The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1869-12-06


There arc two reasons, and each seems to me 60 be
controlling reason, why the bonds OF the United
II not so exempt the amount OF the taxes imposed
by the local authorities will be added to the interest
the Government will be required to pay. and thus
the national Government viii be compelled to pro-
vide for taxes imposed by the local authorities.
Secondly. Inasmuch as the ability to borrow may
under some circumstances, be essential to the pre-
servation OF the Government the power should not
even eUS In times OF ss peace and prosperity be quail
the right 70 tax the means by which the National
Cover government Is mautained The right to use its
claim OF another, is an essential condition OF
regnty and the National Government should never
surrender or qualify Its power In this particular. In
Offering the new loaD citizens and subjects OF other
governments should receive the strongest
according to the terms of the bonds issued, without
deduction or abatement VIVA tsoever.
agents for the negotiation Of the loan, 1
respectfully recommend that liberal commission
be allowed to subscribers, and that those who first
subscribe be permitted TO select the class OF bonds
In which their subscriptions respectively shall be
made. further recommend in connection with the
proposed oan that the banks established under 'he
act 10 provide national currency" be required TO
proposed loan act for those now deposited as secu-
rity for the redemption OF their bills. should any
visiOn should be made for the surrender OF
It's charter, ana authority given for the
deficiency thus created An essential condition to the
success OF the proposed new loan is the continu-
ance of the present revenue system. A chief means
by which the present holders OF the 1ye-twenty
bonds can he induced to surrender them and receive
bond upon longer time and at lower rate OF inte-
rest Is the certainty furnished by the magnitude OF
the national revenue that these bonds are soon to
be redeemed. We must be prepared to offer them
the alternative either OF accepting the new bond at
lower rate OF interest payment OF the principal
Of the existing bonds. When the 1Ve-twenty
bonds shall have been funded to the amount
OF g. 600 900 or 81 200 OOO the revenues can
be reduced materially, and yet sufficient sums be
ernment 20 pay the interest on the puclic debt and
also to pay 1000 to $50 900 Of the principal
annually, should our success In negotiating new
loan be equal to my expectations, based upon the
fact that the ability and disposition OF the people of
the United States TO pay the public debt are SUM-
clent 10 Justify us In assuming that the bonds OF the
United States Will command the highest rates In the
markets Of the world We shall then be in condition
to enter upon the work Of reducing the tax at the
commencement of the next session OF Congress.
ON the 3Oth Of June, 1868, the amount OF Outstand-
ing three per cent certificates and compound inte-
rest notes convertible into three per cent certificates
was 81 6O4, $50. on the aoth OF June, 1861, the
ductlon OF s64l8 4S0 in that form Of Indebtedness
On the lst OF December, 1869, the amount outstand
ing was stu further reduced to S497l6,15s,
s21 SsS, I4o. The three per cent. certificates are "a
substitute to considerable extent, for United
States notes, being largely held by the banks as
portion OF their reserve, and thus Indirectly though
not to their full nominal value, they swell the
made for the redemption OF the three per cent
thcates within reasonable time and, a compu-
currency which would TINS be caused, that
authority be given to grant charters for
capital is less than the share to which they would
be entitled to an amount not exceeding thirtv-fve
millions OF dollars in the aggregate. The redemp
ton OF the three per cent certificates and the a1di-
tions to the banking capital might he arranged as
not to produce serious disturbance in the finances
or business of the country while additional banking
capital would be supplied to the sections now in
need of it. and this without any increase of the
volume OF circulation.
There are two evils in the present banking system
which require remedy by prompt and efficient legs-
aton. 1he first is the practice on the part of banks
q
this practice Is that moneys in the hands OF indiyi-
mercantile and other business purposes are diverted
into the custody Of banks upon the idea that If the
moments notice. Country banks, and others remote
from large centres OF trade, having received money
to transfer such funds to other hands from which
they will receive an equal or larger rate OF interest
in return They stimulated also by the desire to
place their funds where they can be at all time
commanded. Thus Influenced, large sums are
placed on deposit with banks in the Cities and espe
of trade and finance for the Atlantic coast. In the
ordinary course OF trade the currency Of the coun-
stimulate Sh1 Ethis tendency by artificial means
with the impoverishment OF the
country, the banks in the city may be called upon
at any moment to respond to the drafts OF their de-
such funds upon commercial paper payable on time,
but insist upon making call loans, as they are
termed, with Government bonds or other obligations
pledged as collateral security. Merchants will not
borrow money in large sums payable on demand.
The consequence is that the moneys thus accumu-
lated in the city banks are loaned to persons en-
gagged in speculative purposes. The extent OF this
evil is seen in the fact that OF the bank loans in
the city OF New York in October, 1863
SOS, ,OOc,0OO were upon commercial paper and
600 900 upon demand, with pledge OF cOllateras
and in october, 1869, 500 0O0 900 upon CONNER
cial paper and $50 600 900 upon demand In the for
mer year Al per cent and In the latter year 81 per
cent OF the loans made by the New York banks were
upon demand further result is seen in the fact that
parties borrowing money upon commercial paper for
legitimate commercial purposes pay from to o per
cent. additional interest per annum as compared
with persons who borrow money for specus
tive purposes. ], therefore, respectfully
| commend that law be passed prohibiting absO-
lutely the payment Of interest by banks upon de-
posts and limiting also their loans upon coaterals
to an amount not exceeding ten per cent. of their
| capital
| am satisfied also that the practice OF certifying
| checks, even when funds are in the bank to the
credit OF the drawer OF the check is fraught with
evil, and that it ought to be entirely prohibited.
The following statement exhibits the receipts
and expeditures for the fiscal year ending June 80,
| 1869: = Receipts for Customs, $3.50, ,426G3
! direct tax, $765,GS56l; miscellaneous sources,
s27 I52 9297 total exclusive OF loans $3.50 7472l
Expendture-ciyil service, s56,4l4 0Sl 53; pensions
| and Indians, 1855 ,544S4 war Department,
teres on the public debt $50 694 242 so ;premin
$40 U. s. Treasury notes, $500 000 total exclusive
OF loans sS2l, ,59lI6 receipts in excess Of ex
| pendtuTes, $40, ,453, 1876.
| The following statement exhibits the receipts aud
expenditures for the quarter ending September 80,
| 1869 9-Recepts-C s52, ,59S 92l Sc; internal
laneOus sources, s7,412, 1887 total, exclusive o.
| loans, sl00, ,SS3, l6262. Expenditures after de-
dncting the amount of repayments by dlsbursing
Officers and others-Civil service sl5,lO2, ,2O2O5;
Indians and pensions, S13,547, ,9i279; War Depart
ment, S18 46S O5; Navy Department. S. 1872 63096
Interest the public debt, $3 452 2s0I4 total eX-
expenditures 223, ,35l, ,10I 43. The estimated receipts
and expenditures for the three remaining quarters