Democratic Sentinel, Volume 3, Number 43, Rensselaer, Jasper County, 5 December 1879 — THE NATION'S FINANCES. [ARTICLE]

THE NATION'S FINANCES.

Animal Report of the Comptroller of the Currency. Hon. John J. Knox,Controller of the Currency, in his annniLi report to Secretary Sherman, gives a brief history of the growth of the debt of the United States, and the financial operations of the Government from the beginning of the war to the present time. The report says: * The total number of national banks organized from the establishment of the nationalbanking system, Feb. 25,1863, to Nov. 1 of the present year is 2,438. Of these, 307 have gone into voluntary liquidation by the vote es shareholders owning two-tbirds of their respective capitals, and eighty-one have boen placed in the hands of receivers for the purpose of closing up their affairs, leavigg 2,050 in operational the date last named. “Sinoe my last annual report thirty-eight banks have been organized, with an aggregate authorized capital of #3.595,000, to which #2,399 440 in circulating notes have been issued. Thirty-eight banks with an aggregate capital of #4,450,000 have voluntarily discontinued business within the said period, and eight banks have failed, having a total capital of #1,030,000. The insolvent banks included two, with a capital of #700,000, which failed after having gone into voluntary liquidation." The report is accompanied by tables exhibiting the aggregate average capital and deposits on May 31, 18<9, of all olasses of banks other than national, and the oapital and deposits of the national banks on June 14 following. The aggregate capital of the various olasses of Rate, savings and private banks, says the Comptroller, “has diminished from #719,400,000 in 1876 to #656,500,000 in 1879, and the aggregate deposits have fallen off from #2,075,300,(XX) in 1876 to #1,893,500,000 in 1879—a redue ion of #62,900,000 in capital and #181,800,(XX) in deposits during the last four years. The national-banking capital has diminished #45,100,000, but the deposits of the national bankers are almost precisely the same that they' were in 1876. Savings banks with capital show a reduction of about #1,000,000 in capital anil the same amount iu deposits. The capital and. deposits of State banks and private bankers are less bv #17,(XX),000 and #B3,ooo,UX)t_rospectively. The greatest reduction, however, is in tho deposits of savings banks without capital, which have diminished #97,500,000.” Upon the subject of the funding of the public debt the Comptroller says: “The great war debt of the United States w s contracted in less than four and a half years. In 1835 the country was entirely out of debt, and on Jan. 1, 1861, the whole debt of the Union amounted to but #66,243,721. During the next six months it increased at the rate of about $4,000,< 00 a month, being, on the Ist day of July, 1861, #90,589,873. During the next year it increased at the rate of more than #36,000,000 per month, and at the close of the fiscal year ending July 1, 1862, it had reached #524,174,412. At the end of the succeeding year it was considerably more than twice that amount, being, on July 1, 1863, #1,119,772,138. During tho following year it increased nearly #700,000,000, reaching on July 1, 1864, the sum of #1,815,784,370. During the next nine months, to the closo of the war, April 1,1865, the debt increased at the rate of al>out $2,000,000 a day, or about #60,000,000 a montt, and for the five months next thereafter, about $3,000,000 per day, or about #99,000,000 a month, reaching its maximum on Aug. 31, 1865, at which date it amounted to #2,845,907,626. “ An aggregate of more than #1,276,000,000 of temporary obligations of the Government, of which $830,000,-. .00 tore interest at 7.30 per cent, was funded within tho three years which followed the close of tho war, and the skill and good judgment displayed in so doing can only be fuliy appreciated by those wdio aro familiar with the difficulties and delicate conditions under which this great work was accomplished. “The temporary loans, certificates of indebtedness, 7.30 notes, and all the other it mis of the debt, except the legal-tender notes and fractional currency, which have been largely reduced, have been paid, have matured and ceased to bear interest, or have been funded into 5-20 6 per cents., of which more ihan one thousand six hundred millions (#1,602,583,350) were issued. •* Ihe acts of July 14, 1870, and of Jan. 20, 1871, authorized tho issue of bonds for the purpose of refunding tho 5-20 6 per cents. The former act authorized the issue of $1,500,000,000 of bonds, $200,000,(X;0 of which were to bo 5 per cents., payable ten years attor ds> f r. at the pleasure of the United Rates; #300,000’000 of 4J4 per cent.s, payable in fifteen years; and #i;000,000,000 payable in thirty years from the date of their issue, and bearing interest at the rate of 4 per cent, per annum. The act provided that these bonds should not bo sold for less than jhoir par value in coin, and that the proceeds should be applied to the redemption of tbe 5-29 bonds. The latter act increased the amount of the 5-per-cent, bonds to $500,000,000, and provided that the whole amount of bonds issued should not exceed the amount originally authorized; and the subsequent act of Jan. 25, 1879, authorized tho refunding or exchanging of any other 5 or 6-per-cent, bonds which were redeemable at the pleasure of the Government. “The whole amount of the funded debt, on the Ist of July, 1871, was of which $1,437,097,300 consisted of 5-20 bonds, and #194,567,300 of 10-40 bonds. On the first day of August, 1871, nearly $66,000,000 —$65,775,550 —of new 5-per-cent, bonds had been subscribed for, chiefly by the national banks. During the same month an agreement was entered into by the Secretary—Secretary Bontwell’s report, 1871, p. xvii.