Rensselaer Union, Volume 7, Number 11, Rensselaer, Jasper County, 3 December 1874 — Currency Report. [ARTICLE]

Currency Report.

-s Washington, Nov. 27. The annual report of the Comptroller of the Currency shows that during the past year seventy-one National Banks have been organized, with an authorized capital of $6,745,000. Three banks have failed and t wenty gone into voluntary liquidation. The actual increase of National Bank circulation during the year is $3,576,297. The total circulation outstanding Nov. 1, including $3,136,094 due to banks for mutilated notes destroyed, was $351,927,246, -leaving $2,072,754 yet to-be issued of the $354,000,000 authorized. Since the passage of the act of June 20,1874, forty-six National Banks have been organized, with a capital of $4,019,000, to which circulation has been issued. Applications have been made for the organization, of -sixty-four other National Banks, with a capital of $5,110,000, and circulation amounting to #4,500,000 has been assigned to these proposed organizations under Section 4of the act of June 20, 1874. Seven million seven hundred and fourteen thousand live hundred and fifty dollars legal-tender notes have been deposited for the purpose of withdrawing from circulation the same amount of National Bank notes. The total amount issued to banks since June 20, 1874, is $3,330,180. The amount authorized to be issued to banks alreadyorganized is $3,707,000, and to be issued to proposed organizations $4,509,000, of which Rhode Island, Connecticut, New York and Pennsylvania receive none, but Ohio receives $1,395,*000, Indiana $864,000, Illinois $495,000, low-a $315,000, and others amounts smaller. The amounts subject to withdrawal under Sections 7 and 9 of the act of June 20, 1874, in States having more than their proportion of circulation is as follows:

Banks. Where situated. Amount. : = 4. . . New York City $1,383,538 17 Providence R. I. ——2.818,100 15....-. Connecticut 3,034.020 38 Boston 12.853,750 20 Massachusetts ...., 2,553.225 4 .Maine. 668.000 4 Vermont 595,600 12 Baltimore 2,112,876 1. ....... ... .Delaware —. 99.858 ,41............ Pennsylvania 3.967,195 11 New Jersey SJBO.OOO The amount of circulation remainiug unissued and the amount- to be withdrawn is $16,279,589. Total, $47,350,743.

Th« --Comptroller says: “If Congress should provide for the withdrawal of legaltender notes, and the issue of National Bank notes as needed in the place thereof, when the amount of legal-tbnder notes should be reduced to, say, $300,000,000, the legal-tender notes would then be in demand, and in proportion as they should be reduced in amount the demand for them would increase, until finally, when the amount of bank-notes issued should be largely in excess of the amount of legal-tender notys outstanding, tlie National Bank notes would themselves be withdrawn at certain seasons of the year, on account of the . difficulty or expense of obtaining lawful money "with which to redeem them, The gold coin of the country would then make its appearance in answer to the demand for an additional amount for lawful money, and specie payment would follow. Redemption in the proper | sense implies the exchange ©f a promise to play for the thing promised, namely: coin, or

its-representative, which is convertible into coin on demand. The effect of such redemption is to confine banks of issue to a legitimate business, which is the discounting of commercial paper. If banks of issue arc obliged to pay their circulating notes once iu sixty - or ninety days they must discount such promissory notes only as will certainly be paid within that time. If the payment of bank-notes be frequently demanded, banks of issue cannot safely invest their capital in real-estate loans, in doubtful stocks or bonds, j in accommodation notes which require re--1 newal, or in loans on doubtful security, but must have their capital at all times invested in loans which will be promptly paid at maturity. Such a condition indicates a health; ful business, and promotes sound bailkingand the reduction of the amount of legaltender notes, accompanied with such increase of National Bank notes as may be required, will secure a proper system of, redemption, •render free banking practicable; and gradually restore specie payments without necessarily decreasing the amount of the circulating medium.’’ Several amendments to the existing banking laws are recommended, and the Comptroller renews the recommendations contained in his last two reports for the passage of an act to prevent the issue and circulation of unauthorized currency, and requiring the words “counterfeit,” “altered,” “illegal”, to be stamped on all counterfeit or unauthorized issues; also his recommendation for the repeal of the fourth section of the act Of June 1, j 1870, so far as it applies to the prganization

of savings banks in the District of Columbia, and for the enactment in Its stead or a general law in reference to such savings banks, with judicious conditions and restrictions.—