New-York tribune., 1870-12-06

circulation and the Of the circulation and deposit
the legal rate OF Interest viii enable banks 70 pY
taxes expense ana llyldens elu3i W ~ % ,c' % d ceH
rent value OF money whero tho BANK - Gong
business the legal rate viii be transesehded,
or the bank VIII wind up This may safely 10 /
taken for granted An attempt to compel the nsttgton
10 keep within the inits under sueh adverse circun
s.aces WIZ resnt ~ loc!hg ~, J, l,o f @ made ih
evil complained OF caused by the high rate or taxation
imposed by State authority Taxes enter INTO the cost
production and arr Paid By the consumer this ~ Just
true OF money "a Of any other comm0dity. Fofmtry
when the bank circulation was ssued ana INC DhflhsOt
thc Try was traisactcd Dy ms itUtiChs sel
by state Legislatures, valuable impnntes IN tnc gayd
exemption from taxation were granted, IN Ofdf tatos
pnks might ne able ~ furnish in0acy 70 Boi,Osyrs
reasonable ratc aud in most Of the states mo legal as
lcgcs granted. Capital invested In banks was practically
exempted from iazaten an return for which immunity
certain specified rates OF Interest wh". ~
frequently individuals were allowed ~ law %
rates The rates c3,a5.shed foF bsaEs, uad,f
tic conditions referred c I'm continue ami az sougfl
20 OBJ TIc these 1tes bayo hen kcH ay,y Tie pay
5sS ao 4iPg nGteo = no b5 more yaa.1 ss. a
",cn under Stsio authority iao prcnts derived from "
are commonly Orcreatinated. ifir csiimate of ths
exceed lge per cent ad bls il ust about the average
rate OF taxation paid by National hanks 40 that tho
mainly upon the amount Of Dc e., Which, after all
constitute the true basis 81 banA. & ClrcuatOn.'na
H. money its Wprcrntatiye-3 the creature OF we
Cove rHment, and 10 De- relied on as source OF proht
only IN The rldimennIy Stages oI 6anknE Ine ha,i?,I
7.
world furnishes abundant evidence as " the huth ~
tbia statement. ,,,
their opera ions during Pari o 1c yer ~! n,nsas
the fact stated. Lea Ing OFT TIE l'ank o. Ingdnd' Sh
frnsLes tho great hus Of the circulation used IN u
United Kingdom. The banks pore cd enpoy 80
capital exceeding E20c0OOo, ana heir ~ W SIt
months OF ,he year 1869 WCIO SOM VIII ih cA@ns 81
aaiO0OOO or at the rate Of about . per cent pei
Reports OF e. Danhs iGr & .'a Sih nCn, s,ref
snnw capta OF over G30ccocH WIN dividends ayOag
ING O. rcr cent, and net profits not divided
rnH,al to I pcr cent; together making tGe ret
profits OF the G2 banks whose repots are published, Al
The rate e IA rcr cent per dnn,rn;
I'm the United States the accumulation Ol caAh capital
comparatively small As in alt new countries, nearly
the entire caUa IL required for the transaction II active
rss and for the development OF tic REQUIRES Of The
country The amount OF deposits. therefore, or moafyf
ut rsst is small In comparison With TIE actual 'ieTh
wealth of the country; bnt n is cont nay Oh the in
crease aud By its aid the National banks are enaDrd lo
bring their earnings up to an average that mas LhrriS
ihe facts however il SEE ms desirable tat me Oa frs
tion between the rate OF interest and INC re oi As
tion established and observed by nearly all Le 7sics IA
which banks OF issue were authorized should NOT os
trey ignored with regard 10 Natlonll plhAs anu % %ihtS
much as the power OF the States over the National bahA
III these important particulars Is exercised on Hith
tho consent Of the General tO'rILH"ht ~ WO,iu oo
wise preoautOn for Congress to lH such hmllaliOh'1
would prevent unwso, unircndly, OF Otherwlo; dahaS
Auson been made in former reporis 70 the custom
practice existed long before any National Danks ha IN
existence and they only continue 70 DO What tnelf p
decessOrS did before them, and what bankers oyeTywhee
consider themselves compelled TO do.
