Year: 1873

4


IN the new York law, meant discount


L .. was ,ss,to, 20 be a redemption in speue and


was iodnueu upon che av0wed principle that specie
was worth more and was more desirable to hold
man the circulating note authorized. But in
| oTueT tuat tnere should be no mistake the LAW


itself provided that the discount upon the circ,N-


iating notes az the redemption agencies should be
| one-iourth OF one per cent II a law had been
| passed by Congress at that time for the redemp-


lion or the gold coin IN silver com. or for the re-
demption OF silver com In copper coin, such law
| would have been dead letter for the reason that


gold coin is known to be OF greater intrinsic value
| in the market than silver coin, and the silver OF
greater intrinsic value than copper. though each
OF these coins Is legal tender TO an amount
liked by law.


In order 10 have system OF redemption it is
necessary that the thing to be redeemed shall be
known TO be worth less than the thing in which it


Is TO be redeemed, and this principle was legaliZed
by the New York State Legislature when 1t pro-
yided that the bank note should be worth in the
city OF New York One-quarter OF one per cent less
than the gold coinage OF the United States II
$4,000 COO was therefore issued, the circulation OF
New aork STATE was aoo ess a. ,e
$40. s 600 ooo If f'a' the circulation wa was re- re-
deemed eeed an snree times year there re wonig De
the other side and II redeemed six times SGOO,OO0
OF loss and 100000 OF gain. The gain was, as
general rule, divided between the banks which
issued the money and the banks which redeemed
the same; while the country merchant and the
manufacturer and the jobber in the great cities
experienced the loss But the circulation or the
State OF New York was known to be so much
safer, and the discount so much less than the cir
cuiation OF any other State OF the Union, that the
discount was hardly noticed, when the other
States OF the Union was from four TO
as might have been expected that the notes
were not fulfilling their function OF circulating
not Tor the purpose OF obtaining SPECIE but to be
exchanged, one for the other, at the Clearing
the redemption OF other notes, and also to provide
exchange at profit or from one-quarter
amount Of exchange thus gained by tue bankers
ana brokers and the amount OF exchange
computed put there is no doubt that it amounted
annually to millions OF dollars. The average
amount OF specie held BY the New YORK state
was $l7,565,0O6 OF this amount about
eighth say $2,2oo.ooo, was held by the country
banks in their vaults, and the balance, say
SIS, 0Oo held in New York city. II from this
amount should be deducted the coin belonging TO
banks and persons outside OF the State and the
amount OF checks payable in coin it would be
found that the amount OF circulating notes issued
10 years at least five times the amount OF Specie
on deposit for the purpose OF redeeming these
notes.


The amount OF national bank notes now author
tied to be issued ls 1854 900 and the amount Of
legal tender notes 1885, oOo so that the proper


riOn OF legal tender money in which national bank
notes are now redeemable Is nearly Identical,
though slightly in excess. II the National Banking
law was amended so as to require the redemption
Of national bank notes In the legal tender
notes at onequarter Of one per cent discount as in
the New York State law, instead OF at par as pro-
vided in the National Currency act and the ma
tional banks OF the whole country would agree to
sucn provision Of the law the prompt redemp-
ton OF the national bank notes would be insured.
But the redemption of this vast amount OF crcuiat-
ing notes. lredeemed but once year, would result
In loss TO the people OF the United states OF
100000; IL the notes were to be redeemed four
times annually, TO ss 600 OOo and II redeemed six
times annually, $5,4OO,OOO. A system OF redemp-
ton OF this kind would also at once increase the
rate OF exchange from the rate OF 0ne-tenth
periods Of the year between the different cities
OF the Union, to from one.naf per cent 70
one per cent, thus restoring to considerable de.
n a -
the inauguration OF the national banking system,
and insuring loss to the people annually Of mil
undoubtedly result IN the return OF the notes OF the
national banks t certain seasons OF the year when
they were not eeded to the vaults OF the country
banks, TO be - out wnen the demand Tor cur
rency Increase. Such system would also give,
elasticity to the currency. The profit upon the
circulation OF the national banks organized in the
West ana south during the past year: as VIII be
one per cent Tor the country banks, and was
less than one-haf OF one per cent IN the
redemption Cities Under such q condition OF
things, with small margin OF profit TO be
derived from the issue Of circulating notes, there
would be little demand for circulation, and con-
sequently but little danger in throwing the doors
WIDE open to any ASSOCIATION properly organized
that might demand such circulation; but with the
reduction OF the value OF the bonds and the ap-
proclamation of the value ol bank notes to the
value of specie the profit would increase, and with
the Increase OF profit the demand for the issue OF
additional bank notes would also increase, so that
under such a system the issue OF bank notes
would have a continual tendency to lessen the
value Of the paper dollar and prevent its approx
nation to the gold dollar, that all ideas OF specie
payment might be forever abandoned.


In order to insure the prompt redemption OF the
national bank notes the amount issued must be so
much increased that the notes will be- say, at one
eighth per cent discount, and this would probably
not be accomplished until an addition was made
present circulation OF 500 900 GOO. The same
result would follow IRON the reduction OF the vol
ume OF legal tender notes simultaneously with the
increase oil the issues OF the bank notes; but Con-
gress has so frequently refused to diminish the
amount OF legal tender notes that the Comptroller
ing. accompanied with redemption, must be post
poned until resumption Of specie payments.


The Comptroller IN order TO AVOID any amisappre
taat he is not an advocate OF any permanent
system OF currency usually known as irredeemable
currency He believes, however, that the people
OF this country ought not and will not submit to
the high rates ol exchange prevailing previous to
the war ana that amendments to the National |
Currency act which shall result in restoring the |
high rates OF exchange VIII also result IN the down.
viii yet become the most satisfactory Of
anv system ever established. During the
past as r as n Dis navs beS
rarely at any perceptibe discount for legal tender
notes: and during the late panic no distinction was
made by the people between the legal tender notes
of the United Stgtes and the national bank notes.
Both were boarded alike as the thing most de-
siraoe OF all others to hold: and IL Is probable that
wnen specie payment shall be resumed the faith Of
the people Will be well established in the safety
OF the currency OF the BANKS shat no such general
system OF redemption viii be required as was re-
qulred OF the unsafe currency issued by the dner-
ent states previous to the war.


III the circulation should become redundant, as is
sometimes the case with the silver coinage, II Will
only be necessary TO present the surplus to the
agencies the city OF New York, where more than
twothirds OF the circulation is now redeemable IN
oruer to restore the equilibrium, for 1t is to he
hoped that previous to the return OF specie pay
ment some system will be adopted which will give
abundant elasticity TO the currency without IN
curing the expense and burden OF general
demption. and without the loss resulting from the
high rates OF exchange which have always pre-
g2Lled under such system.


ALLEGED MURDER OF PETER MDONOUGH