, 1876-02-08

BY issuing circulation. wll mako Iosa than ns,
coht.ctn Alaasachusetts. whero intorost Il
limited to per cont, llo will gain over per ctnt
ir.o, q oGsn,rd y c moro as e will from shs
Thcro. is no rosson, theu,. why = National
hank. doyifinR to avail ittelf Of tho naany I'd.
vA!tages Of tho National Hank ayttem, would
rodaee " circulation 70 tho o%est Limit On ac.
of Ate eoin-interesi. In ILLINOIS, aud much mo,s 1911;
lii Massachusetts. tho circulation woaiu aNor.l :
profit even with 2o.rer.cent coin n-reaerve..
nut taore is another csuas which has Induced,
dt1co their outstanding circulation. Within
year and hhlf II has roducot1 tho outstanding
circulation Of tho National 1,anhB Of Chcs9s
ft9m fn9, fs7'e 80 on On tho lat day ct stsy
q ootoker. 1s75; and tho circuit.
..ton, Of tho banks ct tho CITY OF Nov
York from e27,2il, 1906 to els,30a,ol7-a 70.
.'ncsion Of over ono.thirl. It waH not tho M.
about This great reduction. Tho profits in Chl.
oago wero about the legal ratio Of interest IL
each year. It was hecauso, II grcCnbRcka aro
noon to appreciate to ouin In valua. ths na1e of
Tho banls'B coin.bonda for grctnbncks is nj
gain to tho amount Of tho plomn.
Tue Chicago National UankB llaye, thareforn
already rottred over %. .00U,O0o Of their circua.
ton ami sold oscr So, 00D, 200 Of bonds prnvious.
ly held. Tile protita Of 70 doing appear, iu nart
1
l. 1870 which Wuro o. per cent of tho cspistl-
h',r7his. or At Tho 1ato Of 1873 pcr sont pet
annu,n.
Nix Chlcago banks bad, In octobsr, reduced
thoir United HtaeB honda 10 $50, 0o0, ,--tha loH.
cut amount required to be held by National
Dhnk, ,--and tlelr calculation 10 445,O0U.
l'y tho rctrement OF tla $4,000, 200 Of ctrcn.
latioti In Chcago. no contraction OF toana
BtrlnEenoY III currency or disturbance OF bIlaf.
ness. has resulted. On tie contrary, by tbo
aalo OF $4,000, ,O00 Of bo.,da At pron,[nni, the
banks have roracol all tho bnnk-notcs retired,
and realized nearly a, ,0u00st0 additional cash.
That Other Nattoual Dauks. especially in The
Wcst, will continue to retire their circulation,
hAvO no doubt, while, IN low-lnsrcst. cAplkal
States. like MaBsachuso.ta. tho circulation Nill
DO Increased.
Tho further retirement Of Characterization,
now going on In the West. will not result Ia
local atringenoy. On tho contrary, tha ability
OF % coul!try-bAnk to accommodate borrowers,
will bo iucrohsed nearly $4,000 for every
500 oa0 Of circulation It rotlres. "a that amount
Of capital. In o1cesa Of notes issued aud loaned,
Is noy Locked up in bonds a,,d pteminn.
But tllero ia u limit TO this retirement. Tha
National Banks must each deposit $4,000 Of
bonds; aud. owning tho bonds, It 10 tue bnuk'a
tntorcst to fsBuo tho $4,000 Of circulation a.
lowod thereon. ..
Thoro were, In October, 2.0B7 National Banks !,
anl tho nun1tor is constantly Increasing. What
| is retired in tho West will 10 compensated By
| ttcirating nonnT-Bcarcitys Putting coin,
which does not circulate At al, In the bank.
reaa,ye, will retoaHe md put in circulation Untt-
Cd Statos not.e at tho ratio Ut $40 010. 0.000 year.
\ It would expand ~ much or moro than |. would
| contract tue circulating currency. 1t vnrkB no
| lBjuHtico, and inp.eBses no BcriouB burden upon
! tho banks. II srecle.pnyrnent sb to bo resumed
III the future. the measure ia intended to require
| tho banks aa veil M thu Government, TO bu
prepared for it. As thoy reap tho largest beno.
Lit. it ID reasonable that lllay should BlIarA part
| Of the burden. IIoKATIp u, DuucHAAD.