The weekly herald. [volume] (Cleveland, Tenn.) 1876-1888, 1877-12-06

| notes Gro maintained al par with coin: then tho
banks nust redeem lhelt notes In coin or United
The ample statistics gwen by the Comptrailer,
aud bis comparison, or the reserves ard condition
OF the National hanks with the reseryes and eondi.
tlop Of other systems 81 banking IN specie-payinr
times, Give asaurauce that The National banEs are
able 70 redeem iheir circulating noiS.D coin at
certainly should not enjoy the franchise OF olrcu.
latIng as money their nOn-interest bearing notes,
unless they are prepared TO redeem them. The
present system OF redemption OF bank notes al the
Treasury Of The United States can be Continued
after United States notes are at par with coin as
dInpnnl receives ara necessary they eau DO re.
quireh. Then, Us nOg, their notea Will be- amply
secured by the deposit OF bonds, and confidence 10
this security VIII dispel the feGf OF failure, which,
under fOfmer systems. has been tie canse OF sud
den runs or demands on bansSslaF payment OF
their notes. IL the policy OF ~ Government
should be 10 maintain IN circulation at par with
cOiu.A maximum OF three hundred millions OF
United States notes and TO support them with a re.
serve OF not less than one hundred millions In coin.
these notes will DO the natpSll rcserAa OF Tie
banks, and moro convenient v M AZ Than
o deposit OF coin In their
The real danger that in former systems threat.
ened O bank was its liability for deposlts. II
these were su'denly Withdrawn. OF greatly dimin-
ishei, The note holder was The chief sufferer. The
first rumor OF weakness about a bank brought a
demand from depositoTs and note hOlders alike,
but under the National banking system Inc note
holder is secure and indifferent whether the bank
breaks or not, aud the deposition, who Is a yOlunta.
ry creditor of the bank, il. not likely tofasten is
fall. He is usually paid by a Transfer % credits,
aud 10 most cases is a debtor as well az a creditor
Of the bank. Scarcely hve per cent. OF deposits
The capital stock Of National banks paid in Is
now S479,467,771 and the surplus fund and other
undivided profits IS now S16G. 34e. 7gg SO. The banks
are exceptionally strong IN their cash reserves.
tTEoir condition IL as favorable 10 maintain redemp.
ton IN coin as in United States notes, aud tho Sec.
rotary cOncurs N the opinion OF the Comptroller
that they OUGHT 10 be, can be, and will
be prepared for redemption of their circu.
latiDR notes In coin or IN United States notes equal
TO coin by the time fixed by law, without interior.
ing with their ability or disposition to render their
aid. as now, by loans and discounts. IN conducting
the business and exchanges Of the country. Tire
market value OF their circulating note is 972s per
cent. The difference is not equal TO six months
interest on the bonds deposited for the security of
the notes, and not five per cent. of their surplus
on hand. Ii is scarcely TO be credited that the pay.
ment OF this will disturb IN any way the even
course OF their business.
Complaint is made by the banks and bankers
Of the country of the tax on their deposits,
and attention is called to what is said
TO the repeal OF this tax. While the
necessity exists for collecting the amount OF reve-
nue. now required. the Secretary is not prepared
TO recommend such repeal, but whenever a sufi.
Client amount OF revenue for the support Of the
Government can be derived from the other arti-
Giles 10Y subject to taxation, a reduction Of bank
taxation will then be advisable.
The cost Of the redemption Of bank notes in
United States notes ut the Treasury, under the
present system, does not exceed One-6iXth OF one
! per cent. on the amount reneet0ed, ana Is refund
ed to the Government by ths banks. The redemp.
ton is q great convenience to them and to tue
public, and should be continued.
The act creating the National banking system
recognizes the character OF these banks as Govern
mcnt agents or depositarles. They could greatly
assist in the process OF refundlnR; they are cOnven.
!ently distributed so as to be within easy reach OF
the people OF the United States. The Secretary is
OF the opinion that they can be, under the existing
law, and ought TO be, made the agents Of the Gov
eminent In the sale or bonds, upon conditions that
will make IL for their interest to promote such
sales, and will be safe and advantageous 10 the
Government. Various plans have been submitted
TO secure their cooperation, and the best will be
adopted.
