, 1880-11-28


In thls connection the writer recalls All evening
ut Mr Chase's oWn residence. when the bank
and currency questions were informally dis
cussed. LII the course Of tho ci,tiycrsa ton 3ir.
Chast asked for u definition uf motion, when
some one answered. "Matteri is Inert; spirit alone
made in mSSa at;e i hs xcs sB
the Secrctary replied: :. II that Is a good dell
nitton. then legai-tender mites [unconyerti-
FOR no snan eau foresec whnt mischief they may
do when they arc onto let loose"
More 1han i yCar betorc the passage Of the
Enttonat- Dauk act sDeoeinber, l66l}, III tho re-
port already referred to, Secretary Chase said:
"1n this plan the people, in their ordinary
business, would find the advantages Of uuiformi-
fectnal snfcsunrd. II etrectuui safeguard is pos
stblc, axuinst dcprcciation; md Of protection
IRON loase6 in discouats and exchanges, while iu
the operations OF the Government tho people
would tud the further advantage Of a large de-
mand for Government securities, Ut increased
facilities for Obtaining the loans required BY the
Industry through u diminutiun in tho rAte Of IN
terest or participation in the profit Of circula-
ton, without rsktng the pcrtls of II grcat money
monopoly 4 further nnl important advantage
to tho people may be reasonably expected in the
increased security OF the Union. sprlnging trusn
the common Interest In its preservation. created
by the distribution Of its stocks to associations
throughout the country As the basls OF their cir
culAtaUn.
Aud, again, Ia 1862, he said:
:" 1t seems difficult to conceive Of 4 note clrcu-
ladon which will combine higher local aud gen.
eral credit than this. After few years no other
circulation would be used. nor could the issues
Of the National circulation be easily increased
beyond the legitimate demands OF business.
The issue Ut United States notes, IL exclusive,
i hazardous and Temporary The security BY
toba mixing associations is comparatively Slfe ard
permanent, and with this USE may be connected
fur the present. and occasionally. as circum-
stances. uiAy require, hereafter the us9 OF the
ordinary United States notes In limited amounts,
:. IL tenporartl5 these associations redeem
t1on Of specie payments will not thereby he de-
iayed Or endangered, but hasteued and secured;
for, just us soon us. victory shall restore peace,
islation will enable the Government, through
advantageous purchases OF specie, to replace at
once large amounts, and at no distant day tho
whole Of this circulation by coin, without dctr-
ment to any interest. but, on the contrary, with
great and manifest benefit to all interests The
Secretary recommends. therefore, no moro
paper-lnoney schemes: but, On the contrary,
series OF measures looking to Il sn1e and grad
ual return to gold and silver as the only per-
maneut basis. standard, and measure OF values
recognized By tho Constitution
These authorizations have, with single e1-
ception,
ALL BEEN REALIZED.
The National banks have continually held near
thus enhancing their value and the credit Of
the Government: so that when recently they
were returned to Us in large amounts from
citation. The banks have also furnished cur
rency both safe and uniform. The whole cir
culation OF the country, both paper and coin,
are Of equal value. But the paper circulation
OF the country does not yet consist OF National
The banks receive but small profit upon cir
culation: tho exchanges OF the people, amount
ing to 1000 millions Of dollars annually. ure made
cost; the rates Of interest have been largely re-
duced; the losses by failures to the dcpoetors
have in tue aggregate been but trlae In com
or$c f1F tsAr
TENS: the losses OF the banks themselves,
through unfortunate loans and investments,
amounting to 100 millions. have been promptly
1tQufdHted, and the present t1rFe surplus, the
gradual result OF good business management.
Is safety-fuud against future disasters. The
% aud It's unprecedented produetons pre- prevent a for
8 time the proper action in reference to the
weak points ct our currency system; but there
dction Of Secretary Chnse may not be fulfilled,
--numeiy, that the legul-tender notes will be
rapidly withdrawa and q no ether S circulation u
true standard
The most gratifying exhibit in the above
statement Is the fact that tho National banks
are now doing business upon specie basis and
with true standard. For the three years pre-
ccding the resumption OF specie-payments the
S1 q so1 ii held St ~ ss ssn59 r tSs
amount has been held by the banks IN the City
OF New York. The amount Of corn held has, OF
course, at times
LARGELY. EXCEEDED THIS AVERAGE,
as on Jan. 20, 1877, when it was more than %
and on the following April it had fallen to
81 millions, the previous increase having been
due chiefly not to deposits OF dealers
interest BY the Government. AT other tunes
the banks have held much less than the average
amount stated: Fer instance, on Oct !, ls;5,
City of New York held but $4,955.6 GIL and on
May Of the same year they held but Slo.aQiGl
Of which the oanks in the City Of New York
held SG,6s3.35. This was at the time when butn
the paper Issues OF the Government and the cir
culntjon OF the banks were at thcir highest
+ ben9 rs sa Sna t5e TIE
proportion Of coin to their circulation then held
By the banks was only about per cent.
recommended com tint II ali tie National banks should
take advantage Ct tho present influx OF gold
to accumulate In their vaults an amount equal
pressed the hope that the reports OF anothor
year might show thom TO be possessed OF Mt least
lUo millions in gold COIN" On June II Of the pres
and on Oct. norc than 10y millions Of coin tin
cuding nearly six and one half OF silver, which
more than equals one-1hrd Of the total ctrcu!a-
ton Of the banks in operation. The amount of
gold coin now held Is but 2j millions less than
the whole cash reserve required. and would I'M
nave oGcn st ~ greater eacep, 70 d9f G tn6
coin. which are greatly dlspropor1ioned to the
cost OF moving paper currency, ind which. It 1B
TO be nopcu, WILL uy 60u1H uEu11S, UG largely IT,
duced.
MUCH NEWSPAPER CRITICISM
has appeared in the meantime. complaining OF
the comparatively small amount OF legal-tendcr
silver dollars held by the banks, and some oH
the banks have themselves encouraged this
criticism. The arguments used tn favor Of the
accumulation Of silver under existing laws are
unsound in principle and against all experience.
No one prefers To put away for future use
product which will spoil by lapse OF time, or
which will deteriornte in value. The banks, II
well managed, will transact business upon the
same general principle as an individual Of su-
pcrior Judgment would conduct his own affairs.
holding in reserve that coin which Is known to
he OF Uniform value everywhere In preference
to that which, by the operation OF the laws OF
trnde or business, will be likely to beCome OF
less value The law competS the citizen and the
corporation to receive all 1eRai-tender money in
payment OF debts; but it does not anu ought
mt to- require any one to receive On deposit
that which will not as readily be
RECEIVED II TURN BY THE DEFosrroR
The Bank of France on Jan. ]. 1871. as will be
seen in su bsequent table ia this report. held
SO millions Of dollars or gold and 1t millions
OF silver, or Il per cent Of gold and = per &c cent M
Of silver On Nov ass It held it,las a11ass5o g
Il per cent Of the former and -
d per cent ct the latter. having lost IN II the in-
teryaIles millions Of gold and gained :sS mill
ions OF silver. and very nearly reversing tae
percentage or each. since Sept. y last, while
ia M circulation was 4T5 million dollars, and It's
dcpoaits IL, millions. It. has lost &3l.aO>uoo oi