The morning news. [volume] (Savannah, Ga.) 1887-1900, 1896-04-13
BANKER CLEws' VIEWS.
The Financial Outlook as Seen From
Wall street.


Wall Street.
New York, April lit is gratifying to
find that Senator Teller can so far detach
himself from his exclusive absorption in
the free coinage question as to remember
that we have such Institutions as national
banks. The senator has made the discov-
cry that the country banks are wont to
keep considerable deposits with their cor
respondent banks at New York; with
the result, as he thinks. of depriving their
customers of needed accommodation and
making their means available for specula-
ton in Wall street. He informs the Senate
that last September S2OUOO900O OF this
outside money was tied up in New York.
ana that 70 per cent. of that amount was
used in stock speculation" Had he pos
seSsed the statistical equipment which be-
flts a senator he would have been aware
that the controller of the currency re-
ports the cash reserves in the New York
national banks, on Sept. Is, last, at Sl25.
$4,000; and he would have been further
aware that Sl10 100000 of that sum was re-
CURED for the lawful reserves of our city
banks; leaving but S15lOO, 900 which could
conceivably be accredited to the deposit of
country banks about which he shows so
much concern. Instead therefore, of $780,,
100000 of country money being used here
for speculation, there could not possibly
nave been more than one-tenth of that
amount, even suppoSing our banks TO
have carried, on their own account, no
surplus of reserve over the legal require
ments. The senator may thus see, after
melting out the dross of eXaggeration
from his statement, what is the reman-
ing modicum of fine silver in his story.
If the senator knew as much about finance
as his exhaustive disquisitions about sill
yer would lead us to expect, he would
long since have been aware that il has
always been the usage, as between the
metropolitan banks and the country
banks, for the latter to deposit with the
former at certain season of the year
and to borrow from them al another sea-
son. During certain months, the country
banks cannot find use for all their re-
sources and therefore are glad to deposit
the idle surplus with their correspondents
at New York, Chicago or ST. Louis at a
low rate of interest, rather than keep
them unproductive and at a loss of in
terest; and, during other months, they
not only withdraw these deposits, but also
get large sums of currency
from their metropolitan CORE
spondents through discounts or against
paper collateral. Thus both classes of
banks reclprocally receive accommodation
ana pay a just rate for it; and the rural
public and the metropolitan public re-
celVe accommodation in turn, neither one
at the expense of the other. AS to loans
made Tor speculative purposes on the
stock exchange, it is impossible to so iso-
iate them from the general operations of
Ihe banks as to ascertain their amount:
out 1t is sufficient, for the question raised
by senator Teller, to state that they are
conducted entirely through the medium
OF checks, and that they become a factor
IN the use of currency only so far as they
may be represented in the deposits, against
winch the banks must hold IS per cent
IN lawful money. 1t is an invariable rule
that when the country banks need mon
ey they get it quite irrespective of the
wants OF speculative borrowers; who are
always the last to be considered, and ex-
pect to have to take care of themselves
and generally prove we'll able to do so.