The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1868-12-09
DAILY PRESS.
PORTLAND.
Wednesday Morning, December 9, 1868.
The Department Reports.
PORTLAND

Ihe following IS an aDSlfacJ Vi secretary
McCulochs annual report: The National fl
nances are in good condition and Mr.. McCul-
| loch believes that with proper financial iegis-
| lation, in the revision of the tariff and the
notifications of certain portions of the inter-
| nal revenue laws, the path to specie payments
may be reached The funding of the public
| debt he regards as one step toward reSump-
| ton. The report shows that up to date, of the
seven -thiry bonds 1927 ,6293j0 have been
| funded into five-twenty six per cent bonds; of
the first series S299 565, 200; second SERIES $780,
| 18S, 200; third series S197 875, ,450 This leaves
| on the first of December, of the outstanding
seven thirty notes but 1868 100. The com
pound interest notes which became due be-
| tween the 10th of June, 1867 and the 18th of
| October 1868, have not all been redeemed; but
| many have been received in exchange for the
three per cent. certificates.
| The Secretary estimates the expenditures
for the fiscal year ending June 80, 1870 to be
S25O.0O0,0O0, though the War Department, in
the event of an Indian war, will add many
millions to this estimate Last year the War
Department asked for S25 900 900 for bounties
| but its estimate this year is less than that am
cunt, as no more appropriations for bounties
are required. The report shows that the an
nual interest on the public debt is, in round
numbers, $40 1000 900, and the estimate for the
next fiscal year is but little in excess OF that
| amount. The estimates of the Navy Depart
| ment are some S15 900 less than last year.
The receipts show that the Internal revenue
| S12O00O,OOO.
The estimated revenue for the next fiscal
! year from customs, internal revenue, lands
and miscellaneous sources. is many millions
| in excess of the expenditures This year the
estimated excess was S9,000000 The Secre
| tary's report shows that the public nebt has
| been reduced during the year from November
| l, 1867 10 Nouember l, 1868, S35, ,624 102 80.
| She report shows an expenditure on account
| of the public debt Of $3.50, 100000 which in
| cIuOeS re0pmOtiOuS conversions lntPrP st
| public debt &c.
| REPORT ON THE COMPTROLLER OF THE CUR
| RENCY.
Mr.. H. r. Hurlburd Comptroller of the
| Currency, has completed his report. Its chief
| points are as tollows
| The Comptroller suggests that national
banking associations which go into voluntary
| liquidation be required to provide for their
| outstanding circulation in lawful money, AID
take up their bonds within three or six
months; in default of which the comptroller
shall have power to sell their bonds by auction
in New York city, and, after paying to the
| Treasurer the amount of the Outstanding Cir
culation of the bank in lawful money, to pay
| over any excess that may be realized from the
sale of the bonds to the association or its legal
representatives. Banks that are winding up
| for the purpose of consolidating with other
banks, or with view of reorganizing at some
other and more desirable points, should be ex-
| cepted from the foregoing requirements.
In regard to central redeeming agency, the
Comptroller says: "The opinion was expressed
| in the last annual report from this office that
it was important that system of redemptions
for national bank notes should be established
as early as practicable, by meaus Of which
they should be made convertible into the law
ful money of the country whether it be paper
or gold, at the principal centre of trade. With
out repeating the argument then made, the
| conviction is again expressed that only by
| rigid, unfailing redemptions at a central point,
can the bank currency of the country be Kept
| at q uniform par value"
The Comptroller speaks as follows in regard
to the periodical stringency in New York city I:
ga careful study of the bank statements of
New York, taken separately, and the applica-
ton of the facts so obtained to the aggregate
statement or abstract of the whole, affords
valuable and instructive information. The
abstract shows the total of loans to be $685.
634 900. An examination OF the statements
| in detail shows the character OF the loans to
be substantially as follows; Commercial or
business paper, S90000000; demand loans, $685.
100000; accommodation loans, S3 100000; sus-
pended loans, 81 500, 900; total, $106, 500 600.
Nlne-sixteenths, or rather more than halt the
| loan, is legitimate business paper, the balance
is upon call or for accommodation. The
amount loaned on call for commercial pur-
poses is not stated, but trustworthy informa-
ton leads to the belief that it is very small.
