Mr. HOOPER, of Massachusetts. This bill proposes, as I have before stated, to prohibit the use of compound interest Treasury notes as part of the reserve of lawful money required in the national banks. The object and intention when the issue of thoseTreasury notes was authorized was that they might circulate as money for only short period, until the interest accrued upon whemhad accumulated to such an extent that they would gradually be changed in, their char. nd instead of circulating as money become more valuable to hold as a he Acting security payable with interest at maturity. The total amount issued by the Treasury Dept has been $266, 495, 440, and of that amount there had been redeemed by the Treasurer and canceled to the 1st of this month $121,594, 600, leaving the amount outstanding $144, 900, 840, mone of which are now in circulation as money, but are all held by banks and others as interest bearing investments. On the 1st of October last the national banks held, according to their reports to the Comptroller of the Currency, $82, 415, 860 of these compound Treasury notes, which were included as part of their reserve. of lawful money. Their whole reserve of law ful money was $205, 770, 641, exclusive of spe cie, but including the compound Treasury notes. It is a mistake to suppose that because the interest accrued on the compound interest Treasury notes causes them to be held as invest ment, they therefore constitute no part of the currency. So far as they are held and returned by the national banks as part of their reserve they take the place of so much lawful money,their use and effect on values is precisely the same as an equal amount of U.S. legal tender notes. The banks would substitute for them an equal amount of the legal tender notes if they could not return the Treasury notes as lawful money. The national bank law requires the reserve of the banks to be in “lawful monev of the U.S. ” Coin and the U.S. legal tender notes known as “greenbacks “ are the only mediums for currency which have been declared by law to be “lawful money of the U.S. ” Every act authorizing the issue of U.S. legal tender notes declared them to be “lawful money and a legal tender in payment of all debts, public and private, within the U.S., except duties on imports and interest” on the portion of the public debt made payable in coin. The act of June 30, 1864, which authorized the issue of the compound interest Treasury notes, did not make them “lawful money.” It said only that Se“cSraeitdaryTreasury notes may be disposed of by the of the treasury, on the besttermsthat can be obtained, for lawful money; and such of themas shall be made payable, principal and interest, at maturity, shall be a legal tender to the same extent as U.S. notesfor their facevalue, excluding interest, and may be paid to any creditor of the U.S. at their parvalue, excluding interest, or to any creditor Wilf. to receive them at par, including interest.” “ Nor shall any Treasury note bearing interest issuedunder this act be a legal tender in payment or redemption of any notes issued by any bank, banking association, or banker, calculated or intended to circulate as money.” The fact that these Treasury notes had never been declared “lawful money of the U.S., ” in connection with the preceding provision against their being a legal tender in payments for the redemption of bank notes, was believed to be sufficient to exclude them from being held by the banks as part of their reserves of lawful money. The managers of banks who return them as part of their reserve defend it by saying that they hold the compound notes to redeem their liability for deposits, and not for the redemption of their circulating notes, thereby evading the letter as well as the spirit of the national bank act, which requires the reserve to be in “lawful money of the U.S. ”