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In 1862 we imported up to 31st July, (the last date to which we have the figures) of cotton from India
£4,883,899 lo 1863
11,950,999 And from other countries,” wbich are really barbarous countries, and therefore absorb bullion more or less, we importedof raw cotton in 1862....
£991,858 of raw cotton in 1863.
3,673,347 and all this must be paid for.
The number of continental schemes and engagements (for solvent individuals have subscribed to them) is very large, and they will undoubtedly pull heavily on our store of actual cash. Many of them are banks or loan societies in rude countries, and whenever cash is lent in or taken to such communities, it is long before more civ. ilized nations see it again. The greater part of the companies which have been started have not absorbed much capital, and bave taken abroad little money, and we bave good reason to believe that the public have shown lately a discretion in their investments far surpassing that of any previous period. But, Devertheles, we bave been gradually engaging ourselves in many foreign undertakings which will cause a very important demand on our bullion.
On the other hand, the effect of our good harvest—at least, of the expectation of it is already written in the Board of Trade tables. We imported up to July 31st:
1863. Wheat ......
£11,380,516 £6,364,080 Wheatmeal and flour.
3,198,310 1,944,517 Total......
£14,578,826 £8,308,597 showing a reduction of about £6,000,000.
Too much credit however must not be taken for this circumstance in face of the general liabilities we have enumerated. It will especially be for the Bank of England not to delay too long to raise the value of money in the face of large immediate demands, and of a higher rate offered for money by its principal competitor.
BANK OF ENGLAND. The following comparative table will be of interest, affording as it does a view of the bank returns, the bank rate of discount, and the price of wheat in London during a period of three years corresponding with the date of our last returns, October 7th: At corresponding dates with the week ending October 7, 1863.
1863. Circulation, including bank post bills... £21,674,563 £22,137,670 £22,545,407 Public deposits...
4,899,914 8,333,779 9,510,057 Other deposits.
12,028,835 18,530,122 12,893,642 Government securities
10,783,123 11,252,566 11,141,227 Other securities....
17,440,363 19,751,704 22,591,637 Reserve of potes and coin
7,859,634 9,828,331 7,737,662 Coin and bullion....
14,141,519 16,548,156 14,856,037 Bank rate of discount...
31 per cent. 2 p. cent. 4 per cent. Average price of wheat...
57s. Od. 518. Id.
42s. 2d. Subjoined is our usual table with the returns brought down to October 7th, 1863 :
24... 20,150,398 8,654,499 14,306,497 31,346,731 14,870,795 3
31... 20,516,435 8,338,717 15,469,254 32,488,020 14,956,421 Jan. 7... 20,927,993 8,782,808 14,393,308 32,620,233 14,635,555 3
14... 21,018,849 4,280,730 16,772,782 31,165,075 14,102,169 4 21... 20,893,931 4,965,798 14,993,225 30,227,086 13,855,849 4
Rate of Discount.
Coin and Rate of Date.
Circulation, Deposits. Deposits. Securities. Bullion. Discont. 28... 20,771,236 5,416,863 14,414,768 30,238,866 13,611,823 5 Feb. 4... 20,709,154 6,351,617 13,352,287 29,997,233 13,692,136 5
11... 20,444,454 6,952,808 13,596,356 30,288,406 14,070,651
25... 19,715,828 7,901,658 13,367,153 29,709,079 14,614,096 4 Mar. 4... 20,822,055 8,036,003 13,368,086 30,880,805 14,504,517 4
11... 19,801,665 8,673,899 13,282,605 81,096,327 14,328,178 4
24... 20,136,276 10,364,471 12,742,282 31,896,338 15,025,274 4 Apr. 1... 20,965,228 10,107,041 13,172,090 32,775,752 15,141,755 4
8... 21,279,339 6,714,109 14,829,832 30,946,784 14,963,835 4
29... 21,452,800 7,178,312 13,606,939 29,994,349 15,348,492 31 May 6... 21,376,999 7,241,739 13,122,087 29,718,602 15,141,760 3
13... 21,252,916 6,735,137 13,727,556 30,201,120 14,653,141 3
27... 20,909,819 8,002,346 13,842,718 31,412,190 14,500,019 4 June 3... 21,009,392 8,779,387 13,896,450 32,389,044 14,425,553 4
10... 21.080,460 9,782,830 13,783,263 33,240,192 14,556,121 4
20,655,178 9,882,135 13,904,506 32,750,953 14,850,156 4 24... 20,525,655 10,279,053 13,809,996 32,756,459 15,026,118 4 • July 1... 21,738,756 10,356,373 16,274,789 36,490,518 15,080,271 4 8...
