Year: 1869




WAs<zxHGToN, Dec g. :


The annual report of the Comptroller
of currency, shows $50 banks in active
operation-s Their condition is more
gratifying than formerly. The oppor-
tunity afforded speculators to manipu-
late the money market is almost entire
ly done away with, and the banks have
more complete control Of their affairs.
The Comptroller recommends the pass
age of the act requiring all banks that
go into liquidation TO deposit legal ten
der notes for outstanding circulation,
and take up their bonds deposited With
the treasury Of the United States as Sc
curity for such circulation within &c
days from the date of the vote of the
stockholders to wind up. He also
recommends that all taxes on banks be
made returnable and payable to the
Treasurer of the United States, inclu-
ding the special tax and dividend tax
now payable to the district collectors;
that the compensation of bank examin-
ers be increased and provisions be made
for its assessment upon banks examined,
and an increase to fair compensation of
persons employed under him in the Cur
rency Bureau. The recommendation
looking to the establishment of a central
redeeming agency in New York, i'll last
annual report, is renewed. The Comp
troller says the legal prohibition to
banks to hire deposit is not sufficiently
explicit or positive to prevent it, and
hints at legislation to that end. The
Comptroller argues in favor of the Ma
tional Banking system as the cause of
ease in the money market, and lower
rates of interest than wonld otherwise
be obtained. He thinks Government
circulation which is not convertible, and
therefore, not elastic, should be with
drawn and substituted by national bank
notes which are nominally redeemable
and certainly amenable to the laws OF
trade. mo check to limitation should be
imposed on the latter other than
the law of supply and demand. A self
adjusting system of currency is the only
one that is adapted to the exigencies Of
trade and to the wants of the. country,
and it is vital question at this time
whether this result can be reached be-
fore the return of specie payments, if
possible, at all. 1t is only through the
agency of national banks that the ma
chinery of the government is not adapt-
ed to such ends and further, if possible.
1t is so only upon the adoption of poll
icy- whicA will tend gradually, but
y
ments. 1t must be gradual develop
ment of a process witch shall absorb the
legal tenders and put in their place a
paper currency which shall at all times
and under all circumstances lie ex-
changeable for coin, either of paper legal
tenders or of gold; paper currency
which shall gradually increase, while
the legal tenders for it's redemption shall
gradually decrease in such ratio as a
healthy demand for banking facilities
may determine. While free banking
may thus be-established with safety an
ferior to specie payments conditioned
only on the withdrawal or cancellation
of legal tender dollar for every dollar
of bank CURRENCY issued. Free bank
ing upon specie basis may also be per-
mitted with equal safety and without
delay, when details are properly adjusted.
Banks may be established with author
ity to Issue and put in circulation gold
notes, limiting the amount only to the
ability of the banks to comply with the
necessary conditions, and redeem their
issues by the establishment of banks on
specie basis. Resumption of specie
payment is only anticipated, and famil-
iarity with gold values will do much to
relieve the subject of mystery with
which it is associated in the minds of
many looking forward to the day when
uniform values shall again prevail. 1t
may be that by wise legislation now
banking system can be established, truly
national in its character and scope,
which will furnish sound currency of
uniform value i1f every State of the
Union. -