The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1893-08-04
They Are Also Discriminating with Depositors
BY Refusing 10 Pay Checks When They
Believe the Money Is 10 Be Hosrded.
Many EMPLOYERS with Big Pay Rolls
Forced TO Resort 10 the Use of Silver.
Country Bankers Getting Even with Their
Gotham Brethren--F Failure OF LaZ u Us Sill
verman, of Chica ;o-0ther Troubles.
CURRENCY SCARCE.


New York Banks Working All Sorts OF
Schsmes R.t. ain the Cash In Their Vaults.
NEW YORK. Aug. 2-The overshadowina
question to-day In financial circIes was the
scarcity of currency. At many banks it
was admitted that cash paw yments for large
checks over the counter had been suspended
for some days. except in cases where il was
known the actual cash was necessary. In
other words. it was said. the bank used
discrimination, and where it was Thoughts
the demand for actual cash lcurrencyl vsa
made for the purpose Of boarding. the bank
insisted on certified check being taken.
In the very general collapse of the ma
chiDery of domestic exchange, the c0llec-
tion of drafts on banks in other towns and
cities has been managed on an unusual sys.
tenn. Ordinarily. when New York banks
depositor turnsin check drawn to his order
on An out-of-town bank. the New YORK bank
RENTS to Its own correspondent N the
same place for collection. or else sends di-
rect to the bank drawn upon Ia both
GASES out-of-town banks have either de-
lay ed in remIttIng. or eise have RENTED
in New YORK exchange at the current
heavy discount. charging up TO the New
York bank the cost of exchange. The city
banks have. therefore. resorted. in un-
usually large measure of late. to direct
collection through the express companies,
which make speciality of presenting
drafts direct at distant points drawing out
the money and shipping IL TO New York.
The coss of this transaction has for long
time been materially below the rate
charged for interior exchange.
Many curious incidents are related By
bankers as to the working of such oolleo-
tions Some outside banks have taken
pains to pay such drafts in inconvenient
currency. notably standard silver dollars.
One case is mentioned of q country bank
on which draft of several thousand dol
lars was collected by express. Among the
money returned was several hundred dol
lars in gold. S400 IN standard silver dollars
and 5000 In Subsidiary coin, almost entirely
dimes with O liberal sprinkllng of Cam
adian pieces. In this case IL is quite prob
able. unless the draft actually exhausted
the little banks resources, that the coun-
try bankers got the better of their city
creditors. for the loss on exchange could
hardly have excseded the virtual loss on
Monies gal tender cein.
The New York banks have virtually shus
down on the shipment OF currency to the
interior. The scarcity of currency has be-
come so pronounced that agents were bid
ding premium of sl0 per thousand dollars
to-day. The institutions with large pay
rolls have been compelled TO resort largely
TO the use OF silver. An uptown bank Is re-
ported TO have paid per cent. tor all the
currency received at big retail mercantile
establishments Banks generally are re-
Questing deposltors to use checks as much
as possible. and where cash Is required are
paying out q large proportion in silver dol
lars The supply of bills at the su btreasury
Is growing limited and has caused a refusal
on the part of the subtreasury to receive
checks from the banks in payment OF
silver dollars and currency for shipment
aud payroll use. The subtreasury col
lected the checks through the clearing
house. The order of the subtreasnry to-
day that the banks must deposit cash
against the withdrawal of currency and
silver one of the results of the con ference
yesterday. between Secretary Carlisle and
Assistant Subtreasurer Jordan.
While the majority OF savings banks
presidents persisted. to-day. IN saying that
they will not be tempted to part with their
government bonds. yet q well-informed
minority OF them declare that this action
Is unavoidable, even IT the Withdrawals
are resumed TO the normal average A
former savings bank president and
now the head OF e trust company
which has extensive dealings with savings
banks, said that the sale OF bonds
would not be necessary. He explained as
follows: The savings banks were well
prepared. Tor the scare we not at all un-
expected. They have Rn sd their re-
serves successfully by the application of
the notice rale and previous similar ex-
perienoes 20 20 show that the 1otices given
will not be ayailed of" 4is continued by
relating how. In 1879. when he was presi-
dent of q savings bank. the notices given
him at that time called for $500. 200. The
notices were for sixty days At the end of
the term only $4,000 was taken. He
added that. moreover. q yesy large part of
the money taken. together with that paid
dat VIZ rat I'm nad hA rtnfn nat
packages. adding. II cannot now remem-
Der the proportion returned untouched,
but / do recollect distinctly that suoh
returns were made daily. This
shows, of course. tnat boarding 10
going on to enormous amounts; and as
evidence of this i NAV repeat what o
Louisville banker told me yesterday. He
said that the Louisville safe deposits had
never done good business. and were com
stantly advertising space. But since this
period of currency famine these institn-
tions have not box TO spare. Another
amusing incident is that which took place
ct local safe deposit. A man who had
closed bis account. Sl2.50. st q savings
bank. pot 1t in q safe deposit. paying for his
little hole SIS.
The subtreasury was s273.0O0 debtor at
the clearing house to-day and paid its DIFF.
ment of the Kinds of money In which GUS
toms payments &C this port are made shows
large increase In gold coin. The pay.
meDts for the past ten days show that
I'm per cent. of the total was In gold ooin
anG g i'm gold certificates or over II per
cent. W hlch Is the largest proportion OF
gold coin in years The loan committee
OF the clearing house to-day issued 8. .800.-
600 certificates. making the total outstand.