The New Orleans crescent. [volume] (New Orleans, La.) 1866-1869, 1868-12-19

ANNUAL REroEf or THE CONTROLLER, n. l.. nuaL.
t BURD. D 1.f1N-

national finances, not heretofore included IN the
very brief abstracts which have been published.
The following is substantially the entire reports:
= On the sutject Of bsnks In voluntary liqaids-
currency act provides that any association may
60 into liquidation and be closed by vote Of
thsreholders owning two-thisds OF the stock that
due notice OF such action shall be published, etc.;
and ct any time after the expiration of o1e year
from the publication Of such notice the sssocis-
ton may pay over TO the treasurer Of the United
States the amount of its outstanding notes In law
full money OF the United States. and take up the
as security for such circulating notes. leaving u
optional with the bank OF its representatives. to
take MP the bonds or not Under this provision.
a bank may go into nq9iaa,ion pay on ns ds-
have no existence as bank OF discount and de-
20 IT, and yet reap all the benefits Of q circulation
guar snteed by the government. In some cases
Ibe ownership has been concentrated In the hands
Of two or three individuals, who continne to do
business as bankers. avoid taxsfion, evade the
requirements Of the currency act, and sfll retain
the most profitable features Of national bank.
To correct abuses of this kind 1t s suggested that
national banking associations which 20 into vol
uptary liquidation be required u provide for their
outstanding circulation in lawful money, and take
up their bonds within three or six months; In de-
fault Of which the controller shall have power to
sell their bonds by auction In New York city. and
after paying TO the treasurer the amount OF the
outstanding circulation Of the bank in lawful
"
ned from the sale of the bonds to the association
or its legal representatives. Banks that are wind
ing up for the purpose Of consolidating with other
bar ks, or with q view Of reorganizng ct some
other and more desirable point, should be ex-
ceDted from the foregoing requirements.
The controller speaks % follows In regard to
the periodical stringency h New York city
careful study OF the bank statements of New York,
isken separately, and the application Of the facts
30 obtained to the aggregate statement or abb
9 ract of the whole. affords valuable and instruo-
tive information. The abstract shows the total
OF loans to be sI63 6s4 900. An examination Of
the statements in detail shows the character of
the loans to be substantially as follows: CONNER
cial or business paper 800 900 600 demand loans
Sos, SOC, 600; accommodating loans So 500 600;
suspended loans 81 100000; total $l63 900.
is legitimate business paper the balance is upon
call or for accommodation. The amount loaned
on call for commercial purposes IL not stated, but
tustworthy information leads to the BELIEF that q
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
$40 GOO 900, they furnished facilities BY means Of
certified checks to the same class OF operators to
an amount ranging from $ll0 900 900 to sl20,o00.-
600 daily. On the 9Th of October the smount was
sll2, $4,000, and these checks are made
to swell the amount s,o Of individual ssnd.,, de-
as money, and are circulated and treated
as money by the banks aud by their customers.
Yet, when ascertaning. the amount of deposits
upon which they must hold the reserve. or upon
which they must pay taxes, the bank. invariably
deduct all such checks on hand. For instance, on
the first Monday Of October they reported: Indi-
viousl deposits, 1924 .l70 900; but deductng
checks on hand, <ll2 s00. 900, they had actual de-
posits Of slil $40 600. Taking the call loans aud
the certified checks together, the somewhat start
ling fact is developed that the New York national
banks furnish $4,000, 900 and $4,000 600 OF
| credit for speculation. The use of certified
| ,hecks is direct imitation to that extent, which
| stimulates the stock market and keeps the prices
| Of large class of miscellaneous securities much
above their actual value so that the market 10
reduces the prices. Taking advantage Of an &C.
| tive demand for money to move the crops, West
| and South, shrewd operators form their combina-
| tons 10 depress the market by locking up !"
| money, Withdrawing all they can control or bor-
row from the common fund; money becomes
scarce the rate Of and stocks de-
CT De. The legitimate demand for m lney continues,
and, fearful of trenching on their reserve, the
| banks are Strengthened for means. They dare
not call in their demand loans, for that would
| compel their customers to cell securities On a
falling Market which would make matters worse.
Habitually lending their means to the utmost
| Eni or prudence, and their credit much beyond
that limit, 10 brokers and spectators they are
| pow erless 70 sffJrd relief. Their customers. by
| the force Of circumstances, become their masters.
The banks cannot hold back or withdraw from the
dilemma IN which their mode of doing business
hts placed them. They must carry the load to
save their margins. A panic, which would
greatly reduce the price Of securities, would
occasion serious If not fatal results to the
banks most extensively engaged in such ope-
T. ions, and would produce feeling Of inse-
curity which would be very dangerous TO the
entire banking interest Of the country. The
fact that bsnkng interest capital and surplus OF
| placed st the mercy of few shrewd, though
bold and uDsci uptlo men, is evidence of some
inherent defect in its management, and the fore
qOirg statemt Mt may serve in some degree to show
where the error lies First, in demand or call
ans to brokers and spectators on collateral Sc
curly, by which nearly one half the active re-
sources Of the banks are used directly to foster
Id promote speculative operations; secondly
certified checks OF loans Of credit to the same
c'sss of men, whereby stocks are inflated and i'm
mense operations are carried on daily upon nc
Ii ious capital; third the payment Of interest on
bank Balances. which, being payable on demand
must be loaned on call in order to avoid loss.
Under the head of specie payments the con
troller says (" Tie subject of specie payments
naturally comes up whenever the currency cues
ton is discussed, and muchiDgenuty has been ex
ercised in deyising plans for an early resumption
The principal obstacle to specie payments may
be found 10 the statement OF the public debt OF
the United States for the LIST of October. 1868
under the head Of debt bearing no interest, al
tiouai currency, sac 1874 6l4 IL, shaking together
f3sS 954 6S7 II of government notes, circulating
Is money and designed to take the place OF goi.
and silver by being made legal tender for al
ports and interest on the bonded debt. As lonl
as the people prefer an inferior currency-inferio
because frredeemable and inconyertible excep
at a heavy dscount-they will have IL to the entir
exclusion OF the precious metals. Whenever tn
people conclude that il Is more economical 4
conduct the business of the country on speci
bssis, they can ordain specie p iyments by max
ing provision through their representatives. II
Congress for the payment or withdrawal OF thu
Present deprt cisted paper currency. issued AM
sept in circulation by the government; and when
ever the people wish to restore the credit OF Thu
nation. they can do it through their represents
hves in Congress. by removing the only embarrass
mept that stands in the way by directing tbs
| provision eball- be made for the payment OF
floating Indebtedness amounting to $5Se 900. 00t
consisting of promises to pay that are never paid
| end so establish the fact that the United States
{ a solvent debtor, able and willing TO pay ever
debt as il becomes due. Specie payments and th
restoration Of public credit are within the reach
and depend upon the will Of the people Of tn
United 5 ates. elr q .
The report closes with an allusion 10 free bank
| ing which we copy entire: Whenever Congress
shall inaugurste measures looking 30 the apprec
alton Of United States notes to a gold standard
. | =. 81 Oh ma mil roko lu ha