New-York tribune., 1878-04-03
THE RANKS md RESUMPTION.

Secretary Sherman deserves thanks for speak
ing plainly and strongly, as he did on Monday,
regarding the position of the banks. We have
no doubt that the published report of the con-
versation between the bankers and General
Ewing did great injustice to some of them ;
indeed we know that perfectly honorable men
who were present deny most positively the
correctness of the report rs to some important
points Perhaps those were also misrepre-
sented who were reported us indulging
in some very silly threats, or protesting
readiness TO give $4,000 for the
right to stand at the head of the line
on redemption day. But these reports have
been widely circulated, and il is well that Mr..
Sherman has promptly met the matter as 1t
deserves The notion that the banks can afford
to make war on the Treasury, i'll order to de-
feat resumption, is i'll the last degree pIepos-
ferrous. The country banks are entirely de-
pendent for a necessary part OF Their reserve
upon the banks of the reserve cities. The
reserve cities are in like manner dependent
upon New York. The only cash reserve III the
country, to withstand single weeks alarm,
or the slightest pressure from the Treasury,
is held by the New-York banks. What
it was only 1714 per cent. of the deposits
less specie of the New-York banks alone.
But the United States Treasury held on the
same day, in excess of all certificates, specie
TO the amount of 30 per cent of its legal
tender notes, and has full power, by issue of
gold certificates, to increase the proportion at
any time to nearly 33 per cent. The reserve
of the Bank of England is less than 33l2 per
cent. Moreover, the Secretary has power to
sell 40 or even 3 per cent bonds, to any
amount that may be necessary, in order to in
crease his store, and there is not a sane banker
in the country who doubts that he could sell
at any time $17 100000 of these bonds, which
would raise his cash reserve to 80 per cent of
the demand liabilities
This is not all. The Treasury is coming
silver at the rate of about $4,OOO,OOO per
month, and can have on hand $50, 100000 by
January /. All the legal-tenders held by all
the NewYOrk banks amount to only $780,
100000. If it were possible to present at
the Treasury every dollar in greenbacks that
the banks now hold, they could get only
silver for the notes, if the Treasury pleased
to resist. THIS silver, being receivable
for customs, would be drawn from the
banks as speedily as possible, leaving
them no reserve with which to an
swer demands from other depositors, and
from banks all over the country. If ever
such a raid upon the Treasury should
be attempted, all prudent banks elsewhere
would make haste to draw their deposits from
| New-York. The Treasury, also. would draw
! its own deposits from national banks. Pru-
dent individuals would hasten to get control
of their own funds, leaving them no longer
with banks engaged in such a crazy undertake
ing. Before the banks of New-YOrk could get
merely the silver reserve out of the
| Treasury, without as yet reaching q
dollar in gold, they would be crushed
By the withdrawal of deposits by Govern
ment, banks, and individuals, and by the
enormous contraction which their operation
would involve. For the silver paid out would
flow back into the Treasury for customs, a:
long rs bankers continued to create distrust
as to resumption. Meanwhile, legal-tender:
would be drawn into the Treasury in payment
of taxes at the rate of $lO,O00,O00 a month
or more. Is it not evident that this cOntrac
ton of paper, and the extraordinary demand
for it by banks to pay deposits, would speed
lily bring the currency to part Then the banks
would have gained absolutely nothing, bu
would have destroyed their own credit ant
many of them would have been forced Il
| close.
] There is no reason to fear that the banks o