, 1874-02-05


permitting banks in any State to issue any
amount Of circulating notes on the prosent basis
Of 90 per cent OF the par value Of the bonds de-
posted, and subject also to the other require
mcntB Of The National Currency act, except tho
keeping Of legal tendcr rosorye against circu-
lation.
Second-For tho ropoal Of tho Requirement
That bhnks shall hold IN their own vaults. or
with other National Banks, any reserve against
=, Third-For the deposit by tho banks OF
eeuiiioient " redemption fund oi legal tender
:a,otea with tho tsub- Treasury at Nav York, or.
tho Treasury at Washington, to redeem al Of
their circulating notes that may be presented iii
Those three propositions Of Mr.. Bhormans
bill hro nearly the Same as thoae Of the Banking
aud Currency Committees bill reported In tho
sonoy ss committeos @ iii, however, the boat @ % b.
cause 1t is more explicit in regard to tho roHervo
to DO held against circulation, and specifics 1t
shsll be kept up to 6per cent, while. Mr. sher-
mans bill only says Ii shall be "suficieut" re-
sasvo. This ia too vague, and thore ia no telling
what construction might be put on It By dineront
offlcinls, who would be In q position to exhibit
their own financial astutonoss by claiming that a
" sufficient reGerve meant more or less.
REBEnvEs AGA1NBT DEPOSITS.
Mr. eherman'a bill also provides that all Ma
tiounl Banks Hl1all havo on hand iu lawful money
Of the United States m amount equal to 25 per
cent Of their deposits;; The language Of this
repeal Of TINT part of the prea5nt National Cur
renoy act which permits country banks to keep
three-afths Of their IL pcr cont reserve in tho
form, OF balances duo from tLeir redeeming
to keep ono-half Of their 25 per cent reserve
with their rcdcemng agents in Now York. If
this part Of MIR. sherman'a bill should become a
law, md be operative, It would lock up
of tho National Banks. hir. shorman'a
requirement for 25 per cont reserve to be held
against deposits by al National Banks ia un-
necessarily exacting and We prefer the pro-
toes bill in this particular, which are: that
banks in tho country shall hold tho 1t per cent
and the banks IN tho redemption cities shall
hold Is per cont OF legal,tendera in their own
aud Currency Oommttteo's bill Ia detective in
respect to the reserve to be held against de-
posits. It is notorious TINT many National
Banks hold deposits vastly disproportionate to
Cougreas may pnss should make some gradua-
tion Of the percentage Of reserve to 30 held
against deposits, requiring those that hold
dopostts t. to +a;o more nai4.1 than double tho
By the National Currency net, aud permitting
those that hold less deposits than double tho
lmount Of their capital to hold less than tho
standard reserve. The. capital OF a bunk ia in
fact, only the margin pledged by tho bank for
the return Of the deposits on domand mud when
this pledge is greater or less than tic reasona-
bio proportion Of 80 per cent Of the depoaitB,
the law governing tho banks should recognize
ti" the Difference by requiring reserve in proper
proportion to deposits.
REDEMPTION or aREENpAoKs,
We come now to tho provision of Mr.. Shor-
mans bill for nppreoiutlng the value Of green
eamo time giving tho Government tho option to
pay IN coin, or, in lieu thereof, to issue per
cent gold bonds, rodoemable at The option Of tho
government after tou years. This is undoubt-
edly the nearest alternative to actual redemption
in cotn that can be devised, and iB provided as
Safeguard against tho entiro stoppAge Of re-
demptions Of greenbaoks IN case the surplus
coin Of tho Treasury should be insufficient to
the Government has not IN accumulation Of
coin. sufficient to insure tho maintenance Of
spccle payments, tlia device Of A1r. she,man's
is, perhaps, tho nearest thing to 1t possible.
It is questionable, however, If tho Goyorn-
mont would be obliged to resort to the alterua-
tive Of redeeming itB greeubacks in por cent
bonds. It wo may presume that tho import trade
OF the United States will within year 10 far ro-
tho revenue from cuBtoma to the 1900, 600 600 at
which 1t was estimated year ago. for this fiscal
year. It would leayo $100, 1000, 600 over and above
the liabilities Of tue Government for coin inter.
coin in 1876 might bo, whether 100000, 900
or only e75, 100000, which latter figure
ia reasonable eefimato-this s,1rnlua tornther
with tile surplus accumulated in tLe current
yenr would he lilo fund ~ coin mnon which thc
Government would ro1y for ratlemntiona of
greenbapks. Tho Goyerumout would, thoreforo.
be able to redeem at least 30 ner cent nf the
greonbacks in coin during the year 1875. before
il WAS obliged to resort to tho exnodient Of Civ
ing per cont bonds In exchange for the greeu-
backs. It iB probable that nothing but tho
actual experiment viii ever doter1nino whether
more than this would ever be presented.
But even ii more tcere presented and
the Government were obliged to resort
to the per- cent a bonds there oa!. scarcely bo