The daily union. [volume] (Washington [D.C.]) 1845-1857, 1847-10-27
For the Union.


What amount of treasury notes, bearing interest
could be kept in circulation, without sinking below the
par of SPECIE and without increasing the present amount
OF taxation?
The experience of the banks affords us the best means
OF answering this question.
According to the returns of the bank commissioners,
the banks of Maine have to redeem the whole amount OF
their issues five times, and the banks of Connecticut have
to redeem theirs times in the OF year. The
notes OF the banks of Maine circulate an average,
seventy three days. and those of the banks of Connect
sixty days, before they returned for payment.
The notes issued by the banks in the large cities, espe-
clay the notes OF a large denomination, have, on an
average, much shorter circulation.
1t is by their connection with system OF discounts
and depostes that bank kept circulation,
for the limited periods Just mentioned Let US look into
the amount of transactions necessary to keep them
rent.
According to the Treasury returns, the amount of bank
notes circulation throughout the Union the
LIST OF January last 05,000000 If they circulated,
on average, long the notes of the banks of
Maine the total redemption of them in the OF the
year must amount to 525 900 0O0 to $500 if
they circulate as long the notes OF the banks OF Con-
necticut.
Take another view of the subject The whole amount
OF loans and discounts OF the banks amounted on the LIST
OF January last to 1871 100000 Suppose them to be
average for sixty days: then the whole amount of
discounts in the course Of year will be
Suppose them to be for ninety days. then the whole
amount of transactions will be 81 ,240,OOO,O00.
1t may be said that this is not fair view of the sub
ect since is notorious that many of the loans and
discounts of the banks for longer periods than six
ty ninety days Well, take only half the amounts
above stated and they will be respectively 1890, 100000
and 1920 900 900.
How very SMALL in comparison with the receipts of the
banks the receipts of the United States government
How very small consequently, is the amount Of paper it
would keep in circulation, par with specie, simply
by receiving it in payment of public dues
If annual bank of 900 supports
average bank circulation of only 100000 an annual
government of $30,000000 will on the same
ito, support average circulation OF only $5,OO0OOO.
View the subject in another aspect:
The gross circulation of the banks the 1st of Janu
Atnr 600 Had, r. 9TH
banks hand l 00O) and SO 900 more for such
notes returned 'sspece funds,' and the outstanding
circulation Of the banks will be found to be only 1856 o0o
0oO Deduct from this, specie on hand and the
nett circulation OF our seven hundred banks with their cap
al of 200, 100000 will be found to be only $51OOO0OO,
Surely is not worth while for the United States gov
eminent to enter into competition with the banks Tor the
profits arising from the manufacture OF paper money.
Some suppose that government paper would have an
advantage that of the local banks because it would
be receivable everywhere in payment OF public dues It
would not however have, in this respec greater ad-
vantage than had the paper OF the late United States
Bank That was vas not only receivable everywhere in
demand. Yet the average circulation of that bank,
during the time it was the fiscal agent of the govern
ment from 1917 to 1893, less than 900,
to speak in exact numbers, $9,6S9,9S2.
In the same period the specie held by the bank was,
average, $685. 01 The nett circulation exceed
ed the specie on hand only $3,S07,62l.
The exchange transactions of the United States Bank
amounted according statement made by Mr.. Binney
in Congress- to more than 1927 in year had
during the whole of the period above MENTIONED public de-
postes 10 amount exceeding 900 900, and private de-
postes to amount exceeding 5Oooo0O on the average
In addition to ifs exchange dealings it made loans and
discounts to the amount OF millions on millons and yet
all the paper it could keep in circulation, above the
amount of specie hand, less on an average, than
"a 900 600.
candid reader that any profit which the government
would reap from the issue of treasury notes OF small de-
nominations, and bearing interest, would be very tn
fling indeed Such notes would, in no one respect, have
any advantage the notes of the late United States
Bank for they receivable everywhere IN payment
OF public dues In another respect they would be very
inferior circulating medium lnsomuch as they would
not be payable in specie demand Yet as we have
seen, the Bank of the United States, with all the advan
tages possessed, could keep in circulation less than
four millions of paper, average above the amount
| of gold and silver in its vaults. THETA.