Daily Ohio statesman. [volume] (Columbus, Ohio) 1855-1870, 1868-12-11
Oblo sStat.e{.s:'1rlnarr, .:'1l
Report l.ep.a Of The CON ptroiIear Q Of thlee

: .aEa Il
Report of the Comptroller OF the |
ti1s4 aaA12oHaC Carreney.9 ~ 1Qnl5i
20 Mr. Fl. R. Hurlburd, Comptroller Of
the Currency, has completed his report.
IT'S chief points, heretofore briefly no /
ticed, are as follows. s's9o7hh 'h' q ans
The Comptroller suggests that nation
al banking associations which 90 into
liquidation be required to
provide for their outstanding circulation
In lawful money, and take up their bonds
withihthree or six months; In default
of which, the Comptroller shall have
power to selFtheir bonds by auction in
New York city, and after paying to the
treasurer the amount ofthe outstanding
circulation of the bank in lawful money,
to pay over anyiexcess that may be re-
allied from the sale of the bonds to the
association or its legal representatives.
Banksthat are winding up for the pur7
pose of consolidating; with other banks,
or with a view ofireorganizing at some
other and more desirable spoints, should
be excepted from the foregoing require
ments.2L .sW b1Ow o. .9miI 110ds /
. In regard to "a central redeemiag
agency, lthe Comptroller says: 90" Th5
opinion was expressed in the last annd-
al report from this office that it was i'm
portant that a SYSTEM of redemptions
for National Bank notes should be es-
tablished as early as practicable, by
means of which they should be made
convertible into the lawful money of'the
country, whether it be paper or gold, at
the principal center of trade. 90 Without
repeating the argument then madey the
conviction is again expressed that only
5by rigid, unfailing relemptions at cen
trail point, can the bank currency of the
be keptaat a uniform par val
ue." .s.iosu sii % {
The Comptroller speaks as follows in
regard to the periodical stringency in
New York city: "As careful study of
the bank statements of New York, taken
separately, and the application of the
facts SO obtained to the aggregate state
ments or abstract of the whole, affords
valuable and instructive information.
The abstract shows the total of loans to
be, S163 634,O0O. An examination of
the statements in detail shows the char,
acter of the loans to be substantially as
follows: Commercial or business pa
per, $90,000,000; demand loans, $685.
100000; accommodation loans, S3,500,-
600; suspended loans, 81 1,50O,000-total,
$1O6, 100000. Nine -sixteenths, or rath-
er more than half the loan, is Legitimate
business paper; the balance is upon call
or for accommodation. The amount
loaned on all for commercial purposes is
not stated, but trustworthy information
leads to the belief that it is very small.
The customs and necessities oftrade are
of such a. character as to, preclude loans
Lof this kind. ga'.i ana oi i9seqqo 5u
"In addition to this direct loan Of
$70,O00,0OO, they furnish facilities by
means of certified cheeks the same
class of operators to an amount ranging
from S11O,0OO,OO0 to $120,0o0, ,0oO
daily. On the 9TH of October the amount
was $112, ,S00,000, and these checks are
made to swell the amount of individual
deposits. They are credited to. depos
itors as money, and are circulated and
treated as money by the banks and by
their customers. Yet, when ascertain.
ing the amount Of deposits upon which
they must hold a reserve, or upon which
they must pay taxes, the banks invaria.
bly, deduct all such checks on hand
For, instance, on the first Monday O.
October they reported: Individual de.
posits, $224,17O,OOO; but deductine
Checks on hand, Sis, 100000, they had
actual deposits of $111,570,O 1000. Taking
the call loans and the, certified checks
together, the somewhat startling fact is
developed that the New York 1iationa
banks furnish $7o,000.000 Of capital ant
100000 of credit for speculation
The use of certified checks is a direct in
hation to that extent.which stimulates tht
stock market, and Keeps the price Of q
large class of miscellaneous. securities
much above their actual value, so that thu
market is feverish and huctuating, anc
a slight stringency reduces the price,
Taking advantage of, an active de.
mand for money to move the crops, Wes
and South, shrewd operators form theil
combinations to depress the market BY
locking up money, Withdrawing al
they can control or. borrow from til.
common fund money becomes scarce
the rate of interest advances and stock;
decline. The legitimate demand fol
money continues, and fearful of trench
ing on their reserve, the banks are strait
ened for means. They dare not call ir
their demand loans, for that would com
pei their, customers to sell securities OIL
falling market, which would make
| matters worse. Habitually lending Their
means to the utmost limit Of prudence
and their credit much beyond that limit
to brokers and Spectators, they are
powerless to afford relief. Their Gus
toners, by the. force of circumstances
become their masters. The banks can
not hold back or Withdraw from. the di
lemma, in which their mode of doing
business has placed them. They must
carry the load to save their margins.
"a panic, which should greatly re-
duce the price of securities, would oc-
casion serious if not fatal results to the
banks most extensively engaged in such
operations, and would produce a a'feeling
of insecurity which would be very dan
gerous to the entire banking interests
Of the country. The fact that bank
ing interest with capital and surplus
of Sl00,O0O.OOO can be, and has been
repeatedly, placed at the mercy of a few
shrewd, though bold and unscruplous
men, is, evidence of some inherent de-
feet in its management, and the forego-
ing statement may serve in some degree