of the United
States, and (3) for use as a reserve in times
of pressure. The sum is none too great for
tho payment of deposits due to individuals on
demand to the aggregate amount OF 23,OOO,0OO.
1t is, in fact but eight millions greater than
the banks held last year, three months before
the panic, and how quickly they were pros
trated is still fresh in the popular remembrance.
This proportion of cash to liabilities is in re-
markable contrast to that which Is thought
necessary for safety and steadiness in Europe.
For instance, the Bank of France aud its
branches, owing avg. y $jlO,OOOOOO to note
holders, and 392 100000 to public and private
depostors. or $500, 100000 in all, held :}jJ,0OO
900 in specie, or above forty per cent of its
entire Indebtedness of every kind. aside from
the capital of the shareholders. There is, of
course, difference between the Bank of
France and its branches and our system OF
banks. Likewise there may be very great diff
ferences in the size, weight, color, strength,
and courage of two animals, and yet both
may be of the same species. We conceive
that if our banks eleven months ago had held
stronger reserve of greenbacks and bank
notes they would have met the demands made
on them with more credit TO themselves and
less injury and alarm to those who had
trusted them. The more able bank is 10
meet sudden calls from its depositors the bet
ter bank it ls.
That ability depends. among other things,
upon the amount of It's cash and not upon
absurd distinctions, such as calling money that
cannot be got hold of part OF the cash reserve,
reckoning as reserve what. for twelve years.
has not been used "a money, and refusing the
name of reserve to bank notes which are
everywhere and by every bank and by the
o. It-nlf ted Ifs
debts. A bank has $2OO00O in bank notes.
1t sends them TO Washington and receives
greenbacks in return. In the jargon of
the day tho "rcserve" of that bank Is
said to be strengthened. its lending power in
creased, and for miles around the change is
supposed to be most potent sunshine for the
Fall trade. In reality the bank is not a par
tcle stronger in cash than it was before.
Adams Express Company have done little
business, and so has the Treasury, and per-
haps clean paper has been substituted for
filthy rags. The advantage of a currency con-
verible into gold is that gold may be OBJ
tanned for the payment of debts abroad, when
merchandise or credit are temporarily not avail
able. This labyrinthine, red tape, oY-wagon
contrivance for the exchange of dirty paper
for clean serves no such purpose. man
might lust as well attach dollar bill to the
weight of an eight-day clock and let it de-
sceud for week, for all the effect this I'M
wieldy process misnamed redemption, has in
" accommodating the volume of currency to
:" the needs of business Seventeen millions
of money are locked up permanently. like
deaths head in the den of an astr0lOger.
That we see, and we acknowledge the power of
inly uSt hp N
it. But we don't see the good. No man or
bank is going to send in money for re-
demphon just for the sake of getting
rid of it. If he or the bank sends it
in, it must be for the purpose Of get
ting something that can be handled
without risk of infection, or on account of
some Fictitious distinction made by the law
between two kinds of irredeemable paper of
precisely the same value. Now the new law,
by putting the required grecnback reserves of
the banks at next to nothing, and IN hund-
reds of cases at less than nothing, has well
nigh annhilated the chief cause of this fac
titious distinction. OF that we have no COM
plaint to make. Ii is for this reason that we
reckon the true reserve of the banks at the
sum total of their combined greenbacks and
bank notes. The true reserve, under the Op-
Grafton of the present law, is but trifle
greater than it was year ago. The banks in
this city are stronger, but the thread by which
they hold the large balances of the country
and redemption city banks is slight. The law
no longer provides for their permanent keep
ing in New-York. In the future they are
almost certain to be more frequently and more
extensively drawn upon in the Spring and
Fall than they have been in the past. and the
position of the New-York banks holding them
ia corresDondngly weakened. In conclusion,