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Report Of The Comptroller Of The Currency

Report Of The Comptroller Of The Currency image
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Tha Coinptroller of the Currency in his forthcouiing report gives a history of the working of tho free banktng systeni in this country previous to the establishment of national banks, and goea on to say that the amount of national bank notes now authoiized to be issued is 1304,000,000, and the amount of legal tender notes $356,000,000, so that the proportion of legal tender mouey in which national bank notes are now redeemable is nearly identical, though slightly in excess. If the natioual banking la w was auiended so as to require the redemption of natioual bank notes in legal tender notes at 1-4 of 1 per cent. discount, as by the New York SJato law, instead of at par as provided in the national currency act, and the national to such a provisión of law the prompt redemption of national bank notes would be insured, but the redemption of this vast amount of circulating notes if redeemed but once a year, would result in great loss to the people of the United States. A system of redemption of this kind wonld also at once increase the rate of exchange from tbe rate of one-tenth of one per cent now existing et most periods of the year between the different cities of the Union to from one-half cent to one per cent., thus restoring to a considerable degree tho condition of exchange at the time of the inauguration of the national banking system and insuring a loss to the people annually of millions of dollars. Such a systam would however, undoubtedly result in the return of the notes of national banks at certaiu (.easons of the year when they were not needed to the vaults of the country banks to be paid out wheu the demand for cur rency increased. Such a system would at once giv, what is exceedingly desirable at the present time, elasticity to the eurrency. In order to insure the piompt redemption of uational bank notes the amount issued must be so much iucreased that the notes will be, say, at one-eighth of one per cent. discount, and this would probably not be accomplished until an addition was made to the present circulation of $100,000,000. The sanie result would tollow froHi the reduction of the volume of legal tender notes simultaneously with the increase of the issues of bank notes, but Cougress has so frequent)y refused to diminish the amount of legal tender notes that the Comptroller is of the opinión that any general system of free banking aocompanied with resuniption must be postponed until the resumption of specie payment. The Comptroller, in order to avoid any misapprehension of his views on this subject, desires to state that ho is not an advocate of any permanent system of currency usually known as irredeemable currency. Ho believes, however, that the people of this country ought not and will not submit to the high rates of exchange prevailing previous to the war, and that an arnendrnent to the national currency act whioh shallresult in the restoring of high rates of exchange will also result in the downfall of a system of banking whicb it is believed will yet become the most satisfaotory of any system ever established. During the past year, as far as his observation has extended, national bank notes have been rarely at any perceptible discount for legal tender notes, and during the late panie no distinction was made by the people between legal tender notes of the United States and national bank notes. Both were hoitrded alike as the thing most desirable of all others to hold, and it is probable that when specio payment shall bp resumed that the faith of the people will be so well established in the safety of the curreucy of the banks that no such general system of redemption will be required as was required of the unsafe currency issued by the different States previous to the war. If the circulation should become redundant, as is sometióles the case with silver coinage, it will only be necessary to present the surplus to agencies in the City of New York, where more than two-thirds of the circulation is now made redeemable, in order to restore the equilibrium, for i t is to be hoped that previous to a return to spocie payment sorne system will be adopted which will give abundant elasticity to the currency without incurring the expense and burden of general redemption, and without loss resulting from the high rates of exchange which have always prevailed undor such. a system. A Covington girl lent her shawl to an invalid gentleman riding in a stage, and when ho handed it back there was a f500 greenback pinned to the shawj. FRIDAY MOH.NING, NOV. 28. 1873


Old News
Michigan Argus