The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1886-10-31
His Opinion With Regard to
National Banks.
qHg CHURCH AND TIE KNIGHTS
90. DissbIsd "PAvOnia"-A Prince In
Tsw BuIgaris-An Academy
Burned-EtGs
NATIONAL Bank Circulation

National Bank Circulation
VAsH1E roy, October 30.-In connec-
eon with the National Bank circula-
ton be Attorney General renders an
oninion in which be says: Certain 3
ror cent. bonds of the United States
hold BY its Treasury and Secretary tor
the circulation Of notes of the First
National Bank OF North Bend, Ne
brsska, having been called in for re-,
6smL tion, and ceased to be interest
bearing, The bank he's been notified by
me Comptroller of the Treasury to ez-
change these bonds for interest-bearin ing
hands Of the United States. The bank
IN reply asks to know by what author
IN inc demand has been made.
alleging that it has once complied with
SsetioR $3.50 of the Revised Statutes
br deUositing with the Trea urer inter
s;tbsaring bonds of the United States,
Tbfcb are worth par. An opinion is
re7nested on the question thus pre-
se1tgd-namely, whether the stopping
ri interest on the bonds deposited re-
suIing from the call of the Secretary of
tbe Tfessury, authorized the Comp
troIler Of Currency to require the bank
to substitute interest bearing bonds for
the boRds now on. deposit 1t is not
Oman to question that the bonds de-
Uositsd by the national bank to
sec1re its circulation must be
intrsst- bearing at the time the
l.----f = N ho4 fha Ioy N
Is explicit. 1t would seem to &c
equally clear. that whatever purpose
Congress has in view in requesting the
bonds deposited by the national banks
70 be Understanding, that the purpose
bss continued the same from the first
law on the subject In 1868 down to the
present time, there being an absence of
any legislative declaration of the change
in the intention IN that particular. In
resolving the question whether it is es-
santal to q valid deposit of bonds by
national banks that the bonds deposited
should be interest-bearing during the
whole time of deposit, 1t may assist US
to read the act of 1853, under which the
national banks system was introduced
IL the light of circumstances in which 1t
vas passed. The secretary has already
mentioned the support to the public
credit which may be expected from the
proposed association. The Importance
'1f this point may excuse some addl-
dOnal observance. The organization as
proposed, if sanctioned by Congress,
would require within q few years. Tor
deposit Is security for circulation,
5O-ds OF The United States TO an
amount not less than $3.50, GOO 900. 1t
may well be eXpeCttd indeed, since the
circulation by uniformity in credit and
value and the capacity OF quick and
cheap transportation will be likely 70
De used more extensively than any
hitherto issued, that the demand for
b0nds will compass this limit.
Should Cong-es ssee fit to restrict the
privilege Of deposit TO Il e bonds known
as the 2Js, authorized by the act OF last
session, tae demand would promptly
absorb all OF that description already
issued, and make a large room for more.
steady market for the e bonds YOU d
tlus De established, and the negotia-
soH OF them greatly facilitated, but 1t is
not IN the immediate results that the
7z.us OF this support would be only or
c2e5y seen. there are always holders
WHO desire 10 sell securities Of whatever
Alnl Ii buyers are few or uncertain,
me market value must decline,
0l- the plan proposed would
greatly decrease the constant demand,
e aIirg and CIuen exceeding the sup
py. Thus steady uniformity IN price
would be maintained, and generally at
tate somewhat above those of the
ponds Of equsl credit, but not available
Banking associations. 1t IS not easy
9appre1iate the full benefits OF snch
v09Guons to the government o l g q
y oolrOW. That the c. Inclusion arrIS cd
d, namely, that it was Ehe intention OF
congress that the deposits Of bonds by
Ia1onal banks should be kept interest
Ossilng during the whole period
u deposits, If correct. would, by
y. .1s act Of July, 1892, en-
sl.s national banking associations to
.1.sld their corporate existence and tOr
~S purposes. Section 9 p Divides that
=, national bank may, on depOsitlng
avn. money with the Treasurer OF
- :, United States withdraw a proper
S--,s's amount of its bonds on deposit.
1 S--.,.slt, however, to the provisO that
- =. more than $4,000, 900 shall be de-
re+- G4-4uS aug CdtCuUdI 14OnGA ~
-. purpose, and to q further provisG
"a Ia lie provisions of this section shall
a.. -. apply to bonds called for re-
T.-Puon by the Secretary Of the
cs,S-eS,ury nor to withdrawal OF the
rrrr'.,-laung notes in consequence
s,-s.7ot; This language it would
~, leaves 10 doubt that 1t wa
- ~ mention Of Congress that when TN
~ ,--S Z. deposited to secure the ciIeula
H. Ia u bank are called for redemption
n, s5yment Of them means the retlr-
l. q. the circulation they secure, IN
IN indeed, the bank, as 1t may law
A. 10, should make a new deposit o
n, suequate amount of interest-bear,
t,s vV9!nds. 1t follows, then that unles
81 81 -t,st National Bank of North Benz
IL .4t interest besring bonds O.
Il, ! 1klng deposit of bo-ds called
e, ne lnpuon, the proceeds OF the LAT
ci,,--ii--sSit De applied to returning IN
I-.lon secured By il"
a1eO) 4. II. GARLAND.