New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-06-26
A WAY TO TIDE OVER DEPRESSION.

To the Editor Of The Tribune
Sir The business Of the country adjusts Itself to
the volume Of currency In circulation. When sea
son Of depression and uncertainty people with
draw their savings from the banks and lock them up.
The currency so withdrawn increases the strngency
causes banks TO call In loans stocks and bonds
are thrown upon the market prices fall, bank accom-
modations are curtailed, borrowers refused AT one
bank. apply 10 another and another and moreover
ask for two and three times as much as they need
fearing their applications II not entirely refused VIII
be cut down to "A half third. This creates an
unusual demand. The more 1t increases the tighter
banks hold on to their funds. witness the action OF
the Ncw-Yorl banks during the past few weeks, Who
while holding $50 900 900 I'm OF their reserves
OF year ago were refusing loans TO their most fav-
orcd customers.
The banks are not 10 blame They cannot tell
when thing 81 this kind begins where 1t Will stop
They are the custodans OF other peoples money, and
liable 10 extraordinary calls. They must protect
themselves, thor dcposltors and shareholders One
prominent failure among them may light fire that
viii sweep arouud the financial horizon. Again,
merchant or manufacturer may fall. lie shows his
creditors that a contraction OF collections ana credus
was the cause. lie settles up at - cents on the dol
lar His creditors trust him again. and soon he Is on
his feeI making money. pays oil the remaining % per
cent OF his debt OF honor. and sands mp before the
yot 40 the banker lie fails II may be- from much
avas nothing. The public regard him as failure,
and henceiorwnrh he Is looked upon as on" OF the
wrccls that line the financial shore. Now. to my
iaind there should be safety valve for conditions
such n those At prc,cnt confronting u.s. II Is not
that money t. There Is just ~ much oi II
as ever: but II Is out OF the usual channels OF trade
and not available
To meet such conditions I would suggest some
such plan as the following: Whenever II period.
sue. ~ that through which we are passing. seems
imminent, let the Cont roller OF the Currency have
rnw.r 10 accept from such Nail NAL bnnHS are ana
Tor yrIr hay" been. within all the requirements
~ the National Currency act ana that have 20 per
cent Ut least. ~ surplus, such collateral rs III Ms
Judgment will be ample and upon that ISSUE 10
III. ianis - supplemental currency To- an amount
not exceeding % per cent Of their capitol these
notes 10 BE- clsly DISTINGUISHED from those usually
ls~u.d: tArn ~Acn this emergency mas PASSED, call
uuon The bnnis to retire them In such sums rs he
may Judge proper and after certain period levy Il
taX iton ,uci as nigh, remain outstanding The
n,rs could casy be- gotten In by each hank asserting
them out. after tie receipt Of the Controllers
order. When bank had sent In 80 per cent. Of
H., SUPPLEMENTARY notes. II could deposit egNl tender
no,rs ana withdraw the remainder Of It's cOltcral.
I submit tbs idea. and VIII be glad 10 see 1t con
.ldrrrd aud n deemed advantage Ou>. acted upon
with such amendments ana notifications as may be
deemed proper. ~ u ~
Wheeling. W. Va. June TO- 1893.