The times. [volume] (Richmond, Va.) 1890-1903, 1898-02-05
SATURDAY. FEBRUARY D. 1895
FINANCIAL QUESTIONS AND AN
SWER>.

We have received from correspondent
a letter criucizing an editorial published
IN these columns some days ago. EMIT
led 1T draws line and quoting the
following paragraph
~shan the Democratic party De lnS
marty of reputation OF contracts anu
cheap money. and the overthrow Oh an
mat is fixed and established? rms Is "a
dreadful question for Democral 10 "Sh
OF his party, but the honest ana sincere
Dcmocrat IS unable TO shut ms eyes 10
what the unwise men VINO nave come
INTO control of IL have already cone 40 IT,
,rhey have torn IL loose from its an
Gent moorings. they nave set II adrlit
titon the high seas OF chaos, ana uhlts7
thev change their course they will drive
n 10 utter wreck against those immuta-
ble barriers which Christian civilization
mas erected TO thwart those VINO wish
10 carry the world back TO a dark age.
our correspondent after upbraiding ms
Tor having written the article asks the
following questions:
Now that 1 am writing ] would Ike
10 ask YOU 10 satisfactorily explain how
the 5000. 100000 OF money which the last
report of the Secretary OF the Treasury
saws IS a conservative estimate Of the
total deposits In an banks in the United
states. can be paid, III they are made
payable in gold. The Secretary says in
the same report that the national ana
all other banks held in gold and gold GER
tifcates. "A total Of $500 7g3.367. which, ac-
cording 90 my reckoning. is only six cents
on the dollar: and 81 there is TO be added
more than 81 .0oO.0o00O0 of notes and more
than S600OoOO0O Of silver money 10 the
5000. 10000 of deposits. making a total
of S. coo. Geo coo. which are TO be- made pay
able in gold. there would not be five cents
on the dollar
" the National Government which IS
the strongest financial institution in the
world. aud more than double as strong
AS all banks combined is not secure. as
YOU say. with 1000 900 OF gold concen-
trated and with comparatively light liza
hilities compared with the banks. How
could the banks sustain the slightest fl
nancial shock for even one week, or
Withstand a slight drain Of gold. with
their immense liabilities and light gold
reserve scattered an over the country?
we say in reply that our correspondent
,as allowed his financial views to so warp
MS Judgment as TO put harsh and I'M
merited construction upon the article,
which was one Of warning, not Of objur-
cation. We have no idea that the cause
OF reason. patriotism. sound money and
intelligent finance will gain any friends
by mere abuse of its opponents. With
out wavering an instant from those prin-
cples which are as true in finance as the
laws of motion are in physics, we shall
treat all respectful dissenters with proper
respect. and there was nothing in our
article which was intended TO be other
than an earnest remonstrance against
Democrats adopting course which would
impair their influence with thoughtful
ana conservative men OF their own party.
Now az to the questions of our CORES
pondent. ana we commend these replies
10 tho Norfolk Pilot we would say that
no bank. or banker or merchant. or
manufacturer. expects to be called upon
TO pay at once all the obligations which
ne has incurred IN the due course OF or
binary business. Experience Justifies
she provision OF the national bank act
which only requires that city banks shall
hold A reserve in legal money of % per
cent. OF their deposits. that banks not
known strictly as city banks. including
even such "a those OF Richmond. are re-
ouired TO hold n reserve of only - per
cent. OF their deposits. while the New
England hanks operated under the SUI
,olk system. which were perfectly solvent,
had al a reserve 10 meet their liabilities
20 depositors and note holders fund in
specie. which then meant gold, Of only
about 81. i c. eight dollars and twenty
cents of specie for every $50 OF liability.
At this rate the 500 Oo0. 900. or TO be pre-
else. a. OF December !. 1887. $685.. $50 GAO
OF gold in the United States would form
a basis for a circulation OF several thou
sand millions OF dollars OF bank notes
even n no more gold were acquired. and
even ~ ali the green backs and silver
dollars. which are now legal tender,
should be retired.
the mistake which our correspondent
makes and which all Ike him make. is
IN srpposng that everybody is going to
aemsnd pay ment Of all their claims at
once. on the same day, al the samo hour
and that all business VIII stop for this