The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1902-05-18
New York Financier.


persons outside those In banking or treas
ury circles. who have more than a general
knowledge Of the processes through which
National hank notes are created and cir
culate until their existence finally termi-
mates. either temporarily or permanently,
~ the redemption bureau at Washington.
The things essential for the creation OF the
rote are the establishment OF the bank
which intends to issue 1t, the procurement
and deposit OF security for the note and OF
the required fund for It's redemption, ana
the mechanical preparation Of the note All
Of these essentials, together with the tax
on its active circulation. may be properly
regarded as expenses more or less directly
ctargesbIe against the profits which may
| be expected 20 accrue from the issue OF
! he promise TO pay, Unless, however, the
/ Lote can be made freely 10 circulate and
! have comparatively long life, unacCOm-
! panied by the cost Of frequent redemption
| the profits Of circulation will he reduced
! to a minimum and National bank note Is
! sues will he discouraged. IL is true that
| the cost OF producing and OF maintaining
the note is partially onset by the interest
! on the bonds which have been deposited for
! its security. but this Interest Is small and.
when the premium paid for the bonds IS
| taken Into consideration, tho not revenue
/ OF the security leavcS bHt narrow margin
/ for the reimbursement OF expenses.
/ Though absolutely secured by bonds Of
/ the government. or 10y the deposit Of money
/ with the United states treasurer when
| such bonds are withdrawn from his Gus
! tody thus ensurinE the redemption OF thu
I note. the bank issue has limited legal
! tender privileges which initiate, to a great
/ er or less extent against its usefulness
/ It Is not receivable for duties on imports
nor for Interest on the puoNc debt nor in
/ redemntIon Of National currency thus plac-
| In. IL an a Disadvantage in competition
with other forms of paper money More
/ over It is unavailahlc AS reserve by Ma.
: tionai hunks and only 10 n limited extent
! by state hanks Of mis- state though being
: r6lrewabrn n, lc~,t tr-irr ana tbcrcfors
as go"I as Gold note While tbo silver cor.
I tifcate As accented as MARI of tla b1ns re-.
[ scr,r TS5c otsn,.o ~ f,Ii lcr,I +ordor
[ nrivi1rpes and rho tscr maj mo roto con
! hot he co1ntrl In Eatio1gi hank reserves
t,5 - ,-t,,,, to-. s,,'',. re,i,,,-+i,,,
ro, ,i ~, rc,', titroi,,
All" ~ ",',,,.,- , ,t Wv Guy
pr9T, ~ it,t,otfgr t iooni +c,lor
ntSIlltN ,LS t.i.i,ul.," % 'tE.I ei l
,4' ii ,,,,'", 1nsN "gnri
uuger v'HeI u,N,gH, ,s L'IVs o.ls lu"l's
un4t' t3' ny' p' ',v-,, w u'Il ON r. " nS
W,tt.' 'T.a al j" ,,tb.u."S .W@ Hur'' so
lhe issue OF one. two ana tnrte douar pans
uulSS- lHeh Nall9N"i udHh V'l'u'"iIu H NnN
gsro & a n,, %',' $50. ts .--l NJ sri5
. ISSUE, n"l 0iSG ne'au-e 'ar 'uII'I'! u,ln
WIS non So tnlE @',Apl'a by ieS2l tender
issues Ine acl oi June o. INnt hnNH'tr;
PROVIDED NAV nor more man gne.SlKtn OF
lion should he NJ the denomin0uon or I'VE
do.ars. anu IL was provided olSo talt aller
specie payments should he resumed no Sueh
association should be ln.nlshed With note.
these enactments the profit, ~ hank note
issues we're 9hrldsed, br the restrictions
MS 10 HE emission NJ small notes which,
being more useful 10 the business commu-
nifty than large notes, naturally had com
parntivcly long ufc. The prohts Of note
circulation were also limited by the toct
Of i,sTinc ones fwo's and rhree's the banIs
were in competition with the silver cartih
Gates and loyal tenders and since tho pro
hibtion Of issues ~ hank notes az SIS the
banks have been obliged to compete with
The limitation Of 'egai tender privileges
Of National bank notes and the reauirement
the denomlnntloa Of from so In and i'm
cmldlns 5000, contribute 70 the rreluent
banks which NAV receive the notes In the
regular course of business IN assert them
our Of their cash and send them to Wash
lueton. which is done ar the expense Of
the issuing bank One object II this pro.