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The average daily balance of cash (by which is meant Treasury certificates, gold certificates, silver certificates, National Bank Notes, greenbacks, gold and silver bullion, gold and silver coin, subsidiary coins of copper and nickel) is very difficult to state with any exactness, inasmuch as it varies daily not in thousands of dollars or hundreds of thousands or even millions, but often in tens of millions. Within the last year ending December, 1894, the average daily balance has been about $110,000,000.

The receipts consist mainly of duties received at the Custom House, which are daily paid in, internal-revenue taxes, deposits of postmasters, remittances from banks acting as national depositories, and deposits of banks or individuals throughout the country of bullion. Here gold certificates payable in coin or in bullion, all forms of paper money, save silver certificates, are redeemed in coin upon. presentation.

Silver and gold coin and bullion in large amounts are deposited by banks and private individuals on receipt. These deposits form no part of the real available assets of the Sub-Treasury, which, for the time being, is simply used as a storehouse for their safekeeping.

The principal payments and disbursements are those made to the disbursing officers of the army and navy, against which payments deposits have been previously made from the main Treasury in Washington. Other disbursements are the regular Treasury payments on appropriations for public buildings, improvements, the construction of public works, and the payment of pensions, about $90,000,000 being paid out annually by this Sub-Treasury for this account alone. In addition to these disbursements the interest charges on government bonds falling due are here paid to the holders.

Several times when its financial condition warranted, the government has, in order to relieve the stringency of the money market, anticipated the payment of its bonds, the

necessary disbursements for which were made principally through this Sub-Treasury.

The Sub-Treasury is a member by courtesy of "The New York Clearing-House Association," as it has daily to pay large balances to the different banks, and it thereby saves itself and them the trouble of making payments to each, instead paying the amount due all to the Clearing House, which distributes it.

The Assay Office, immediately to the right and adjoining the Sub-Treasury, of which it forms a necessary part, is interesting principally as the storehouse of the SubTreasury and from the fact that millions of coin and bullion are here stored. A comparatively small part of the gold and silver here in store is in the shape of coin, that being generally kept at the Sub-Treasury. But here may be seen bricks, as they are termed, of gold bullion, little larger than a watch charm, square in shape, and worth about $130, according to the fineness of the metal, to larger bricks worth $6000.

Bullion is received in this office through the Sub-Treasury from all parts of the republic, and requisitions are made by the various mints of the country on it for such bullion as they need for coinage.

CHAPTER II.

Banks-National Bank Act.

THE function of a bank is to issue, receive on deposit, and loan money, to economize its use, and to receive, extend, and facilitate the interchange of credits; and to banks is largely due the extension and the development of the system of domestic and foreign exchange, which is an extension of the system of banking itself.

To appreciate fully the extent of the exchanges effected by banks, we must bear in mind that while the active currency of our country is about $1,600,000,000 the total annual clearances of the Clearing Houses of the country are $62,000,000,000.

These associations are formed by banks for the purpose of avoiding actual payment, in money, of their obligations to each other (see Clearing House). Nor does this amount include transfers between depositors of the same banks effected on the books of those banks.

Banks are divided into six different kinds, the first and most important being those organized under the National Banking Act of 1863, and the amendments which have from time to time been made thereto, and called National Banks. Trust Companies which are organized under the laws of the various States in which they are located, State banks, savings banks, National Gold Banks, and private banks.

The present national banking system came into exist ence under the Act of 1863; this Act, however, was re

pealed and superseded by that of 1864, previous to which the banks of issue were organized under the laws of the different States in which they were located. These laws were not uniform, some being far more stringent than others. The banking laws of some States, however, were almost models of their kind, and provided ample security for the protection of the holders of the bank notes as well as of the depositors.

The banking laws of several of the States furnish excellent object-lessons, in the difference between sound principles and their application to finance, and dangerous experiments in the attempt to create money out of nothing, or, at most, out of values insufficient to secure the face value of the paper money issued against it, and which value could not be readily converted into good money.

In considering the question of banking laws, the natural and political conditions of a country must always be taken into consideration, and it is not fair to assume, because at a certain stage of a country's development a law has been unsuccessful, at a later period, when the conditions have been entirely changed, the result would be the same. Unquestionably, if the present national banking system had been tried in the earlier days of our republic, or, in fact, at any period sooner than it was, it must have met with nearly the same result as attended State legislation, or at best have been but little more successful than the average. It would, undoubtedly, however, have secured uniformity in the price of circulating notes—that is, the notes of every bank would be of the same value as that of every other, which is something unattainable under State laws.

The National Bank Act provides for the incorporation of National Banks, and prescribes that such banks shall include as a part of their title the word "National," and prohibits all other banks from using the word “National" as a part of their name. Under this law are also organized

and operated, principally on the Pacific Coast, what are termed "National Gold Banks," In the District of Columbia there is a National Savings Bank, authorized by this act. State banks are organized under the laws of the States in which they are located. Trust companies are also formed under the State laws.

Savings banks are organized under the laws of the various States in which they are located, and are subject to many restrictions in regard to the character of their investments and of the collateral on which they may loan, also the proportion of currency to deposits which must be kept on hand, and other matters which will be more fully explained under "Savings Banks."

Private banks and bankers, i.e., one or more individuals engaged in the business of banking but not incorporated as a company, are subject to State supervision, the same as State banks, only when they issue circulating notes, which they are permitted to do under the laws of New York, on the same conditions imposed upon State banks, but which they have found unprofitable on account of the Federal tax of ten per cent. on the issue of all but national banks.

In order to convey a clear idea of the powers of, and the differences between the several kinds of banks, it has been found necessary to give a synopsis of the laws under which they exist, and to which they are amenable.

NATIONAL BANKS.

The National Banking Act of the United States was first passed in the year 1863, repealed and a new act substituted in 1864, which has been amended from time to time since. Below is the act as it at present stands.

To thoroughly establish the national banking system, it became necessary for the Federal Government to impose a tax of ten per cent. upon the circulating notes of all other than national banks. By many, this tax is consid

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