St. Paul daily globe., 1893-08-04
CURRENCY is SCARCE.
CASH PAYMENTS FOR LARGE CHECKS
TEMPORARILY SUSr E. DED.
HOW COLLECTIONS ARE MADE.
Bankers Paying Each Other In
Gold and Silver Heavy Ex-
press Charges-Savings Bank
Presidents DO Not Want to
Part With Government Bonds
Effect of Sixty-Day Notices.

Part With Government Bonds
Effect of Sixty-Day Notices.
New YORK, Aug. 3.-The overshad-
owing question this morning III tinan-
cial circles was the scarcity of Cdr
rency. At many banks it was admitted
that cash payments tor large checks
over the counter had been suspended
for some days, except in cases where it
was known the actual cash was neces-
sary. In other words, 1t was said. the
banks used Discrimination, and where
1t was thought the demand for actual
cash Currency was made for the pur-
pose of boarding, the bank insisted on a
certified check being taken.
In the very general collapse of the
machinery of domestic exchange the
collection of drafts on banks in other
towns and cities has been managed on
an unusual system. Ordinarily, when
New York banks depOSitOr turns in a
check drawn TO his order on an Out-of-
town bank the New York bank RENTS
to its own correspondent in the same
place for collection, or else sends direct
TO the bank drawn upon. In both cases,
out-of-town banks have either de-
layed in remirting or else have re-
mtted in New York exchange at the
current heavy discount, charging uD to
the New York bank the cost of eX-
change. The city banks have. there
fore, resOrted in unusually large meas
ure, of late, To direct collection through
the express companies, which make a
specially OF presenting dIaftS direct at
distant points, drawing out the money
and shipping it 10 New York. The cost
of this transaction has for a long time
been materially below the rate charged
for interior exchange. Many curious
Incidents are related by bankers as to
the working of such collections. Some
outside banks have taken pains to pay
such drafts i'll Inconvenient currency,
notably standard silver dollars. One
case is mentioned of country bank on
which draft of several thousand dol
lars was collected by express. Among
tile money returned was several hull
dred dollars in gold, S4O0 in standard
silver dollars ana 5000 in subsidiary
| coin, almost entirely dimes, with lib
erai sprInkllng OF Canadian pieces. In
this Case 1t is quite prOOable, unless the
draft actually exhausted the little banks
| resources, tnat the country bankers got
the better of their city creditors; for the
lusS on exchange could hardly have
| exceeded the virtual loss on abraded
and nOm-legal tender coin.
While the majority of savings bank
| presidents persisted today in saying
| that they will not he tempted TO part
with their government bonds, yet a
Well-infOrmed minority of them declare
that this action is unavoidable, even if
| the Withdrawals are reduced to the nor
mai average. A former savings bank
| president, and now the mead of a trust
company which has extensive dealings
win savings banks, said that the sale
| or bonds would not De necessary. He
explained as follows:
the savings banks were we'll pre-
pared. for the scare was not at all uneX-
pected. They have guarded their re-
serves successfully by the application
of the notice rule, and previous similar
experiences go 10 show that the notices
gwen Will not be availed OFF,
He continued by relating how in 1879.
when he was pre- -ident of savings
bank, the notices given him III that
time called for 100000. The notices
were for sixty days. At the end of that
time only $1,000 was taken. He added
that, moreover, very large part OF the
money taken, together with that paid
OH demand, was returned in the original
packages, adding: Il cannot now re-
member the proportion returned un-
touched, but l do recOllect distinctly
that such returns were made daily.
This shows, OF course, that boarding is
going on to enormous amounts; and, as
evidence of this, may repeat what a
Louisville banker told me yesterday.
He said that the Louisville safe depoS =
its had never done a good business,
and were constantly advertising space.
But since this period of currency fam
inc, these institutions have not box to
spare. Another amusing incident is
that which took place at local safe
deposit A man who had closed his ac-
count, $3.50, at savings bank, put it
in safe deposit, paying for his little
hole So"