The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1865-11-20

TUE @oeh VI footuais IL ooth yuatt was
1870 ................ tlu, I'll JOY osoe oTe
lI9l .-................. ~, oyy lso q eao ana
I3z.................... ii,o4",cio a ose cog
i1oa ''''''''''''''.'..' aoea'as0 S7s6,5l4
lte4. ................... loisoo,1Scc II ia o30
1873. l5o3si~ 11'1te 1ao
1895 . IL O30 10 l,1io,Ioo
The amount Therefore OF advances 70 the government
does not appear TO have bor1sfor ssSe .ime
to the Restriction act mlh less propofon 20 The Total
hnent OF notes outstanding than the advances since
1914 have borne 10 the notes issued In corresponding
periods
GOVERNMENT INDEBTEDNESS TO THE BANK
II will be that material reduction OF the dept 70
the bank took place between the month OF August 1873
and the month OF February, 1915, having been re-
duced in the period to the sum OF 300 de-
ducting the advances from unclaimed dividends.
This debt again increased between February, 1876
and August following .
amount were romitted large addition authorized by
several acts Of Parliament, was made TO the unfunded
debt and TO the advances Of which the government
yances was again reduced from f37 Ell $50 600
the I'd Of August 1875 and the 18th OF Februa
ry, 1879
sum eight nine millions by gradual instruments
of one million month, from the month Of May; tho
bank having then considered that repayment sufficient
according to the evidence of the Governo "to enable
them to make the experiment OF the resumption of cash
TO meet these charges and the services Of the year.
and also effect further reduction OF the unfunded
debt provision made by loan Of three millions in
amount Of about twenty-seven millions, with power to
the subscribers Of making money payments instead OF
bringing in exeheauer os ana y was 'aa'
to the extent Of the monthly payments above men,
toned.
II appears however that the sum maid In money on
account Of this loan fell short Of the amont which was
expected and the repayment to the bank did not much
exceed FIVE millions at the end Of January 1872 one
mil ion of which the bank do not consider effective
repayment interest to that amount being due to the
bank upon the whole Of their advances.
The amount of the advances OF the bank to govern
mont was the Goth OF April last fl9 43s 900 the
of 9S $40 being deducted from the account furnished
by the bank the amount OF advances on sums issued
for the pay ment Of dividends.
THE BANK DEMANDS PAYMENT FROM THE GOVERN
MENr IN ORDER TO RESUME SPECIE PAYMENTS.
II will be seen by references to a communicate made
by the court Of directors of the bank to the committee
well the whole tenor Of the evidence OF the
directors who examined personally before them,
that they consider the repayment Of large proportion
of those advances essentially necessary preparatory to
the resumption OF cash payments AS the notes which
issued by the bank upon the discount OF mercantile
bills. revert to them at the expiration OF the period
which those bills have to and which never exceeds
sixty five days Is clear that that port OF their issues
be extended or limited at their discretion while over
the notes which issued consequence Of advances
to they have not practically the same con-
troll. To whatever extent these advances may be re-
duced the bank will gain corresponding control ovor
the amount OF their circulating paper, and will be ena
bled to supply the dimnuton of notes thus created by
OF their issues either upon the discount of
mercantile bills by the purchase OF bullion, or, II
necessary to make n reduction in the total amount of
notes outstanding equal TO the whole or any part OF the
repayment
ments by which the bank effect reduction Of their
issues surprising part OF the advances made by them
the government to be repaid is by limiting that
commodaon trade which they have long been in the
habit OF granting by the discount of mercantile bills OF
uRdoubted sodity arising out OF real commercial trans
actions, and falling due within short and fixed periods
BANK PROFITS ON GOVERNMENT DEPOSITS.
Although the amount Of the advances made by tho
bank puc securities is accurately stated in the
count in the appendix, and although the committee
strongly advise the repayment Of the portion Of them
required by the bank yet they think 10 necessary TO OBJ
that in deermung the actual amount Of the debt
duo - She hank of these advances elbow
ancs ought made IN favor oc tho publc TO the
tent 81 tno hiences o. public money deposited at Tho
bank.
called TO the extern ana operation Of those balances In
the report Of the committee public expenditure pre-
aggregate amount of the public money deposited at the
bank then calculated TO be Ell l0i 0l9 and sum
equal to FIVE per cent interest the avcras balances in
question, considered, by that committee, not far
from the amount of the profits derived by the bank from
this source.
The average amount OF public balances held by the
bank appears have been about eleven millions from
the year 1907 To the year 1915 and in consideration Of
the advantage resulting to tho bank from the possession
them the sum Of three millions advanced by the
68k TO government, without interest in 1903, which
advance continued under the authority of acts
year 1916 the public balances held BY tho bank have
been diminished and their average amount In the year
1918 did not exceed the sum OF seven millions Their
amount has been still further reduced by the operation
Of act which has passed In tho present session. which
makes tho growing produce OF tho consolidated fund
AVAILABLE limited for the public service and
certain degree within those limits lessons the benefit
previously derived by the bank from its accumulation
rom the first 10 the last day of each quarter.
II appears, however to the committee that whatever
may be, either hereafter the amount Of the pub
c balances held by the bank that ought always
be kept in view, and allowance made for IT when the
advances from the bank to the government under
consideration; for II is clear that II final settlement of
this account were to take place the public money dc
posted with the bank must be st oil against the adj
made by them TO the upon cxchoquer
bills and other securities bearing interest
A BANK DIRECTOR or THE WITNESS STAND.
In confirmation of this view OF the subject the com.
beg leave to refer to the evidence OF Mr. ald
nand OF the bank directors He states that 1t
il his opinion that sum Of from eight to ten millions
hou be repaid 10 the bank by government, supposng
he public balances to remain without any considerable
decrease in AMOUNT And being asked, "Does the ag
srcgate amount Of such balances operate dminuon
)f the total ADJ ancos made by the bank TO the puocr
he answers Eyes II does
THE RELATIONS BETWEEN THE GOVERNMENT AND
THE BANK.
For the alleged II appears to your committee
that although the amount of the advances OF the Onns
upon government securities Is accurately stated IN tue
appendix yet In determining the effect which these adj
yances have diminishing the control OF the bank
their ssucs deduction must be made corresponding In
the average held for any given period by
the bank deposit OF public money, since that dc.
post by ltsscning tho amount Of notes in circulation,
resiorcs TO the bank, In proportion 10 s extent tho
power OF acccdng TO the applications made TO them for
the discount OF the mercantile bills
Your committee trust they shall not be considered 10
have entered into unnecessary details in having thus
given full exposition OF the relations between the
rrnment and the bank II will be by reference TO
The evidence that the Of their advances to the
public Is urged by the bank OF the main impede
ments to the early resumption Of cash payments and
hat order 10 make preparations for their resumption
he bank require repayment TO the extent oil fen mil
lions. The committee was anxious therefore, that the
mount and operation Of these advances and the
20 which their effect counteracied by the balances OF
public money held by the bank should be clearly under
stood and this appeared TO them the more necessary as
he committee feel IL their duty TO close this branch Of
heir inquiry with earnest Recommendation to the
House make immediate provision for the gradual re-
payment the bank OF that portion OF the debt which
Inc bank requires TO be repaid, and to establish some
permanent provisions limiting and defining the auhori
OF the bank TO make advances 10 the government and
@ purchase government securities and bringing under
he slant inspection OF Parliament the extent which
hat az thority may be in future exercised
rUE EXPEpIENCY OF RESTORING SPECIE PAYMENTS.
Second your committee proceed 10 tho next head of
exprdicnry of reycrtinQ