New-York tribune., 1878-04-15
Tile RANKS 1ND TIE TREASTRY.

Secretary sherman has done much, in his
remarks before committees of the Senate
and House, to correct popular impressions as to
the difficulties of resumption. Bat upon two
important points, perhaps because of frequent
Interruptions, he did not dwell as fully as was
desirable. He might have shown, much more
clearly, first, the impOssbility of any combi-
nation of banks for the purpose of drawing
gold.
Why should National banks try to depreciate
their own crculation9 Yet that circulation is
legally redeemabe in leeal-tenders. Any at
tempt to "break the Treasury" if successful,
involves a great depreciation Of greenbacks,
and consequently of bank notes. But sharp
demand for redemption of these notes is pre-
cisely what the banks cannot afford, 1t IS
said that bank circulation has not been profit
able in some localities. But its rapid increase
here, in most of the Eastern States, and in the
very cities where the largest reserves of green
backs are held, proves that it has been con-
sidered profitable there. Any rapid rcdcmp-
ton of notes would place the banks issuing
them in great difficulties. But an attack upon
the public credit, an effort to make gold
apDear much more valuable than legal-tcn-
ders, would surely produce a powerful popu-
lar movement for redemption of the bank
circulation.
1t is not possible to enlist a majority of the
hanks in such a movement To the greater
number of them, though not to many banks
in this city, the circulation is important. But,
moreover, III other parts of the country, and
even here, the majority of banks are in
favor of resumption, and will not take part In
schemes to defeat it, In NewYOrk, the
banks which hold the largest legal
tender reserve are generally the banks
which could not be drawn into an effort so
reckless. No one thinks that the Chemical
Bank, for example, could be induced to try to
" break the Treasury" No one imagines such
thing Of the First National, or of any bank
largely dealing in or largely holding United
States bonds. These, certainly, do not want
to destroy the public credit Nor can those
banks which have the largest deposits from
other banks afford to join III a movement
which would cause the removal OF their de-
posits. No one who understands the cOndi-
tion and business Of the banks Of this city
will imagine that one-half of the legal-tenders
held by them can be offered for redemption.
But the only considerable surplus of green
backs Is held here. Such movement is still
less possible at Boston, Chicago, and other re-
serve cities, or with the country banks, because
an essential part Of their reserves are here.
Certainly. less than S35, 200, ,000-half the
creenback reserves of the banks-cOuld be
presented for redemption in any case, and the
Treasury will have on hand more than that
sum in silver. The cOnspiring banks could
only get a coin costly to keep and costly to
move, and of less intrinsic value than the
notes surrendered.
1t is beyond measure absurd to suppose that
the payment of all deposits will be de-
manded in coin. Commercial banks are
not savings banks, though General Ewing
does not seem to know the difference.
The greater part of deposits in commercial
banks is only the portion not yet drawn of
money borrowed. Such banks receive notes,
checks, bills, drafts, and all forms of credit,
and "deposits mean favorable balances of
credit No firm in active business, whether
commercial, manufacturing or banking, can
afford to draw out and hoard Its active capi-
tai In most cases, the firm not only
EMPLOYS all its capital but requires, in
addition, the use of some capital from
the banks, and cannot withdraw Its
deposit without presently paying back to the
bank q sum as large, or larger, in meeting
maturing obligations. Hence there is not the
slightest reason to aDprehend that firms in
commercial manufacturing or banking busi-
ness will try to draw their balances in order
to get gold
Another part of deposits represents the idle
funds of capitalists. This fund can be drawn
whenever owners find better use for it, but,
if not sent abroad, it must quickly come back
to the banks by deposit of the person to whom
it is loaned, or from whom property is pur-
chased. In large amount, money cannot be
permanently kept out of bank. because it
costs too much to guard and keep it, and to
lose the interest on it,
If any capitalist draws out legal tenders in
order to get the gold, unless to meet an imme-
date need for gold, it must be because he
expects the specie to advance in price. But
specie cannot advance, if legal tenders to any