The Daily state journal. [volume] (Alexandria, Va.) 1868-1874, 1871-12-07
DEPARTMENTAL REPORTS.
REPORT OF THE CONTROLLER OF THE
lg CURRENCY,

49, 49, -" = - -
REPORT OF THE CONTROLLER OF THE
CURRENCY.
The report of Hon. Ii. r. Hulburd, Con-
troller Of the Currency, shows that 155
national banks have been organized during
the past year, making the total number
organized up to October LIST, of this year,
1850. One hundred and forty-fye of
these banks were organized under the act
of July IL, 1870, providing for the issue of
circulation. The aggregate capital of
amount of currency issued under the act
$22 1888 800, some $40, 900, 900 of which has
been furnished to new banks, and the re-
mainder to existing banks which had not
received their full quota or which had in
creased their capital to meet the growing
demands of business.
The number Of banks organized in tho
South is small, as the banks in that section
were not in a condition to take any con-
siderable portion of the circulation. The
Controller estimates that ell the Western
and Northwestern States can be fully sup
piled and still leave from $4,000, 600 to
s25, 100000 for the Southern States when
they are in condition to take it. He sug-
gcsts the propriety of removing the restric-
ton limiting the amount Of circulation to
any one bank at $1,000 But one gold
bank has been organized, the First National
Gold Bank of San Francisco; but the success
of this institution has not been so hattering
as to induce the organization Of Others of a
similar character.
He says the tenacity with which the Pa
cific States adhere to gold currency is
quite notable. Whether it is equally
praiseworthv is another thing. 1t is not
clear that those States derive any substan-
tial benefit from the course they have pur-
sued, and it is beginning to be manifest that
the United States are not at all benefited
by it. The substitution of paper curTen-
cy in California and the other gold produ-
chg States for their present hard money
would probably set free for the use of the
government and the whole country some
thirty or forty millions of gold, and at the
same time provide these communities with
more economical, active, and accommo-
dating circulating medium.
He recommends that provision be made
for the establishment of national banks in
California and the other Pacific States upon
legal-tender basis, and that the law be so
modified as to enable them to cope success
fully with other banking institutions at
present doing business in those States.
He again calls the attention of Congress
to the very high rates of taxation that are
imposed on national banks in most of the
States. 1t is asserted by bank officers,
and admitted to be true, that local taxation
is SO high in some of the States as to make
it impossible to lend money at legal rates
without loss to the bank. 1t is probably
true that, in some instances. the objecs Of
the Legislature in imposing these burdens
is hostile one, intended to drive national
banks out of existence, while In other cases,
onerous taxes are imposed under the inn
preston that the banks are making enor-
nous profits, and can afford to divide them
with the State.
He expresses the opinion that the public
good would justify some limitation to the
power of the States to tax the shares o.
national banks, and recommends that the
controller be clothed with power to act ii
cases where the capital of a bank has beer
seriously impaired by losses or otherwise
either by requiring the capital to be made
whole by assessment Of the shareholders
or by requiring the bank to wind up its at
fairs within reasonable time if its capita
is not made good. Also to wind up the at.
fairs of any bank which is not engaged ii
the transaction of legitimate and reputa
BILE business, or which has obtained an or
ganization through false or fraudulent rep
reservations.
In regard to specie payments, he think
the act Of February, 1868, which prohibit
any further reduction of the currenc,
should be repealed lftpubhc sentimen
will not permit or sanction such action b.
Congress, it will be because the people d
not wish for resumption at the expense Q
contraction.
In reviewing the question Of return t
specie payments and commenting on tn
various theories the controller says
ultimate solvency is of far greater i'm
portance to the community than convert
bility, and the liberal and judicious use c
credit is of far more value in the CONNER
cial world than the instant command {
gold and silver"
The theory that the currency shout
be maintained at its present volume unit
ahc industrial and commercial interests {
the country shall recover from the effect
Of the war, and until the natural growth
population and wealth, the revival Of enter
prise, thu increased facilities of trade, an
the expansion of our borders, shall create
legitimate use of the whole amount of cul
rency now outstanding" is plausible one
and commends itself to popular favor, q
affording an easy and gradual transition
specie payment without any of the incor
veniences and hardships associated in til
public mind with contraction.
The fundamental idea underlying tn
theory is that the conditions necessary
growth exist already. IL presupposes th'
the country may prosper; that trade, II
dustry, aud enterprise may flourish; tbs
labor may have bountiful reward, thu
individuals and communities may grow ric
and increase in wealth and substance, no
withstanding superintendent, irredeen
able, deprecated currency. If this a
sumption is correct, it is hardly necessar
to look forward to the time when natur
Growth shall absorb the surplus currenc,
aud specie payments shall come in IL
course of nature.
He says "the probabilities seem to
that with wise administration of the fina
ces paper and specie viii gradually al
surely, though perhaps slowly, approx
mate to an equality in value. If it we
possible, in considering the practicable
of resumption, to distinguish between CT
culation and deposits, making the form