The independent., 1903-05-21
BANK RESERVES
Mr.. Van VorhIs Again Calls AttentInn to
tho Deceptive Gambling COntri-
vanc. created by Law

tlOn Of the New York banks that they
would get some assistance by dcpos-
it's from banks outside has been. in
some degree. realized during the week
ending May . The Increase Of de-
pOSljS. $lH.I56.9 300. Is a partial rec0v-
cry OF the loss OF nearly $76 600 600
between February II and April Is.
There was practically no Increase Of
t'nttod States deposits. The increase.
therefore, must have come from the
west and south. While it Is imp0s-
Siblc to tell the exact source of this
increase, In all probability it Is mon
cy that belongs to the Reserves Of
other banks, and which Ought to have
been kept at home. It has been sent
to New York under the permission of
the national bank law by which it
can be loaned to the banks there. AMI
at the same time counted as part OF
! the reserves of banks sending it,
The spirit Of gambling desire
to get something for nothing, and the
hope to do so-appears to permeate
almost every field Of business in New
York city, This spirit is certainly
| very manifest among what is called
! the financial institutions Of that city.
| It is this same spirit among bankers
elsewhere that, in large part, ac-
counts for this flow Of money to the
New York banks.
The i,70i national banks outside Of
| the central reserve cities tNeW York.
! Chicago and st Louise had. on Feb
ruary 6, $21S, $50 ,&oH Of their reserves
deposited with sO-callcd reserve
agents OF this amount the 279 re-
serve city banks of the second class
had deposited $l2G,9i9 SOB, the re-
maindcr was the deposits made by
the /, ,i25 country banks. Some money
from the OutSid" banks will Of course,
be kept on deposit in New York as a
matter of convenience in making COM
mcrcial rcmittances, No one will be-
licve, however. that a constant de-
pu&it of over S275. 000, 600 is required
for such business purposes, nor will
any sensible man believe that such
deposits are sent to New York for
safety.
The reserve city banks are pr0hih-
itrd by law from loaning at home over
- per cent and country banks over
s. per cent OF their deposits, but the
one may loan onc-half of - per cent
and the other thrcc-dfths Of 10 per
cent to other banks. and still count
ii aS part of the reserves as il il were
cash on hand, 1t is an absurd and
dangerous legal contriyancc that can
have no rational purpose except to
benefit New York banks,
The reserve required 10 be held in
cash on February 6, by the 81 CEN
tral reserve banks in the central re-
serve cities (New York. Chicago and
| st. louisl was $2G4 939 969 These
/ banks are reported to have held in
cash $29O, ,Go11l9 or $21T61T15 more
/ than required The total reserve re-
| Quired to be held by the 4,425 cou0-
| try banks aud 259 reserve city banks
was, on the same date S522 i61. .&90.
/ They had more than One~haH Of this
/ amount $21S. .663, &OS--On deposit with
reserve agent banks, and reported by
such banks as part Of their depoS-
jts. and Included by them in their
calculations by which they determined
how mach reserve they We're required
10 hold This dangerous permission
uf the banking law enables the New
YORK banks to draw into tArlr d@-
pusjt> a large part of rhe reserves NJ
country bauhs and rr~vye .Gly banks
hN appya'ns tn lh" 8Naga" IF the
lauAryS lJ Is 49t'n We'd ."a,r,forl
thai thr ~1-AUeJ r.>rrtr aAeuj@ pay
lotrre~t ON sd Jrp,-.ts OF reserves.
Thu, pan oG lrpostlog h~ rrs~rves
Ut uan h3UA lo a@orh.E an5 sasI.