The Iola register. [volume] (Iola, Allen County, Kansas) 1875-1902, 1884-12-05
THE COMPTROLLER.
The Annual Report of the Comptroller
Bonds in Banks.

The Annual Report of the Comptroller
Bonds in Banks.
WASHINGTON, ID. c., November 29.-The
annual report of the Comptroller of Cur
rency says: The National banks held, No.
vember 1, 1884, S155, go, 400 worth of three
per cent. bonds, payable at the pleasure Of
the Government Of which Ss,5s6, 200 have
been called for payment, interest ceasing
November 1, 1884. If these bonds are re-
placed by others bearing interest there will
be an immediate reduction in the circulation
of ninety per cent. of that amount. On No
vember 1, there were sl94, 100, 500 worth
at the pleasure of the Government
These bonds will probably be
paid within the next two years, even il con.
siderable changes are made in the tariff, and
from 1887 to 1891, when $3.50, OO0, 600 of
four and half per cents mature, there will
be no bonds which the Government can call
in for redemption. No doubt the accumu-
lation of surplus revenue, if it continues to
accrue at the present rate during four years,
between 1887 and 1891, together with the
revenue of 1892, will be more than sufli-
cient to pay off the four and one-half per
cents, and from 1892 until 1907, it will be
impossible for the Government to nse any
surplus revenues for the payment of its
bonds, except at option of their holders. 1t
is apparent that the Government can not
accumulate and hold its surplus revenues,
eveG during the short period from 1881 to
1882, without great disturbances 10 the bust
ness interests of the country. and much
less can it do SO during the longer pc
riod from 1892 to 1907. 1t appears, there
fore, that the foregoing conclusions should
be given due weight to any plan for fund
ing per cent bonds maturing in 1907. and
the Comptroller therefore suggests that the
principal difficulties of the situation may
perhaps be obviated, as well as the reduc-
ton of interest effected, by funding these
bonds into Others, which shall mature i'm
prOpOrtionate amounts at certain fixed in
tervals. Thus the S73S, 100000 4 per cent
bonds might be funded into an equal amount
of 3 or "a per cent bonds, One-fifth of
which, or Sl4I 100000, to mature at inter
walls of FIVE years, the first installment fall
ing due July |, 1897, and the remaining
instalnents, of S141, 100000 each, on the
first day of July in the last year,
each succeeding period or five years. viz:
1902, 1907, 1912 and 1917. The average
maturity of these fine classes of bonds
would be the same as that of the present
four per cents, viz: July 1, 1907. What
ever course may be deemed expedient by
Congress regard to funding or future pay
ment of the public debt, the Comptroller is
of the opinion that it is perfectly SAFE and
will afford great benefit to the public to
prevent all issue by National banks of cir
culation to the extent of one hundred per
cent, par value, bonds deposited instead of
OF ND adp fl,o
bonds representing the public debt when
funded at lower rates might at times in
the future be below par in the market the
Government would, if forced to reduce notes,
on insOvent, National banks always have the
right to cancel bonds on the deposit secur-
ing the same, and thus extinguish the
amount of its debt equal dollar for dollar to
the notes redeemed. 1t is further submit
ted that the profit on the circulation may
be increased to point which will induce
banks to keep up their circulation to max
imum and stop the contraction of their cir
culatiOn which is now occurring, by speak
ing the law, taxing such circulation at rate
of one half of one per cent. semi-annually.
The expenses of keeping up the National
banking system by the Government are at
present paid in part from proceeds of this tax
and in part by assessment on the banks.
If the tax be abolished, all these expenses
should be paid by the last named
method. In considering this matter the
Comptroller wishes it distinctly understood
that he is not in favor of any measure
which will cause initiation. He il of the
opinion that the present aggregate paper
circulation, made up of legal tender and
National Bank notes and gold and silver
certificates is ample for all needs of bus-
ness. He believes, however, that a sudden
contraction of the National Bank circua-
ton, which, without appropriate legislation,
is imminent will seriously embarrass the
business of the country, and that if this
contraction is permitted to go on it may re-
suit in the entire discOntinuance of notes by
National Banks. The Comptroller believes
that this form of currency, which can
be increased or diminished in accordance
with the National laws which control bust
ness, should be continued in preference to
any other now permitted by the law. In
regard to a circulation based OH silver, the
Comptroller says: THE people of the
United States now hold paper circulation
based upon silver dollars, in amount equal
to more than oEe-third of the National bank
circulation" If it is for the best Interests
of the United States to issue a circulation
based upon silver, the Comptroller believes
that such circulation should be issued
upon coin or bullion which con-
tains sufficient number of grains
Of silver to have intrinsic value equal
in the market of the world to its nominal
value. The present laws make the pur-
chase and coinage of fixed amount of silver
bullion mandatory. This is, the Comp
troiler says, very pernicious in its effect as
the unlimited and continued issuance OF full
legal tender silver coin and certificates
based thereon. of intrinsic value already
caused the boarding of gold and will event
ually drive it from the channels of trade,
thereby causing practical suspension of
gold payments. There are reductions of
his, notably this uneasineSs in financial
,ircles in June and July last, car
led by the reserve gold in the Treasury,
followed SO near to point at which under
he new issuance gold certiticatiOn ceased.
It also will be observed that during the |
present year the National Banks through |
tut the country have increased their holding |
If gold, including the sum of S19,G15, $50. !
The Comptroller concludes the report with |
discussion on the subject of bank eyami- |
nations, and the consideration of the fnan- |
ial trouble of May, 1854.
Tired of Life.
New YORK, December Robert K. |
stewart, the drummer who shot himself |
because he was discharged from