The herald., 1896-04-17

1t so happens, however, that in second-
| ary and outside factors there are so
many things out of joint as to call for
an unusual margin of allowance for
| possible accidents and unforeseen out
| comes. That is now the point of weak
/ ness in Wall street, and, until there Is "a
| clearing up of these numerous small
| causes OF distrust, a real and large re-
| covery In the financial markets must be
patiently waited for.
1t is gratifying to find that Senator
Teiler 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 dis
covery tnat the country banks are wont
to keep considerable deposits with their
correspondent banks at New York. with
the result. as he thinks, of depriving
their customers of needed accommoda-
ton and making their means available
for speculation in Wall street. He in
forms the senate that last Sente,nhar
s200O00,00O of this outside money was
tied up in New York." and that rs per
cent of that amount was used in stock
speculation" Had he possessed the sta
tistical equipment which BELTS q sena-
tor he would have been aware that the
comptroller OF the currency reports the
cash reserves in the New York national
banks. on the 2Sth of last September,
at $125, 500, 600; and he would have been
further aware that $110, 100000 of that
sum was required for the lawful re-
serves of our city banks, leaving but
$15 600 which could conceivably be
accredited to the deposits of country
banks about which he shows so much
concern. Instead, therefore, of 50,000,-
900 of country money being used here
for speculation. there could not possibly
have been more than onetenth Of that
amount, even SuppOsing our banks to
carried their
surplus of reserve over the legal re-
quirements. The senator may thus see,
after melting out the dross of exaggera-
tion from his statement what is the re-
naming modicum of fine silver in his
story. If the senator knew as much
about finance as his exhaustive disqui-
sitions about silver would lead us to ex-
pect. he would long since have been
aware that it has always been the
usage, as between the metropolitan
banks and the country banks for the
latter to deposit with the former at
cerain season of the year and to borrow
from them at another season. During
certain months the country banks can
not find use for all their resources 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 interest;
and. during other months, they 'Sot only
withdraw these deposits, but also get
large sums of currency from their
metropolitan correspondents through
discounts or against paper collateral.
Thus both classes of banks reciprUcaliy
receive accommodation and pay just
rate for it. and the rural public and the
metropolitan public receive accomno-
daton in turn, neither one at the eX-
pense of the other. AS to the loans
made for speculative purposes on the
stock exchange. it is impossible to so
isolate them from the general opera
tons of the banks rs to ascertain their
amount; but it is sufficient. for the ques-
ton 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 cur
rency only so far as they may be repre-
sented in the deposits, against which
the banks must hold 25 per cent in law
full money. 1t is an invariable rule that
when the country banks need money
they get it quite irrespective OF the
wants of the speculative borrowers.
who are always the last to be consid
cred and expect to have to take care or
themselves, and generally prove we'll
able to do So