Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1872-12-06

millions In different States of the Union,
which will require to be filed before the
proportion among the several States will be
equallzed upon the basis of wealth and
population. This deficiency arises from the
Tact that while fifty -four millions of new
crcuiation were authorized, there was at
the time Of the passage of the act def
clency existing of ninety-four millions of
dollars.
Section 8 of the act of July II, 1870,
provides that after the whole fifty-four mil
mons OF circulation shall have been distri
outed, twenty-five millions additional shall
De Withdrawn from banking associations Or
ganlzed in States having an excess and dis
triouted among States having less than
Their proportion, first, by reducing in such
States the circulation Of all banks having
! more than one million of dollars to that
amount; and secondly, by Withdrawing
from other banks having circulation ex-
ceedlng 100000, their circulation pro rata
in excess Of that amount.
Under this act it viii be the duty of the
Comptroller, as soon as the amount of cir
| culation authorized shall have been issued,
TO make requisitiOn upon the banks iadi-
Gated and prescribed. The twenty-five
millions of circulation would be withdrawn
| from the following cities and States: From
eleven banks in the city of New York, ST.
100000; from thirty six banks in the city
of Boston, Sill ,403, 5000; from fifty-three
county BANKS of Massachusetts, 81 100000;
from fifteen banks in Connecticut, 81 $751;
0OO; from sixteen banks In the city of Prov
idence, $Z,68S,00O.
This would reduce the circulation OF all
The banks Of Massachusetts, of Rhode
Island, and Of Connecticut TO $500, 000,'
without reference to the business of each.
Ii the banks do not respond to these requi-
s1tlons land IS their notes are scattered
throughout the whole country it will be i'm
| possible for them TO do sc), The COmptrol-
| Ter Is required at the end one year to sell
sufficient amount of bonds and redeem
| their notes as they come into the Treasury,
| until tie whole amount required shah have
| been returned. The notss will not conle to
the Treasury for redemption unless frstas-
sorted by the brokers and resold by them to
new national banks about to be organized.
| This will encourage the Objectionable
| practice Of authorizing new national banks
with circulation upon the condition that
currency shall be purchased of brokers III
the market at from four to six per cent.
| premium, practices which should not be-
| encouraged or authorized by law.
The Comptroller therefore recommends
| the repeal of this section OF the authorize
ton OF the issue Of 100000 of addition
al circulation Annually for the next five
years, TO be distributed among the States
which are deficient. This, with the S54,
| 000,000 of circulation recently authorized,
will probably furnish all the additional cur
| rency required, during the next five years,
| for the establishment of new national
banks In the States which are deficient, and
virtually inaugurate q free banking sys-
| tenn.
The Comptroller also recommends tn at
| the law be 80 amended that national banks
may be organized in accordance with its
| provisions, without circulation, upon the
| deposit of $4,000 Of United States bonds
with the Treasurer, instead of the deposit
OF one third Of the capital paid up and now
| required.
Three national gold banks have been or
| ganized in California under the act of july
| II, 1870, with an aggregate capital of 50,
500, 600, and circulation of 81 ,4S0. 900, based
| upon United States bonds, at the rate Of
eighty cents on the dollar.
This currency is redeemabIs in coin, is
more convenient than the coin Itself in TIE
transaction of business, and circulates free
| ly at par upon the Pacific coast. Other ap
plicatioDs have been received for the organ
ization of similar institutions, and it is pro-
| bable that this kind of circulation will be
considerably increased during the coming
year.