This gives the amount of gold in the Treasury at the first of each month. Now if we take the amount received from customs in each month, and the amounts paid for interest, we shall have results as follows: Kind Total..... Thus the interest paid was more than the customs receipts of this port, and probably about equals the receipts at all the ports. But the receipts are now declining. Those for November give about $3,478,561 for the month, or $6,000,000 for the two months. The payments will be, for interest $9,360,000, and for principal of the Texan loan, $2,062.000, making $11,422,000, or thus for six months: From this it will be seen that if more gold bonds are issued, the Treasury will probably be required to buy gold, and there is therefore objection in some quarters to the further issue of such bonds. But when we remember the other alternative, we think no one can hesitate as to which course should be pursued. The question is reduced simply this-whether the Treasury shall buy gold or shall issue more paper? Which will increase the price, or more properly depreciate the currency most? We think there can be no doubt on this point. The course of paper is just now manifesting itself in the working of the national banking law, so that while the customs receipts are declining, the reservoirs of specie are being reduced. Those banks which are making arrangements to merge their business under the National Bank Law, with a view to escape the State laws in relation to local taxation and the ultimate payment of their notes in specie, were steadily selling their specie. On the 20th of October, the Philadelphia banks concluded to go under the national law. Those of Boston have, many of them, arrived at the same conclusion. The weekly returns show the following results of specie in bank: Thus those banks have sold 31 per cent of their specie in five weeks since they determined to go into the national system, which dispenses with specie altogether. The exports of specie out of the country in excess of all receipts has been for the same time as follows: The difficulties of the market gradually caused the price of foreign exchange to fix itself in gold, the bankers requiring payment in gold. During the last four weeks in the following table, therefore, the quotations are for the gold price. To find the currency price the premium on gold is to be added: 124 a 125 66 Aug 66 "21, 196 a 198 28, 201 a 2034 June 4, 218 a 210 11, 215 a 218 "18, 216 a 219 "25, 235 a 238 July 2, 270 a 295 9, 292 a 298 66 16, 268 a 290 66 23, 273 a 282 66 30, 270 a 274 6, 279 a 283 13, 274 a 277 20, 278 a 279 66 27, 275 a 276 Sept. 3, 260 a 275 10, 253 a 256 17, 245 24, 230 2.65 a 2.60 98 a100 103 al05 2.06 a 2.02 100 a 102 101 a103 91 a 924 183 2.08 a 2.05 2.15 a 2.05 2.25 a 2.20 2.31 a 2.27 a 240 1.47 a 2.35 a 248 a.. 90 a.. a 90 178 a 180 85 a 90 170 a 180 a 84 166 a 167 83 a.. 83 a 90 a a 79 a 8080 a 80 a.. a.. 85 a 95 a 184' The disposition to draw only for gold makes the exchange market more regular and satisfactory, and throws upon the importers the whole trouble of buying gold, cost of commissions, etc. The demand then is from importers for duties, and also for gold to pay for bills drawn. Commercial bills are sold to some extent for currency. JOURNAL OF BANKING, CURRENCY, AND FINANCE. STATE BANKS IN PHILADELPHIA RE-ORGANIZING UNDER NATIONAL LAW-NATIONAL BANK RETURNS INCREASE IN CAPITAL AND CIRCULATION-BOSTON AND NEW YORK STATE BANKS AND THE NATIONAL LAW-NATIONAL CIRCULATION, WHAT IS IT?-BANK OF COMMERCE TO BECOME A NATIONAL BANK, AND WHAT WILL BE ITS CIRCULATION-THE PROFITS OF BANKING UNDER NATIONAL ACT-NEW YORK, BOSTON AND PHILADELPHIA BANK RETURNS ACCOUNTS FROM ENGLAND MORE FAVORABLE-BETURNS OF BANK OF ENGLAND AND BANK OF FRANCE, ETC. The officers of the banks of Philadelphia, and many of those of Boston, have been constrained to make arrangements for re-organizing their banks under the National Bank Law, because of the expenses and local taxes that so eat up the profits of the local banks, that it requires 20 per cent. in earnings to pay 8 per cent. dividends. The tendency is, therefore, to make a change and become National banks. These banks are not taxed directly, but under the State laws the tax will fall upon the stockholder, which must be in proportion to other profits. But the advantages held out to the institutions of not paying specie, by being Treasury depositors, &c., are such as to counteract that tax. Other institutions will probably soon assume the national character before the limit al lowed by the law is taken up by new institutions. The report of the National Banks, Oct. 1, was as follows. We also give the figures for July: CONDITION OF THE NATIONAL BANKS ON THE MORNING OF THE FIRST MONDAY OF 00TOBER AND OF JULY, A. D. 1864, BEFORE THE COMMENCEMENT OF BUSINESSS ON SAID In the quarter to October 1, it appears the capital increased $11,568,857, and the circulation increased 20 million. Since October 1, the weekly increase has been as follows: It appears from the above that the weekly increase of circulation has been nearly $2,000,000 per week, and more than one-third of the authorized capital is already