New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1883-10-20
NATIONAL CAPITAL TOPICS.
sHRNKAGE OF BANK CIRCULATION.
EFFECT oF TUE CALLS FOR THREE PER CENT BONDS
rBY TELEGRAPH TO THE rRBUNE.l


WASHINGTON, Oct 19-The amount Of National
Bank notes outstanding at the close Of business yes
terday, including S755, 1884 of gold notes,
1852 S37 99l, showing loss ,of circulation during
the last eighteen days of 1904, $50, and a steady
contraction since January / amounting in all 10
$9Sl3,271
That the outstanding circulation will diminish
more rapidly during the next ninety days than
during the last three months seems inevitable. The
statement mentioned in The TRIBUNE of yesterday
as tn of preparation in the Controllers Office,
completed to-day. 1t shows that the first call
for $25 900 900 Of three per cents which will mature
December l, affects bonds to the amount Of
$4 037, 400 now held by the Treasury security in
whole in part for the circulation of 1913 National
Banks; and that the second call for $l5 900, ,OOO
which will mature December 10, affects the security
deposits of IA National Banks to the extent Of
SS,1OO45O. Thus, within the next sixty days, the
present basis Of nearly 100000 Of circulation,
issued by 200 OF more National Banks, will be re-
moved, and they will be required to substitute
$l2,l37, $50 in other Government securities or re-
duce their circulation.
Probably some Of the banks thus affected own
other three per cents which have not yet been
called, and few of them may have four per cents,
four and half per cents that they can deposit IN
lieu of the three per cents called and such banks
will probably be ready to make the substitution re-
quired in order to keep their circulation. How
many of them will be able to do so no one can tell
at present.
The effect of the first two calls for three per cents
is such as to offer the banks but slight encourage
ment to buy those bonds and deposit them as
pledge for their circulating notes Already there is
talk among Treasury officials Of another call for
three per cents before the end of the year. and the
irtarra1 giupa
the beginning Of October justify talk Of that
sort. While the customs receipts for last month
showed a falling off of 50 GjG,79I and the internal
revenue receipts showed a decrease of $3,2Ss717
as compared with September, 1889, the customs
receipts for the last eighteen days show decrease
of only So9, ,13B as compared Wlth tine corresponding
period Of last year, and the internal revenue Ie-
Ccipts are greater by S243Sl. The receipts from
miscellaneous sources were Tl,2SD,3l0 more than
for the first eighteen days Of last October the m
crease IN this item being mainly from plohts on
coinage In other words, the revenue (S2O,OJO,2B4)
of the Government for the first eighteen days III Oc-
tober, 1888, exceeded by Sl,2l5,l6 the revenue
SIS s54,O94 for the first eighteen days OF October
If the Secretary of the Treasury felt authorized 10
do So he might buy four per cents instead OF three
per cents for the sinking fund. II that policy
should be adopted the reduction OF the three per
cent loan would be less rapid by some 5,OOO,OOo
a year than at present, and to that extent would
add stability to these bonds as basis ioI National
Bank note circulation. In his last report Secretary
tOlger said
II is doubtless good policy to eXtinmsh the long
bonds of the Government rather than those payable
at its pleasure; for the time is at hand when, with
the present of receipts and the present rate OK
payment of the public debt all the bonds subject to
optional time of payment, will have been called ln
Then if there be a surplus in the Treasury, there
will be no outlet for 1t save by purchase at large
premium Of long bonds, or the disbursement OF 1t
through appropriations for purposes beyond the or
binary and economical needs of the Government lt
is therefore for Congress to consider the propriety
of empowering this Department to buy the long
bonds at a high premium. Ii it shall deem it polite
MUM for eNtinguishment, it should by law give TO
this Department express authority 50 to do, and
thus adopt that policy