New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-11-27
PRICE FOUR CENTS.
WASHINGTON.
BANK RESERVES.

THE ENGLISH BANK hLoLkFES LA'i|N ''"N
THOSE OF OUR NATIONAL BASKs-A SKETCH on
TIE RECENT PANIC-AN ADDITIONAL ISSUE 0F
$2j 600 600 or CIRCULATION RECOMMENDED.
[BY TELEGRAPH TO THE TRmUgEl
WASHINGTON, Nov. &c. - The Controller OF
the Currency, I'm addition his suggestions the sub
ject OF fiee banking and Interest Oh deposits which
have already been given the public win in hIs annual
report discuss at considerable length the subject OF re-
serve and win show that both he Bank Of England and
the joint stock banks of England really hold muc0
larger amount OF available at all times than tho
national banks OF this country This reserve Goa
sists in the first place, OF cash or hand and
cash deposits IN the Bank OF England and
secondly, OF Government funds. consisting OF
English consos and Exehequer bills, TO large
amount. These funds always be purchased at the
rate OF about % in the market and be sold at less for
than other kind OF funds IN themarkeis OF the
world. The Joint stock banks. therefore, have final
at all times, upon which they realize az any
moment 10 times OF financial trouble panic. State
OF returns OF the leading joint stock banks
Of England viii accompany the report, showing the
amount of funds held by these banks during the last
year. and the rates Of their for four different
periods
The why such large amounts OF deposits OF the
country banks held by the banks Of the City OF New
York is because the country banks have Trustworthy
fund, bearing low OF interest, In which their sur
plus be invested and upon which the cash can he
realized at any moment without material loss.
Upon the return OF specie payment and tho funding OF
the Government debt IN bonds bearing low rate OF
interest tho banks will supplied with
Ia which their reserves be placed vhout danger OK
any great discount II forced upon tie market. Tie
banks having such send their money largely
to the city banks purpose obtaining
per interest upon deposits generally offered By the
city banks. If Government certificates were issued
bearing low rate OF interest. the surplus funds Of tho
country banks would be invested in such certificates.
Gates for the Government would hold the legal tenders
representing them. The objection thea would be, that
the Government would lose the amount OF interest paid
If the legaltender notes were held special deposit
But the banks by OF Congress, required to
pay a. Internal Revenue tax OF between Sj,C0J,OOo
and A,OOoo0O annually upon all deposits. This
tax is war tax never before imposed,
and not known in any other country and should have
been repealed with other internal revenue taxation.
The interest upon the certificates would simply be re-
bate upon this tax to which the banks would object
il certificates issued and authorized 10 counted
qured TO be kept in the vaults OF the bank could thea
be very largely increased, and it is believed that the
effect would be 70 diminish the amount OF funds scat 60
the City of Ncw-York, which loaned to STOCK oper-
ayes and tend 10 hinder rather than facilitate tho
legitimate business Of the country
The Act OF July H. $50, required that the additional
hfy-four millions authOrz d should be issued 10 tho
states which deficient, and accordingly this
laton has been distributed to banks organized in the
west and South The average rate Of interest Ia these
states not less than cent per cent
bonds during the pasI year have been worm us III the
and mortgage for series OF years, the annual interest
would be 81 go II The sane amount were nyos,ed IN
premium at Is per cent would be s. -
upon ths god. Upon thls bond, a nauQnal BAN,
be required 10 keep 25 per cent OF that amount in
serve, leaving s6 81 from when &c would derive
Of sc IS, and IRON this must be deducted of
per cent, 20 cents upon the amount of circulation
currency OF Gil 90, whrh Is bat slightly in excess Of
the 10 per cent Investment upon bond and bCgage
20 i keep SSt Is ~ S S
of little Than per cent upon tue circulation and.
suffer the ultimate loss Of the premium o. SIS upon the
The report gives the amount Of taxes paii By the
national banks OF the country during tue ast also,
tabular statement VI tne dlyiuelds paid b. these
banks and the ratio Of dividends capital aud surplus
for present year, years prece lux show
ing that tue dividends upon capital aud surplus have
The report refers to the panic OF 1873, giving a brief
sketch OF the incidents OF the week OF he pane Also
complete tables, giving the condition tue banks pre-
when the New-York city banks He'll The sI1alIest
amount OF leglltender notes and upon tie lay when
they resumed currency Payments. Thc repoIt also
different states in reference to the STATE banks and saw.
Jugs banks which VIII exhibit with the keep ion nine
Srates entire negligence requiring reports made
the State authorities also the loose manner IN vi ch
organizations authorized by authority of no Gllcnt
states are conducted IL calls attention 10 nDas-
cTs issued in various parts Of the country
mends stringent legislation FOR the Suypr ss"l OF sIeh
issues, ana also Tie passage o. law relieving Abe NJ
onal banks from the responsibility FOR special deposits
unless e;;. receipt fS shall be SVEN - tne bans
and the DGuk 10 recommends measures TO bc taken Tor
tue return anu uCsIuClbh Ol ulllAtcd curl ncY IN
existence, and the withdrawal OF the notes ~ banks Ia
liquidation, and the relssulng OK the am9uBl 10 the
states which deficient IL opposes the engraving OF
National bank notes. which VIII involve expense
OF more than million OF dollars, To Be borne by the
banks, and recommends the Ythnrawa OF the genuine
notes issued to amy banks OF such denominations a.
shall have been counterfecd at expense exceed
ing $1,000.
The Controller opposed TO the issue OF an additional
amount Of National bank IIc believes that the
country needs more capital, not more currency, aud
more nutrlment and not more water in the haIonal
soup. But AS tho provision OF the National Currency
act, which requires the withdrawal $2JOOJO0O from
OF the Eastern States, aud It's redistribution m the
West and South, IS lmpraoticable aud cannot
probably be repealed without Increase of
circulation to TIE present amount, he repeats
recommendation Of last year for the Issue Of 25O
600 additional circulation TO the states which are te
the repeal Of the provision referred TO- He Is
OF the opinion from the applications fle in his Office
that this amount Will be sufficient % satisfy the demand
from these States which deficient, and Will be so
gradually issued during the next three years as not
to have the effect TO deprecae the value OF the paper
money now in existence.