The use OF other peoples money In the shape oi ae
come to be considered cardinal necessity Of modcrn
banking. There Will always bo those ready TO accept u
custody, assume all the risks ana pay Interest ior us usc
for nrn of pront rangng from QUO to three per cent
banker Who is Wiling to paw the highest ratio for this use
OF other peoples money Ordinarily Judging OF Daak,
a, OF individuals, the most IN need OF money often
the greatest inducements to depoaitors. In theory
not always safe. but nevertheless, it is 20
thoroughly ntrenc6ed in it, position by long observ
auco at any sweeping enactment prohibiting the pay
an OF interest on deposits By National banks woid bs
posts. There 0ge scores OF banks ana bankers, MOI
subject TO the control OF Congress- who would rejoice
over such prohibition as over the discontinue or an
enemy; yet there point that should le guarded
extent in Boston, New-York Philadelphia, end otter
large cites These reserves shoald be pr0ecled Ihey
should DE placed under such restrictions as 8on oDy
all necessity for their use by the depository Dink III
the institutions owning these reserves cannot nnord -
allow them 10 remain unemployed 30 lh9t taey .iAy ne
in reality what they arc IN name, rehcI sHoula De
Afforded IN soIoe other way IL Is ol Eifu VIZ ihlDfs l
ance 10 the country mat no pciIyu 81 ~ ". ptI,
centage which the law requires banks 10 h1T
loaned out subject the vicissdes and GIotuatons
Of and property. There may be- prosperous and
upon the ability OF single bank in New-l CITY tn
pay the deposits Of its country bank Correspondent
try The banks Of New-York City have paid rs Interest
ol deposits during the ending with the GOTH 0i se
~ SIS; the Phadel lpha banks, Sl0O0 AZ while the
gate paid by all the banks thai allow interest ON dc
These large sums indicate the wide prevalence Of tho
practice nnder consideration, and the dilcu.'y tht
tire abrogaOn. II by any means however, tue moneys
held i'm the large cities constituting tine reserves Of the
country banks, he exempt from the operation ~ th
custom, the main point ana tine one m Which, ABOVE AL
Oth tho entire public is interested, will De gained
Tile nrther consideration ths subject Is submitted
Ia tne wisdom Vi Congress.
REDENFTtON OF NOTES.
Tie necessity for some arrangement by which tee
notes OF NutlOna banks maybe assorted and rturned to
the several banks Of issue for redemption is becoming
more and more apparent the difficulty Of dealing with
the worn aud muiated notes In circulation Is eIp-
rieuccd The arguments contained IN former reports In
favor of general rcdeeming agency IN the Cty Ot New"
York will not repeated extended on tue pfesPnt
OCCASION The conviction is expressed however that ~
the banks authorized 20 establish an institution OIL
their for that purpose, owned, cont Jled AMI ah
aged IN their interest they would find 1t greatly 10 thef
profit to do
such an institution would also the eusto dan
OF the reserves kept in New-Hork thereby eNempung
them from the risks incident to funds deposited IN s
ordinary way aud drawing interest, and would porhle
Obyate the necessity Of specific legislation upon the sub
ect Of the payment OF interest ON deposits wlo t4e
benefit the whole country arising frOn fsea agney
70 truly national in its character, regulating the cur
rency the exchanges, and the banking Interests of te
country beyond the control Of any ring or cigue-be
cause managed by all for the benefit OF alwond he dI
the most substantial and enduring kind. Respectfully
tlIbmitted, HIIASD Il. HULEURD,
Controller o: the Currency.
Hon. GEO. &. boutwell,.
Secretary of the Treasury.
ARiag fae nnbcr and an0i Q po' isusd refe~
GRd outstanding ST,L T. ls'o
SS;ss. SS9t Amount. SSt'% Arnquut
IsS~iIo 7eszy7 eio7s 81 fs-li...... g2ia sia 9sta
.,srnsi ... .s5OJ ls6 % 2eielaet... ,a5 sre&st
Outstsnus. sIsOycS sIGo6ss oat'ta9lrg aotJ7 SAl%'