Comptroller of the Currency

“ Every association shall make to the Comptroller of the Currency not less than five reports during each year, according to the form which may be prescribed by him, verified by the oath or affirmation of the president or cashier of such association, and attested by the signature of at least three of the directors. ”

“ A Currency Association may be formed by ten or more banks having an aggregate capital and surplus of at least $5,000,000. Only one may be formed in any city, and no bank may belong to more than one. It must be formed by banks located in territory as contiguous as convenient. All applications for emergency currency are to be passed upon by the Secretary of the Treasury after recommendation by the Comptroller of the Currency. The Secretary will also determine whether business conditions in the locality warrant the issuance of such circulation. ”

“ The single question for our determination is whether the Comptroller of the Currency, acting under the national banking laws, can validly make more than one assessment upon the shareholders of an insolvent national banking association. ”

“ There was precedent in the office for such a course. Comptroller Flagg, upon the suspension of specie payment in 1837, made good the difference between the depreciated currency and coin. Comptroller [Pg 57] Allen followed the lead of Mr. Robinson, and urged the payment of these debts in coin. This was not done, however, until 1870, when the State went into the open market and bought coin to pay the interest on its bonds, and continued this policy until the resumption of specie payment in 1879. This course, however, was not pursued with reference to the bounty debt. ”

“ It fixes arbitrarily the amount of circulating medium for the whole country; the amount being $356,000,000 in legal tender notes, and about the same amount in national currency; and of this last amount the banks are compelled to keep on hand a reserve of from fifteen to twenty-five per cent on all their bills and deposits, thus leaving for circulation, throughout the entire country, not more than $550,000,000, the whole of which is irredeemable in coin. It places the finance of the whole country under the control of one man—the secretary of the treasury. ”

“ We hold that the power to control and regulate a paper currency is inseparable from the power to coin money, and hence that all currency intended to circulate as money should be issued, and its volume controlled, by the General Government only, and should be a legal tender. ”

“ Any other banking system, if left under the same control, would be subject to the same objections. No one department of the government, nor the whole government combined, can determine the amount of currency necessary for transacting the business of the country. ”

“ Creditors may exact gold and silver or they may waive the right to require such money, and accept credit currency, or commodities, other than gold and silver, and the United States, as creditors, or in the exercise of their express power to lay and collect taxes, duties, imposts, and excises, may, if they see fit, accept the treasury notes or bank bills in such payments as substitutes for the constitutional currency. ”

“ A commission will be appointed to study our banking laws and to recommend, if it is found desirable, a central bank to become the fiscal agency of the Government in the control of credit, to act as the clearing house for inter-bank transactions, to manage bank reserves and to afford more flexibility in our currency system. ”

“ I do not doubt in the least either the integrity or the capacity of the present incumbent of the treasury department. I have as much confidence in him as anyone; but this question of the currency is one that affects so intimately all the business relations of life, the property of every man in this country, his ability to pay taxes, his ability to earn food and acquire a living, that no man ought to have the power to vary the volume of currency. ”

“ If Congress can prescribe the structure, equipment, and management of vessels to navigate rivers flowing between or through different States as a regulation of commerce, Congress may assuredly determine what currency shall be employed in the interchange of their commodities, which is the very essence of commerce. Statesmen who have agreed in little else have concurred in the opinion that the power to regulate coin is, in substance and effect, a power to regulate currency, and that the framers of the Constitution so intended. ”

“ The system which they recommended involved a National Reserve Association, which was, in certain of its faculties and functions, a bank, and which was given through its governing authorities the power, by issuing circulating notes for approved commercial paper, by fixing discounts, and by other methods of transfer of currency, to expand the supply of the monetary medium where it was most needed to prevent the export or hoarding of gold and generally to exercise such supervision over the supply of money in every part of the country as to prevent a stringency and a panic. ”

“ From General Washington’s presidency to the last hour of the late President’s, both the government and the country have supposed Congress to be clothed with the general duty of protecting the currency, either as an inference from the coinage power or from the obvious and incontestable truth, that the regulation of the currency is naturally and plainly a branch of the commercial power. ”

“ Congress has authority to issue these obligations in a form adapted to circulation from hand to hand in the ordinary transactions of commerce and business. In order to promote and facilitate such circulation, to adapt them to use as currency, and to make them more current in the market, it may provide for their redemption in coin or bonds, and may make them receivable in payment of debts to the government. ”

“ The coin of the country is shipped to foreign countries to meet demands against us in those countries, and to pay for such commodities as we purchase from them. Credit currency, no matter whether it is issued by the general or state government is not, nor can it under the the constitution, be made a legal tender by act of congress or by a decision of any court in the land, because the laws of trade will control the whole matter, being stronger than legal enactments or judicial decisions. ”

“ This policy of contraction, honestly entertained and persistently urged by Secretary McCulloch in spite of growing stringency, led Congress, by the act of February 4, 1868, to suspend indefinitely the authority of the Secretary of the Treasury to make any reduction of the currency by retiring or canceling United States notes. ”

“ The Government has nothing to do with it but to see that the coin struck in its mints be of the prescribed standard value; it prevents and punishes counterfeiting; it regulates the banking system, so as to make it safe, and then it lets currency and trade in their relations take care of themselves, without assuming any arbitrary control over volume and value. These are the simple principles of a sound money system under which business can regain confidence in itself and prosperity will revive. ”

“ Immediately associated with the financial subject just discussed is the important question what legislation is needed regarding the national currency.
The aggregate amount of bonds now on deposit in the Treasury to support the national-bank circulation is about $350,000,000. Nearly $200,000,000 of this amount consists of 3 percents, which, as already stated, are payable at the pleasure of the Government and are likely to be called in within less than four years unless meantime the surplus revenues shall be diminished. ”

“ It daily issues bills, checks, and obligations payable in 'gold' and payable in 'dollars' simply, i. e., in currency. It keeps its accounts of specie and currency distinct and reports each separately. It sells commodities for coin only, and buys and sells coin for currency. It estimates taxes on sales of gold according to the market value of the gold. In all returns of taxes and income it requires coin to be turned into the equivalent currency. It taxes all legacies of coin at their equivalent in currency, and receives only coin for duties. ”

“ Let us sum up the points of incompatibility between the characteristics of this currency, and the requisites of the charter: let us group and contrast the frightful features of their flagrant illegality. 1. Are they signed by the president of the bank and his principal cashier? They are not! 2. Are they under the corporate seal? Not at all! 3. Are they drawn in the name of the corporation? By no means! 4. Are they subject to the double limitation of time and amount in case of credit? They are not; they may exceed sixty days' time, and be less than one hundred dollars! ”

“ In the estimation of the value of foreign moneys for the purpose of assessing duties, there must be an end to controversy somewhere. When Congress fixes the value by a general statute, parties must abide by that. When it fixes the value through the agency of official instrumentalities, devised for the purpose of making a nearer approximation to the actual state of things, they must abide by the values so ascertained. If the currency is a standard one, based on coin, the Secretary's proclamation fixes it ”