—with Jay Cooke & Co., for the sale of the remainder of $200,000,(:00 of said bonds, and, in the month of January, 1873, similar arrangements were made for the sale of a large additional amount. The remainder of the $500,000,000 —$178,548,300 —was sold during the next three years, the Secretary of the Treasury stating, in his report of Dec. 6,1875, that he had ‘the pleasure of tnnouncing to Congress that the funding of $500,000,000 6-per-cent. bonds into those bearing 5-per-cent, interest has been accomplished.—Secretary Bris cw’s report, 1875, p. xii.’.’ Referring to the resumption operations ot tho Treasury Department, tho report says: “The act of Jan. 14, 1875, required the Secretary of the Treasury to redeem ‘in coin tho United States legal tender notes then outstanding, oh their presentation for redemption at the office of the Aesis ant Treasurer* of tho United States iu the city of New York, in sums of not less than sso,’ on and aftor Jan. 1. 1879. At the time of the passage of this act the leading industries and general’business of the country were very much depressed. The agricultural classes were largely in debt, and the failures of mercantile establishments and manufacturing corporations in the three years previous represented more than $500,900,W0. During the succeeding years an era of economy supervened, agricultural products greatly increased, and the balance of trade was turned largely in our favor, the excess of exports over imports for the fiscal year 1876 being more than $79,000,000, in 1877 more than $151,000,000, in 1878 exceeding $257,000,000, and for the year ending Sept. 30 last more than #294,000,000. For 1878 the excess was more than three times as great as that of 1876, aud more than two thirds greater than that of 1877. “The Resumption act not only fixed the day of resumption, but authorized the Secretary, in order to prepare and provide therefor, to" use any surp.us revenues not otherwise appropriated, and to issue, sell, and dispose of, at not less than par in coin, any of the bonds of the United States described in the act of July 14, 1870. Under this aot, the Secretary in 1877 sold at par in coin #15,000,000 of 4Lfs, and #25,000,000 of 4’s, and in April, 1878, $50,000,000 of per cents, at a premium of I}£ per cent The coin in the treasury continually increased, so that on the day of resumption the Secretary had sl35 i 382,639 of gold coin and bullion, and, in addition, $30,557,533 in silver ciin, the gold coin alone being equal to more than 40 per cent of the United States notes then outstanding. . “The Comptroller has for a series of years presented in his reports the’following tables, showing the amount of treasury notes and of national-bank notes outstanding at the dates named therein, with the currency price of gold and the gold price of currency at the same dates: “On July 1, 1864, SIOO in gold was worth $238 in treasury notes; on Aug. 31,1865, the day when the public debt was aUits maximum, it was worth more than $144; and on Jan. 1, 1870, $120; since which time the treasury and iptq* ‘eiqir; Suuionoj op; £q aoos oq £bui ‘otoo pjoS 88 J9Avod atnstjqorna otmse 9qt poqo’Bor qoB9 ueqii jU9B9.id oq} jo Sammaeq oqt jpun ‘oniua. m possojo -ui XpunpuaS OAuq sajou quuq-praop*p. oqj gives the value in cents of the standard gold dollar in legal-tender paper dollars on July 1 of each year from 1864 to 1878, and also on Jan. 1 of the present year: Cents. 18(54 252.1 18(55 142.1 1866 151.6 18(57 139 4 1868 142 7 1869 136.1 1870 116.8 1871 1872 114.3 1873 115.7 1874 llu.P 1875 114.8 1876 112.1 1877 105.8 1878 100.6 1879 100.0 “During the last fifteen years gold coin has been used by the banks in comparatively small amounts as a reserve, and by the people only in the payment of customs duties and in purchase of foreign exchange. If it was used for home purposes, it was first converted into paper money; but since the day of resump'ion the treasury note and the national-bank note have been generally preferred in business transactions to coin itself. “ The old forms of tables, giving the amount and kind of currency in circulation, are now obsolete, and must be superseded by new ones, which shall include not only the paper currency but also the coin of the country. The total amount of the circulating medium cannot, for this reason, be hereafter accurately given, such total being affected by estimates of the amount of the coin in the country. The latter amount is estimated by the Director of the Mint to have been $427,( 00,000 on the Ist day of N ve Tiber, in this year, of which amount $121,009, ( 00 was in silver ooin. If tßis estimate i# comet, tlja

circulating medium on that date was composed Treiururynotes ou(standing • &J6.6M National-banknotes outstanding.... 887,181418 Gold in the treasury, lees certificates held by the banks Sllrer in the treasury. ®e Ooin the banks (Oct. *)-.••••;;•"• 421.8,141 Estimated amount of coin held by the people 231.475.518 Total .#1.165,tftri.504 "The estimated total currency of the mantry on Nov. 1 thus appears to hare been moro than #1,165,000,000, which amount is at least #880,000,000 in excess of the highest point reached between the suspension and tbe resumption of specie payment" The Comptroller urgently recommends that all the national banks shall take advantage of the present influx of gold to accumulate in their vaults an amoont equal to the total cash reserve required by law. He iudnlges tho hone that the reports of another year may show them to be possessed of at least #100,000,0c0 of gold coin.