The daily gazette., 1880-03-24

ing the notes of the Bank of the
United States from the Treasury, and
provided that said notes should there
after be received therein though the
bank was then only a State bank.
That same year the bank made q dis
astrous failure. This act also repeal.
ed the act of 1910, called the first SUBJ
Treasury act, and provided that bank
notes should be received in the Treas
ury.
THE LAWS RELATING TO THE PRES
ENr NATIONAL BANKS.
THE ACT OF FEBRUARY 25, 1858, (sTA-
TUTEs 10, p. 665,)
authorizes the national banking sys-
tenn now in existence. The bill was
introduced by Senator Sherman who
assigns reasons why the notes of these
banks should take the place of legal
tender notes. These notes were to be
based upon Government bonds. An
examination of these reasons will
show that they have no foundation in
reasons Of truth.
THE ACT OF JUNE 13, 1864, (sTATUrEs
13, P.99,)
repeals the act of February rs, 1868,
and provides more fully and extensively
for the issue Of the national bank circu-
lation. One provision is that banks in
cities or money centers, shall always
keep as reserves, rs per cent. of their
circulation and deposits in lawful money
or legal tender notes, and that banks not
IN money centers should keep 16 per
cent. of the circulation and deposits in
lawful money. A neglect to comply with
this clause in the law, subjects banks to
the forfeiture Of their charters. These
banks had fully secured their circulation
by bonds of the United States to the ex-
tent Of 10 per cent. over the amount
issued upon them. The legal tenuer
notes were not, therefore, required to
make the circulation secure. The object
Of this section of the law, was reduce the
amount Of legal tender notes In circula-
tion, and to fill their places by national
bank notes, and also to concentrate
money in New York and other money
centers for speculative purposes. This
act required these banks before they
could lift their bonds deposited in the
Treasury as security for circulation, to
return their notes to the Treasury. This
was juseand proper, but We will see fur.
tbeT on, how the law was afterward
changed in the interest of the banks and
bondholders.
Thes notes of these banks were made
legal tender to the Government and to
the banks for everything excepting du-
ties on imports and Interest on the pub
lie debt; but they were not legel lender
to the people or receivable in redemption
of legal-tender Treasury notes. The
former were redeemable In the latter;
but the latter were not ledeemable In
the former. This shows which was the
superior money of the two.
THE ACT OF MARCH 2, 1867, (sTATUTEs
10, y
provides that per cent. certificates may
be held by national banks as reserves In
place of legal tender notes, thus reliev-
ing said Eotes from the banks and put
ling them into circulation. This was
done to meet the demand for money,
created by the shameful reduction of the
under the reign of McCulloch,
Secretary of the Treasury, when the
Iegal-tender notes were reduced from
s450, 900 900 to 1856, 6,000,0 900, and the
other forms of money were reduced over
81 ZOO, 100000
The most ruinous provision In the
bank act of 1864 is that which provides
in the 32d section for selecting banks IN
.cities to redeem the notes
Of national banks, and that one-half the
reserves of said banks thus selecting
may be in these redemption banks.
This section In the law took took the
money of the bank from the place
where the bank was located and trans
erred IL to New York and other places
where 1t was not needed for business,
and where 1t was used for stock and
yold gambling TO the injury of the coun-
ry. The notes of the banks needed no
redemption by other banks. They
we're par everywhere. The notes Of one
bank were as good ss those of another.
No redemption of said notes took place.
The whole provision was intended to |
,lace the funds of national banks Ia |
New York, SO that the money market |
ould be controlled by New York at any
ime. We all remember the disastrous
esults of said law in the fall Of 1873,
Vhen the New York banks suspended |
urrency payments owing to their gam
ling operations.
HE ACT OF FEBRUARY 10, 1858,
(sTATUTEs 10, P. 34,)
these bank shares TO be taxed
lnder State authority as,much as other
,anks were, but not more.
HE ACT OF FEBRUARY 10, 1869,
(srATUTEs 15, p. 270,)
rovldes that national banks shall not
pan money on their own notes, as it
Tould tend to create q scarity in the
honey market by locking money up.
HE ACT OF MARCH 3, 1860, (sTAr-
UTKs 10, P. 326,)
rovides that national banks shall make
nd publish five reports each year.
HE ACT OF MARCH 8, 1869, STAT
UTEs 10, P. 335.)
rovides that checks shall not be paid
'ithout funds.
HE ACT OF APRIL 8, 1870, (sTATUTEs
16, P.7,)
rovides penalties for fraudulent officers
these banks and those who aid them
commit frauds.
HE ACT OF JULY 8, 1870, (sTATUTEs
IL, P. 1852
'ovldes for the punishment Of those
no embezzle the funds of the banks.
THE ACT OF 1864,
nited the circulation Of national banks
$30O, 600, 600.
liz ACT OF JULY 2, 1870, STATUTES
16. P. 25l,)
ereases the circulation to $3.50, 200, 600,
hich was TO be divided among the i.
ates according to population.