Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1832-05-22

babIe emergency OF the bank, much specie i'm
vaults.-Thess domestic bills OF exchange are founded
upon the actual operations Of internal trade and are
IN fact drawn in anticipation of the southern and
tern crops, which regularly arrive in the northern and
eastern cities in time TO pay them. They are uniformly
and promptly paid at their maturity, without any
lion OF renewed accommodation from the bank as in the
case OF discounted notes In addition the sum already
stated the bank has good notes discounted on paymcnt
and other security amounting to $i7 1915 O7s aud real
estate and foreign bills, amounting TO $3,0i2,s25
The whole of the available of the bank will
be thus to $S2 O57 43S at least one half of
which could ON any emergency, be converted into cash
in the Of few months On the other hand the
whole amount of the responsibilities of the bank ncud.
ing the circulation foreign debt. aud public and private
dePosites, amount TO only $is.6s56o3.
SO that instead OF being reduced the fphf preli
cament oil having only can aggregate 80 $40 900 10
meet aggregate responsibility of SAP OOO which
the author OF the report might well set down with two
notes oil admiration, the bank has undoubted RESOURCES
amounting to- $s2O57,i3S TO responsibility of
S43, 6S5 6O3.
In the actual state of the country it is visionary in the
extreme, TO imagine the bank is in the slightest danger of
being reduced to the necessity of suspendng payment
The whole amount Of its circulation is now only 22 900
ooo and this is the only portion Of its responsibility which
can be properly taken into the estimate the view now
under consideration. The depostes i'm periods when
all commercial confidence is lost far from being proper
~ regarded as debt for which the bank should make
vision as Tor its circulation universally by
all banks as fund upon the faith OF which they may safe
W issue their paper equal amount NAV be
the amount of the deposies, at any given time il il fair
calculation, founded on actual experience that il will be
equally great as at any future time
III this were not the case the government deposites
about which so much has been said would be of no value
to the bank; but ON the contrary very great incun-
brance.
Upon the whole then, the bank not only fully able to
meet all ITS engagements but is in state of the highest
prosperity Aad is bare but Justice here to remark that
ITS general operations have been conducted with
Judgment and ability in those very particulars which
part oil the committee have selected topics of dsappro-
| baton and censure. "
The minority the committee i'll barely advert n
OF the other topics introduced into the report
Is alleged that the bank has given undue extension
10 It's ana by some process OF reasoning difficult
10 comprchend II seems TO be inferred that the alleged
excess OF the circulating medium owing in part TO that
cause is sufficient TO remark, this point that the
greatest Improvement which has been made in the admins
traon OF the bank, and that which gives its true federal
character has been effected by the establishment of bran
ches wherever the commerce of the country reoirod
then ana by the system OF exchange operations which
these branches have enabled the bank carry into effect
The whole business Of dealing in domestic bills of ex-
change, so essential to the internal commerce of the coun
try has been almost entirely brought about within the
last eight years In june 1919, the bank did not own
single dollar OF domestic bills; and in December 1924
owned only to the amount Of So 37S $780, whereas now
owns TO the amount OF 23,052972.
The opinion OF Mr. Cheves in 1919 sadyered TO in the
report TO prove the mpocy of the number of
branches and the acis stated that large proportion of
the loses sustained by the bank have been owing IN The
Encouragement of the branches.
The opinion OF Mr. Cheves founded on the peculiar
state Of things which existed at the time He felt the dit
ncuy oil controlling these branches, which, he stated
the directors were frequently governed by individual
ana oc interests and feelings and he into the adj
ninlstraon at time when immense losses had been suf
Tered by their NAL administration But il is very mport-
ant to renark-wha the report does not bring in
that almost all the dsproporionae losses incurred by the
branches, previous 1915 and that since the ex-
tension OF the branches Of which the report complains,
they have not sustained greater losses, proportion than
the mother bank while nine-tenths OF the commercial ia
cies afforded the country and Of the pro-
hS secured Tor the stockholders, have resulted from the
operations Of these branches.
The report makes reference to the obigaion Of tbc
Bank to transfer the funds OF the Government to any point
where they may be wanted for disbursement and seems
1izrnu fhuftl
ton is no burden at ALL but actual benefit TO the baak
the satisfaction Of those who might be sceptica the
words oil the report will be given.
"Che largest portion of the revenue particularly fom
imports as Is universally known, is collected in the Allan
tic cities north OF the Potomac. These cities being the
great maTts oil supply TO nearly the whole Of the United
o'acs and places which remttances from almost
every part OF the country, demand for funds up-
on mem from nearly every quarter, constantly and gene
RAINY al premium Therefore, far the bank is call
led upon 10 transfer funds from those cities TO other places
becomes matter Of profit and not Of expense to it
and The larger Me ey required to be transfer
red OF the government and the greater the distance the
greater the profit and advantage to the bank
Ii these views OF the bank be correct bank certain
ly invaluable institution 1t has not only annihated
time and space, but it has done something more Ii
has produced such state OF the exchanges that il much
easier for man in New York pay thousand dollars in
ST. Lons than TO pay itn Wall and in which, con.
sequeny the New York debtor actually makes profit
by being required TO pay his debt thousand miles off in
stead OF paying il at his door, If this be correct
view OF the subject it undoubtedly Of the greatest of
the modern discoveries in finance and commerce.
But the minority still ncredulous They cannot un
dersand how it is possible for the bank make profit
by transferring funds when is expressly stipulated that
they shall transfer them for nothing Nor can they well
conceive how the loss which the bank sustans by the ope
ration OF transferring funds for the government can be
less than the difference between the 'nothng which il
receives from the government and the profit which would
derive from the operation, if performed for ndiv
duas
If the government collected its revenue in spece i'm
IN york; and had occasion to spend il at st. Lewis, ii
would certainly cost 1t something transport the specie
from one place TO the other II in the absence OF the
FEDERAL Bank collected its in the bills of
State banks asst would be obliged TO do the operation OF
transferring these funds to distant places would involve
still greater expense But, under the existing SYSTEM
The bank rs responsible for the safe custody of the govern
nen unds and Tor placing them wherever they may be
required, without any expense whatever the govern
ment.
IT, then, the bank has "aided the fiscal operations of
the government, as tile report to intimate, uni
form currency and revenue safely kept universally
transferred at the risk Of the bank and without expense
10 the government affords aid financial operations
he report, adverng to letter from the President of
the bank, oil the 10th OF March last in which he informs
the Secretary OF the Treasury that the Collector New
Ork ad requested the "bank to authorize extension of
loans III that city, in order TO assist the debtors of the 90
vernment, and that this had been promptly done gives
view OF the discounts Of tao office at that place calculated
to make the impression that extension loans had Ia
ken place Tbs Is II proceeds from coniound-
ing notes discounted with bills of exchange purchased by
the bank 1t will be by the weekly statement Of the
New York board, that the amount OF discounted on
the first of September 1884, was 81 1874 and that on
the 2st March, 1892 few days before the date Of the
Presidents letter, the amount 1884 9l7 exhibiting
an increase OF $73l 1872, in little than six months
III the amount OF domestic bills falling due al distance
during the same period larger than the amount pu