The Manitowoc tribune. [volume] (Manitowoc, Wis.) 1866-1878, 1873-12-04
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
tender notes SS56 O so tbat e tbe nrnnoriog nf
lega-tenders in which national bank notes are
now redeemable is nearly identical, though slight
ly in excess. II the national banking law was
amended as to require the redemption of nation
al bank notes in leeal-tender notes at one-fourth
of one per cent. discount, in the New York
State law, instead Of at par, as provided in the
national currency act, and the national banks of
the whole country would agree TO such a provision
of law the prompt redemption of national bank
notes would be insured. but the redemption of the
vast amount of circulating notes. if redeemed but
pie of the United States. system of redemption of
this kind would also at once increase the rate of
cent now existing at most periods of the year be-
tween different cities OF the Union, to from one
half TO one per cent, thus restoring TO consdera
bic degree the condition of exchange at the time
of the Inauguration of the national banking system.
and insuring a loss to the people annually Of
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
y desirable at presentelasticity to the currency.
In order to insure the prompt redemption Of the
national bank notes the amount issued must be
so much increased that The notes viii be, say,
eighth II one per cent. discount, and this would
probably not be accomplished until addition
oO0. The same result would follow from reduc-
ton of the volume of legal tender notes stimuli
taneously with the increase Of the issues Of bank
notes but Congress has so frequently refused to d
mlnish the amount OF legal tender notes, that the
Comptroller is of the opinion that any general sys-
tenn of free banking accompanied with resumption
must be postponed until the resumption of specie
payments. The Comptroller, in order to avoid any
misapprehension of his views upon this subject.
de- Tres to state that he is advocate of any
permanent system of currency usually known as
irredeemable currency. He believes, however,
I Of his
not. submit to the high rates of exchange prevail
ing previous TO the war, and that amendment
restoring the high rates of exchange will also
suit in the downfall of system of banking
Which S it is believed will yet become
ed. During the past year, as far observation
has extended, national bank notes have been rare
ly at any perceptble discount for legal tender
notes. and during the late panic distinction
made by the people between legal tender notes of
the United States and national bank notes; both
were boarded alike thing most desirable of all
Others TO hold And it 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 such general
system Of redemption will be required as Of the
unsafe currency Issued by the different States pre-
vious to the war If circulation should become
redundant, as Is sometimes the case with silver
coinage 1t will only be necessary TO present the
surplus TO the agencies in the city Of New York,
where more than two-thirds of the circulation is
now redeemable, in order to restore equilibrium;
for II Is to be hoped that previous to the return
specie payment some system will be adopted
which viii give abundant elasticity 10 the cnrren-
cy without mourning the expense and burden Of
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 certifcation of checks the Comptroller says:
I'm my last annual report referred briefly to the
evils resulting from the payment of interest upon
deposits, and my predecessors have frequently re-
ferred more at length to the same subject The
difficulty has been that the proposed legislation by
Congress upon the subject would apply only to
national banks. The effect Of such legislation
would be to bring State banks and savings banks
organized by the authority of the different States
in direct competition with national banks in secur
ing the accounts of correspondents and dealers
The national banks will be DESTROYS of retaining
their business. and the more interruptions would
not stop TO evade the law by offering make col
buy and sell stocks without commission. and re-
discount paper at low rates.
The kind of legislation needed is that which
shall apply to all banks and bankers alike, whether
organize under the national currency act other
laws. A law prohibiting the payment of interest
feet, unless followed by similar legislation under
authority of the different States and there is little
hope that such legislation can be Obtained
The Comptroller repeats the recommendation in
last years report for repeal of Section .: of the
act OF July. 1870, which provided that after the
whole 600 of circulation shall have been
distributed, 600 additional shall be with
drawn from the banking associations organized In
States having an excess. and distributed among
States having less than their proportion. Under
New York, Massachusetts,. Connecticut and Rhode
Island, and the Comptroller also recommends the
authorization of $50 90 more currency, to be
distributed among States which are deficient,
namely those of the South and West. He is of the
opinion that 1t would require from three te five
IN Distribute this nd al