New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-02-07

the PROVISIONS OF the act OF loIU WHICH Has bp"' i
proved dead letter, regarded by the most proni
ncnt mhatOnists in the Senate as an attempt 10
satisfy the States of the West and South on account
of the UNEQUAL distribution of the National bank
circulation without increasing that circulation at
ALL Senator Morton says the bill will probably pass
the Senate, but not without distinct declaration
on the part of those who complain because OF the
unequal distribution of that circulation, and who
also demand an increase of the currency, that IL
is not to be received in satis1ac-
ton of their demands. but will only be
accepted so far as it may go. They claim that
after the $540O0000 of additional bank circulation
provided by the Act of 1870, has been fully distrlb-
uted it will still require $40000O upon the basis OK
the Act of 1865 to equalze the distribution among
the States applied to the wealth and population
of the several States, as shown by the census OF
1870 +; but that owing to the rapid growth of the
States in the West while those in the East have
been comparatively standing STILL it will now
require still larger amount TO bring about such
equality.
The second bill introduced by Mr. Sherman is
substantially his bill of last year The main feature
of il is a proposition to redeem the gTeenbacks by
allowing them to be funded at par in per cent
gold bonds running ten years, but when they come
into the Treasury they may be paid out again for
ordinary expenses, or in the purchase Of the out
standing per cent bonds. 1t is not believed by
prominent Senators that this feature OF his bill
will be adopted. Other sections provide for
free banking after JAN l. 1875, certain conditions.
Those who are in favor OF an increase of the cur
Tency clam that there is majority III the Senate
for it of from four TO six. They SEEM however, to
have abandoned the idea of increasing the amount
Of greenbacks beyond the issue of the $AOOO,OOO
reserve and their plan is to enlarge the circu-
lation Of the National banks by from $40,CO00O0 to
$50O00000, claiming that this amount is necessary
10 equalize the circulation among the States The
more radical of the infationists will not however,
he satisfied with this.
PROPOSITIONS TO PROHIBIT THE PAYMENT OF IN
TFREsT BY NATIONAL BANKS AND REQUIRING
THEM TO RETAIN THEIR RESERVES IN THEIR
OwN VAULTS.
FROM THE REGULAR CORRESPONDENTS OF TIE TRfBUSE
WASHINGTON, Feb. G-The Senate Committee on
Finance has been engaged, recently, in the discus
sion of several of the recommendations contained in
the last report Of the Controller of the Currency
with a view to embodying them in general bill,
should majority of the Committee agree to favor
them. The two most important OF these are llst)
section prohibiting the payment by National banks
of interest on deposits, and ed another requiring
all National banks to retain their reserves in their
own vaults instead of keeping large part Of them
at the great redemption centers.
Neither of these propositions meets with the
unanimous approval Of the Committee. The OPP
ponents of the first while they admit that there has
been altogether too much speculation with the
money of depOstoTs in National banks lent out by
those institutions hold that the prohibition proposed
would not correct the evil. The fact that a bank
pays three four per cent to its depostors, they
say, does not increase the greed of the man
If fho no IN a tba n1e
intrusted to their keeping. In other words
they will lend it out for speculative purposes just as
quickly if they themselves pay nothing for its use
as If they paid or per cent, while if the National
banks do not pay interest TO their depositors many
business will transfer their accounts to private
banks, some of which not managed on the same
conservative principles that it is intended shall
characterize the conduct of the National banks.
On the other hand, those who favor the Control
ler's recommendation advance the old arguments
which have generally been considered good by con-
servative business men, that "A bank that paws in
terest on its deposits is forced to realize large
profits and to assume greater risks, which detract
from the security that should surround all banking
institutions.
The second recommendation that banks shall be
required 20 keep their reserves IN their own vaults
instead Of having part of them at the redemption
ceDters also divides the COMMITTEE. Inc total
amount of legal reserves is now about $15OOO0000,
of which it is estimated one-third. or about $5Oo0O
co., is actually in illegal circulation and under the
present system the bank examiners are not
always able to discover the absence of the
reserve from any bank. If the banks were
required to keep this money always in their own
vaults it would be unsafe TO have any part of it in
illegal circulation, since the officers of no bank
could know when the bank examiner would appear
and discover the deficiency.
This proposition will probably receive the support
of the contractonists, since. if this currency was
actually held by the banks it would be out of the
circulation, and would be contraction to that
amount