Year: 1865

ing SO well teach es bank the necessity of kerr
ing its loans in the hands Of prompt customers
and its means under Its own control, as the Ger
tainty OF being frequently called upon to its
own obligations. II is quite important that inex-
pereneed bankers, under the National Banking
system, should learn that their notes are not
money, but promises to pay it; and the sooner
and the more effective this lesson is impressed
upon them. the better will it be for their stock
holders and the system.


Tae National Banking system was designed not
only to furnish thepeople with sound circulation
but one of uniform value and this is not likely
be fully accomplished until the banks, by compul-
zion their own voluntary act keep their notes
par in the principal money markets Of the
country.


THE NATIONAL BANKING SYSTEM.


The establishment of the National Banking sys-
TEN is one of the great compensatons Of the war
one of the great achiev ements of this able
period. In about two years and half from the
organization OF the first national bank the whole
system Of banking under State laws has been su-
perseded, and the people of the United States have
been furnished with circulation hearing upon il
the seal of the Treasury Department a guaranty
of its solyency. 1t only remains that this crcula-
ton shall be redeemable circulation redeemable
not only ~ the counters of the banks, but at the
commercial cities, to make the national banking
system Of almost inconceivabe benefit to the coun-
try.


NO INCREASE OF CURRENCY


The present law limits the circulation of the Ma
tional Banks to three hundred millions Of dollars:
and il is not probable when the business of the
country returns to healthy basis, that O larger
paper circulation than this will be required. In
deed, it it doubtful whether larger circulation
can be maintained on specie basis Should an
increase however, be necessary, it he provided
for hereafter 1t is. perhaps, unfortunate that
greater restriction had not been placed upon the
circulation OF the large banks already organized.
in view Of the wants Of the Southern States II is
quite likely, however, that the anticipated with
drawal of portion Of the United States notes fno;
to speak OF the ctect of the restoration of specie
paymcntsi viii reduce the circulation OF the
Northern bank ~ to afford to the South. under the
present limitation of the law, all the paper curren
ey which will DC required in that quarter.


The Act of March 5, 1865, authorized the Secre-
tary to borrow anys sums not exceeding six hun
dred millions of dollars and TO issue therefor bonds
or Treasury notes of the United States in such
forms as he might prescribe


Under this act there issued during the month
of March SO coo of notes payable three years
after date, an bearing an interest payable semi
annually in currency ut the Of and three
tenths per cent per annum, and convertible at ma
turity. at the pleasure of the holders, into Ave
twenty gold bearing bonds.


Upon the capture of Richmond and the surren-
der ofthe Confederate armies. it became apparent
thar there would bc early disbanding of the
fbrccs of the United States and nsequently heavy
requisition from the War Department for transpor-
tation and payment of the army, including boun
ties. As it was important that these requisitiers
should be pr ,mpty met, and especially important
that not soldier should remain in the service
single day FOR want Of means TO pay him, the Sec
Rotary perceived the necessity Of realizing speed
lily as possible the amount-$530 ,0oe, 000-stll
authorized to be borrowed under this act. No loan
ever offered in the United States, Notwithstanding
the large amount Of Government securities pre-
viously taken by the people, promptly sub
sIlbed for as this. Before the first vi August the
entire amount of $53n,090.90e had been taken
and the Secretary had the unexpected salts
faction Of being able with the receipts from Gus
toms and internal revenue and small increase of
the temporary loan to meet all the rcquisitions
upon the Treasury.


Oftwo hundred and thirty millions of these notes
the Government has the option Of paying the inter
est at the rate of six per cent in coin, instead of
seven and shree tenths in currency. The Secretary
thought it advisable to this option because
he INDUCED the hope that before their maturity
specie payments would be restored, and because
six per cent lincoln is high rate of interest as
the Government should pay on its obligations


RECEIPTS corn.


The receipts of coin have been for some months
past so large that there have been constant aceu-