New-York tribune., 1875-03-09
LEGAL TENDER RFCRDING.

We have news from Washington that Secre-
tary Brstow has withdrawn from circulation
81 900 of legal tender notes, that amount
being eighty per cent OF the amount OF new
bank circulation issued under the act OF Con-
grcss authorizing " free banking" and prom
ising resumption of payments in gold IN 1879.
In reality, during the last two months there
has been decrease of National bank circula-
tion, caused by the surrender by several
banks of their privilege OF issue. The Ian
guage of the act, however, is, for wonder,
explicit on this point of contraction, running
as follows:
SEC g. That Section 5,777 Of the Revised Statutes OF
the United States limiting aggregate amount OF the
circulating notes of NATIONAL banking associations bo
aud Is hereby repealed, and each existing banking
association may its circulating notes in accord
ance with tho existing law, without respect 10 said
aggregate limit and new banking associations may DO
Organized accordanco with tho existing law without
respect to said aggregate liaiS, and the pro-
visions OF tho law for tho withdrawal
aud redistribution Of National bank currency
among the several States and Territories arr
hereby repealed and whenever and 50 often rs circu
ating notes shall be issued to any such bank assoca
on increasing It's capital circulating notes. or so
newly organized aforesaid it shall be the duty OF the
Secretary the Treasury to redeem the legal tender
United States notes in only OF soo00)OOO To the
amount of so per centum OF tho of National bank
notes 80 issued to any such banking association, as
ufvrosad, and to continue such redemption as such cl
cultng issued until there shall DO oust4nd
Ing the sum of s3)OjCOJ) OF such LEGAL tender United
states notes, aud no more.
The circulation OF the National banks is
usually reported from Washington at about
S3A0QO,OO0, but about fourteen MILLIONS of
this aggregate have for some months consisted
of notes issued by banks which have either
ceased to exist or have deposited legal tender
notes with the Treasurer and withdrawn
their bonds. Now, it is to be noted in the
frst place that the fourteen millions of green
backs deposited with tho Treasurer for the
purpose Of retiring bank notes are no part OF
the currency, and can only pass into the cur
rency by being paid out for bank notes, which
are destroyed as soon as received In the second
place, the bank notes which tho greenbackS
have been set apart to cXtinguish have become
an obligation for which the United States
Treasury is solely responsible. At the present
time the banks of the country are responsible
for only about e530,0000O0 of the paper money
aGoat, and the total paper circulation is equal
only to the sum Of these S39Q0OO,OO0 and tho
$4,000, 900 grcenbacks. II the reader chooses
to call the bank note circulation $34l, 100000,
he must call the legal tender only $363,0jO,O00,
for fourteen millions of the greenbacks do not
aud cannot circulate until the United States
Treasurer gets hold of certain bank notes and
extinguishes them. Under our present system
of currency, when bank fails it is sS diff
cult to get hold of its notes and put an end
to them as it would be to rid township OF
rats or snakes. At the end of four or tive
years most OF the notes will have been sent
in but there will still be some which continue
to circulate. There are doubtless bills still
in active circulation of every National bank
which has issued notes since the origin
of the system. At the rate OF progress
now attained by the Redemption Bureau, it
will take from two to three years to so through
the National bank circulation once, suppoSing
what of course is far from the fact, that no
note is transmitted twice to the Bureau, and
no new note returned for renovation until
every old one has been redeemed. AS fourteen
millions are only about four per cent of the
existing notes in circulation, only about four per
cent of the notes received by the Redemption
Bureau will belong to that part of the cir
culatlOn which the Treasury alone is bound
to pay. In the course of month therefore
the Bureau may expect to get hold
of about half million Of these notes
of extinct banks, and will thereupon
set a6oat its own greenbacks in place of them.
Supposing new banks to call for circulation
at this rate and the deposlting of green
backs to withdraw existing circulation to
cease, it is plain that imitation might
ata for nnyla 80
without any change whatever in the reported
aggregate circulation of bank notes. Half q
million fatherless bank potes would he w''t-