New-York tribune., 1870-04-15
TIE DISTRIBUTION OF THE NATIONAL BANK
CURRENCY-A CARD FROM SENATOR SHERMAN.
To lie EditOr OF The TribNne.

THE DISTRIBUTION OF THE NATIONAL BANK
CURRENCY-A CARD FROM SENATOR SHERMAN.
To the Edftor Of The TrtbHnc
SIR: In your paper of Saturday the Hon.
Freeman Clarke formerly Controller of the Currency In
defending himself seeks 10 make share in the respon'
siby for the grossly unequal distribution Of the Ns
tional Banking circulation. under which New-England
and NewYork got greatly more than their proportion
plead "Not Guilty" to this charge. The section OF the
original Banking act Of 1863 quoted by him, WAS written
by me. This section omitted in the act OF l0t; Dut
as it became manifest that without some such limit tho
whole circulation would be absorbed by the Eastern
States that section reGnacted and n6raad In ha
Banking act approved March 1866, and is as follows:
One fifty millions Of dollars Of the entire snsun Of cree
sng notes suthorl to he issgSd shan le pTSaea % $500 ~ %
ing to rerresentauye GoITa,on asl Le Inn,sr SUI, ~ ~
by the Secretary Of Zoe Treasury among Gcl-,ou; & p Srv
due rr to the existing banking capital resource a lp'is'' o ~
state, District, srd Territory.
Under this section II was the plain drty Of the Con-
troer to reserve for each state its share Of at least @
OCoOO 1t true that in the Internal Tax act also ap-
proved March 3, 1866, the provision quoted by hm was
inserted the motion Of Mr.. Anthony Of T. l. For thh
provision certainly not responsible But even thh
limited privilege TO state Banks di not justify Wh-t 10.
lowed Tho two acts construed together, both haSine
passed tho day, would require the apFortion
meu Of the circulation to be 8ade among the states
and the old state Banks to nave preference to new
banks in the state in tie distribution of the crcus
ton awarded TO that State. Such construction wouid
have given effect to both provisions.
But even if the Controller justified In utNty ai'
regarding general aw 10 give eject to anothcr Iased
on tho same day, which by its terms expired July 1913
how can he justify the extension Of Tie preference 10
state banks beyond the time hxcdi On the 1st Juy
1861 the amount Of circulating notes was about soV'
OO0 On the 1St of October. 1885, u appears from hr
Carkes report that the whole circulation Issued TO pah
was $780, OJ5 stin leaving sllocoo for Distribution
according to law Even after this date very large por
ton of this lOOOOOOO issued to states that had n
excess OF circulation and especially 10 MASSACHUSETTS,
Rhode Island, and Connecticut.
My allusion TO Mr. Clarke, quoted by lin, was IN nc
unkind spirit shows that his error was concurredn IN
by Mr. McCuloch and II grew out of the natural desire
10 absorb the state banks. But must insist that tho
sectional monopoly enjoyed by the baas Of three OF
four Eastern States obtained in disregard OF the
law and that this has led to well grounded complaints IN
the West and the South The truth Is that under eooi
OF the complaint that taxed state banks ont oi ef
i,tence the National Banks of New-Engand aud New
York have secured nearly much banking dIcuato'
as all the banks of the United states had before the va"
They have now over Sl73OooOoO of circulation or nearV
threcflths OF an the present bank circulation OF '
United States and this ia riOlatioH o. iGp.
Washington, d. C., April H. 1870. JoIS SHERMAN