The New York herald., 1877-09-13

your practice 10 70 have no agencies. note this DIFF
terence ~ our system from yours without attempting
10 discuss the merits OF the systems. The agency
system necessitales vriant inspection and certainly
has IT'S weak points though II has Likewise its advan-
on warehouse receipts Tor produce purchased IA me
scinity ot the agencies and delivered at our CONNER
cia capltsi-Aontreai. Our banks deal largely
ia iorsisu exchange, and have nearly al
i.orcon correspondents. while two or th:ee
nave nave omces vi their own IN London and New ORR.
"ith regard to the relations between ths government
ana inc banks, may mention that tho Bans ol Mon
irea has been for many years the fiscal agent OF he
government, receiving the revenue at all the principal
Whenever required
poMisIox SAVINGS BANKS
Our savings bank law system was originally mod
elled ON yours, but was repealed and ceased lew
years ago. We have an admirable Post Onics savings
Bank system, which is being gradually extended.
Several Of the chartered banks have savings bank de-
ono al Montreai, one at Quebec and Que al Toronto
which were, at the time o the old act specially char
tered. IL was deemed expedient by our government
from the poorer classes OF society should give the same
security those receiving the deposits OF tho weather.
classes aud when the Old savings oahS expired,
about six years ago, was not renewed, and the few
existing institutions wore givea the option either
organlzo with a largo subscribed capital.
twenty-five per cent of which shond be paid up or 10
wind up. or tho five institutions then existing Two
wound up, paying their deposors In iu: TWO organ
lied with prosper,yone with capital Of 81 600 900,
tho other with ST. 0O0, 000and one obtained special
temporary act TO continue on It's old footing. The
Canadian municipalities have considerable indebted
ness, chiefly owing the numerous BONUSES gwen 10
railways They are required 10 submit all bylaws Tor
creating these obligations for the approval OF the tax
payers by special vote and there are stringent pro
visions the municipal .er enforcing payment OF
such obligations by means OF rates leviablc by the
sherins. tear that have occupied too much timo
with these preliminary observations. which l have
made in accordance with suggestion 10 that effect
CONCERNING RESUMPTION.
The immediate subject Tor present discussion Is tho
resumption OF specie pay mcnts, aud assure you
that il Is which your Canadian neighOors feel
very deep interest have long observed with regret,
OF a
both numerous ana active, while on the other
hand the advocates OF resumption seem TO oe quite
disunitcd. am not an inattentive observer OF what
is going on among you, but confess arm wholly un-
able TO discover how the opponents OF resumption eX-
pect realize the advantages which s their object
TO attain. They profess 10 apprebcnd that the con
sequence ofresump pon would be a contraction OF the
loaning power OF The banks Now, apprehend that
the loanipg power of the national banks Is limited
ia deposits ana circuaon 1t is the interest banks
10 loan as much as they can do with safety. believe
considerable substitution national bank notes tor
loyal tenders Under the present system there cannot
be redundant issue OF national bank notes, and on
the assumption thaf there is redundant issue
OF legal tenders such issue does not increase
the loanng power OF the banks, and as no
commercial paper IS held against 1t its In
diminuton would only be felt in AN increase
or reduction OF the premium on gold, which Is, and
must continue TO be, Notwithstanding any legislation
In contrary direction. the real measure of value.
The loyal tender circulation Is at present about three
hundred and fifty millions IL II were reduced by
any means, TO three hundred millions, gold would
probably be- at par II it were Increased by fifty mill
ions there would be a considerable increase in The
prem um gOlu. If b.mctallic standard were
adopted gold would be at higher premium than " ls
at present. but wou not ccase to be the real stand
ard. Among the advocates for resumption there aro
some who desire withdraw the legal tenders en-
tirey from circulation. IL seems probable that TINS
proposition is supported III tho interests OF tho ma
iional banks. My own conviction is that under
such system we have III Canada tue national
beneat by the retention OF legal tender circulation
The chic OBJECT OF maintaining that circulation IS 10
cconomizc the use Of gold, or silver II the latter
standard should be adopted the legal tenders were
WITHDRAWN every bank IN tho United States would
have to keep reserves IN coin 10 meet It's Liabilities
demand, although in practice the city OF Now YORK
Is the national clearing Of the United States
London Is for the United Kingdom The cost TO the ma
nous but tne inconvenience would be let more,
and this would be intensified II IT should De necessary
TO movc silver instead OF gold
RELATION BANKS 70 GOVERNMENT.
