The Financial Outlook

Fiom the Financial and Commercial Chronicle. While a number of ingenious gentlemen at Washington, in lively pursuit of their ovra private ends, ire anxiously clamoring in tho lobby for the " mcans of relieving tho monetary stringency,' the rate of interest in New York is going down, and yestcrday our banks tried in vain to lend on Governments at four per cent. The banks are f uil to plethora, and as some of them pay interest on deposits it is futile to expect that they WÜ1 mueh longer refrain f rom londing all they can, even if thoy have to submit to a sacrifice of one or two per cent. in the rates they get for loans. Till a week ago tho banks had a wholesome dread of expansión. The lessons of the panic were still fresh in thoir minds. They refused to foster stock exchange speculation. They would discount none but firat-class, legitímate notes, They gave the cold shouldor to all dealers in accoininodation paper. They thus uccuuiulated a large amount of funds, and the reserve rose in proportion. Now it appears as if a change were impending, and we shall not be surprised to find in the bank statement today some indications of expansión in the averaged business of this week. Hero we have another illustration of the want of elasticity of our financial system. The relief which our banks are now tempted to seek from their burdens, by lending theh excessive funds atlow rates to foster speculation, would be inuch better attained by sending these deposits home, so far, at ieast, as they are represented by notes of the country banks. At this moment we are assured that several millions of dollars of such notes are held on doposit by our city banks, and these banks are wLolly powerless to send the notes home if they are not redeemed in N. York, for tho expense of sorting and sending the notes to distant centers is too great. This expansión raight be expected tobe checked by the outflow of greenbacks which is going i'orward in a very active way in consequcnoe of the recovery of business and tho moveinent of produce. For several days past the outward current of greenbaoks for the country has been somowhat in excess of the green back receipts, though the iuilux of deposits shows on the aggregcte 110 abatement. This would lead us to look for a diminished legal tender excess, combined with a continuedjaccumulation of idle funds in bank, so that thcre will be a growing necossity pressing on the banks and urging them to lugment their loans. It is, however, well worthy of notice that 4,000,000 or 5,000,000 of country bank notes have, within a few clays, been sorted out for redemption. This new movement of assorting notes for suoh a purpose has only lately been started ainong our city banks, and it is destined to relieve, hereaf ter, the pressure of such plethoric seasons as that in which our money ma rket is at present. In fact this redemption movement seems to have been stimulated by the agitation for free banking. Some law for free banking seems to be oonfidently expected from Cougress by our financial men. And this expeetation as ofton happens, is being diseounted beforehand. Which of the various sehemes for this purpose stands the best chance, it is premature, perhaps, to conjecture.