The Cairo bulletin. [volume] (Cairo, Ill.) 1872-1878, 1877-08-30
THE BANK RESERVES.

| the extracts ! sent you from the speech
made by Mr. John sherman IN The sen
ate in 1860. Mr.. John Sherm"h's rcr> |
sonal C, nsistcncy or Inconsistency Is |
subject of no very great ccn cqucncc to
ANYBODY. 1t is OF supreme Importance
however, that he shall be right in his
financial policy now, no matter what he |
may have thought or said or done eight |
years ago, seeing that his policy j. the !
actual policy oi the government; hut ,
whe, her right or wrong-whcthcr wise
and Just aud eXpedient or utterly other
wise-is question the examination OF
which may, tor the present at any rate,
be deferred. Until after congress meets
ii seems very certain no change Will be
made in it; so that We may now give At
tention to Mr.. John Sherman's method
OF dealing with the American people,
whose officer and servant he is and TO
whom he owes all loyalty and candDr,
rs suppose we may safely assume.
In his speech at Mansfield The other |
evening Mr.. John Sherman made certain J
statements. the intent OF which WAS 10 !
create belief In the public mind that
there is a vast accumulation OF unlOaded |
and unloanaOle paper money al this |
time lying idle and unemployed in the |
national banks. There are now de
posted with the treasury" said Mr..
John Sherman, "by private corporations,
banks and individuals S.. 900. 000,of
which there We're deposited by the
national banks at the date OF their last
statement, made June -, S44jU0,000:
and they (the national banks have in
the cash reserves held by them ST. 500.
600 more than the amount required by
law, thus clearly showing" said Mr..
John Sherman, THAT there is no want Of
currency when demanded tor the re-
Quirements of business"
There is no installing Mr.. Sherman
designs in making these statements. lie
intended to create belief that the ma
tional banks have in their vaults and at
their command $S7 900, 600 OF surplus I'M
employed money, which they are ready
to loan upon adequate securities, but for
which there is no demand; Sll,5O0,0OO
lying idle aud unemployed in the custody
OF the federal treasury, and S42, 100000
lying idle and unemployed IN their own
vaults.
Now what ar, the actual facts?
AM examination OF the condition Of the
national banks on the 22d OF June last, as
appears from the cOmptroler's statement,
shows that they held at the close OF busl-
ness on that day certificates of deposit
with the federal treasury amounting to
S44, 10000. II these certificates of de-
posltl represented idle, unemployed and
surplus funds they assuredly would not
appear among the "awful money re.
serves" of the banks. But they do so
appear. and without their appearance
there the returns made by the banks on
The I'D of June last would show them to
be short of the reserves required by law
to an amount aggregating nearly S25,-
900, 600. IL happens, moreover, that
these certificates OF deposit form, ms we
see, not only an integral part OF the law
ful money reserves OF the national banks,
but are used for clearing house purposes
also, and in this respect perform most
important office. 1t is very doubtfnl. IN.
deed, whether the 81 500. 900 OF United
States notes, as represented by these GER
uiicates.-which Mr.. John Sherman seeks
TO make us believe are idle and surplus
funds--d0 not perform functions more
extensive and important than those per.
formed by any other equal sums either
in or out OF the custody Of the banks.
Undoubtedly the existence OF these certi-
iicates do not warrant the belief Mr.. John
Sherman seeks to establish.
Mr.. John Sherman alleged also in his
speech at Mansfield the other night that
the national banks held in their cash
reserve" on the I'D of June last 81, 500
600, "more than the amount required by
law ltwould be interesting to have
Mr.. John sherman point out where this
s42 500, 900 excess of cash reserve is to
be found. The cash reserve Is made ND
OF four Items specie, legal tender notes,
United States certificates OF deposit and
the five per cent redemption fund. On
the I'D OF June last the national banks
held, according to the statement nf the
comptroller, OF specie, S2l.3i0,lll; of
,, legal tenders, S7S,00i,356; OF United
States certificates of deposit, S4,4l0, 900.
and of five per cent redemption fund,
{ Sl4,6l2 ,4I-tOtal leash reserves of the
national banks, $l5s, 1866 s3O The state.
ment of the comptroller does not show
the amount Of cash reserves the banks
{ ought to have held on the 22d of June
last, but assuming Sl40,000.000 to be a
correct estimate (the amount at the date
OF the last preceding statement of the
! comptroller, April II, 1877, was Slil.-
: zoo, O00) and we find the amount OF cash
reserve" In excess OF the amount re.
Quired by law to be slightly over SIS.
c 600, 900, or wide OF Mr.. Sherman's repor,
nearly $25,000,0O0! Certainly. Mr..
Sherman leash reserve in excess of the
amount required by laws exists some
y where else than in the banks
One OF the methods Of which the intla.
I tionists are confronted with large accu
mutations OF surplus paper money" in
. the national banks is as follows The
banke are divided into three classes
: country" banks, "city" banks and New
Ork city" banks. Under the national
bank acts the country banks may de-
post II certain per cent of their reserves
with the "city" banks located in Al.
bany, Boston, Baltimore. Charleston.
Chicago. Cincinnati. Cleveland, Detroit,
Louisville, Milwaukee, New Orleans.
New lok, Philadelphia, Pittsburg
I Richmond, st. Louis, San Francisco AMI
< Washington an In turn the city,
. banks may deposit a certain rer cent o;
their resources with the New York
. city" banks. But while il is quite true
Y that these deposits OF the "coun,ry''
- banks with the "city" banks, with the
e New York banks, are technically
lawful money reserves" It is perfectly
well known tina. the 'city' banks and
i the New York" b"nks loan those dc.
n posts just as they loan the deposits o,
n their private customers. But II Ia only
by counting these purely technical