National Republican., 1873-11-26
COMPTROLLER KNoH,s REPORT

Those portions OF the report Of the Comp;
iroller Of the Currency which have appeared
In the REPUBLICAN of yesterday and to-day
give q very clear view Of tho operations Of
the national banks under the national cur
rency act. That onr present system OF na-
tional banking affords entire protection to
the bill-holder at the same time that II fur
nlshes currency uniformly good in all parts
Of the country Is demonstrated beyond cayil.
The millions annually paid TO bankers aud
brokers formerly, in the shape Of discounts,
is now saved to The people. Every note now
in circulation, whether legal tender or the
issue Of national bank, IS secured by thu
pledged faith Of the whole tax paying ability
Of the people Of the United States. In the
case Of the national banks the gold-bearine
bonds Of the Government to the amount o.
one dollar for each ninety cents OF their cir
culating notes is safely lodged in the vault
Of the Treasury rs collateral security for th,
redemption Of these notes In legal tenders
This possession makes the national banl
notes quite as safe TO hold as the legal
tender notes. and hence their redemption Il
never demanded so long rs III,
bank OF issue continues TO do business
Should II suspend they are promptly re-
deemed by the Government.
The basis upon which the national banking
system Is organized II the same, essentially
as that Of the free banking system of tn,
State OF New York, which existed before tn,
war, only substituting United States Govern
ment securities for the protection Of the bill
holder, whereas ihe State system required
State and real estate securities.
Referring to the payment Of interest ol
deposits by the national and other banks, tn,
Comptroller wisely denonnces the practice ~
fraught with danger both to banks and de
positor.. IL stimulates a rivalry among thu
different banks In their efforts to obtain these
additions to their working capital, which re-
snlts in the offer Of higher rates than theii
business will justify. When disaster over
takes them the depositors suffer. The Comp
troller suggests the repeal Of the present Ia,
so far rs it applies TO demand deposits, ant
that an increased rate Of taxation be imposet
uniformly upon oil deposits which. either di
rectly or indirectly, are placed with banks o
bankers, with the offer or expectation Of re
ceiylng interest.
Such legislation, it is contended, would hav,
'h'Nt w futt vi luttTtdl, uilt
also to prevent the illcgitimate organization
Of savings banks. These latter should onl,
be organized and conducted in the interest
of the depositors, upon the cooperative mu
tual plan. The deposits should be safely an,
prudently invested, and the profits, ate
payingJeasonable expenses, be divided anon
the dcpositors.
The Comptroller states that he shall here
after rigidly enforce the act Of March 3, 1869
In regard to the certi1cation Of checks wheI
the account Of the drawer Is not good for tn,
amount. Receivers are 10 be appointed a
once up"n notice Of q violation OF the pro
yisionsof the law.
The report is an able exposition Of GU
whole currency system, and should be care
fully considered by legislators and busines
men throughout the country. ItS reasoning
appears to be sound, and its conclusions wis,
and Inst,