The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1886-12-06
How the Notes of a National Bank Are Retired
-Sixty-Fiye Millions Said To Be the Limit
Of Circulation for the Silver Dollar.
Secretary Endicott's Report of the Opera
tions of the War Department.
Secretary Lamar Tells of the Work of the In
terror Department, and Offers Suggestions
as to Indians Public Lands and Labor.
TREASURER JORDAN.

yer Dollars and Banking in General
WAsHINGToN, Dec. 5.-The annual report of
Mr.. Jordan, Treasurer OF the United States, was
given to the press to-day. Mr. Jordan presents
a very comprehensive report of the operations
OF the treasury for the fiscal year ended June 80,
1886. and its condition on that and subsequent
dates. The net receipts of the government for
the fiscal year were 1886 439, 727 the ret expend
iture was $242, 49, 1885, The receipts were $12.
$4,000 greater and the expenditures were ST.,
TAB, 1876 less than last year, making an increase
in the net receipts for the past fiscal year over
that of 1885 of $50, 1872 817 The excess Of reve
nue. over expenditures was 500, 956, $50. During
theyear bonds amounting to $44, 53l, $50 were re-
deemed and applied to the sinking fund. Treas
urer Jordan suggests revision Of the method
heretofore adopted in making up the sinking
fund, by which the sinking fund charge for the
current year will be $37, 436, 458 instead of $49
$40. 728, according to the present method By
the present method the entire debt of the United
States will be retired by the year 1908 and if the
method suggested by Treasurer Jordan is
adopted the debt viii be extinguished by the
year 1913.
AT the close of the year the United States
bonds held as security for national bank circula-
ton amounted to 1915, 974, 800, o reduction Of
$780, ITO. 400 during the year Three per cent
bonds amountingto 1874, 458, 75O were withdrawn
during the year, most OF which were surren-
dered for redemption The amount of bonds de-
posted during the year was SIG, 1924, 900 and the
bonds withdrawn amounted to SOL, 062, 400, show
ing decrease of $34, III, 500. OF the movement
of redemption of national bank notes of late
years, Treasurer Jordan says
The national bank notes presented for redemption
during the fiscal year amounted to $780, 296 6O6,
which was $l9912, 523, or 1926 per cent less
fiscal year 1885. That there would be falling off
in the amount presented for redemption indicated
by the amount presented during the first three
months of the fiscal year, and my opinion. based
thereon and expressed in my last report that the
eliminating point in the second upward
movement in banknote redemption had been
verified The rate of increase in the redemptions of
bank notes during the second upward movement,
isrepresented by the percentage 81 34. % and 10,
respectively. feature of this upward movement
was the constantly decreasing volume of national bank
Jan. l, 1882 to s,3l9, O68, 932. on June 80 1855
a decrease of $43 352, O56. This seems to indicate
that the volume of bank notes outstanding during that
period excessive. or above the point at which It
could be pro6tably maint tanned. Another fact how
ever should be considered In this connection, which is
thai during these fSr Of as in in rsds%p
was increased $75, 7S5, 1872, from S39, 11O7 on
Jane 80, 1881 to $1I4 1865, o / on Dec. 81 1884.
This increase much more than balanced the decrease
in banknote circulation and the apparent excessive
issue of bank notes might to considerable extent,
DO due to that fact The decline in the volume of bank
note circulation has continued without interruption
until the amount outstanding on Sept. so, 1886 was
$3o3, 81 Pal making a total reduction of
sss9io tat ns since JAN 1882 i. and
certificate circnlation gradually decreased until IN
July 81 1885, it had fallen $27. 3O1 867, to S87-
56l OLA. The average outstanding for year pre-
July 1, 1885 the decline in the bank-note circulation
has apparently had the effect to check the decrease in
bank-note redemptons; as they have steadily fallen
off from that date until they for the current
fiscal year. about 81 per cent. less than in the pre-
ceding year.
Still further on, while discussing the question
of retirement of national bank circulation, the
Treasurer says
As there seems to be, the part of the public an
idea that the Treasury is locking up money in its
vaults account of this fund. the whole operation
of the retirement of the notes of national bank will
be stated here in order to relieve any apprehension
which may be felt on this subject. The threeper-
cent. bonds OF the Washington National Bank, of
Westerly. r. L. amounting to 800 900, were called
on the 10Th day of September 1886 On the 18th
day of October 1886 the bank sent its duplicate re-
ceipt to this o6ice-the original being held blythe
Comptroller of the Currency. with the request that
deposit of 90 per cent Of the above amount should
be made retire Its Circulation with the Treasurer
of the United States agent for the redemption Of
the notes of the national banks, and requesting a
check for the 10 per cent difference. Accordingly,
credit placed upon the books of the Treasurer
agent for the national banks, for 500, 600 and
check for $40 600 and the amount standing to the
credit of the bank in the per cent redemption fund
amount of redeemed notes charged to this account
since it was opened Is 81 1872. The annual percent
age of such redemptions is $25.22, and it win there
fore take ct least four before the greater part of
the notes of this bank will be redeemed. The amount
credited to the general fund thus created stands
the books of the Treasurer agent as q credit for
the redemption Of the notes of the banks and as the
notes come in for redemption they charged to
this account and the national bank circulation out
standing is decreased by corresponding amount. At
present owing to the active business none
but mutilated notes sent in for redemption.
paid either by check New York in such form of
currency as may be desired by them. The indebted
the part of the Treasury created above de-
scribed, is, doubt due in legal tenders, but is
lioudated in the manner stated and no attempt is
made to reserve any specific sum of legal tenders or
any other form of currency out of the general treas
ury balance in which to pay these constantly accrung
liabilities.
There was on Nov. 80, of this kind of liability,
adding the 5.percent. fund, which theoretically is
composed Of legal tenders, the sum S94, 1872 $50.
The total amount of legal tenders in the Treasury on
the date, exclusive of that held to redeem the
legaender certificates which are used in the banks as
reserve in their stead was 500 $40 1913, thus show
ing that there must be held in the Treasury in some
other forms of money, the balance of 1885, 204 POI.
composed of $50 548. 1873 legal tenders 1872 Co.,
100 standard silver dollars, and $32 Coz 100 gold
If the books of the Treasury stated accurately the
balance due by it depository the amount now re-
ported as credit balance would be materially de.
creased That these balances should not be so re-
ported is in tho opinion of the Treasurer one of the
greatest defects of the present Treasury system.
Discussing the question of the silver coinage,
after referring to the fact that there now in
circulation 81, 76l, 448 standard dollars, the
Treasurer says he thinks that $65, 600 600 is the
extreme limit OF circulation which may be OBJ
tanned. 1t certainly cannot be maintained at
that sum whea the new silver 81 and 81 certi6-
Gates are ia fully supply and return to the
Treasury Of one-half OF the amount of standard
dollars now in circulation must be looked for,