New-York tribune., 1866-12-04
ctIon at you'd be uIged sganst dreot reauent q Iax

Western and southern states whose nnanca interests de-
mand consideration The notes Of banks located In those cities
are by the provisions Of the law as II stands Teeemabs
In NewYO and the managers Of those banks would have
h otherwise II the law did not require II they would youn
tary redeem there The proposed amendment only requires
all other banks TO DO the same hng ~ w give those cities
and the banks In those cities currency that worth par in
New.York instead OF deprecated currency thar would be
continual clog upon all business operations
York The fact that banks Of that section required
deem in New-York viii net make IL tributary but wiz msks
such redemption easy sud n noEise burdsnsome Tue com
merca importance Of place VIII force ITS own recognition;
money be drawn from only for the pay ment Of ITS deb
Trade flows in natural channels and money with It, Wher.
ever trade ceners there money win accumulate sufficiently for
II money is arbitrarily concentrated contrary 20 tbs pcipIe
II will now back again just as water Tln mo rs eye the
argument against edeening New York is based upon the
prepOnderatieg mpoanceO any other place as center OF
trade II ceases TO be argument as IN the natural order Of
worth more home than at any other point and viii home
for the payment Of balances rather than to New York for
qurement II the argument is not based upon assumption
il argument for the other side Of the question for tits
the necessity
If all national banks are required to redeem THEN issues in
banks Of that cy The balances KEEP. in those banks viii
amount in the aggregate to very large and there win Be
competition between them for the accounts OF the country
banks Such competition already exists and has Jed 20 the dan
gerous practice OF paying interest deposits This practice
condemned by all prudent bankers but where does it.
others must do lose The accounts OF good correspondents
bank that pays interest on current Danrc obliged 70
keep funds In constant lose money IN order to do
this loans payable call made upon collateral security Of
less value and there 20 much competition io such
loans that 10 has the effect 10 lower the standard Of security
CURED Everything which causes extraordinary facilities in
monetary transactions tends to produce excitement overad
ing and speculation TO bring compen alton
later checked in pressure distress and disaster Loans
this description made chiefly 70 spectators and that
reason enough why practice should be regarded unsafe
Conservative banks should cOutenance aid speculation;
and York Cv banks made by law the cu,ioan OF hs
available means for reeeng tho circulation s the banks
hanIs They so1d moi he allowed 10 eoporle fi funds OF
the country banks by oanng them for speculation and they
would not If they not obliged 70 pay 1tcI them
Stop the payment Of interest and tho tempaoa 10 make i'm
rrofsar rraoo of ueh IA IL
II can he Tenede AZ an by law prohibne ege,y national
bank from payng OF receiving interest bank balances
the proprey Of such law Is recommended TO the consideration
Concarrently with practical system Of redcmpons
gradual reduction Of the volume 0! legal tender notes would
operate benehcay upon the character Of The nstona currency
by checking expansion beyond the necessities Of business
in Circulation should not exceed the required perform tho
functions OF lawful money the substitute FOR specie fedemp
would be stringent and banks would pe compelled
10 regulate their issues by the demands OF trade
law during the last session o Congress provide.
that the Secretary Of the Treasury may DIM h The oune OF
the United notes in circulation not TO exceed 100000
the diminutiOn commences regular reductoh o f4WOU0
each month woudlsave at the expiration Of two years 0O0
of ega tender in 81 In lawful money Tor the
redemption O each d0ar OF national currency Authorized ms
ratio would hardly render redemption sufficiently stringent
produce much effect bank circulation bu th point could
be reached BY the expiration Of one year. the eject would %
-Four million dollars per month would be at the n $4,000
per day but bankers should see the means o he flemlon
OF their issues diminishing az the rate of sOo per day they
would naturally and unayosby cura their circulation 20 tne
lowest point their business would permit aud the benefits
arising nom practical system OF redemption" would Desin
This proposition basd upon the presumption that viii BE-
the p0cy Of the Government withdraw a rs issued
for Circulation as last As II shall have power The
fact not overlooked however that On.os prevails 70
and strenaoGsly urged that the should keep
IN circulation and thus have the use Of w much money
II is proposed very briefly consider tins question United
States notes originated IN the necessities o. s 'aneal
in the necessities Of trade and commeIce lar amoaAi
was regulated By the business ecesste Of ne county
but by the necessities Of great emegney ana vas oay
limited By reaching the maximum OF eApehn'l vulns 20
time Of The amount issued was entirely arbitrary 80 iI
the business interests OF the country were concerned aLd
altogether IN excess OF the demands OF uuu a y Aue.
