782 



UNITED STATES, FINANCES OF THE. 



banks, the question how to avert the contraction of 

 the currency caused by their retirement is one of con- 

 stantly increasing importance. It seems to be gener- 

 ally conceded that the law governing this matter ex- 

 acts from the banks excessive security, and that, upon 

 their present bond deposits, a larger circulation than 

 is now allowed may be granted with safety. 1 hope 

 that the bill which passed the Senate at the last ses- 

 sion, permitting the issue of notes equal to the face 

 value of the deposited bonds, will commend itself to 

 the approval of the House of .Representatives. 



The Secretary of the Treasury, in his annual 

 report, said: 



It will be noted that the circulation decreased 

 $25,156,452 during the year. The bonds deposited to 

 secure circulation, which decreased $9,613,350 in 1883, 

 were still further reduced $25,442,300 during 1884 

 a reduction of $35.055,650 in two years. The 3 per 

 cent, bonds of the United States have now been re- 

 duced to less than $200,000,000, and they will be fur- 

 ther reduced through the operations 01 the sinking 

 fund by nearly $50,000,000 each year. The market 

 prices of the 4 per cent, and the 4i per cent, bonds of 

 the United States have declined somewhat during the 

 past year ; but that these bonds are still too high to 

 enable banks to base circulation upon them at a profit 

 is plain from the fact that the circulation has been 

 voluntarily decreased more than $25,000,000 during 

 the year. Among the measures of relief recommended 

 in the last report were an increase of the issue of notes 

 to the face value of the bonds deposited, a bill to au- 

 thorize which passed the Senate during the last ses- 

 sion of Congress ; the acceptance of the 3'65 per cent, 

 bonds of 1924 of the District of Columbia, the pay- 

 ment of which is guaranteed by the United States ; 

 and a repeal of the tax on circulation. I earnestly 

 commend these propositions to the wisdom of Con- 



fress, believing that, if adopted, they will enable 

 anks which now contemplate a surrender of their 

 circulation in consequence of the calling of their 3 per 

 cent, bonds to maintain it on the long-time bonds 

 with a small profit, or at least without loss. Inas- 

 much as about $135,000,000 of the circulation of banks 

 is based upon our 3 per cent, bonds, which are now 

 redeemable and being rapidly redeemed, remedial ac- 

 tion can not be postponed beyond the present session 

 if a rapid reduction of our bank-note circulation is to 

 be avoided. The subject is a very important one, and 

 should receive immediate attention. These, however, 

 would be measures of temporary relief only. 



The Comptroller of the Currency discussed 

 the subject at great length in his annual report. 



The House of Representatives, by a two- third 

 vote, set apart Thursday, Jan. 15, 1885, for the 

 consideration of the so-called u McPherson bill." 

 authorizing the issue to national banks of cir- 

 culation equal to the par value of the bonds 

 deposited as security, which passed the Senate 

 at the preceding session. When the bill came 

 up in the House, it was opposed, not only by 

 the opponents of any legislation on the subject, 

 but by the advocates of the "Potter bill," 

 which provided for issuing, in lieu of the 4 and 

 4 per cent, bonds, 2 per cent, bonds having 

 an equal time to run, -paying out of the surplus 

 revenues a premium on the bonds taken up equal 

 to the present worth of the surrendered inter- 

 est computed at 3 per cent, and for reducing the 

 tax on circulation from 1 to -J per cent, a year. 

 Among the opponents of the measure were Mr. 

 O. B. Potter, the author of the " Potter bill," 

 and Mr. A. S. Hewitt. Mr. Potter said that 

 the measure would increase the premium on the 



Government bonds and aggravate the difficulty 

 of the situation, besides weakening the security 

 for the bank circulation. Mr. Hewitt opposed 

 the bill because it would " give us expansion 

 when we need contraction," and would not 

 prevent the payment and retirement of the 

 bonds on which the bank circulation is based. 

 Before a vote was reached on the bill, the House 

 by a vote of 130 to 112 adjourned for the day. 

 This vote was accepted as settling the fate of 

 the measure, and no further attempt was made 

 to bring it before the House. 



The Coinage. The deposits of gold with the 

 several mints and assay-offices during the fis- 

 cal year 1884 amounted to $46,326,678.66, of 

 which $29,079,596.33 consisted of gold bullion 

 of domestic production ; $6,023,734.45 of for- 

 eign bullion; $9,095,461.45 of foreign coin; 

 $263,117.17 of United States coin, and $1,864,- 

 769.26 of jewelry, old plate, etc. The silver 

 purchased for coinage and contained in bullion 

 deposits amounted at its coining value to $36,- 

 520,290.36, of which $31,463,113.88 consisted 

 of bullion of domestic production ; $2,524,- 

 742.53 of foreign bullion ; $1,984,365.62 of for- 

 eign coin ; $152,031.20 of United States coin, 

 and $396,037.13 of plate, jewelry, etc. Includ- 

 ing redeposits, the total amount received and 

 operated upon by the mints and assay - offices 

 was $87,955,153.92. 



The coinage executed at the mints of the 

 United States during the calendar year 1884 



The coinage of silver dollars under the act 

 of Feb. 28, 1878, to Dec. 31, 1884, amounted 

 to $189,561,994. Of this amount $146,502,865 

 was held by the treasury, and $43,059,129 was 

 in circulation. Of the dollars held by the 

 treasury, $114,865,911 was represented by out- 

 standing silver certificates, leaving $31,636,954 

 uncovered by certificates and owned by the 

 Government. 



Adverting to the condition of the funds in 



