Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1873-11-26
THE CURRENCY.
Report OF the Comptroller History Of
the Free Ranking Systematic
National Banks.
Legal Tenders-High Rates Of Ex.
ehange-Greenbaoks, and Gold,
and Silver HOarded Alike.
Interest on Deposits and Certiiieati9n
of Cheek-The New York Clear
ing House, Etc.

WASHINGTON, November 25.-The
comptroller of the currency in his forth
coming report gives history of the free
banking system in the country previous
to the establishment of national banks,
and goes on to say that the amount of
national bank notes now authorized to
be issued is three hundred and fifty-four
millions of dollars, and the amount of
legal-tender notes at three hundred and
fifty-six millions of collars, so that the
proportion of legal-tender money in
which national bank notes are now re-
deemsble is nearly identical, although
slightlyin excess. If the national bank
ing law was amended so as to
require the redemption of national
bank notes in legal-tender notes
at one-fOurth of one per cent. discount,
as in the New York State law, instead
of at par, as provided in the national
currency act, and the national banks of
the whole country would agree to such
provision of law, and the prompt re-
demption of national bank notes would
be insured. But the redemption of this
vast amount of notes in circulation, if
redeemed but once year, would result
in great loss to the people of the United
states. A system of redemption of this
kind would also at once increase the
rate of exchange from one-tenth of one
per cent, now existing at most periods
of the year between different cities of
the Union, to from one-half of one
per cent. to one per cent, thus restoring
to a considerable degree the condition
of the exchange at the time of the in
auguration of the national banking sys-
tenn, and insuring a loss to the people
annually of millions of dollars. Such a
system would, however, undoubtedly
result in the return of the notes of the
national banks at certain seasons of the
year when they were not needed to the
vaults of the country banks, to b. paid
out wnen the demand for currency in
creased. Such a system would also give
what is exceedingly desirable at the
present time-elasticity to currency, in
order to insure the prompt redemption
of the national and national bank notes.
The amount issued must be so much in
creased that the notes will be, say at
One-eighth Of one per cent. dis
count; Of this there would probably
not be accomplished .until an addition
was made to the present circulation
of one hundred million dollars. The
same result would follow from the re-
duction of the volume Of legal-tender
notes simultaneous with the increase of
the issues of bank notes. But congress
has so frequently refused to diminish the
amount OF the legal-tender notes so that
the comptroller is of the opinion that
any general system of free banking, ac-
eOmpanied with redemption, must be
postponed until the resumption of specie
payments. The comptroller, in order
to avoid any misapprehension OF his
views upon this subject, desires to state
that he is not an advocate
of any permanent system Of
currency usually known as irredeema-
ble currency. He believes, however,
that the people of this country ought
not, and will not, submit to the high
rates of exchange prevailing previous to
the war, and that the amendment to the
national currency act, which shall re-
guilt in restoring high rates Of exchange, !
will also result in the downfall OF q sys-
tenn Of banks, which, it is believed, will |
yet become the most satisfactory of any
system ever established. During the |
past year, as far as his observation has
extended, national bank notes have
been rarely at any perceptible |
discount for legal-tender notes, and
during the late panic no distinction |
was made by the people between the
legal-tendeF notes Of the United States
and national bank notes. Both were
boarded alike as the thing most desira-
BILE of all others to hold, and it is proba- 1
BILE that, when specie payment shall be
resumed, the faith Of the people viii be
so we'll established in the safety of the |
currency Of the banks that no such gen
eral system Of redemption viii be re-
quired, as was required of the unsafe
currency issued oy the different States
previous to the war. II the circula-
tion should become redundant, as is
sometimes the case with silver coinage,
1t will only be necessary to present the
surplus to agencies in the city of New
York, where more than tWo-thirds of
the circulation Is now Fedeemable, In or
der to restore It's equilibrium, for It Is to
De hoped that previous TO return to
specie payment s0ne system will be
adopted which will give abundant elias
ticity to currency without mourning the 1
expense and burden Of a general re-
demption, and without loss resulting