The Richmond palladium. [volume] (Richmond, Ind.) 1855-1875, 1873-12-06

otes au;ht,eized. But iny0roer hat thege
hould be no niss9kes the law itself provideu1
hat the, discount upon the circulating notes at |
he ans e ssn saS ss
Congress &C that time Tor 1he reeemIho n0i the 4
yoid coin in silvef coin, OF Tor the Redemption |
If silver coin,in copper coin, such law would
lave been dead letter, for the eason that
value in the market than silver coin. and the
silver Of greater intrinsic value than ceppars !
though each 0ftheee coins are legal tender
% an amount fixed by Law. In order to have
! system OF redemption. it is necessary
hat the things TO be redeemed shall be known
70 be worth less than the thing in
which it is to be redeemed, and this principle
was legalized by the New York State Legtsla-
ture, when it provided that the bank note /
should be worth in the city Of New York one
coinage OF the United States. II $40 100000
was therefore issued, the circulation Of New |
York State was $50, 1S2, $40. Its valne ct the |
OF issue was 500. 600 less than 49,.
600, 600 II the, circulation was redee med
loss on one side and s300. 600 OF gain on the
other side, and il redeemed eix times 360OUOO
OF loss and $60O 600 Of gain Oh the other side.
The gain was. as 3 general rule. divided be.
tween the banks which issued the money ana
country merchant, and the manufacturer. and
the iobber in.the great cities experienced the
loss. But the circulation of the State of New
York was known to be 80 mucn safer. and the
discount SO much less, than the circulation
Of shy other Sta.e OF the Union that the dis
count was hardly noticed when the loss upon
notes of most OF the other States of the Union
was from four to six times Is great. The re-
suit was, as might have been expected, that
their notes were not fulfilling their function az
circulating medium, butbeing sent forward
and backward not for the purpose of obtain
ing specie, but to be exchanged one for the
other at the clearing house, in order to provide
fund in New York for the redemption OF
other notes, and also to provide exchange at a
profit of from one fourth to one and one
fourth per cent. The amount Of the exchange
thus gained BY the bankers and brokers, and
the amount of exchange lost by the people in
these transactions can not be computed, but
there is no doubt that it amounted annually to
specie held by the New York State banks
for ten. years previous to the year
| 1860 was 81, 565 600 OF this amount ABOUT
one eighth, say ~, 200 600 was held by the
| country banks in their vaults, and the balance
| say SIS, 3OO, 600 was held in New York city. III
from this amount should be deducted the coin
belonging to the banks and persons outside OF
the State, and the amount of checks, payable
| in coin, it would be found that the amount OF
circulating notes issued In the State, Of New
York was, on an average for ten years. at least
five times the amount 9f specie on deposit fol
the purpose of redeeming their notes. The
amount of national bank notes nov authorized
to be issued is 1854, 600 900, and the amount Of
legal tender notes $3.50, GOO 600, so that the pro
portion Of legal-sender money in which ma
identical, though slightly In excess. II thu
National Banking law was amended q
az to require the redemption OF ;, ma
tienal bank notes in the legal tende
as in the New York State law. instead Of At par
as provided in the National Currency act, an,
the national banks Of the whole country woul,
| agree to such aprovision OF the law, the promp
redemption OF the national bank notes woult
} be insured. But the redemption Of this vas
amount Of circulating notes, il redeemed bu
once year, would result in q loss t6 the peopl
: Of the United States of $500. 600; il the note
! | we're to be redeemed four times annually, 81
| 600 600, and ii redeemed six times annuall,
IS, 400, 600. A system o, redemption of thi
!; kind would, also, at ono, increase the ratio 9
exchange, from the rate of One-tenth OF on
per cent. (nOw existing at most periods of tn
! year between the different cities Of the UniOI
TO from one-haY per cent. to one per cent
} thus restoring to considerable degree Il
condition of the exchange at the time Of th
) Inauguration Of the national banking system
! and insuring loss to the people annually {
: millions OF dollars. 3l,
81 90 REDEMPrIoN.
{ Such system would, However, undoubted
e result in the returns of the notes of tt
q National banks, at certain seasons of the We,
i when they were not needed to the vaults
the country banks, to be paid oat when the d
d mand for currency Increased. Such syste
Y would also give what is exceedingly desirab
) at the present time-elasticity 70 the currenc
i The profit upon the circulation of Nation
:. banks organized in the West and South durir
: the past year, as will be shown more full
r hereafter, did not much exceed one per cen
e for the country banks, and was less than on
L b. el..~ 9~.r~r s<.~.u
u Under such condition Of things, with SO SIN,
Is margin Of profit to be derived from issue
lie circulating notes, there would be little denal
r. for circulation, and consequently but Hit
danger in throwing therdoors wide open to a
association properly organized that mig
II demand such circulation, but with reducti
" of the value of the bonds and {
approximation of che value Of bank not
9 to the value of specie, the profit wOu
Ell increase, and with the increase of profit,
d would also increase, so that under such q 81
u ten the issue of bank notes would have CT
r. tinued tendency to lessen the value OF
it paper dollar, and prevent it's appf0ximation
be the gold dollar. 90 that all ideas OF specie p'
of ment might forever be abandoned. In orr
n to insure the prompt redemption of the !
le tional bank notes the amount issued must
rst SO much increased that the notes win be, /
mt at one eighth OF one per cent. discount q
ed this would probably not be accomplished vi
he an addition was made 10 the present circu
lds ton OF 800 900 600. The same result NO,
de follow from the reduction of the. volume
on legal tender notes simultaneously with
he increase Of The issues OF the bank notes,
at Congress has frequently refused to dimin
at the amount OF legal tender notes so that
he Controller is Of opinion that, any general {
81, TEN OF free banking, accompanied with
ar. demption, must be postponed until resumpt
ed OF specie payments a.s8 f,lJsg IA
ing st.s.,r-
nu- VALUE OF TIE CURRENCY. saa
ew The Controller, In order to avoid any mis-
md prehension OF his views upon the subj
nth desires to state he Is not an advocate OF
mt. permanent system OF currency, usually XIX
d as irfedeemable currency. He believes, b
) to ever, that the people Of this country OF
lew not, and viii not, submit to the high rates
ted exchange prevailing previous to the war,
nal that amendment TO the National Currency
t Of which shall result in restoring the high r,
the OF Exchange, win Also result IN the dow
the OF q system OF banking which, It is belit
lev. will yet become the most satisfactory of
the system ever established. During the
the year, as far as his observation has exten
that the national bank notes have been rare
The any perceptible discount for legal tender M