The customs and necessities of trade are of
such character as to preclude loans of this
kind.
In addition to this direct loan of $4,000 900
they furnished facilities by means of certified
checks to the same class of operators to an
amount ranging from $1100O0000 to $120O0O-
COO daily. On the 9TH of October the am ount
was S112, 100000, and these checks are made to
swell the amount of individual deposits. They
are credited to depoSitors 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 pay taxes, the banks invariably deduct
all such checks on hand. For instance, on the
first Monday Of October they reported: Indi-
yidual deposits, S22417000O; but deducting
checks on hand, $112 100000, they had actual
deposits of S111 $4,000. Taking the call
loans and the certified checks together, the
somewhat startling TACT is developed that the
New York national banks furnish $4,000 900
of capital and $112, 100000 of credit Tor specu-
lation. The use of certified checks is direct
imitation to that extent, which stimulates the
stock market, and keeps the price of large
class OF miscellaneous securities much above
their actual value; so that the market is fever
ish and fiuctuating; and slight stringency
reduces the price.
Taking advantage of an active demand for
money to move the crops, west and South
shrewd operators form their combinations to
depress the market by locking up" money
withdrawing all they can control or borrow
from the common fund; money becomes scarce
the rate of interest advances and stocks de-
cline. The legitimate demand for money con
nnues,and fearful OF trenching on their reserve
the banks are straitened for means They dare
not call i'll their demand loans, for that would
compel their customers to sell securities on
falling market, which would make matters
worse. Hab.tually lending their means to the
| utmost limit of prudence, and their credit
much beyond that limit, to brokers and specu-
lators, they are powerless to afford reliet.-
Their customers, by the force of circum-
stances, become their masters. The banks can
| not hold back or withdraw from the dilemma
| N mo Of Aoipe l,,es, L.
placed them. They must carry the load to
save their margins.
A panic, which should greatly reduce the
price OF securities, would occasion serious il
| not fatal results to the banks most extensive
ly engaged in such operations, and would pro-
duce feeling of insecurity which would be
very dangerous to the entire banking interest
of the country. The fact that a banking in
terest with capital and surplus of $780, 00O
can be, and has been repeatedly placed at the
mercy of few shrewd, though bold and un.
scrupuous men, is evidence Of some Inherent
defect in its management, and the foregoing
statement may serve in some degree to show
where the error lies: First, in demand or call
loans to brokers and spectators on collateral
security, by which nearly onehalf the active
resources of the banks are used directly to fos-
ter and promote speculative operations; Sc c.
ondly, certified checks or loans of credit to the
same class OF men, whereby stocks are inflated
and immense operations are carried on daily
upon fictitious capital third, the payment q
interest on bank balances, which being paya-
bic on demand, must be loaned on call in or
der to avoid loss.
Under the head of specie payments tn,
Comptroller says:
The subject OF specie payments naturally
comes up whenever the currency question is
discussed, and much ingenuity has been exer-
cised in devising plans for an early resump-
ton. The principal obstacle to specie pay
ments may be found in the statement of the
public debt of the United States for the 1st Of
October, 1868, under the head of "debt bearing
no interest" as follows: United States notes,
1856 021 ,O73; fractional currency, S32 1888 GA IL
making together $388, ,954, III of government
notes circulating as money and designed to
take the place of gold aud silver by being
made legal tender for all debts, public and
private, except duties on imports and interest
on the bonded debt. As long as the people
prefer an inferior currency, inferior because
irredeemable, and inconvertible except at a
heavy discount, 9hey will have it to the entire
exclusion of the precious metals.
Whenever the people conclude that it is
more economical to conduct the business of
the country on a specie basis, they can ordain
specie payments by making provision through
their representatives in Congress for the pay
ment or withdrawal of the present deprecat-
ed paper currency, issued and kept in circula-
ton by the government; and whenever the
people wish to restore the credit of the nation,
they can do it through their representatives in
Congress, by removing the only embarrass-
ment that stands in the way, by directing that
provision shah be made for the payment of a
floating indebtedness, amounting to 1888 OOO-
900 consisting of promises to paw that are
never paid, and so establish the fact that the
| United States is a solvent debtor, able ana
| willing to pay every debt as il becomes Que