Perrysburg journal. (Perrysburg, Wood Co., O. [Ohio]) 186?-1965, 1873-12-05
Report Of the Comptroller OF the
Currency.

The Comptroller Of the Currency, in his report
gives 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 $35t o. 900, and the amount OF legal
tender notes 1856 0000O so that the proportion OF
legal-tenders in which national bank notes arc
now redeemable Is nearly identical, though slight
ly In excess II the national banking law was
amended "a to require the redemption Of nation.
al bank notes in legal-tender notes at one. fourth
of one per cent. discount as In the New York
state law, instead OF st par, as provided In the
the whole country would agree TO such provision
OF law the prompt redemption of national bank
vast amount OF circulating notes, II redeemed but
once year would result In great loss to the peo-
pie of the United States system Of redemption Of
exchange from the rate of one-ienth Of one per
cent now existing Mt most periods Of the year be-
tween different cities Of the Union, to from one
half to per cent, thus restoring 10 considera-
bic degree the condition OF exchange at the time
OF the Inauguration Of the national banking system,
and insuring a loss 70 the people annually Of
millions or 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 be
paid out when the demand for currency Increased.
Such system would also give what is exceeding
ly desirable at presen-elasticty to the currency.
In order TO insure the prompt redemption OF the
national bank notes the amount issued must be
50 much increased that the notes will be- say
eighth Of one per cent. discount, and this would
probably not be accomplished until an addition
was made to the present circulation of 81 O,OO0,
600. The same result would follow from a reduc-
tion OF the volume OF legal tender notes stimuli
taneously with the increase OF the issues OF bank
notes, but Congress has frequently refused to di
minish the amount of legal tender notes. that the
Comptroller is OF the opinion that any general sys.
TEN OF free banking accompanied with resumption
must be postponed until the resumption of specie
payments. The Comptroller, in order to avoid any
misrepresentation OF his views upon this subject,
IaasN 60, sluNI I. -.
permanent system Of currency usually known as
irredeemable currency. He believes, however,
that the people of this country ought not, and will
not, submit to the high rates OF exchange prevail
ing previous to the war, and that amendment
to the national currency act which shall result in
| restoring the high rates Of exchange will also re-
which, 1t is believed, will yet become
the most satisfactory Of any system ever establish
ed. During the past year, as far as observation
has extended, national bank notes have been rare
| ly at any perceptible discount for legal tender
notes and during the late panic no dis stnction was
made by the people between legal tender notes of
| the United States and national bank notes; both
were boarded alike as thing most desirable Of all
Others to hold. And 1t is probable that when spe
| Gle payment shall be resumed the faith Of The
people will be well established in the safety OF
| the currency Of the banks that no such general
system OF redemption will be required as Of the
unsafe currency issued by the different States pre-
| vious to the war II circulation should become
| redundant as is sometimes the with silver
coinage, it will only be necessary to present the
| surplus to the agencies In the city Of New York
where more than two-lhrds OF the circulation Ii
now redeemable, In order to restore equilibrium
for II Is to be hoped that previous to the return tC
specie payment some system will be adopted
which will give abundant elasticity TO the curren
cy without incurng the expense and burden o
general redemption, and without loss resulting
from the high rates Of exchange which have al
ways prevailed under such system.
Regarding the question Of interest on deposits
and certihcaton of checks, the Comptroller says:
"ln my last annual report referred briefly TO tn,
deposits, and my predecessors have frequently re
ferred more at length to the same subject. TIL,
difficulty has been that the proposed legislation b,
Congress upon the subject would apply only Il
national banks. The effect Of such Legislation
would be to bring State banks and savings bank
| organized by the authority Of the different State
in direct competition with national banks in secur
ing the accounts Of correspondents and dealers
The national banks will be dcsirous of retaining
their business, and the more INSCRIPTIONS would
not stop 10 evade the law by Offering to make col
ections throughout the country free OF charge; 4
| buy and sell stocks without commission. and re
| discount paper at low rates.
THE kind Of legislation needed II that whcl
shall apply to all banks and bankers alike whethe
organized under the national currency act or Othe
| laws. law prohibiting the payment OF intercs
| on deposits by National Banks will have little ef
feet, unless followed by similar legislation unde
authority of tie different States, and there il lit
| hope that such legislation can be obtained"
| The Comptroller repeats the recommendation il
last years report fora repeal of Section e. OF tn
| act Of july 1870, which provided that after til
| whole $i4,O00,000 OF circulation shall have beel
distributed, $25,0000O0 additional shall be with
| drawn from the banking associations organized Il
| States having an excess, and distributed anon
| States having less than their proportion. Unde
| this section that amount would be withdrawn fror
| New York, Massachusetts,, Connecticut and Rhod
| Island. and the Comptroller also recommends III
| authorization Of 5,0v0O,0 more currency, 10 b
distributed among States which are deficient
| opinion that 1t would require from three 10 hv
| years to distribute this additional amount.