Year: 1869

WASHINGTON, Dec. 5.-The annual
report of the Comptroller of Currency
shows that $40 banks are In active
operation, and that their condition is
more gratifying than formerly. The
opportunity afforded spectators to
manipulate the money market is al
most entirely done away with, and
banks have a more complete control
of their affairs. The Comptroller
recommends the passage of an act
requiring all banks that go into iqui-
dation to deposit legal tender notes
for the outstanding circulation, and
take up their bonds deposited with
the Treasurer of the United States as
security for such circulation within
sixty days from the date of vote of
the stockholders to wind up. He
also recommends that ell taxes on
banks be made returnable and pay
able to the Treasurer of the Uaited
States, including the special tax and
District Collectors; that the compen-
sation of Bank Examiners be in-
creased and provision be made for its
assessment upon the banks examined,
aud an increase to fair compensation
of persons employed under him in the
Currency Bureau.


The recommendation looking to the
establishment of q central redeemiUg
agency in New York, In the last an
nual report, is renewed. The Comp
troller says the legal prohibition TO
banks to have deposits is not suf6-
GENTLY explicit or positive to prevent
it, aud hints at legislation to that end.
The Comptroller argues in favor of a
national banking system as a cause of
ease In the money market and lower
rates of interest than would other
wise be obtained. He thinks the Gov
ernment circulation, which is not
convertible, and therefore not elastic,
should be withdrawn and substituted
by national bank notes, which are
nominally redeemable, and are GER
tainly amenable to the laws of trade


No check or limitation should be
imposed on the latter other than the
law of supply and demand. A self
adjusting currency is the only one that
is adapted to the exigencies of trade
aud to the wants of the country, and
it is a vital question at this time
whether this result can be reached
before the return of specie payments.
If possible at all, it is only through
the agency of National Banks. The
machinery of the Government is not
adapted to such ends, and further. if
possible, it is so only upon the adop-
ton of policy which will lead gradu-
ally, but surely, to the resumption of
specie payments. It must be grad
ual development of process
which shall absorb legal tenders and
put in their place a paper currency
which shall at all times. and under
all circumstances, be exchaDgeable
for coin, either of paper legal tenders
or of gold. A paper currency which
shall gradually increase. while the
legal tenders, for its redemption.
shall gradually decrease in such
rates as a healthy demand for
banking facilities may determine.
while free banking may thus
be established with safety, anterior to
| specie payments, conditioned only q
the withdrawal and cancellation of q
! legal tender dollar for every dollar OF
bank currency issued. Free banking
upon g specie basis may also be per-
mitted with equal safety and without
delay. With details properly adjusted,
banks may be established, with au-
thority 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 estab-
| lishment of banks on specie basis


The resumption of specie payments


is only anticipated, and Familiarity


with gold values will do much to re-


lieve the subject of the mystery with


which it is associated in the minds oil


many looking forward to the day


when uniform values viii again pre-


vail. It may be that by wise legislation


now, banking aTstem can b8 esfab
i lished truly rational in its charactei
/ and SCOPE. which vii furnish q sern,