The Columbia herald. [volume] (Columbia, Tenn.) 1850-1873, 1869-12-17

49,
According 20 the report of the Comp,
troller of the Currency, nine National
Banks have been organized within the
year, Of which eight are new associations,
and one n conversion from q State bank,
making the total number organized up to
October, 1869, sixteen hundred and ninety
four. The number in active operation is
sixteen hundred and twenty.
The total amount of notes of all demon
nations outstanding on the 30th of Sep
tember, 1859, was $299, 7S9, $685. The
amount of United States bonds held by
the Treasurer Of the United States to Sc
cure the redemption of the circulating
notes of National Banks on the 30th day
of September, 1859, was $342, 475, 100. Of
$17,560 of notes prepared in the usual man
ner for issue for National Banks which
were purloined previous to the annual re-
port of 1857, only 81, 400 of the same have
been recovered. OF these 4,500 were in
fifty and one hundred dollar notes of the
National City Bank of Lynn, Massachu-
sets, and $4,000 in fifty and one hundred
dollar notes of the First National Bank of
Jersey City, in addition to which several
thefts of a single sheet had occurred. The
Comptroller says it is q serious question
WhOsuCk PAONlcfOu euOQlQ HUI Uc LldQC 1OI
the payment Of these stolen notes when
found in the hands of innocent holders
Their similarity to the genuine issues of
the same and other National Banks, and the
difficulty, to any but the most expert and
skillful, in recognizing the forged sigma
lures, make 1t impossible for the great
majority of those who may handle money
to distinguish the spurious from the genu
inc issues. The subject is respectfully
submitted to the consideration of Con-
gresa.
The Comptroller cites attention to the
fact that, as the law now stands, q bank
may, by a vote of the shareholders owning
two-thirds Of its stock, go into liquidation
and close up its affairs After the expira.
ton of one year from the publication OF
notice to its bill holders snd creditors, as
required by the statute, it may deposit
with the Treasurer of the United States
leral-tender notes for its outstanding ciI-
culation, and take up the bonds held as
security therefor. This section was un-
doubtedly intended to provide for the
winding up of banks under the ordinary
conditions incident to specie payments
But under existing circumstances, banks
go into liquidation, and call upon note
holders to present their notes for redemp-
ton, by publishing notice, as required by
law, but, during the whole year that fol-
lows, are not obliged to redeem anything
except, now and then, a WORKOUT or de-
faced note. This facility of circulation,
and the absence of all cost of redemptions,
have probably induced some associations
&c take the legal steps for going into liqui-
dation, with the expectation of continuing
to reap the benefit of their outstanding
circulation, while they continue to do a
banking business under State laws or as
private bankers. This is an abuse that
could only be practised under q suspen-
sion of specie payments, and during the
absence of all demand for redemptions
but for the time it is none the less an abuse
that requires correction. The Comptroller
recommends that Congress should pass an
act in one section, uncOnnected with any
other SUBJECT, fe,iuIi ming ii3sr FL hanks thu go
into liquidation TO deposit legal-tender
notes for their outstanding circulation, and
take up their bonds deposited with the
Treasurer of the United States as security
for such circulation, within sixty days
from the date of the vote of the share
holders to go into liquidation.
1t is recommended that all taxes imposed
on National Banks by the United States
be made returnable and payable to the
Treasurer of the United States, in the same
manner that the larger portion of them
now are
The employment by the government Of
agents to examine into the affairs of Ma
tional Banks, without previous notice, has
done more than any other one thing to
promote the safety and sound management
of the banks, and the good results brought
about, directly and indirectly, by such ex
aminations, have fully INDICATED the wis
dom of the provision. Congress is urged
to make provision for an increase in the
compensation of these examiners, as mat
ter of necessity as well asa matter of jus
.lce
The salaries of the clerks employed in
the Comptroller's Office are inadequate to
the abilities and integrity required, and
the Comptroller recommends that they be-
increased. He recommends that the Dep
uty Comptroller be paid salary of 3d..
500; the head Of each division, s., 400; two
correspondents, 81, 200 each; and two
bookkeepers, $4,000 each.
The recommendation contained in his
last preceding annual report, looking
to the, establishment of an agency in
the city of New York in the interest OF
the National Banks, owned and controlled
by them, for the redemption of all theil
issues and for the transaction of all theil
business, is again submitted to the consid
Grafton of Congress
Concerning the interest on deposits anC
call loans, the Comptroller says that tn,
law for the organization of Nationa
Banks defines their power with precision
They are empowered to exercise undel
the act, call such incidental powers a
shall be necessary to carry on the bust
ness of banking, by discounting and ne
gotiating promissory notes, drafts, bills o
exchange, and other evidences of debt b,
receiving deposits; by buying and selling
exchange, coin, and bullion; by loanin,
money on personal security; by obtaining
issuing, and circulating notes." &c-fron
which it will be seen that National Bank
are authorized, among other things, to RI
ceiUe deposits ;" that is when money j
brought to them they are authorized t,
receive it. They are not, however, au
thorized to hire deposits, and the law doe
not contemplate that they should solici
loans, under the guise of deposits, by tn
offer to pay interest on them. This prac
tice, however, prevails extensively; an,
although by implication, the law forbid
it. the prohibition is MOI sufficiently ex
plicit or positive to prevent il. If bank
pay interest on these deposits, they must
of course, use them; and as they are pay
able on demand, they must be loaned OF
call Call loans, as rule, are made 4
brokers and operators in stocks and gold
Men engaged in trade cannot ordinaril,
afford to borrow money which they ma
be called upon to refund at an hours no
tice. The facility with which large loan
can be effected, payable on call, at Low
rates of interest, while commercial pape
is only done at high rates, or i
declined altogether, fosters speculation
The delegation by the government t,
banking associations of the power to issu,
notes TO circulate as money has a tendency
to lower the rate of interest, and 30 L
furnish cheap money to the business com
munity. The incorporated bank, doinl
business and issuing circulation under tn,
authority of the government, is uniformly
regarded as the most reliable and reasona
BILE source of accommodation by the bust
ness community. The private banker
depending upon the active use of his CAPT
tai for his profit, must charge a mucf
higher rate of interest to realize the sam.
relative profit, supposing, of course, tina
the deposits of the two institutions arr
equal. The government, therefore, con
fers greater boon upon the business
public, by enabling it to borrow money a
moderate rates of interest, than is general
ly realized or admitted. If all the bank
were deprived of INSTRUMENTATION durins
the coming year, by act of Congress, tn,
rates at which money could be borrove.