Marshall County Republican. (Plymouth, Ind.) 1856-1878, 1874-07-02
Especial to Cincinnati Commercial.l
National Bank Reserves.

The construction placed upon the Lew
Currency Bill by Comptroller Knox, took
a new turn to day, which, 1t is limited, has
been the result of an interview with Sec
rotary Bristow. In conversation this
morning with Mr.. Knox, that official said
he had erred in his previous construction
of the meaning of the law from not hav-
ing had, until last night, time or opportu-
nifty to carefully study it. He said his
first idea was formed from hasty reading
Of the actin effect as was teiegraphed
last night,-an he had urged tnat view
upon persons who called upon him.
Now, however, he finds that it does not
affect the former law regarding reserves
except as far as related to a reserve for
circulation, which was required to be
deposited at the agency of each bank.
Turning to the law he read section 2, the
very clause upon which he based his ar
guments yesterday. The moneys required
by section 81. act of June, 1864, 10 be
kept at all times on hand shall be deter
mined by the amount of deposits in all
respects as provided for in said section.
"Now," said he. turning to the original
law OF 1874, 1.-The law provides that all
banks in the cities of St. Louis, Louis
vile, Chicago, Detroit, Milwaukee, New
Orleans, Cincinnati, Cleveland, Pitts
burg, Baltimore, Philadelphia, Boston,
New York, Albany, Leayenworth, Kan
sas. San Francisco and Washington City.
must at all times keep on hand in lawful
money a. least twenty-five per centum of
its circulation and deposits, and all bank
ing ASSOCIATE ons in cities other than these
named in the law, must keep fifteen per
centum, and W hen the reserve is below
these amounts the bank can not, under
the law. make any new loans or discounts
other than on sight bills of exchange, and
can not declare dividends to its stock
holders until the reserve is made good.
Three-fifths of the fifteen per centum re-
ouired of the country banks might be kept
in one of the cities n,,iued for redemption
of circulation, and the banks of those
cities were required to keep one-half
deposited with the same bank as its agent
| for REDEMPTION. This made reserve on
hand for country banks OF SIX per cent,
and for the cities named OF twelve and
ne-half; to secure deposits This new
law does not in any way relieve the banks
from keeping the reserve on hand, but
instead of keeping part of it in owe of the
cities named they may keep it III their
own vaults entirely"
I'm computing the amount of re serve
the banks may count the five per cent re-
uuired by the new law to be deposited
with the Treasurer as part of the twenty
five and fifteen per cent. required The
amount is not changed under the new
law. For example, National Bank here
in Washington, which is one of the sew
enteen cities designated, with 100000
deposits, must keep twenty-five per cent,
i or $4,000 Five per cent of that circu-
lation must be deposited with the Treas
urer. and that amount being deducted
from the SOC, 900, the bank may keep the
balance ia its own vaults, or it may Keep
half of it in New York, or any one of the
other cities named. In case of banks re-
|quired to keep fifteen per cent, the case
would be the same"
Many members of the House are quite
iubilant over this construction OF the law,
and declare that that was the true intent
of the law but on the other hand. Sena-
tors say that the point was raised in the
Senate that the bill absolutely freed The
banks from all requirements of a reserve,
except the five per cent. deposited at the
Treasury, and the Senate adopted the bill
One good effect of the new law will be
to replace the present mutilated and
worn out issue of National Bank curren-
ICY with new notes.
COMPTROLLER Knox finds his authority
for holding his new opinion, that the de-
post for redemption may form part of the
reserve, in the following clause in Section
3. of the new bill, viz: Every association
organized or to be organized under the
National Bank Act shall at all times have
and keep on deposit with the Treasure
of the United States, In lawful money of
the United States, sum equal to tive per
cent. ofits circulation, to be held and
used for the redemption of such ciTcula-
ton. which sum shall be counted as part
of its lawful reserve, as provided IN Sec
ton q" the section before quoted.