Iowa voter. [volume] (Knoxville, Iowa) 1867-1874, 1873-12-11
Report OF the Comptroller OF the Cur.
rency.

The Comptroller Of the Currency, in his re.
por,, gives history OF the working OF the free
banking system in the country previous to the
establishment OF the national banks and goes on
10 say that the amount Of national bank notes
now authorized TO be issued, is 1854 ,000, 600
ana the amount Of legatender notes $50 600 co., go
that the proportion OF legal tender in which ma
tonal bank notes are now redeemable, lie nearly
identical, though slightly In excess. II the ma
uonai banking law was amended so as to re-
CURE the redemption OF national bank notes in
legal tender notes, at one-fourth Of one per cent
discount, as In the New York State law, instead
OF at par, as provided in the national currency act
ana the rational banks of the whole country
would agree to such provision Of law, the
prompt redemption Of national bank notes would
oe insured but the redemption Of this vast amount
OF circulating notes, III redeemed but once year
would result in great loss to the people Of the
United States system OF redemption OF this
KIND would also at once increase the rate of ex-
change from the rate Of onetenth OF one per cent,
now existing at most periods Of the year between
Inherent cities Of the Union, to from onehalf 10
one per cent, thus restoring to considerable de-
gree the condition OF exchange at the time
OF the Inauguration OF the national banking
system, and insuring a loss to the people
annually OF millions OF dollars Such q sys-
TEN 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 exceedingly
"
order to insure the prompt redemption Of the
nonal bank notes the amount issued must be SO
much increased that the notes win be, say, one
elgnth OF one per cent discount, and this would
probably not be accomplished until an addition
was made to the present circulation of $100, 0O0,-
OO0 The same result would follow from q reduc-
ton OF the volume OF legal tender notes smuta-
neously with the increase Of the issues OF bank
notes, but Congress has so frequently refused to
diminish the amount of lceal tender notes, so
that the Comptroller Is Of the opinion that any
general system OF free banking accompanied with
resumption must be postponed until the resump
ton OF specie payments. The Comptroller, In or
der to avoid any Misrepresentation OF his views on
this subject desires to state that he lie not advo
cate OF any permanent system Of currency usual
~ known az irredeemable currency. He believes,
however, that the people OF this country ought
not, and Will not, submit to the high rates OF ex-
change prevailing previous to the war, and that
an amendment to the national currency act which
shall result in restoring the high rates
Of exchange win also resuls in
in s wS SSgni syten vet Of bs ssaa
the most satisfactory Of any system ever estab-
lished During the past year. as far as observation
has extended, national bank notes have been rare
ly at any percepdble discount for legal-tender
notes, and during the late panic distinction was
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 1t Is probable that when
specie payment shall be resumed the faith OF the
people will be so well established in the safety OF
the currency Of the banks that such general sys-
tenn OF redemption will be required a. Of the I'M
safe currency issued by the different States pre-
yious TO the war. II circulation should become re-
dundant as IL sometimes the case with silver coin
age VIII only BE- necessary PC to present the sur
more than two-thirds Of the circulation Is now re-
deemable In order to restore equilibrium; for 1t Is
to be hoped that previous to the return to specie
payment some system will be adopted which will
give abundant elasticity 10 the currency without
mourning the expense and burden OF general re-
demption, and without loss resulting from the high
rates Of exchange which have always prevailed I'M
der such a system.
Regarding the question Of interest on deposits
and certihcation OF checks, the Comptroller says
In my last annual report ! referred briefly 10
the evils resulting from the payment OF interest
upon deposits and my predecessors have frequent
iy referred more at length TO the same subject.
The difficulty has been that the proposed legisla-
non by Congress upon the subject would apply
lation would be TO bring State banks and savings
banks organized by the authority Of the different
States In direct competition with national banks
In securing the accounts OF correspondents and
dealers. The national banks will be DESTROYS Of
retaining their business, and the more unscrupu.
loIs would not stop TO eyade the law by Offering TO
make collections throughout the country free Of
charge; to buy and sell stocks without commits
sion, and rc-discount paper at low rates
1.-The kind Of legislation needed is that which
shall apply to all banks and bankers alike whether
organized under the national currency act or other
laws. A law prohibiting the pa ment OF interest
on deposits by National Banks will have little ef-
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 g. Of the
act Of July, 1870, which provided that after the
whole So CO... 000 OF circulation sball have been
distributed, $25000000 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
this section that amount would he Withdrawn from
New York. Massachusetts. Connecticut and Rhode
Island, and the Comptroller also recommends the
authorization Of 600 more currency, 10 be
distributed among States which are deficient,
namely those Of the South and West. He Is Of the
opinion that II would require from three TO five
We ara 10 Ill frihn 10 fhia adhifinnal amnnnt