, 1874-03-06
MONEY AND COMMERCE.


THURSDAY EVENING, March b.
The lnoney-markotH throughout tho country
continue plethorio, and trado continues dull. III
tls markos, tito prospect Is TINT tlllh abundance
Of mouoy will continue all tho spring. Thore ia
III, immense amount OF pork aud proyisiona
horo,-fully aoub1o tho usnal qnantity,-wlilch
will DO sold and turned into money within tho
ncxt two months Dotwoon s9.000,000 aud
$4,000, 900 OF tho capital locked up In these oonl'
motlities belongs to Chicago dealers, whoHo
usual practice Is to lend their money IN tho
spring nftcr they havo realizcd and thoro IS
good reason to expect TINT this must bc tioir
policy month or two lonco.
Now York exchange WIS tlr1ner to-tlny, with
salos as 26c por 81, 600 discount, though somo
were also mado at Goo.
FnEE nANklNd WILL START nEDEMrTIoNB or Nh
rloNAL nANK EorEs. -.
On Boyeral occasions during tho past two yearB
whom tloro wag plethora Of money in Now
York, bauk deposits have iucroaHol thero 30
much that tho increased requirements for 1cgal-
tondprB for reserves has .nado n premium OF Is
Of per cent for yroenbacsa over National l'a'lk
notes, Tha novor occurred until tho National
Bank currency began to tncrcnHo W tlio iss1lo OF
Tho additional s64 900 authorized by tho Inv
Of July, 1870. ThIB fact alone Is conclusive owl
donco lint continuance OF Lho iucroaHo OF Nn-
tom, hank notes would create q larger pre-
mi,lm for groenhnckH whenever thoro W9a n
plsthora II mo.ey. II, ,ntlor froo banking
law, tho Nntlonal Bank currency should ilcroaHo
s5O0U0OOO nboyo ltB present volume, without
euy corresponding moroaso Of grconbachA, It ia
plain tint tho premium Oil Erconbncks would IN
crease 10 nl,lcll TINT tho notes Of tho interior
National DnnkB would bo sorted out i'll Now
York, and proHoutod ut tho Now York roleom-
domplion In grcofIbacks, md II redemption III
groonbacks woro thus etartotl, aa it undoubtedly
would bo, 1t would etrectuhlly check any undue
expansion Of bunk currency. Interior bai'!s
OF per cont to redeem their circulation i'll
Now York that II tho facilities woro
available for withdrawing, their bonds
md surrcndoring their circulation 1t would 10
uono to large e1tent ut such seasons Of tho
year. ThiH viow Of tho cnso alono ought to be
conc1uBivo answer to those WHO havc got the
notion into thor hoadB that FREQ banking would
lead to imitation"
particular form, or kind Of capital which ia used
only in small transactions. For this roason 1t Ia
in demand whom tho crops aro being moyoti, and
It il required for Bmnll payments to farmors.
has no nBo for:thia form of captal,-it IL sent
East to pny tlabts, and accumulatos in tho cities.
but In tile cities bank notes Aro OF comparatively
little use at my tine. Dusinoss il trans-
country, and is settled BY bank checka through
tho clearing -houses, and Ms tho currency itself Is
M Improbable form Of capital which yields no
interest 1t becomes nuisance. nnd all the city
banks arc anxious to exchange 1t for IrcerbackB
which arc available for legal reBorvo. An in.
croaso In tho aggregate amount OF National Bank
notos would therefore incrcaso tho desire to OK
change them for grdcnbhcks to Huch nh eStent
III to Htnrt tho custom Of sorting them out, mid
thus start rcdemptions in greonbnclH.
On tho othor hand. whom tho crops wero be-
ing moved; and lnr6o amounts Of currency could
DO used ~ the country. bonls notes would Ill
iasno all they could keep II circulation. Thus,
under a FREQ banking Inv, tho volume Of paper
money would alternately expand md contract at
difforont seasons Of tho year In accordance with
average. volume Of currency might bo under
those circumstances, this alternate expansion
and contraction would not aifsct the ualue OF the
grcenbacks, because these expansions and COLI
currency for Legitimate ,,scs. Tho prolninm on
greonbacks which would start relemptiouB OF
hank notes would be realya dtscountou National
l3ank notoH, which would ahow the limit to which
that point would causo contraction Of tho cur
renoy. This would furnish a flexible currency,
WHY THE CURRENCY Is DErnEo1ATED.
Tho present depreciation of groenharks, and,
dccnab,o In greenbacks. Is not duo to an cxccs-
sivo volume Of paper money in this country, but
simply to the fact TINT the Government does not
redeem !ts notes in spocio. The presont. dis
iSo na oesfe pe5 conf Of Of for eH % is
caused by the ropudiation Of its demand
obligations by Tho Government. II tho Govorn-
ment should become involved in q war, gold
would 20 up, not because there was an increase
pf currency, but because the doubt about the
payment OF that already out would be Increased.
In FACT tho practical effect OF riso in gold is to
contract the currency, because 1t diminlshos it's
purchasing power. contraction of grcenbncks
howoyer, would cause decline in gold, not be.
EnUaD it WAH uccfGA6D In tle am0nt