Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1873-11-26

from the high rates Of exchange which
have always prevailed under such sys-
tenn.
The report win also contain the fol-
! lowing on the subject of interest on de-
pOsits and certifeation Of checks: In
my last annual report / referred briefly
to the evils resulting from the payment
OF interest upon deposits, and my pre-
decessors have frequently referred more
at length to the same subject. The dif-
fculty has been that proposed legisla-
ton by congress upon this subject would
apply only to national banks. The
effect of such legislation would be 10
bring the State banks and savings
banks, organized by authority of the
different States. in direct competition
with national banks in securing ac-
counts of correspondents and debtors.
The national banks will be desirous Of
retaining their business, and the more
INSCRIPTIONS would not hesitate to evade
the law by offering to make collections
throughout the country free of charge,
10 buy and sell stocks without commits
sion, and re-discount paper at low rates.
The proposed action Of the clearing
house in the city of New York, if adopt
ed by the clearinghouse of the prinei-
pal cities would do more to prevent
payment of interest on deposits, than
any long seasonal enactments. But
evils from the payment Of interest on
deposits are by no means confined TO
city banks. 1t may be safely said that
this custom, which prevails in almost
every city and village of the Union, has
done more than any other to demoralize
the business of banking. State banks,
private bankers, and associations. under
the guise OF savings banks,
everywhere offer rates of inter-
est upon deposits which cannot safely
be paid by those engaged in legitimate
business. National banks desirous of re-
tanning the business of their dealers, also
make similar offers, and the result is
not only an increase of rates of in
terest paid by business men, but, as a
consequence, investments in unsecured |
loans, bringing ultimate loss both upon |
shareholders of banks and depOsitOrs |
The kind of legislation needed is that !
which shall apply to all banks and /
bankers alike, whether organized under |
national currency act or otherwise; law |
prohibiting the payment of interest on /
deposits by the national banks will have /
little effect unless followed by similar |
legislation under authority of the differ |
ent States, and there is little hope lhat |
such legislation can be obtained. The 1
national currency act, which was passed 1
during the war, provided for TAX Of
one-haH of one per cent. upon |
all deposits, and subsequent in
teCnal revenue legislation extend !
ed this tax to all deposits I
made with State banks, and individual |
bankers. This was essentially = war
tax, and should, in my judgment, be /
repealed, with other similar internal /
revenue taxation; and / recommend, if
is proposed on this subject, 4
that the law be 50 amended as to repeal |
this tax, so farss it applies to tOdemandiug
deposits, and that an increased rate of
taxation be imposed uniformly upon all |
deposits, which, either directly or indi-
rectly, are placed with banks OF bank
ers, with the offer or expectation of
receiving interest. Such legislation, if
rigidly enforced, will have the effect not
only to reduce the rate of interest
the country, but will at the
same time prevent the illegitimate or
ganiZatiOn of savings banks, the or
ganizatiOn of which should be allowed
only on condition that the savings of
the people shall be carefully and pru-
IDENTIFY invested, and the interest arising
after deducting reasonable
expenses, distributed, from time to time,
to depOsItors, and to no other person
The act of March 3, 1859,
the appointment of a re-
celveT, If any officer, clerk or agent,
Of any national bank shall certify 70 any
check drawn upon said bank, unless the
person or company drawing said check
shall have on deposit in said bank at
the time said check is certified an
amount of money equal to the amount
specified in such check.n Receivers have |
been appointed for the National bank of
Commonwealth, New York, and the
New Orleans banking associations dur
ing the past year for violations of this
act, and it is the intention of the comp
troller hereafter to rigidly enforce this
act whenever he is satisfied of such vio-
Iation.
The comptroller of currency reports
a recommendation in last years report
for the repeal of section six of an act
Of July, 1870, which provided that after
the whole fiity-four million of dollars
Of circulation shall have been distributed,
twenty-five millions additional shall be
from banking associations
iR the States having an ex-
cess, and distributed amCng the
States having less than their pro-
portion. Under this section that amount
would be withdrawn from New York.
Connecticut aud Rhode
Island, and the comptroller also recon-
mends the authorization of twenty-five
million more currency to be distributed |
among the States which are deficient,
namely those of the south and west
He is of the opinion that it would re-
luire from three to five years TO dis
tribute this additional amount.