New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-03-09
THE BANKS AND THEIR CIRCULATION.

THK QUESTION OF THE WITHDRAWAL OF THEIR LIZ
aAI.TaNpERs FROM THE TREASURY, AND THE
SUBSTITUTION OF BONDS. NOT YET DECIDED.
w,sRrNaroN. March S.-The session of the Cabi-
nat to-day was almost entirely devoted to a dis
css,on of the question whether not the National
banks shall be permitted to substitute bonds for
leqa-tenders deposited by them with the Treasurer
for the purpose of withdrawing their circulation.
The importance OF correct decision in the matter
was recognized. and, with view OF securing the
fullest information, further consideration was post
poned until the next meeting of the Cabinet Mean
while the Controller of the Currency aud the Treas
urer Of the United States will be called upon to sub
nit their respective views and all facts bearing
upou the case. The weight Of opinion at the meet
ing to-day inclined to the view THAT the whole mat
Ter hinged upon question of ruling departmental
regulation rather than of law. and that the decision
should be such as would least injurousy affect the
financial and business interests of the country.
II was suggested that decision against immedi
stsly restoring to circulation the legaltenders
which have been deposited would operate as seri-
ous contraction of the currency for some time to
come and cause renewal OF the stringency and
uncertainty experienced few days since, while
10 allow the banks to substitute bonds and with
draw their legal-tenders would restore confidence
at once, relieve uncertainty, and prove las nothing
in the law prohibits M the easiest and readiest solu-
ton of the difficulty.
On the other hand, 1t was suggested that such
decision would be opposed 20 former precedents and
rulings, and would afford opportunity to the banks
TO initiate contract their circulation at will or to
suit their supposed interests. while TO compel them
70 resort 10 the ordinary means OF restoring bne
former volume OF their circulation would Involve,
at most, only short delay and could not cause any
view Of the fact that the Treasury. Department is
prepnreQ TO begin the printing and reissue OF the
ne,ss m M from DAY 70 day mmediatey upon the receipt
" tl< sRpeations nom the banks and that the IS
sue ci fhe ebtlre amouut could probably be com
pietod vltein three weeks
engaged today 10 preparing a statement ia writing
embodying the request recently made by the Ma
tonal banks Iela,iye TO the withdrawal Of the legal
ton upon depositing bonds and contaimnS yarioas
quotations from the revised statutes bearing on the
subject wnseh VIII DO submitted 70 Secretary VIM
Under the present law National hank which de-
sires to Increase its Circulation must transfer its
them In trust; and In the process u bonds rscSve
now number. bond which may have been the
rst Of its KIND @ Dc ssued win thus II deposited
To-Day 70 secure circulation. bear the hi0hest nuIn
Der OF ifs series, and under the Law must he the 6rst
one called for redemption. As the Refnndiro h;II
dd nob become aInw the ability Of the Secretary
OF the treasury 10 redeem the ontstanding bigb
rate bonds Is limited 70 the amount of snrnlns rav
enuc; and 1t IT, therefore, manifest that tbe bsnts
winch made early deposits of bonds and whose
bonds bear low numbers may draw Interest for a
longer period than those whose bonds are depositsd
later. Those banks which recently deposited legal.
lenders withdrawing their bonds. are now seeking
permission 10 reverse the operation by redepostinS
I tho bonds and taking cot their legal-tendcrs TINS
barring their old circulation afoat and RETAINING
\ f42 original number upon their bonds. Secretary
zoo to.inorrow but there IS nothing toOuiss sGs
- Ec>cate now he will decide.
z ees been sad that Il tho decision be that the