22,038,478 5,593,834 18,595,718 34,647,536. 14,824,969 4 15... 22,194,996 4,918,458 16,381,914 32,052,521 14,749,876 4
22... 22,230,612 5,386,948 14,675,625 30,975,774 14,620,872 4 Aug. 5... 22,340,809 5,577,268 13,790,855 30,289,227 14,843,185 4 12 21,937,198 5,754,863 13,578,358 29,657,833 15,040,819 4
22,003,176 6,126,668 13,005,322 29,503,127 15,081,152 4 26... 21,699,696 6,713,801 12,806,568 29,322,757 15,309,384 Sept. 2... 21,920,722 6,818,182 13,261,512 30,180,384 15,494,219 9... 21,646,811 6,997,402 12,909,484 29,919,543 15,345,488 4
21,487,105 7,371 510 13,484,939 30,601,940 15,461,566 4 23. 21,515,731 8,291,491 12,859,580 30,960,809 15,532,838 4
30 22,312,747 9,270,486 18,717,460 33,751,403 15,277,885 4 Oct. 7... 22,545,407 9,510,057 12,893,642 33,829,764 14,856,037 4
Returns OF THE CANADA BANKS.—We give below the Auditor's statement of the banks of Canada for January, May, August, and September, 1863:
January. May. August. September. Capital authorized
$35.266,666 $35,266,666 $35,266,666 $36,266,666 Capital paid up...
26,455,298 26,739,878 26,781,194 26,807,642
LIABILITIES. Notes in circulation.....
$9,940,423 $9,024,240 $9,097,116 $10,121,221 Balance due to other banks. 1,249,808 1,836,314 1,218,069 648,306 Deposits not bearing interest.. 9,580,143 10,119,578 10,499,900 11,216,590 Deposits bearing interest..... 9,662,483 9,940,333 10,827,585 10,904,879 Total liabilities..
$30,382,357 $30,920,465 $31,642,670 $32,890,996
ASSETS. Coin and bullion....
$5,615,519 $5,394,927 $6,913,042 $7,247,381 Landed or other property
1,974,786 2,017,810 2,058,953 2,068,676 Government securities...
5,027,739 4,990,334 4,802,248 4,808,250 Notes or bills of other banks.. 1,132,788 1,087,414 1,424,161 1,405,385 Balances Jue from other banks. 2,143,238 1,050,523 1,683,838 1,856,699 Notes and bills discounted.... 42,458,413 44,605,111 42,048,243 42,818,444 Other debts not before includ'd 2,629,681 2,758,772 2,908,427 2,921,563
$60,982,218 $61,904,891 $61,838,932 $63,126,898
OFFICIAL LETTER OF CONTROLLER McCULLOUGH.
ANSWERS OF THE CONTROLLER OF THE CURRENCY TO QUESTIONS IN RE
LATION TO THE NATIONAL CURRENCY ACT.
We publish the following important Government document, as it forms a prominent feature in the financial history of the times, and should be preserved.
WASHINGTON, July 14, 1863. Most of the questions presented to the Controller, in regard to the National Currency Act, have been answered in the forms and instructions which have been sent from this office, and by letters to the interrogators. There are a few, however; that can be more conveniently and satisfactorily answered in this form than in
other. 1st Question. Is there any“ reasonable doubt” of the constitutionality of this Act ?
Answer. The constitutionality of the Act of Congress establishing, in time of peace, a United States Bank, with power to locate in the States branches thereof, having been affirmatively decided by the Supreme Court of the United States, the constitutionality of the National Currency Act is not considered to be an open question.
In ordinary times the constitutionality of this Act would hardly be questioned; but in the existing emergency of the Government, engaged, as it is, in a war of gigantic proportions—with specie no longer a circulating medium-with a large internal revenue to be collected in the States and Territories, such a currency as is provided for in this Act is an absolute recessity. To deny to the Government, through such agencies as Congress might create, the power to provide a currency based upon its own resources, would be not only to deny its sovereignty, but its authority to perform properly and safely its acknowledged functions.
2d Question. What are stockholders of State Banks to gain by discontinuing their present organizations, and organizing under the national law?
Answer. The chief gain will be in a circulation of notes, which cannot long be secured through the agency of State institutions. Legal tender notes have created a taste and prepared the way for a national bank note circulation. These notes, in all sections of the country, have a better credit and are in greater demand than the notes of the strongest banks. Country bankers, notwithstanding the largeness of the issue, find it difficult to supply the call for them, and are frequently under the necessity of ordering them, at considerable expense, from commercial points, to meet the demand that will not be satisfied with anything else. The preference for these notes is not chiefly to be attributed to the fact that they are a “legal tender," but to the fact that they are Government money, and must be good, if the Government is good. I do not say that their general credit is not, in a measure, owing to the fact that they are declared to be “lawful money," or that it was not necessary to make them so, to place them beyond the influences that might, at the time, have been combined to depreciate them ; but I do say, that the people, who control the currency, as they do the legislation of the country, prefer legal tenders to bank notes, because they
are Government issues, are receivable for Government dues, and must, every dollar of them, be redeemed, if the Government is maintained.
