News and citizen. [volume] (Morrisville, Vt. ;) 1881-current, 1886-09-23
The National Banks.


that calls Of three per cent. bonds
| will result in the surrender of three
fourths of the national bank circula-
ton. The banks generally prefer to
suspend issues of notes rather than
buy fours and four and one halls. A
few bonds Of these denominations
will be held as security for currency
issues, under exceptional circumstan-
ces, but the profits on circulation are
not sufficient to warrant that course
as rule. Unless some new basis of
security for the redemption of nation
al bank notes shall be authorized by
Congress within two years the coun-
try will have to rely largely upon the
new silver certifcates-ones, twos
and fives-for currency. AS these
certificates will be issued on the
strength of the ownership of silver
dollars actually deposited i'll the treas
ury, which cannot be used for any
purpose other than that of redemp-
ton, they will practically constitute
coin circulation.
But the silver certificates will be at
par nowhere except within the juris-
diction of the United States. Out
side that Jurisdiction their value will
be that Of the market price of silver
bullion, just as that of the standard
dollar is now. Then the only gold
bearing currency will be the green
backs and the remnant of national
bank notes based upon four and four
and one-half per cent. bonds. The
aggregate amount of the greenbacks
is fixed by law at $346, 6S1 ,016, but
the volume of bank notes must nee
essarily be determined by varying cir
cumstances. The total number of
silver dollars coined down to July 81,
1886, was $235, 644 1856, and is stead
lily increasing at the rate of consider
ably more than So, ZOO, 900 per month.
1t is easy to understand that the sur
render of bank circulation must re-
suit in an increased use of silver or
it's representative certificates. And,
so far as the decrease of bank notes
goes, there will be diminution of
gold bearing currency, the vacuum
thus created being filled by silver
bearing currency. To the extent that
purely domestic wants are con-
cerned, the latter will answer the same
purposes as the former, but any seri-
GUS reversal of the balance of trade
with foreign countries must bring
trouble in its wake through heavy
demand for gold to be exported, thus
forcing our standard down to a silver
level.
1t is mooted question whether the
government can continue to charter
national banks, with authority to
issue circulating notes, after July l,
1887, beyond which date there will be
no United States bonds that will not
be subject to call within twenty years
the four and one-half per cents.
being redeemable Sept. 1, 1891, and
the four per cents. July 1, 1907. A
dispatch to the New York CONNER
ciaI Bulletin from Washington says,
Comptroller Trenholm is of the opin-
ion that in the absence of legislation
the granting of charters should con-
tinue after July /, 1887, as before,
with the understanding that some new
basis of circulation must sooner or
later be agreed upon, and that the Cir
culation be subjected to the risk of
the redemption of the bonds. But
what basis of circulation can be de-
vised? Several plans have been sug-
gested to meet the difficulty, but none
of them seem to meet with general
Unless some agreement
be reached the days of the national
bank system are numbered; for the
only advantage that system offers
over the State bank system is the
in itself very valuable
of issuing note circulation.
The abandonment of the national
system would be a calamity to the
Some policy of adequate
security should be devised to save and
it.-TToy Times.