Mexico weekly ledger., 1878-02-07
rs NATIONAL BANKS
IAN THE LAND SffARKS:-

tobe substituted for national bahkt
and makes them receivable for
all purposes by the United States,
and for all claims and demands
against the United States, except for
the principal and interest of United
States bonds made payable in coin
by law, and also exchangeable for
the four per cent. bonds of the Unit
ed States, authorized by the net of
July IA, 1870.
The second section provides that
no more circulating notes shall be-
issued to any national banking asso-
citation, and compels them to deposit
five per cent. monthly of the outstand-
ing issue, or legal tenders in lieu
thereof in the Treasury of the United
States, until sum equal to the out
standing circulation shall have been
received by the Treasury, and that
the Secretary upon each monthly de-
post shall reassign and deliver to the
banks u proportional amount as near
us may be. of the bonds deposited to
secure their circulation, and when
legal tenders or their own notes, equal
to the total circulation have been so
deposited. that the whole of the bonds
shall he delivered to the banker, and
they shall be relieved from the re-
demption of the issue and it further
provides hat If any bank, fails to
make the monthly deposit of five per
cent. of this issue, or legal tender
notes in lieu thereof. and take up its
bonds within sixty days after the OK
piration of the month during which
said deposit is required to be made,
that the Comptroller of the currency
shall sell 4 proportional amount of
the bonds pledged for the circulation,
and provide for the redemption and
cancellation OF the circulation. the
cost cf sale, and pay tie remainder.
if any there be-. to the defaulting
bank.
Section three provides that the
Secretary ofthe Treasury shall month
" issue five per cent. of said Treas
~ notes in the purchase of any six
per cent. outstanding bonds of the
United States now payable ut the OPP
| ton of the Government, on terms the
NEST advantageous to the United
| States, OIL purchase coin with them
either at home or abroad with which
to reSheem said bonds. and in contin-
gcncy of deficiency Of coin in the
Treasury al any time to mcGt the coin
obligations of the Government. that
he dispose of the bonds of the United
! States of either class authorized by
the set Of July II, 1870, mt not less
than par. in order to pay the said
coin interest.
The last section provides for the
repeal Of the tax on the national bank
circulation, and the repeal Of the re-
serve clause OF the national banking
law.
, The legal effuc.. of this hill is first
to cut of the double source of Inter
est that the national hanks realize
from the people. by retiring the ma
tional bank circulation and using tbs
Treasury note issue to absorb out
standing bonded Indebtedness, equal
to the bHying capacity of that issue.
If the issue DC held az par it will re-
tire three hundred ard twenty mil.
flions Of bonds, upon which the peo-
pie annually pay an interest Of nine
teen million two hundred Thousand
dollars. This is the most apparent
and most prominent remedial money
result that will follow its enactment,
The next most prominent feature
of the bill is the capacity of the issue
to purchase at par the four per cent,
bond of July Il, 1870, and upon sale
tilereofhy the Government that the
Treasury note received shall be dc.
voted to the further absorption of thu
six per cent. interest bond outstand'
ing, payable at the option Of the
Government. The practical result
Of this will be to substitute the fou,
per cent. for the SIX per cent bond
which will result in further saving Il
the Government of about eight nil
lions annually, being n saving of twt
per cent. interest on the remaining
outstanding Indebtedness of thi.
character, the whole amount of which
is in excess of seven hundred mil
lions, three hundred and twenty mil
lions OF which will be retired by thu
original issue of the Treasury notes
The last section of the bill is a tut
thrown to the national bank whale, t.
buoy them up during the agonies O
dis5olutionthat the law would inau
gurate. IT the resumption act shoul,
not be repealed it robs It OF one 9
its most dangerous features, for eve
nv sensible man knows that gold re
demptiou Of the national bank circu
~la.ion by the banks in 1870 is pliysi
caliy impossible, and that their fail
ure TO redeem Under that act wonlt
wreck the entire country, the legisla
ton governing them having subjected
to their control all the cash and cred
its of the country.