Mineral Point tribune. (Mineral Point, Wis.) 1869-1938, 1884-12-04
LOOKING TO TIE BONDS.

Evils I'm the Currency Systesn--The
! Comptro Ter Pleads for Bankers-A
| Bullion Basis OF Intrinsic Values
! suggested-A Demand for the Re-
funding of the Public Debt.
] WASHINGTON, d. G.. Nov. 2s The
annual report of the comptroller of
: the currency shows that during the
| fiscal year ended Nov !, 191 national
banks were organized, with capital
of SIG, 042, 200; circulating notes is
sued. So, sec, 230. The west followed
by the south leads lis the number of
new organizations. Since the estab-
/ lishment of the system on Feb. 25,
| 1868, there have been organized 1881
national banks, of which 1871 are
now in existence. Eleven national
banks, representing 81, 2S5, 900 capital,
have failed during the year. During
the past eleven years the business of
| the banks has greatly increased. OF
! their sources of speculation only the
items Of United States bonds and the
circulation thereon have decreased
during the last two years. Bank
Liabilities to depositors and cores
pondents were reduced $94, 900, 600
during the year. There was general
reduction of loans amounting TO $685.
600, 600 during the year, doubtless due
to business depression. For the same
period the cash resources by about
! 1921, 900, 900 specie and 81, 000,0 600
legal tenders and certificates of deposit.
| The banks held on Nov 1, 1884, 1885,,
GOA, 400 of per cent bonds payable at
the pleasure of the government, of
which 50 $50, 200 had been called for
payment, the interest thereon ceasing
| Nov. 1. 1884. If these bonds are not
replaced by others bearing interest,
| there will be AN immediate reduction
in the circulation of 80 per cent of
their amount.
On New. / there were 1894, 100, 500
3 per cent bonds payable at the pleas
ure of the government. These bonds
will probably be paid within the next
two years, even if considerable chang
es are made in the tariff and from
1886 to 1891, when $3.50, 600, 600 of the
! per C nts mature, there will be no
bonds which the government can call
in for redemption. No doubt the ac-
emulation of surplus revenue, If 1t
continue to accrue at the present rate
during the four years between 1887
and 1891, together with revenues of
1892 will be more than sufficient to
pay off the Al per cents; and from
1892 until 1907 it will be impossible
for the government to use any of its
surplus revenues for the payment of
its bonds except ut the option of their
holders. 1t is apparent that the gov
eminent cannot accumulate and hold
its surplus revenues, even during the
short period from 1887 to 1892, without
great disturbances to the business in
terests of the country, and much less
can do so during longer period from
1892 10 1907. 1t appears, therefore,
that the foregoing considerations
should be given due weight ia any
plan for funding the 4 per cent. bonds
maturing in 1907, and the comptroller
suggests that the principal difficulties
of the situation may perhaps be obvlo-
ted, as we'll as the reduction of interest
effected, by funding these bonds into
others which shall mature in proper
tomato amounts at certain fixed inter
walls. Thus the $73S, 900, 600 4 per
cent. might be funded into an equal
amount of 3 or q per cent. bonds, one
fifth of which, or $l47, 600, 900, to ma
ture at intervals of five years, the
first installment falling due July l,
1897, and the remaining installments
of $147, 600 600 each on July /, in the
last year of each succeeding period of
FIVE years, viz, /: 1902, 1897, 1912, and
1917. The average maturity of these
five classes of bonds would be the
same as that of the present 4 per cents.
July /, 1907.
Whatever course may be deemed
expedient by congress IN regard to
the funding in future payment of the
public debt the comptroller is of the
opinion that it is perfectly safe and
will afford great benefit TO the public
to permit an issue by the national
banks of circulation to the extent of
100 per cent. par value of bonds de-
posted instead of 80 per cent. Even
admitting that the bonds representing
the public debt when funded at lower
rates might at times in the future be
below par in the market, government
would, if forced to redeem the notes
of insolgent national banks, always
have the right 10 cancel the bonds on
deposit securing the same, and thus
extinguish an amount of its debt
equal dollar for dollar to the notes re
deemed.
1t is further submitted that the
profit on circulation may be increased
to a point which will induce banks to
keep up their circulation to the maxi
mum and stop the contraction of their
circulation which is now occurring by
repeating the law taxing such circula-
ton at the rate of one-half OF per
cent. semiannually.
The expenses of keeping up the
national banking system by the gov
eminent are at present paid in part
by assessment on the banks. If the
tax be abolished all these expenses
should be paid by the last named
method.
In concluding this subject the comp
troller wishes to have il distinctly
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