The National Bank Note circulation is intended gradually to take the place of the direct issues of the Government. It is not expected that it will, at once, have the credit that has been attained by the “ legal tenders,” nor that the notes of the National Associations, scattered from Maine to California, will be of absolutely uniform value throughout the Union ; but it is expected that these notes, sustained by the credit and secured by the resources of the nation, receivable for all public dues, except duties upon im. ports, and in payment of all claims against the Government, and, in case of the failure of the banks, to be redeemed at the Treasury of the United States, will challenge, to a greater degree, the public confidence, and possess more uniformity of value than can be attained by the issues of the best managed State institutions. I will go further than this : through the instrumentality of Clearing Houses, or Redeeming Agencies, which, in due time, may become a necessary feature of the system, the notes of the National Banks, wherever situated, will be as nearly of uniform value throughout the Union as the commercial interests of the country will require.
There will not be, in my judgment, for any considerable time, two sys. tems of corporate banking (one State and the other National) in the United States; not that there is a necessary antagonism between the two systems, but because both will not be equally acceptable to the people and equally profitable to the banker. One or the other will fully occupy the field; and. aside from the manner in which the National system is being regarded by the people, and the rapidity with which National Associations are being formed, it requires no spirit of prophecy to predict which of the two is destined to give way. The losses which the people have sustained by bank failures; the inadequate protection which state legislation, with rare exceptions, has given to the bill-holders; the fact that the good credit of the issues of the strongest and best conducted State Banks, outside of the States or the section where they exist, is not the result of public confidence in their solvency, but of the influence of bankers and money dealers, who can as easily depress that credit as they can sustain it, and who do not unfrequently depress or sustain it, as suits their own interests or convenience alone ; that all the credit that State Banks have at a distance from home is artificial and unreliable: all these things have given rise to a wide-spread dissatisfaction with the existing bank note circulation, and created a popular desire for a circulation, of whose solvency there can be no question, and whose credit will not be at the mercy of bank note brokers.
The Government of the United States is not to be overthrown by the attempted secession of the Southern States, and the war in which it is engaged. On the contrary, it will be vastly strengthened by the severe ordea! to which it is being subjected-strengthened by the evidence, which is every day being exbibited, of its inherent power, and the conviction tbat is constantly spreading and deepening in the minds of the people, that their personal destinies are identified with it—strengthened by the very debt it is contracting, and the evidences of value that are to based upon this debt.
Banks whose issues are secured by the Government, and wbich are to become the financial agents of the Government, will, in my opinion, ere long, be the only ones that will be tolerated by the people; and if the banks of the older and richer States continue, as they have done, and are now to a large extent doing, to furnish the newer and less wealthy States with a bank note circulation, they will have to do it through the agency of National Banks. In availing themselves of the National Currency Act, for loaning their capital and credit to the people of the new States, they will have the satisfaction of knowing that while adding to their own wealth, they are strengthening the Government, and creating a powerful influence against repudiation, by aiding in furnishing to the people a circulation secured by the stocks, and representing the unity of the nation.
Aside from the matter of circulation, the National Currency Act is as favorable to bankers as the banking laws of most of the States. Should it prove to be too stringent, it is safe to expect that such amendments will be made to it as will accommodate it to the reasonable requirements of capitalists, and the want of a great and growing nation.
Question. Will State Banks be furnished with the national circulation, according to the provisions of the 63d section of the Act ?'
Answer. This section is a part of the law, and must be obeyed. I have hoped, however, that very few banks would claim the advantages of it. The engrafting upon a national system of banking of a provision that, to some extent, denationalizes it, was, in my opinion, a great mistake. Nor can I understand how State Banks, without the aid of State legislation, can avail themselves of the provisions of this section without violating their charters, or the laws under which they are incorporated. But if enabling acts, authorizing State Banks to circulate the National Currency, have been or should be passed by the Legislatures of the proper States, I should still regret being compelled to furnish this currency to institutions over wbich the Government can exercise no supervision or control. I trust that few banks will deposit bonds and claim circulation, under the 62d section, but that the stockholders of solvent banks, who desire to connect themselves with the system, will do so, by availing themselves of the priviliges of the 61st section, or, what would be better still, by winding up their present State institutions, and organizing new associations, independent of the old ones. The intention of the law was to provide a national circulatijn through the agency of National Banks, which should be subject to Government supervision and control. Nothing would be more sure to destroy the symmetry of the system, or be more likely to bring it into disrepute, than a distribution among the banking institutions of the States, (“good, bad and indifferent,") of the national currency.
I must, however, obey the law, and unless prevented from doing so, by a judicial decision or an authoritative opinion, I shall furnish circulation under the section referred to as soon as it can be provided. As notes will be first supplied to Associations, organized under the Act, it is not likely that State Banks can be supplied, to any considerable extent, before the early part of the next year.
Question. Is it expected that State Banks that may become National Associations under the 61st section of the Act will give up their present corporate names ?
Answer. Before I entered upon the discharge of my duties as Controller of the Currency, the Secretary of the Treasury, after much consideration, had come to the conclusion, as a National Currency was to be provided through the instrumentality of National Banking Associations, that all such associations should have a common name. Persons forming associations under the act have, therefore, been advised to take the names of First, Second, Third, &c., National Banks of the places in which they are established, according to the order of organization. This rule is expected to be ob