taken up. To this will be added the Boston capital, and most of that of New York, as soon as the coming legislature shall have passed an enroling act, which will remove all doubts as to the legal right of the State institutions to merge their rights in the new system. The bank of Commerce with its capital of $10,000,000, has already announced its intention to organize under the new law. The direction of this movement is to increase greatly paper issues, because the new circulation of $300,000,000 will not be based upon specie real or pretended, but upon $150,000,000 United States legal tender that are now at 40 cents on the dollar in gold. The National bank notes being a legal tender between the government and the people, will require but a small amount of legal tender basis, because there will be no need of demanding payment. If any one has money to pay the government, except for duties, the bank notes are available. If he wants specie, the bank notes will buy it on nearly as good terms as the greenbacks, in which they are redeemable. Thus an institution in the country issuing $100,000 notes, must have on hand 15 per cent. in lawful money, of which $9,000 must be in legal tender; and $6,000 in balances due to it from other banks, which means simply nothing. Thus the whole issue of $100,000 circulation is $3,600, if we estimate it at the present value in specie. In case legal tenders fall, as fall they will, from the mere effect of these bank issues, the whole obligation becomes nil. Besides all this, the re-organization of these old banks enables the most of them to issue a large amount of additional currency. Take the Bank of Commerce of New York as an instance. The capital is, as we have stated, $10,000,000. One-third of this capital will have to be lodged, in the form of United States boncs, with the Comptroller of the Currency at Washington, and ninety per cent. of the market value of the bonds deposited will be restored to it in circulating notes. The law gives any bank the option of increasing its deposit to the full amount of its subscribed capital and its circulation in proportion. The minimum amount of currency placed at its disposal will thus be more than three millions, and may be about nine millions. Its circulation now is only one thousand seven hundred and five dollars. The evils connected with these National Banks are beginning to receive the attention of the daily press. The Cincinnati Gazette of the 15th of November, speaks of them as follows. If our readers will turn to the back numbers of the Magazine issued when the National Act was first passed, much the same ideas will be found repeatedly expressed, only then few believed us. The Gazette says: The country has suffered but little thus far from National Banks, but it is plain enough to see that the foundations have been laid for a bubble of the most extraordinary dimensions, and the superstructure is going up rapidly. National Banks are running into the wildest kind of a wildcat system. There is no doubt at all about this. We need not say that we do not refer here to the banks based upon bona fide capital, and organized for legitimate purposes; but it is known that the ropes are being arranged for operations that will, so far as regards the inflation of the currency, throw the old, broken-down system of Indi ana and Illinois into the shade. What else can be expected? Never was such an opportunity for making money presented. Let us look at it: A bank is organized with a nominal capital of $300,000. The sum of $100,000 is subscribed and paid in. This is invested in United States bonds, which are deposited with the comptroller, and $90,000 in currency issued. This is used indirectly for purchasing other bonds, and a further instalment of $81,000 is obtained in currency. This is again used, and another instalment of $73.000 in currency is received. Thus the bank has, on a bona fide capital of $100,000, secured and deposited bonds to the amount of $271,000, and has in circulation notes to the amount of $244,000. Put these together, and we have $515,000 standing on $100,000. This is almost equal to anything the Indiana and Illinois sharpers ever got up in their palmiest days. Now let us look at the profits: Interest on bonds, equal in currency to.... Total interest... $37,940 00 14,640 00 $52,580 00 We have deducted from the currency 25 per cent., which banks are required to keep on hand. But the managers who go into this kind of business will do better than that. How this may be. done, we need not stop to explain. It is very easy to make an average, by having large amounts of currency two or three times in a month, to swear by. It is thus seen that on a capital of $100,000 a company of gentlemen may realize a profit of $52,580 00 per annum from the circulation alone. If gold should go higher than 240, the profits would be still larger. It would be in the direct line of interest with those bankers to inflate the currency and enhance the price of gold. But about redemptions. Isn't a bank required to redeem? Yes, in greenbacks; but they are not asked to redeem in anything. There would be no object in it. If we had specie pay |