the high prices borne by every kind OF eomc ana om tle
surplus OF money subject 70 tne eonOl oi A: =,
currency cannot contract or expand ron hhW1 cases
issued 90 the country from bankrupt during pro-
tlacted struggle with armed rebellion and ony bs
contracted by legal enactment Of Congress There u no
element about in sympathy with the commercial and indus
trial interests Of the county
The power OF issuing notes 20 circulate money dan
gerOus be placed AZ Toe mercy Oi political aro, IA goYen
and disaster calculated 10 exciie the grayesi l.Lsoh IN
the minds Of prudent Having served purpose for
which called into existence provision should De- made iof
ON the other hand banks are direct syafhs with trade.
cOnnts and BY furnishing circulating mediums II currency
issued OF demand is immediately returned Tor re-
word banks amenabls 70 the laws oi trade While ms
Government issues are not >, -. a.,
Government throughout the and they have been largely
instrumental In developing our national resources ana N o
creang our national wealth The managers and stockholders
comprise large useful and public spirited ca N tne comma
nifty. numbering over 2OlN0 cHens Dullls tf ls. !oi, =,
no. ~ tS United states. Tbey have redeemed and returned
10 tue Treasury OF the United States over e4WpVD OF mutt
lated legalenders. and have redeemed SOvn 81 ~ cos.
pon the very great convenience OF both me ADg lu s
Treasury DEPARTMENT They have been entail i placing
In the hands the people more than 81 O0VJn " Umea
States securities They have received anq disDl'ea rom ~
revenues OO0 Of public moneys free Oi expense 70 @
Government
The expense Of transporting and concentrating for dburss-
ment this immense by ordinary means, without tue agency
Of naonu banks would have been, at moderate esmaI
9 Te net los, sustained By the Government through failure
Of two banks which repositories Of pubic moneys VIZ
probably not exceed s0 0OO about one theh one f
cent OF the total amount involved and about onena OF s
amount would have cost the Government TO 10 Ae DusA
without the aid Of the banks. .,.
From this statement viii DO evident that national JANA
although organized and managed by indiydua r heI Gsa
profit are yet capable Of rendering important Ices OOtl
the Goyernment ana 70 lhe puUuO t aiu na' - tstH
losses have occurred the Government through eE as
the amount is small compared with the oat'y ha woaA
have been necessary TO carry On the business WHOM %
DISTRIBUTION OF THE CIRCULATION AUTn0hIlED By Law
The original act OF March 95 ls63 provided io an appex
nant of lie national currency % the several S'tes and lem
tories as follows $3.50 900 O according 20 repeseniau7e pt
laton and O according TO banking eap' resources
and business -,
This requirement was repealed by the act Of June ~
which left distribution TO the discretion Of the Conuoda
the Currency BY the amendment OF March 1862 the class
requiring app0rtOnment to be made reenactd 6la
the date amendment TO section OF tho internal hs
nue. act provided that all existing State banks SHOULD le
right 10 become national banks and should have tlc r~
organizations up 70 the lst day OF july le03
These two amendments not IN harmony ioI n ihe ~
portionment made required by the amendnent y cS
~ the State banks then IN existence could nos Aaie u ~
yerted without exceeding In many instances the amount 81
cuation npporoned 20 the different states But as se
be the intention and policy ot the act to absoroau eAps
ing Institutions rather than 20 create new banking les
adlton thereto the Controller OF the Currency 50
the amendments 70 permit the conversion o. sao
without limitation The effect OF this action was 70 s
very unequal distribution Of the currency some OF le 80
receiving more than they we're entitled to by ne appos
ment and leaving but very limited amount " DC a"~O
the Southern and some Of tho Western States -.
Now as the Government has assumed entire control o. ~
currency of the country involving direct supervision
banking interests becomes the duty o. the GoNefnmem
provide adeanae banking aeles 70 an seotlons