Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1875-12-23
The Comptroller of the CurreAcy on
the Greenback Question.


In his annual report the Comptroller
says:
1t has been proposed to withdraw the
National Bank notes from circulation and
TO authorize an additional issue of $4OO. !
oo0, of greenbacks,'' the latter to be
Interchangeable in sums of fifty dollars
Tor treasury notes, bearing interest at the
rate OF $50 per cent. per annum, or one
cent per day on each 500, and to repeal
all acts tending to q resumption of pay
ment In specie. The "greenbacks" re-
ceived by the Treasury in exchange for
the $50 notes are to be used for the pur-
| chase OF per cent $40 bonds, for the
purpose OF saving interest to the Govern
ment r.---- Is
The non-interest- bearing certificates of
deposit now held by the banks, and
amounting to $50,SS0, 900, will at once be
converted into g greenbacks," and these
together with the $50, 900, 900 of cash re-
serve also held by the different banks and
bankers of the country, will be speedily
exchanged for 3. IS notes. These latter notes
will be used by every clearing house in the
country for the payment of balances, and q
large proportion of the circulation will
then consist of the new inconvertible in
terest- bearing notes, SO that the whole au-
thorized issue of these bonds will soon be
in demand. If the amount of the interest
bearing notes be limited to $400, 900 900,
81
tender notes be held in the Treasury, the
amount of the latter, which may be in
vested in United States per cent. bonds,
will be $500, 100000. This sum will pur-
chase $250,0C0 900 of per cent. bonds,
! assuming that the average premium is not
greater than at present-20 per cent The
amount of interest saved upon the $780,
000,00 of $50 bonds retired will be SIS
1000, while the interest paid by the
Government on the $400, 900, 900 of $50
notes outstanding will be $14 600 900, the
net saving to the Government being $780,
600. But through this process the pres
ent tax on bank circulation, amounting to
So $50 900, will be lost, so that instead of
saving $400 900 the Government will by
this experiment be actually the loser of
S., $780, 600. If, however, the issue of 3.65
notes shall be increased to an amount
equal to that of the legal tender and Ma
tiOnal Bank notes combined, the loss in
interest to the Government would be
somewhat less than before stated, but
equal to at least $3.50, 900. 1t therefore
seems evident that the substitution of the
proposed expedient in place of system
which has been in successful operation
for the last thirteen years will result IN a
loss to the Government instead of a gain.
The National Banks, as has been seen,
are disposed to retire their circulation,
and it is probable that during the next
year a very large proportion of it will be
voluntarily surrendered, but if the propo-
sition now under consideration should
be adopted many of the banks would go
into liquidation, and the loans 20 very
great extent be called in for the purpose
of distributing their present capital and
surplus among their stockholders, who
would, without doubt, generally organ
iZe under State systems and as private
bankers.
By this course large proportion Of the
State taxes, now amounting to an average
of about per cent. upon capital, would
be saved to the banks, as result of a
conversion of their capital or deposits into
interest-bearing notes, which, like other
issues of the Government, would be sub
jectto taxation neither by national nor State
authorities.