The Abilene reflector. [volume] (Abilene, Kan.) 1883-1888, 1884-12-04
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, ,6O4 400 worth of three
per cent. bonds, payable at the pleasure Of
the Government of which $3.50, 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 S194, 100, 500 worth
or three per cent bonds PAYABLE
at the pleasure of the Government
These bonds will probably be
paid within the next two years, even if con.
siderable changes are made in the tariff, and
from 1887 TO 1891, when $3.50, ,OOO. 900 of
four and a 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 suffi-
cient to pay OFF the four and One-half per
cents, and from 1892 until 1907, it vii. be
impossible for the Government to use 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,
even during the short period from 1881 to
1882, without great disturbances TO the busi-
ness interests of the country. and much
less can il do 50 during the longer Pc
riod from 1892 10 1907. 1t appears, there
fore, that the foregoing conclusions should
be given due weight to any plan for fund
ing 4 per cent bonds maturing in 1907, and
the Comptroller therefore suggests that the
principal difficulties of the situation may
perhaps be Obyiated, as well as the reduc-
tiOn of interest effected, by funding these
bonds into Others, which shall mature in
amounts at certain fixed in
.ervals. Thus the S13S O0O. 900 per cent
bonds might be funded into an equal amount
of 8 or PA per cent bonds, One-fifth of
which, or Sl41, 100000, TO mature at inter-
valS of five years, the first instaliment fall
ing due July 1, 1897, and the remaining
of S147, 100000 each, or the
first day of July in the last, year,
each succeeding period or five years, viz:
1902. 1907, 1912 and 1917. The average
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 an issue by National banks of cir
culatiOp to the extent of one hundred per
cent, par value, bonds deposited instead of
at ninety per cent, and even admitting the
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,
Oh inSOlvent 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
De increased TO q point which will induce
banks to keep up their circulation to max
mum and stop the contraction of their cir
eulatiOn which is now occurring, by speak |
ng the law, taxing such circulation at rate |
IF 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 |
md i'll part by assessment on the banks. |
# the tax be abolished, all these expenses
should be paid by the last named |
method. In considering this matter the |
wishes it distinctly understood |
hat he is not i'll 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 bust
less. He believes, however, that sudden
contraction of the National Bank circula-
ion, which, without appropriate legislation,
5 imminent will seriously embarrasS the
BUSINESS of the country, and that if this
is permitted to go on it may re-
ult in the entire diScOntinuance of notes by
National Banks. The Comptroller believes
hat this form of currency, which can
e increased or diminished in accordance
With the National laws which control buSi-
esS, should be continued in preference to
ny other now permitted by the law. In
pgard to a circulation based on silver, the
comptroller says: The people of the
Jnited States now hold a paper circulation
aSed upon silver dollars, i'll amount equal
D more than oEe-third of the National bank
If it is for the best Interests
the United States to issue circulation
aSed upon silver, the Comptroller believes
nat such circulation should be issued
pom coin or bullion which con-
lins a sufficient number of grains
silver to have intrinsic value equal
the market of the world to its nominal
ilue. The present laws make the pur
lase and coinage of fixed amount of silver
ullOn mandatory. This is, the Comp
Oller says, very perniciOus in its effect as
he unlimited and continued issuance of full
gal tender silver coin and certificates
ased thereon. of intrinsic value already
aused the boarding of gold and will event
ally drive it from the channels of trade,
hereby causing a practical suspension of
Did payments. There are reductions of
lis, notably this unea sineSs in financial
relies in June and July last, car !
ed by the reserve gold in the Treasury, |
llOwed SD near 70 point at which under
e new issuance gold certificatiOn ceased. !,
also will be observed that during the {
resent year the National Banks through
1t the country have increased their holding ,
gold, including the sum OF S19,615, $50.
he Comptroller concludes the report with 5
discussion on the subject of bank e<ami-
ltiOns, and the consideration OF the finan- !
al trouble of May, 1884. I
Tired of Life. 1
NEW YORK, December Robert K.