Important Action of the New York Banks

From the N. Y. Times’ Money Article of Friday.

The Associated Banks of this city, in general meeting of the Presidents to-day, have recognized the United States notes as the appropriate medium for making their daily exchanges and settlements with each other through the Clearing House.  They have resolved that the United States notes should be deposited with the Government Sub-Treasury, under the recent act of Congress, on an interest of 5 per cent. per annum, the certificates of such deposits being used in the daily settlements at the Clearing House between the debtor and creditor banks.  The meeting to-day resolved to limit such deposits to $20,000,000 being four fifths of the whole sum authorized by Congress to be received by the public at large, at all the Sub-Treasuries on interest.  The present demand United States notes will at once be employed in this way; thus removing all questions as to whether or not these notes are funds current in the business of the Banks, without waiting for the substitution of the regular legal tender United States Notes, not yet prepared by the Department at Washington.  The supplemental Treasury bill now passing thro’ Congress will declare the present notes in all respects legal tender, besides reaffirming the discrimination in their favor for Custom-house payments.  It affords us pleasure to report the judicious action of the Associated Bankers to-day.  Besides securing to themselves the liberal interest of 5 per cent. on the medium of daily settlement between each other, the arrangement anticipates what must have been done under the act of Congress, on the appearance of the legal tender issue of the United States Notes.  The Association will be fortunate if they are enabled to place as much as $20,000,000 with the Sub-Treasury before a larger share than $5,000,000 is deposited by other parties.  Of course the decision to-day removed all present obstacles to the easy working of the money market.  The probability is that 6 per cent. will soon become the rule rather than the exception, on loan and stocks collateral.

– Published in The Burlington Weekly Hawk-Eye, Burlington, Iowa, Saturday, March 15, 1862, p. 3