New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1883-12-05

All of the latter are likely to be called for payment dur
ing the next four or Ave years. a unless ns a pr no profit
circulation based upon and 4a per cent bonds az hS
per cents win probably result in large reduction ofthe
bank circulation unless counter stimulus applied
The National bank act at first provided for the issue OF
value but not TO exceed the par value of United states
hands hearing per cent interest and the subsequent act
Of March g. 1865 limited the circulation 20 $3loOOOUOO
TO be issued In the same ratio capital upon and per
cent bonds then the rate Of interest upon bonds
and the profit on circulation have decreased win ina,
decrease the ratio of circulation issued upon the actual
or market value OF bonds has also decreased, until IL is
probable that, without helping legislation loss, instead
OF GAIN will ensue from deposng bonds as security Ior
circulation. -,...
The holder Of bonds can borrow money in the market
upon them pledge at % per cent upon Their market
value There is discrepancy with this, In the require
ment Of the law that 500 only Of circulation snail pc is
sued upon bonds some OF when nave market Vaue %
81 D. This asks margin of 32 as security for cfcu
ton, instead of So as It was at the start OF the y se
The workings Of the system show that II ro tae -n pe
ginning 800 OF circulation had been issued upon so OF
bonds no loss would have accrued 70 ho9ers OF e U
Of insovent and failing banks though there hnt nNS
been loss to general creditors who must nave Sependeu
gate capital OF the National banks when nave iaileu uu
ing the last twenty years was about twenty mlons II
upon the bonds held security for the notes OF nose
banks circulation had been issued for the tu par yau
and there had been decline OF per cent III inc Nue VI
the securities st the whole loss would not nave eA
cecded one million OF dollars which would nave iaSn
upon creditors, and not upon bhOders so long as tne
bonds were assets in the hands OF receiver moreover
gain accrucs TO the Government by law, from the non
redemption OF National bank notes They have been IN
TO = per cent for that period about $l0OOOO0,
will be brought in for redemption That sum WI
be of any possible loss that can threaten the
Government from authorizing an issue OF Circulating
notes of 90per cent upon the market value o. Dohus
deposited BY law bonds held by banks decline IN value
below the amount Of circulation Issued, the Controller
may demand additional bonds or money to equal the
disparity Moreover all the assets Of the banks and the
individual liability of the stockholders, can be eXhausteu
before the billholder or the Government suffers iSss
notes in ciTcnIaon without loss TO the banks thereby,
andy Government and the Dll-nO.ucf
In all that have 10 say assume that the Nat ii
creation of the legislative power, and that inc
country has acquieseed IN as sucn ., ' tse
people; and that there is almost universal desire 70
continue the circulation of these notes. as convenience
and benefit which it would rk us TO be without.
HOW TO CONTINUE CIRCULATION.
The publc mind is naturally turned to the inquiry
How snail the National bank be kept In circuaton
what shall be taken a safe foundation therefor ana yet
he so low in price that the banks can afford to BUY ana
banks safeguard against loss In taking and Issuing ccu
ating hottest not in favor Of anything put lne
TO 20 abroad for the securities or other states Is 10 go
OF political and judicial jurisdiction ana sHec ~
their international conflicts, OF possible hostility 10 ns
country and of going before strange Ia y he
states of the Union IL, that trustees anu other .he
hducary persons, who more Immediately under he
hand and guidance of the sovereignty shall not place
their moneys in securities whose habitat Is III Other uT
dons NOT even I'm those of sister States In a. large
degree Il that fitting policy in this great matter. To
rv unon the debts OF the states look to basis not
mich more permanent than that which the United states
bends now offer aud one which will call for scrutiny and
investigation not easily to be made ana winch, Iuly
and fairly made likely to excite jealousy and other
IN eenS 10 take the obligations of municipalities and
other corporate bodies ia OF like mpracticabity and
result aud also rely upon the good fath prudent
conduct ana sovcncy of debtors whom the Govern
ment has but little il any, direct and eihcient conio u;
10 take security on real estate Is to launch on sea OF
uncertainty and fraud that Il sure to wreck the 9dVen
urer. Other propositions have been made wnich are
reducbe to some Of these oaegOres, and need not DC
specially considered. There are 0her pfoposllons, ln
yerebra idea OF which Is the creation OF new i0F %
public debt. plausible one Is iof the uoEeIeno ~
offer new bond of its own issue, at low rate Oh INTEREST,"
10 run long period In exchange for its four per cents
and fOuranda half per cents aOwing sucn aaeo ~
premium upon the latter but lower than that ~ presehs
rake The new and 10 make this security for bank crcu-
ation doubt not that this Is feasible In mat way'
faIile the nrenilum allowed on his bond, and draw
interest at the rate that as wei as on the primer
ier than hold or In the present difficulty Of desirable
rcinvesment to sell. am persuaded nom me 0nca.
