The state chronicle., 1893-06-07
THE FINANCIAL SITUATION.

Ino telegraph pilASs Ao"S Va
nancial troubles of more or less I'M
portance, and while conservative
papers at the North in general
way seem to consider that it is a
sort of mild punishment for over
trading and that the wedding out
of the business houses that happen
to 90 under is therefore not a mat
ter of regret, yet We who have
broader sympathies and perhaps
iuster views of life must refuse to
accept the teachings Of such phil
osophy. To US it seems an evil
that any man who has devoted him
self to the work of building up a
business should go under; and when
his failure is not the result OF i'm
proper speculation, nor the conse-
quence of foolish expansion OF
business, but comes froZa money
stringency, while his business is in
comparatively normal condition,
then the wrecking of ones life work
is deplorable. It is hard philos-
ophy that can view such ruin with
complscency; and ye. it seems as if
the New York papers that are allied
in their design to repeal the silver
purchase act at any cost are not only
complacent, but appear to regard
the situation with satisfaction. That
the unfortunates could not comply
with their engagements is evidence
to them that their engagements
were improvidently made, and,
therefore, they ought to suffer fer
their improvidence, while it will
be so much the better when we get
on the sound and healthy basis ol
rock bottom, and the weak houses
are weeded out: such is the trend
of thought in the circles to which
we allude. But can New York com
ply with her own engagements
Can her banks pay their depositors
Should demand be made upon them
how would it be? It is true tina
the New York banks have pursued
a very cautious policy, and are il
excellent condition; but it has
been at the expense of the business
of that city. On the 4th OF June
1892, the loans Of the Banks ther;
were $492,7O1,7OO; while on Jun,
4th, 1898, their loans were $416,
900, 200, decline $76,OOO,OO9.
Instead of there being an increas;
in loans incident. to q. years growth
in business in that great metropolis
there has been a curtailment O
more than fifteen per cent, while (
great part of the present loans ar
exclusively on call, thus ruling ou
mercantile paper entirely. Will,
therefore the New York banks hav,
taken care of themselves, New
York business must be considerabl,
Strengthened
All this comes from the scarcit
OF money, for while the local de
posits in the New York banks re
main about the same as last yea,
the country banks have drawn 0,
their deposits in that city so heav
lily that the deposits have ru
down from $542,O00,OO0 yea
ago, to $431 100000 now, a differ
ence of $110,OOO,O0O. This deple
ton Of cash necessarily prevent
the New York banks from bein
easy with their mercantile custe
mers, who in turn press their Gus
toners, and SO an influence is ez
erted that extends through ell line
of trade throughout the countr,
Now, this is largely due to war
of elasticity in the currency. "
are now st one Of the times wbe
an addition Of City millions c
more to the volume of the currenc
would be very helpful. But the,
is no means to make such additio,
While during the year just passe
there has been a considerable los
of gold from this country, yet muc
of it was drawn from the Unite
States Treasury, where it stood r.
tired from the volume of currenc,
our gold mines have produced du
I ing the year enough to counte
. balance the residue of our gold e:
o ports This leaves the $60,00O,0(
of coin notes issued in the pu
chase of silver as practical add
ton to the volume of circulatio
= But Notwithstanding that additio
Q a scarcity of currency exists, al
: another evidence is given of ho
J. undesirable is the present system
. finances in which the element
q elasticity is SO obviously lackin
8 Indeed, we find in the present sit
q alton a strong argument for t
= restoration of State Banks Of ISIS,