The western Democrat. [volume] (Charlotte, N.C.) 1852-1870, 1866-06-05
VALUE of NATIONAL BANK NOTES.

VALUE of NATIONAL BANK NOTES.
Mr. Spinner, the Treasurer of the United
States, has recently published q very interesting
letter il relation Co the responsibility OF the
Government for the notes issued by National
Banks, which is Of sufficient importance TO re-
auire comment, so that the subject may be
thoroughly understood. The United States
Government holds, in all cases, its own bonds
for the full amount of the notes that can be
issued by National Bank, and ten per cent.
additional. The United States also issue the
notes to the banks which put them in circula-
tiou SO that all frauds by over issues can be
prevented. The very serious question which
has been mooted 10 relation to these issues is
this Suppose that in the market value United
States bonds depreciate more than ten per cent.
below par, and bank should fail, what security
have noteholders for the redemption of the foil
amount Of notes exceeding the market value of
the bonds 7 10 other words, is the Government
bound to redeem the bank issues, dollar for dol
lar :? In reply to this inquiry, Mr Spinner says,
that in addition to the bonds the Government
has a paramount lien upon the assets Of the
bank, to make good all losses. But suppose
that the bank should Utterly fall and have no
"assets." what then In reply to this inquiry
Mr. Spinner says, "the Government is bound to
redeem every dollar of. the National Bank note
currency" He says that the Government un-
dertakes specifically that the bonds shall not
depreciate more than ten per cent, aud if they
do, Government undertakes that the bank cir
culation shall be paid. 1t is provided that the
notes Of all National Banks shall be legal
tender to the United States for all dues except
customs, and they must be received at the de-
post cries when offered, whether the bank has
failed or not. How this will work is shown by
fho ~ Ron of Atfyo
N. Y, which failed about fourteen months since.
Notice was given by the Government that the
notes of that bank would be redeemed, but up
to this time they have not all come 10, and the
interest upon the bonds held by Government
exceeds to-day, by one thousand dollars, the
amount of all the notes of that bark which have
been presented for redemption.
There is another matter which bears upon
this question beyond these principles, and that
is. that the United States, in case Of National
Bank failure, has paramount lien on the assets.
Even if the deposit bonds should be worth only
ninety per cent. of the principal, everything
else that the bank owns, including the capital
stock and the individual liabilities Of stockhol-
ders for the amount, become assets in the hands
of the United States for the payment Of the
notes. Under the most unfavorable circum-
stances, therefore, of National Bank failure,
d
difference between the current rates of United
States bonds and ninety per cent. Of their amount
could not be made up in one way or another
Mr. Spinner says that the position Of the United
States Government towards holders of National
Bank notes is not that of trustee, responsible
only for an honest use of the trust funds. 1t is
really an en0orser, and responsible for the
issues of the bank in every event. The COM
munity, we undertake to say, has always thus
understood the matter; but the opinion of Mr.
Spinner, whose knowledge is great, and whose
authority to speak is ample, places the matter
beyond all chance for further controversy.
FROM MEXICO.
The Mexican Consul at San Francisco has
received au official dispatch, dated the 10Th,
from Mazatlan, announcing that the Liberals at.
tackled the garrison at Her Monsllo on the 4th,
and after bloody struggle captured and pill.
LACED the town. Imperial reinforcements sub
sequently arrived, killed two hundred Liberals,
drove away the balance and recaptired all the
booty. MIR Ainsa, an American citizen, and
Don Gonzales, who refused to give the Liberals
900, together with thirteen Americans,
were cruelty murdered The Imperialists de-
feated Covona and Songalva killing one hun
dred and eighty, Several wealthy families have
arrived here, flying from Liberal rule. The
published accounts declare that in the attack Oh
Her Mensillo the Liberals murdered thirty. Eve
foreigners and five hundred citizens who assist
ed to defend the town. Letters corroborate.
the statement of forced contributions by the
Liberals. The town was pillaeed and women
violated. The population of Sonora was rising
to aVcnge the wrongs perpetrated by the Lib.
erals.