Fort Worth daily gazette. (Fort Worth, Tex.) 1882-1891, 1883-11-26
COMPTROLLER KNOCKS RE.
PORT.
Interesting Review of National Bank
Circulation and Status of
United States Bonds,

Circulation and Status of
United States Bonds.
Washington, November 25.-That
portion of Comptroller liuoX's report
relating to the contraction of national
bank circulation is the most interest
I ing and important part of the docu-
ment. The comptroller refers to the
probability that all threes will be
called for redemption within the next
three years, and says this will reduce the
bonds held by banks from 1888, 900, COO
to $l5l 600, goo, and cause contraction
in national bank circulation of about
| $50, 100000 per annum. 1t is evident
that unless there is additional legisla-
ton, the bonds held as security
for circulation will rapidly dimin-
ish. New legislation may, however,
postpone payment of the public debt,
or cause profit on circulation to liz
crease sufficiently to induce the ma
tional banks to invest in long four per
cents. which are not to mature for
twenty-four years. Contraction of
bank circulation may be avoided by
reduction of redundant revenue, and
there is no doubt this is the true policy.
Contraction of bank circulation may
also be avoided by the conversion OF
long bonds into three per cents, by Of
fering inducements to holders of bonds
to exchange them for three per cents
to mature in 1892, the govern
ment paying holders thereof
reasonable amount for difference of
value. The premium to be paid hold
ers of these long bonds may he con-
siderably reduced by providing that
circulation to be issued upon the pro-
posed bonds, when deposited by ma
tional banks as security therefor, shall
not be subject as ut present to one per
cent. per annum, or by postponing the
time of their payment. Contraction
would also be avoided by providing
for the removal of the tax on circula-
ton, and an increase of the amount
of circulation to be issued
by banks upon bonds deposited
by them. The comptroller considers
that so long as there is sufficient
amount of United States bonds out
standing legislation should be so shap-
ed rs TO continue them in use ms Il basi.
for national bank circulation, with II
decrease of interest and decrease of
profit upon circulation, with the
amount of issue upon the value of the
propriety or justice in authorizing an
issue of $50 upon every 500 of 3
per cent. bonds, worth par, and refus-
ing to issue like proportion upon 4
per cents, worth 1921. The holder of
II government bond can readily Dor
row money upon it rs n pledge to
the bank 10 the amount of
% per cent, its market value, and it is
not surprising that the banks propose
To relinquish their circulation rather
than deposit rs security bonds having
margin more than one-third of circu-
lation issued. a law authorizing an
increase of issue to ninety or ninety
five per cent upon the lowest market
price during the calender or fiscal
| year previous to deposit, together with
repeal OF tax upon circulation, would
result in the deposit of sufficient
amount of four and four and hall per
cents to maintain circulation about
as present. The aggregate amount of
| gam 10 the government from
the accidental loss or destruction of
| circulating notes, the comptroller SAYS
does not properly belong to the United
States or to the bank issuing the notes,
but 10 the owners of the notes at the
time of the loss. and the gain thus nc.
cruing should be carried to the credit
of the insolvent banks reclamation nc.
count in the Office of the treasurer.
The comptroller believes the PROPOSE
ton to convert long bonds into threes
is more desirable than the proposition
to increase the rate OF circulation. and
that the large contraction of currency
now imminent should not be allowed
to axe place too rapidly, or
the deficiency caused by such
contraction will be replaced by
substitutes less desirable than the
bank notes now in circulation. Knox
calls notice to the statement that the
contraction of currency may be sup
Piled by imported gold, by the annual
product of the mines or by the coin
age of silver dollars, upon which silver
certificates are now issued, and shows
that the excess of gold imports is
growing smaller, and the probability is
thatgold now held by the United States
WIN not long hence be greatly dimin-
ished. The substitution of standard
SILVER collars Tor retired circulation
would he simply the introduction of
INFERIOR currency. In answer to the
proposition tnat treasury notes as well
rs silver certificates may be issued in
the place of bank notes to !, retired
the comptroller says the L !asury is
embarrassed with a revenue greater
Than II needs and greater than il can
Judiclously disburse, Under such CIR
eumstances the authority of congress
TO print additional treasury notes will
lead 10 still greater embarrassment,
ana place more treasury notes i'm
CIRCULATION Mt time when
the most important subject before
congress in the reduction OF redundant
revenue, and the employment of the
surplus of an Overlooking treasury N