The attention Of Congress is called 10 the great
value TO our fellow citizens Of the Organization of
some plan for the collection, safe keeping, and
profitable employment of small deposits by the
people. How far this can be done without trench.
ing upon the proper functions Of the State Gov
ernments is a question OF difficulty; yet IL is i'm
port0nt TO secure. II possible, a general system
throughout the United States. This can hardly be
effected by the organization OF a multitude OF
savings banks, depending upon the fidelity, iDteg-
rity. and skill Of their officers, but the beneficial
object of such banks might be secured by author.
money-order otieo in tbet nited States, and me
issue OF Governmental ~fhcates, convertible
on demand Of the into four.per;
s sgof character DDn%s desert I'd ntSG amount s1nse Is Will ii
enable . and induce ice gtle NelI-sOns to - convert vst
value. The mopey WEI yetged could be EN-,
ployed In the rcdeut, ntstaDdinQ bonds
bearing a higher rate . Ivy erest. By some erch
public debt, reduced 10 Its smallest possible bur
den. could be distributed among our own people.
With a slight modification OF existing law this ben
eflcial result would DO secured. The deposits now
held by savings banks throughout the country
amount to ,SS43, 154. 804, Deposited by 100000 per
sons. and mostly by deserving citizens, who thus
wisely seek to preserve mall savings for future
need. No object could more strongly appeal to
the considerate Judgment of CONGRESS. The
heavy losses that have boen sustained through
savings banks, whose funds have been imprOvi.
IDENTIFY loaned upon insufficient security, have in
1icted far greater injury upon the depOsitors than
would a similar loss suffered By persons engaged
in banking or commercial pursuits. The Secretary.
therefore, that authority be granted
to issue certificates for small deposits, convertible
into four. percent. bonds now authorized by law,
the proceeds 10 be used solely for the redemption
Of bonds bearing u higher rate Of interest, and now
redeemable at par.
COINS AND COINAGE.
The Secretary calls the attention OF Congress to
the report of the Director of The Mint. The general
management of the mints and assay Offices. and
the amount, accuracy. and perfection of their
work, are highly satisfactory. The coinage OF
gold and silver, their relative value to each other,
and their legal-tender qualities, are now the sub.
iects OF discussion and legislation In all civilized
tant TO the United States, now in transition from
an iTredeemable paper currency TO q mixed cur
rency, redeemaDle III coin, and will justify the
Secretary in a fuller presentation of those topics
than ia usual in his annual report.
The Resumption Act Of January IL, 1875, pro.
vlded for the exchange und substitution Of silver
coin for fractional currency. To facilitate this OK
change, the JOINT resolution approved July %, 1876,
provided that such coin should be issued to au
amount not exceeding $4,000, 900, for IN equal
amount Of legal-tender notes. 1t also provided
that the aggregate amount OF such coin aud trac'
tional currency outstanding should not exceed, al
any time, s50,00O,000. That limit would have been
reached some time since, II the whole amount of
fractional currency issued and not redeemed, had
boen held TO be "outstanding." 1t is well known:
however, that a very large amount Of fractional
currency issued had been destroyed, aud could not
be presented for redemption, and could hardly be
held to be outstanding" The Treasurer OF the
United States, tho Comptroller Of the Currency
and the Director Of tho Mint ooncurred In estimat.
49, the amount no lost and destroyed 10 be not
Tfdss than s8,053, 519.
AS IL was evident that CONGRESS- intended TO pro
vide mn nRaregate ISSUE Of S50,00o,000 Of such coin
aud currency hholroulatiOn, the Secretary directed
N the fnrther issue MSRllver coin equal IN amount to
the currency estlmater-So have been lost md de-
AtrOyed. II @
With submitted that tho limitation upon the
amount Of such fractional eoin 10 be iseued In ex'
change for United BtOtea notes should be re- ealed,
This coin Is readily taken IL, In great favor with
the peop1e, Its Issue Ia profitable 70 the Govern
ment. and experience has shown that there Is no
difficulty IN maintaining IT at par with United
In circulation in the United States in 1850. Mt par
with gold, was S43,0O0,0O0. Great Britain,
i with u population of 1900. 600, main
tains an inferior fractional coin to the
amount of $50, 463, 800" Mt par with gold, ana other
Nations maintain u much larger per CAPITA
mand that may he made for its issue, mud II only
Issued in exchange for United Suites notes there
Is no danger OF an excess being issued. /
By the coinage act Of 1873 any person may DC