Year: 1878

that additional legal tender notes can be constitu
tionally issued If, therefore, Treasury notes shall
be substituted for the present national bank notes.
i is doubtful if they can be made legal tender In
the payment Of all debts. Two kinds OF Treasury
notes viii then be in circulation of which viii
be full legal tender and the other not, even between
national banks. as is now the with their own
notes. The full legal tender notes will be OF
greater value than the other class unless both are
alike redeemable in gold at the commercial centres.
II more notes issued to the banks than neces
sary for the requirements of business they can be
easily retired larger amount Ia desired they can
be readily obtained upon application in the manner
provided by law. On the other hand il the entire
circulation OF the country is to be issued by gov
ernmont. its amount must be fixed by Congress, and
can be neither increased nor diminished except by its
action. The Treasury note represents business
capital, aud the volume OF currency will be CON
troued. not by the demands of business and the
tions OF political parties and of Congress.
II the amount of government issues should read
rency Of s2a3 900 in coin must be kept
on hand. The interest upon this amount Of reserve
at the lowest government rate -four per cent would
be ss.920000 The expense of issuing the notes aud
the cost of redemption would also be large, and the
total cost TO the government including the hazars
would probably be less than $4,000 0Do annually.
This amount is not greatly less than that CT the net
annual interest received by the national banks upon
their bonds and is much greater than the profts de-
rived by them from their entire circulation.


1t is believed by the Comptroller that this proposed
substitution is impracticable and that repeal of the
National Bank act will result, not in additional
issue Of Treasury notes. but in restoration of State
systems similar to those which were previously in
operation.


The national banks. as a class. are by no means
thusiastic advocates of the national system. inl-
piled in the assertions of those who proclaim
that these banks will form a combination
or union for its defence at any hazard.
No formidable combination can be organized among
them to save the system from repeal. On the con-
trary, 1t will be found that large numbers of the
banks viii quietly acquiesce in such repeal provided
they shall be satisfied that the old State systems
certain to be revived The proposition is to save
money to the government by placing the principal
existing monetary institutions Of the country in
liquidation at time when specie payment is assured
There will be no saving to the government. but loss
OF millions OF dollars annually to the people which
loss increases yearly with the growth OF business and
commerce between the different States


TREASURY.


The Comptroller refers to the amount of coin
in the Treasury, and says this amount is constantly
increasing and it is to-day "a solid basis for circua
tion Congress has fixed the day for the restoration
of the specie standard and the legislation needed is
that which will not overthrow. but cooperate with
the present well-managed monetary institutions of
the country in accomplishing this result.


When this is done the present banking system. il
then thought desirable. may be modified without
danger to the creditor the business and CONNER
cia interests of this great nation


Then follows table showing that the amount of
held the LIST Of October last was greater
than that required by law The Treasury Department
owns 900 of coin, which is equal to more
than forty per cent of the entire issues of the legal
tender notes, and is available for their redemption
while the banks hold nearly one-thrd Of the legal
tender notes. IT, therefore, the banks Of the country
cooperate with the Treasury, it is impossible that
resumption shall fail; but even il this cooperation
should not be universal it could not affect the ulh
result for any considerable portion Of the legal
tender notes be exchanged for coin at the Treasury
and withdrawn from use. the notes will become
and be forced into circulation to supply
the requirements of business and fill the gap


The coin will thereafter be returned to the
Treasury i'll payment Of customs duties and internal
revenue taxes and offered III exchange for greenback
coin certificates, which viii be generally accept
able to the people tor the that the notes
of the Bank OF England and OF the Bank of France
preferred to coin.


In conclusion the Comptroller quotes from pre-
vious report submitted by him to show that the
banks will not be called to pay their deposits in
specie; that the people throughout the country
know that the national bank notes safe, and will
not decline to receive them in payment OF their de-
posts,