The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1867-12-04


while II such rus n not sstablisb "a Ae burden win b.
unsquay divided failing most heavily those banks
which conforn the highest standard compelling them
suss whils Il sss sap tine the remote banks Win DO
tempted 70 undue sxpanson BY the diiculty and On
pense Of rsurnps their notes for redemption in sn
Is In all other sases the inferior currency wu % the
: Rigid unfailng coavsrtibnity s the only safe ruls
and Ia tba and the most economical IL 10 obliga-
ton which every national bank owes TO the system 70
contribute s due the maintenance Of circu-
lie own issues az par the great centres Of trade Any
pian which 10 not comprehensive, thorough and rigid
Win nay . ny the purpose The when
authorizes the issue OF bank notes for currency has
right require all banks 70 conform 70 the highest
standard. The currency OF country belongs 70 the
people, and the government which representa- the
people should 70 that the people have the very
Al present there no immediate demand for the 70.
demption Of national bank notes; but IL would be
the heathiest evidences Of returning soundness in
financial affairs should Do inauguratsd. II legal
tenders should command small premium II would be-
gin i would BE- the nrst step toward: specie payments
pay, aud not the payment itself il would mark era
in legal tender notes.-the date OF their appreciation IN
value Al the same time would be healthy reminder
TO the banks that their circulation Ia liability payable
Attention 10 respectfully called 70 . practice prevail
ing lsas in the banks OF the principal otes Of
practice characterized by the Chancellor Of the Ex
chequsr Of England. In commenting upon the canses
aSu aud Of
and 20 which many Of the evils Of the recent crisis may
Country banks keep deposits With city banks for the
purpose OF facilitating exchanges In carrying on their
owe business and ordinarily, II s 10 be presumed they
working balance in the city banks The funds 90 placed
needed and properly belong there but will not b
current demands Of business. The payment Of high
rates OF interest ON such balances attracts all the spare
sss Z mi. tns sSSn 2 ss .oS;S
remain dead or unemployed but II is drawn away from
the country where needed % the business centres
come into competiton with the country. and compel
borrowers In the country 70 pay higher ratios.
THE CURRENCY QUESTION.
This subject y before the pubic upon two PROPOSE
sue notes for circulation in order that the government
may issue its own notes in their place
comOouud interest no.es notsi snd SyS
twenty bonds. a. they mature and become payable.
The advocates Of the last mentioned scheme regard
the first proposition - the preliminary step TO the accom-
pishment Of their purposss and therefore unite in
It's support. Regarding the suggestion contained In the
demand Of all parties who dissatisfied with pres
snt status Of the currency It will be necessary TO ex
anime the grounds upon which the demand s based In
pursuing this investigation It be 70 touch
upon questions seeming to trench upon the wider fields
ally and no further than may be essential to an nte-
gent understanding Of tho currency question: which IL
legitimate subject OF inquiry and consideration in this
report
To state the FIRST proposition fairly proposes with
draw the circulation Of national banks In order that the
government may occupy the whole field. The three
hundred millions OF bank notes to be replaced by
three hundred millions Of United States notes.
The three hundred millions OF United States notes
to be used for the purchase of United States bonds
which 10 be cancelled and thus interest bear.
Ing notes TO be substituted for interest bearing
bonds, whereby saving Ia to be effected Of the amount
OF interest that would otherwise be paid upon the bonds
cancelled.
1t is claimed that by the payment Of Interest the
bonds deposited BY the national banks with the Treasu
Of the United States security TOR their circulating
notes, the government pays to the banks bonus for
issuing three hundred millions of currency which 1t
might have without the bonus, by issuing its notes
Gates honest Ia the belief that by acting upon this
theory the government would actually eighteen
millions per annum, and they are entitled to q fair
hearing.
The national banks authorized to issue 5000
OF currency The same amount OF legal tenders substl
ued for this currency would purchase $277 800 900
United states bonds at 10S which is less than the pre-
market price The interest these bonds. six
per cent, would be &c. Sos 900.
II the bonds could be purchased at l05 the legal
tenders would buy $2S5 700.0 600, the interest upon
when would be SIT, 142, 000
II the bonds could be bought a. par, there would be
$500 00o, 900, upon which tho interest would be
SIS, 900 900.
The naouai banks however, for the year 1865,
actually paid $l6, 600 600 In taxes, foo@s:-
10 the States s94s 4Sl
Total $l6,Ol9,3S9
II may not be improper here state that, OF the
paid by the banks the amount received by the federal
government IL furnished by the books OF tho
aud Commissioner OF Internal Revenue. The
paid the several states is derived from specific
returns Of about fourteen hundred banks minimum