Year: 1879

| respect to the amount OF lhterese-p."i
ing certificates that may be issued, I'D,
nortspt information may be gathered
from the recent experience OF the De-
partment in placing the four per ceh'
bonds. OF those about S26O,OOo'ooo nave
been taken since January l, and very large
proportiOn of them are of small denomina'
tions. The long delay in filling orders mas
arisen in great part from the immense mum
her of bonds to be printed and signed. The
nrecise proportion of each denomination Is not
known. but it is stated that the orders for
bonds of small amounts have been much
greater of the four per cents than or any
previous loan. 1t has been supposed that
very large amount of the $lo certihca'es
might thus be required, and the more because
these certificates would be used not only tor
deposits of savings, but to some extent as
currency. Serious apprehensions have also
been felt as to the effect OF general WITH
drawal of savings from the savings BANKS
But it does not yet appear that there Is any
occasion for alarm.


The depositOrs in savings banks, as a RUE,
have in such banks sums exceeding Soo each.
The average sum to the credit OF each depos-
itor in ten States is over $500, and und0ubt-
edly a very large majority have over $1Oo
each But for all persons who have over
$50 TO invest, the four per cent BOND
il both more convenient and safer than
the new certificates. Hence, whatever
tendency there may be to wlthdra"
funds from savings banks, in order to invest
them in Government securities of any class,
that tendency has had full effect and has
been fairly tested. as to the great majority
of depositors, by the free sale of four per cent
bonds. 1t may be reasoned that the new
certificates are likely to acquire q use
as currency which the bonds have not,
but the bonds also are really used as cur
rency in very many transactions. They clrcu-
late less freely than small notes, and so do
$1,000 greenbacks circulate less freely
than SO bills, but it does seem
that the interest-bearing note Is at
all likely to circulate as freely as the legal
tender. The disposition to get together
enough of these notes to enable the holder to
exchange them for a small registered BOND
will be quite strong, ard it will 90 far to
Withdraw them from active circulation.


The new certificates, therefore, are not to
be regarded with serious apprehension for any
reason that yet appears, either as likely to
cause a disastrous withdrawal OF deposits
from savings banks, or as likely to produce a
disastrous initiation of the currency. The
certificates are to be issued only upon actual
deposit of cash in the Treasury, and the
money thus received must be held until it
can be employed in redeemlng SIX per cent
bonds as fast as the certificates may be ex-
changed for four per cent bonds. The
immediate effect must be withdrawal
of greenbacks from circulation. As the
new certificates can be expected to
be employed as currency only in qualified
sense there will be some contraction OF the
volume of paper currency. But as soon
as the certificates have been exchanged
for bonds, and calls for old bonds have ma
tured, payments of money from the Treasury
will in part restore the circulation temporarily
Withdrawn. The temporary effect of the with
drawal, however, may be not incOnsiderable
if it should prove that large amount of the
new certificates are demanded.