, 1876-02-08
Lk,su on circulation,


dividends " whilo boarding gold, or premium
on tho gold or premium On tho bonds, or
riaks and perils of redemption, tho above
figures very clearly prove TINT 1t would DO
against tile pecuniary intercst Of tllo National
Danks to nnaintain and support tho burden Of
specie-rodonpt!o under tho restrictions Of
tho present National Banking net.
A1r. BuncHAnn refers to tllo bA1,1s crculn-
ton boforo tho War which was rctloo1ncd III
specie. Ho says that botwocn 1865 and 1860
tho notes in circulation averaged $l93,228,-
o00, and the coin reserves for its redemption
$7G, OBS, 900, or 40 por cent, md between
1860 and 1862 tho notes were 5000, zoo, 600,
and tho coin reserves sol, ,03G, 1000, or 4Gt per
cent.
Conceding these figures to bo correct, they
do not provo what he clain,B for tlom by any
,ncana, bocauso ho supprcases several vitAs
facta In tho problem, which ho must pardon
lis for bringing to light.
i. Tho oldstato banks paid no Fc,1eral taxes
on their circulation, deposits, or capitnl; nntl
Stato md municipal taxation III those dnys
was very light iu comparison to these.
2. Tho per cent tax OIL circulation is equal
to Ii per cent Of tho profit roalized in tho
West from tho lonn Of tho notos after deduct
ing tho idle money for reserves, and in New
England, whore the rates Of interest aro but
drcr cont,-o1ccpt on tho sly,-tho tax on
circulation consumes 25 per cent Of tho net
pratt realized on tho uotoB. The old s.ato
banks escaped this onorouB tax.
8. Tho National Banking law only permits
10 per cent Of circulation to 100 Of bonds de-
posted to sccnro their redemption. Nome Of
tho State banks were no restricted. In tho
Now England States, which furnished largo
part of tho circulating medium, no bonds
were required to secure notes. Tho
banks wcro permitted to issno NJ
many notss aa tloy wore ablo to keep in
circulation, aud redeem through tho Suffolk
Dank in Boston. Tho New York law required
the banks to deposit State or National bonds
with tho Comptroller only to the amount Of tho
notes issued. A fow other statoa had si1nilar
requirements. Ohio had both the New Yorl.
mud Now England systc,as. But in all Statcs,
whero bonds woro required, the notcs that
could be issued wero equal to tho face OF tho
bonds and In somn of tho Western and
Southern States 1t WIS not necessary that tho
bonds should be worth par, and tho notcs Issued
upon tho1n were never rodoolncd in coin, but
foil into discount md beca1ne "atumptaiL"
But leaving those stumptail bnnks out Of tho
account, aud taling the Now York and New
England systems, it will 10 acen TINT tho in-
lucemcnt for banks to issuo notes and re.
deem tllom WAS altogether greater thau that
afforded by tho existing Nationa1 Banking
law. II tho ta1 on circulation wero removed,
and 100 Of notes instead Of 90 were por-
mitted to DO issuod ngainst 100 Of bonds,
tllero would bo so,no pscuniary temptation to
venture TO issne gold notes.
4. The demand for gold in those antc-bcl-
lum Days was slight III comparison to wllat. It
is now. Only S'o7,000,000 year was OBJ
tanned from tho tariff in JAoksoA'a and VAN
DuREN's time. And in DucuANAN's Adm inis-
tration only $57, 100000 annually. Ou. in-
ports uuder the low tariff Of 1867 wero
under ultra protection. Tho whole
amount Of paper which tho Importers
presented to tho banhs for redemption to OBJ
tain gold to pay dntioa md remit abroad did
not average moro than 500, 600, 900 a year
from 1856 to 1861, whereas the a1nount now
required would DO fully hrco tmps TINT sum;
tho dntics alone would require t,early twice
the total amount needed for all purposes be.
fore the War. Before tho Rebellion tho or
portaaon Of gold was comparatively nmall.
OF lato years ii hos become Immense. Tho
balances Of trade, tho interests on our aecuri.
ties held abroad, and tho expenses of tens Of
thousands uf American woniuu md men tray
cling In Europe, require afl enormous o1.
portation Of gold. and while tho present tariff
and tratlc relations with Cuba continue there,
can be no decrease OF tho dolnand for gold to
ships abroad.
Still wo believe the banks could maintain
paper circulation adequate to all the wants Of
trade and redeem 1t in coiu, mud far,,isl. all
the gold tho foreign and domestic commerce
df tho country demands, ii the Inv made 1t
to their interest to do so. But it does not
and they would lose money heavily by al
tenpting 1t undos present oncrous taxes and
restrictions, Mr. DuEcHAuu does not seem
to know TINT it costa specio-paylug banks
something to purchase coin to renow that
which ia drawn out in redemption Of their
notea. At times this expense is quito large.
bankers will also inform Afr. DUacIAnn that |
tho excess OF reserves held by tlle
banks last October, to which flo calls |
our attention, waa duo to tie wide |
apread staDuation Of business since tho panic |
and the utter absence OF speculative demand |
for money. Tens Of millions Of dollas8 hayo |
lain unused and ,,nwanted In tho vaults Of |
thn banks because no gafp enlpfoymeuk cnttfa |