The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1874-06-29
FINANCIAL and COMMERCIAL.
The New Influences at Work in
Business Circles.
HOP E F UL SIG N S.
Labor and Production the Basis
of National Prosperity.
Some Words Of Caution Re-
speeding the Stock Market.
WALL STREET,

WALL STREET. !
SUNDAY, June 2S, 1874.
In this market the new Currency act has been
varlously estimated contraction or imitation
measure as the separate interests OF those who
regarded it Influenced their views, although IL is
difficult to how even the glamour OF selfnterest
could blind any one to its
PLAIN PROVISIONS OF EXPANSION.
That 1t is not imitation, in the of adding any
thing to the volume OF lawful money, except
far as 1t makes the 500 100000 drawn from the
called 'reserve" part Of the permanent circula-
ton, not TO be Withdrawn until the further action
OF Congress, must be conceded, well as that in
abohshng that quasi reserve entirely it does not
by any means favor Initiation in the true meaning
Of that word That 1t permits larger bank expan-
sion, and the difference between that ana imitation
pointed out III this column in the early
days OF the debate In Congress upon this
financial question, is the strongest answer to
those who assume to regard 1t as measure OF
contraction. The precis, application OF this argu.
ment Is shown, although only an Initial ign, in
the analysis OF the bank statement yesterday,
which, under the operation Of the new bill, offers
the following exhibit
RESOURCES.
specie $19 ia 300
Legal tenders. 62,923. 200
LIABILITIES
twenty five per cent OF which is $3.50, 500
showing surplus OF resources over
the required legal reserve of......... 24,4O5, 200
And a gain over last week of.......... 5000, $50
In this analysis the circulation Is wholly dropped
from the account. both because the new law no
longer requires the banks to maintain themselves
reserve against that item of liabilities, thus
releasing such amount or currency as would other
alsO hnca
the five per cent reserve required to be held at
washington Tor redemption purposes amounting
TINS week TO $780, 65) Ii counted by the banks in
their deposits, and banked upon in the issue OF
credits precisely as though it were In their own
vaults. The total circulation OF national banks is
about $40 10000, the limit OF the legal tender
circulation now fixed by law, and all OF 1t belong.
ing to the active money OF the country, is
$685., 200, which furnishes basis for healthy
bank expansion, or bank credits, to the extent OF
four times $722, 600. When 1t is considered how
much OF the business OF the country is done
through bank paper, checks, notes. &C., this will
not seem large amount, nor will IL strike the
thinker as being any step towards imitation, when
it is considered that 1t is accompanied by pro-
vision for redemption, which, however Slight is
yet recognition of that feature as sound one in
healthy banking, and looks, II it does no MORE
towards that ultimate ground or perfect safety
in the knowledge that the holder OF national
bank note may at any time, If he sees ct, force Its
conversion into United States note and that the
machinery exists for that conversion without the
necessity Of applying force, inasmucn as the same
security is behind both, although In different
shape yet 1t Is
HOPEFUL STEP
in the right direction, a beginning, the end Of
which is the solid basis Of specie redemption. The
f;nvx fk,<
thought. induce more conservative action the
part Of the banks generally, as being under he
obligation OF maintaining that redemption fund OF
five per cent OF their circulation in legal tenders
at Washington; and redemption being beyond
their control they will also be obliged to maintain
themselves at home in such condition that they
may be always In position to meet any dra
that may be made upon them in consequence OF
any sudden reduction Of the Washington reserve.
Tue operation 49, OF course, after all, experimental,
as must all legislation upon the finances and
banking be until we have reached specie
payments, when the legal tenders are wiped
out OF existence and bank paper is
constantly chnngeabe into gold. Then we can have
free banking and other reforms that now would be
dangerous to attempt. Falling far short Of this
1t is encouraging, however to note in this latest
effort OF Congress to give relief to the country on
this financial question, the admission which was
so completely lost sight OF in the first bill that
challenged the Presidential veto, that
PROVISION MUST BE MADE FOR THE REDEMPTION
OF ordinary paper money into something of more
secure value even If that security be only crea-
ton of the imagination. There is hope in this
dawning recognition OF great fact, thus awaken
ing as 1t were to the great principle that underlies
all monetary safety, that before the meeting OF the
next Congress our Senators and Representatives
will have grown to an understanding OF the fact
that the only solid foundation OF national pros
perity the only secure resting place for national
faith national honor and national integrity, is to
be found in a hard money status.
There is another feature In this new Currency
bill which promises also large instruction to the
next Congress. That is the provision
for redistribution OF the currency. 1t
will determine how far the sections OF
the country that have been clamoring for more
currency are in condition to avail themselves Of
the privilege contained here for their benefit,
which permits them to have more currency ii they
have anything to give In exchange Tor it. 1t will
be recollected that 1t was argued against the I'M
reasonable attacks which some OF the more de-
monstrative representatives of the South and West
made upon the East for absorbing all the money or
the country, that money was only the express on
Of capital, and 1t was because the capital was here
we had the money also; that
IF THE SOUTH AND WEST HAD THE CAPITAL
they could soon monetize it, but that lacking that,
no legislation could put money into their
pockets any more than 1t could make
1t lawful to take 1t out OF other
peoples and only to that extent. This bill offers
the opportunity OF testing the correctness or
falsity OF this argument. The Comptroller OF the
Currency has announced his readiness to receive
applications from promoters Of new banks and If
the injured sections have the capital to engage in
such ENTERPRISE IL will soon be clearly shown. It
is to be hoped they have, as the greater prosperity