10 Take at low rate Of interest all the United states
bonds that can reasonably be issued provided they DS AZ
lnny time OF payment OF principal The lower Market
yae which they would have upon their hTst Issue az
least would bring them within the range OF PrOn'apS
iouT-anda6afs with which to make exchange O9 the
other hand the premi9n Tor % cb re and still be
AMI TO induce exchange as that by the tune 70 Oe " M
TeIcmUtion of the new bonds, the difference IN tht
amount of interest reserved the fours and fouranda
hnlfs and that paid the new bonds wiz nave e9a
The amount premium allowed IN exchange; SHOULD .n
project be fayorably considered details can De
Yet / am 40 averse to recommending the ,CIe
that as great as are IN my Judgment u'
SItI Of the National bank circulation
I'm safety I'm uniformity or value ever" 'u Jun I
matters Of convenience and confidence, look upon sueI
project dn.e resort apatner nop crruiaon b
DO. that the internal revenue YAK upon ,'t NJ an
taken of in whole in part This Is per cent per an
mum and amounts TO about three millions ana quartz
'''u '''' TAKE OFF THE TAX.
Tho privilege of furnishing circulation has been,
the past profit the banks It has BEEN ana Il an Ta
or to Lt Government TO supervise the Issue OF H. an
Generality to take of the National Dahk y stel
privcg6kc any franchise accorded oy tHe
and preferable subject OF taxation Inc pIiuG o,yNOo
the taxation, in the oegnniHg, wa ~ Up' behalf
the blnks U was laid upon this franchise because ~ va
relation between the privilege ana ,c FOR that pai
'I1r nnrt,ose because then the Government was I
% ~ snticcfs for taxation, and the franchise % bank
fc'S U r.riaIlv ths one was of ana profit Bu
tiI, hye changed The workings OF the systemi an
llr Win Them IL Il now desirable for the CON
rpit INT the privilege should be continued ana exer
cisco profitable to the banks as that they all
or any greatly, wish 70 e1TVisT n take off ihis Ia
oI Keen itself recompcnsed The tax yields annual
about 3OOOOOO. The expense Of eaTrylns on tu
o 055 or of which $l6s2O is TO be reimbursed pY W
Rational banks All other eNEehs,S, SUI SG 10
and furnishing notes, ana tne hhS, W. g n
which S5I 800 were for plates, when is 10 Dc @
by the banks. The net expense 10 tnv y t in
Tl74S0O o.. The gam TO lhe - 81 610 mi
o notes ts stated abOyc) 10 al low estimate pOOUoC
for every period of twenty yours Vr III t6
mcnt NOT br loser. II may be taken OF IA PaI au 80
Government receive more by reason ol ea,s torn m
, ,nyu A. rXucnds To keep t IN existence am aware VA
his reduction Of taxation IN favor OF organized GU
tall; what is taken OF here must sooner oI S ~ II
sc dcgree taken IN elsewhere FOR means 10 ply on u
Ubicde IdonO favor the relief ofcapt9 to the DurdS
Bits competitors df that phrase Is aIo%aoIl or
TIoor Vet IL this tax is not taken OH by law, and IN
e circulation kept In existence, 80 expensive may II
n come fo the banks to keep up their crcuhoh hdt t
- % e togethcr to do so, for to do SO Is not comp
n s1r uu0n them and IN that case the tax ceases Win
tl,n dir
scntcd of striking OF the tax and thus obtaining pun
a orommodation or OF keeping the law FOR the TAX up
~ c statc-hoOk without product therctrom, anu io
he accommodation by the lack OF motive lOr Ialusi
~ a. I'm mat view the tax will cease, not from INo D
m means of reaching desirable end It's TO ne Z,
II icred TOO that in the States this FORM Oh oIeniL
n contol paws It's share, sometimes more nth s 4"