New-York tribune., 1879-12-13

warning However desirable the modification
in the character of reserves may be. it should
be effected gradually, prudcntly, and Win
reasonable notice and time for preparation.
The bill now requires each bank in New
York and other reserve cities to hold re-
serve amounting to % per cent OF ITS deposhs'
and each country bank TO bold reserve
amounting to Is per cent or ifs de-
posits. One half of this reserve, IN
each case, must be held in coin and
in the vanlts of the bank. Under
other laws, which the pending bill
does not repeal, FER cent OF circulation
must be held in the Treasury as n redemption
fund, but may be counted as part OF the re-
serve aga,nst deposits. The practical effect
will be that, on the basis of the returns OF
October 2, banks in reserve cities other than
New-Yorli will he obliged to bold S2s, 100000
specie in thcir vaults, whereas they then
held only 1900, 900. From some reserve,
therefore, they must draw $17, 800, 900 III coin,
in order to comply with the law. Also the
country banks mast hold $24750,OOO specie
in their vaults. whereas they held. October ,,
only $11.500.000, and they must therefore
draw from some reserve S13,25O,OOo. In
short, about S3000O,00 in coin will be re-
quiged bv banks outside Of this city, in order
30 comply with the proposed law, and the
hanks OF this city could not spare that sum-
without warning or preparation. except at the
cost of grave and general disaster.
Ii is rue. the outside banks can send I'm
lega-truders to the Sub-Treas uIy here to be
exchanged for CON. Bat the shipment OF
notes to the Treasury would invclye greater
cxpense than the mere withdrawal OF their
balances here. and. moreover, thc proposed
Oi woHid permit them To r-t1in scarcely any
h..laaccs H. TIL. ,iy.
The bil! provides for reserve of % per
cent in the citics and 10 per cont III the
country. aud in activc times il ia generally
considered dat the banks do not need ~ Keep,
and cannot pioGtabiy keep. larger propor-
tiGn OF their funds ldlc Drdnrting the half
to he held in specie and in their vaults. and
the amount of the per cent redemption
fund kept in the Treasury namely, %3, 100000
for the banks of reserve cities, and
S11 200, 900 for the country banks-there
would be left of the legal reserve required by
the bill not more than $25.2Oo,0 600 for
the other reserve cities and ST., $500 900
for the country banks. Bat ont of this must
be supplied the entire stock of legal-tenders on
hand, and the whole or the balances N re-
serve cities or the banks must hold o larger
idle reserve than the law contemplates. The
81 8. 100000 for over 1,SC0 country banks
is less than $500 to each bank. for
its supply of notes on hand and Its
balances to meet exchanges in other
serve cities and in Ncw-YOrk. Yet in Oct0-
ber, when the demand for currency in
the country was especially great, the country
banks held $30, 900, 900 of legal-tendcrs IN
their vaults, and the banks OF the reserve
cities, other than New York. S33, 600, 900.
Evidently, after supplying absolute needs at
home in the form OF currency, ana holding
the coin reserve required and the redemption
fund the banks outside will have scarcely
any money tn meet exchanges here. In
fact, one object of the bill is to pre-
vent an undue accumulation OF reserves
at this point. But the consequence Is that, If
the bill should pass, the reserves now here
must be almost wholly Withdrawn. And that
is n change, members OF Congress will per-
ceivc, which cannot be made at all without
grave disaster at the season when coin re-
serves here are low. and which should not he
attcmried without full warning and ample
time for preparation.