The Columbia herald. [volume] (Columbia, Tenn.) 1850-1873, 1873-12-05
FINANCIAL.
The Forthcoming Report OF the Comp
trOIler of Currency.

The Forthcoming Report OF the Comp
trOIler of Currency.
The comptroller of currency, in his
forthcoming report, gives the history of
the working of the free banking system
in the country previous to the establish
ment of national banks, and goes on to
say that the amount of national bank
notes now authorized to be issued is
$780,, 0OO, 900, and the amount of legal
tender notes 1856, 900, 900, so that the
proportion of legal tender money in
which national bank notes are now re-
deemable is nearly identical, though
slightly in excess. If the national bank
ing law was amended so as to require
the redemption of national bank notes
in legal tender notes at / 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 ma
tional banks of the whole country would
agree to such a provision of law, prompt
redemption of national bank notes
would be insured, but the redemption
of this vast amount of circulating notes,
if redeemed but once a year, would re-
salt III 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 ITO of one
per cent. now existing at most periods
of the year between different cities of
the Union, to from per cent. to one per
cent, thus restoring to a considerable
degree the condition of exchange at the
time of the Inauguration of the national
banking system, and insuring loss to
the people annually of millions of dol
lars. Such system would, however,
undoubtedly result in the return of the
notes of national banks at certain sea-
sons of the year when they are not
needed, to the vaults of the country
banks to be paid out when the demand
for currency is increased. Such sys-
TEN would also give what is exceedingly
desirable at the present time, elasticity
to the currency. In order to insure
prompt redemption of national bank
notes the amount issued must be so in
creased that notes will be, say at ] of
one per cent. discount. This would
probably not be accomplished until ad-
dition was made to the present circula-
ton of 800, 000,0 900. The same result
would follow from a reduction of the
volume of legal tender notes simultane-
GUS with the increase of issues of bank
notes. But congress has frequently
refused to diminish the amount of legal
tender notes, SO that the comptroller is
of opinion that any general system of
free banking accompanied with redemp-
ton, must be postponed until the re-
sumption of specie payment. The comp
troller, in order to avoid any misappre-
hension of his views on this subject,
desires to state that he is not an advo.
NR Of
cy usually known as irredeemable our
rency. He believes, however, that the
people of this country ought not and
will not submit to the high rates of ex-
change prevailing previous to the war,
and that an amendment to the national
currency act which shall result in re-
storing high rates of exchange, will also
result in the downfall of a system of
banking 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 percepti-
BILE discount for legal tender notes, and
during the late panic no distinction was
made by the people between legal ten
der notes of the United States and ma
alike, as thing most desirable of ali
others to hold, and it is probable that
when specie payment shall be resumed,
that the faith of the people will be so
well established in the safety of the
currency of the banks, that no such
general system of redemption will be
required of unsafe currency issued by
different states previous to the war. If
the circulation should become redund-
ant, as is sometimes the case with silver
it will only benecessary to pre-
sent the surplus to agencies in the city
of New York, where more than two-thirds
of the circulation is now redeemable, in
order to restore equilibrium, for it is
to be hoped that previous to return
to specie payment, some system
will be adopted which will give
abundant elasticity to the cur
rency without mourning the expense
and burden of general redemption, and
without loss resulting from higher
rates of exchange, which have always
under such a system.