believe that II all rivalry between the government
and the national banks could be removed the con.
venenco tho latter oI the legal tender notes would
| induce them to withdraw all opposition to their
ISSUE That It is possible TO avoid rivalry our Gu
| IL not for The small note issue, Tor the sur
render which our banks got al equivalent in tho
never Dc seen by ,he general Public in Canada The
from $50 10 s1 600 are held by the banks as re-
ment ,nau COIN for setting balances thlnk that IN
the United States II would 6e desirable that mutual
understanding should be arrived at between the Treas
ury ana the banks the effect that the former would
issue no notes either $l00or $50, and small
denomination under S.. The national banks should
be satisfied, think, with the circulation OF notes Of
| SIS and upward The practical effect would be that the
government note circulation would Do mted to the
requirements of the banks Tor reserves and the
| unaer 81. believe that the effect OF such plan as
| have indicated would DC 10 increase the Ma
tional bank circulation and thereby the loan
| the nation a bank note currency superior TO
in any country in the world. nave not adverted
the oil ehectng or preparing Tor resumption,
and labor under The being unaware OF
the I'm ped the OF general substitution or
United interest bearing bonds for any redundant
issues The price OF gold would lead to the inference
that The legal tender issues are not much II at al IN
excess OF The public requirements monthly sales Oh
would bring them TO par, ana my opinion should
prove correct, that after resumption national bank
notes would take the place legal tenders 10 consid
cradle extent the practical elect would be that United
States bonds would be deposited for such increased
national issues, and would replace the present legal
tenders lit were asccrained would be under
convertible system, what amount OF legal tenders
would be rec urcd for public couveniences would
be difficulty ia maintaining adequate reserve oil
coin at tho Office Of redemption, which would certainly
be IN New York and not at Washington may here
observe that in times OF panic, which, 1t may be feared,
will time to time N all countries where cx.
tcnsve credits given, there would be less danger
OF large demands for gold on redemption OF legal tcn
der notes IN the United States than England. In
the United States and in Canada likewise each bank
would Tor It's sake endeavor TO keep that reserve
strong possible In England 1t Is admitted by all
the best writer's the subject that the banks gen
orally rely on the Bank Of England TO carry
the commercial classes through panic.
That bank is the custodian OF the national
reserve, and any who examines the banks state
mcnts q week or two before the Overend Gurney Co.
failure 1866 and those a fortnight later will at
perceive what load hat bank Is obliged to carry at
period OF financial embarrassment In America tho
burden would fail the banks generally and would
| certainly not be embarrassing.
The address Of SIR Francis H'ncks was warmly ap
pauded and vote OF thanks was unanimously
| adopted Mr. j. D.. hayes, OF the Merchants and
Manufacturers Bank or Detroit, addressed tho Con-
vention saying that so long as government bonds
manned in the United States the specie pay mcnts OF
Interest them would remain In the United Slater,
and II there was extra call on the government for
specie 1t would have no difficulty In meeting demands
| In coin Whatever laws might be passed wo could not
resume until wo had tho power 10 do IT, Believing IN
ability TO resume at tho time specified, he hopod
the law providing for resumption would be warmly
| sustained bv all tho banks.
| THE FOUR PER CEyTs
Mr.. J. II. McAdam, president OF the Merchants and
| Farmers National Bank of Charlotte, n. c., offered
| the following resolution