Mr. HOOPER, of Massachusetts. It would seem as if there should be some legislation to regulate and secure the public against misman agement of banks when 20 of them can be managed by one individual, the President and directors never troubling themselves for a moment to know what was done in the bank nor why anything was done, and all 20 of the banks fail in consequence of the failure of Culver, Penn & Co., of NewYork. The banks need some regulation and restraint for their own good as well as for the security of the public. Nothing can be more wholesome in its effects upon them than the requirement to redeem their circulation and to discourage the accumulation of their funds in the large cities to be used for speculative purposes. The effect of a prompt and frequent redemption of circulating notes in NewYork would discourage the use of those notes elsewhere than at home, among the customers of the bank. It would soon be evident to a bank doing a legitimate business that it was for its interest to keep their circulation for use about their own neighborhood, instead of sending it away, and that the redemption of it at distant places should be casual and exceptional. It has seemed to me that the managers of banks do not generally recognize the difference between the national bank circulation and that of the old State banks. Under State law the banks had practically unlimited power as to the amount of their circulation, but the cir culation was comparatively local in its character, and there was a constant effort by each bank to put its circulation out at the greatest distance possible from home, while all the banks were competing to increase their own circulation by gathering up and sending home that of other banks. The experience?. far with the national bank circulation has shown that the notes rarely return to the bank that issues them, but that they become, like the Government legal tender notes, part of the great mass of the currency of the country. The notes of the most obscure national bank on the most distant frontier has upon it a stamp of nationality which overrides any security given to it by the bank purporting to issue it, and it circulates from one end of the country to the other as readily as a Government legal tender note. The bank that issued it is bound to redeem it on demand in lawful money; but who wishes to have it redeemed? Other banks do not; they are too glad to use it for currency, and the lawful money in which it would be redeemed would generally have no greater value than the bank note. The effect would have been precisely the same if Government legal tender notes had been loaned, without interest, to the same amount as the circula ting bank notes were furnished. The Treasurer of the U.S. borrowed in 1863and since, large amounts of their circulating notes from the national banks before they were put in circulation, and few or none of them have ever been seen by those banks since. My friendfrom Maine [Mr. LYNCH] says the people in his State require more currency. but if $ 9,000,000 was added tomorrow to the circulation of the national banks in Maine, the whole of it would be incorporated at once into the great mass of the currency of the country, and the State of Maine would get only her proportion of the whole mass, as she does now. I admit that it would be a source of E. to those banks in Maine that received it; utit would decrease the pecuniary resources of that State and diminish the amount that those banks could loan to the people there, as they would have to invest more than ten millions of their money in Government bonds, which sell at a premium, to obtain the 9 millious of circulating notes which they would add to the general mass of the circulation of the country. A majority of the ComBanking&Currency were opposed to any increase of the circulating notes of the national banks beyond 300 millions, as now Prescribed in the law. But recognizing the justice of the claims in various States where few or no national banks are organized, and of State banks that seek to be organized as national banks, the committee could suggest no fairer or better way of providing for them than to reduce the amount of circulation allotted under the law to the eexisting national banks. It was proposed, therefore, to obtain the additional amount required, by reducing the Present allotment ten%. of all the banks, which furnishes a margin of 30 millions for new institutions to be organized under the law. In accordance with the views of a majority of the committee, the bill reported exempts from this reduction all banks having not more than $300,000 of capital, and compensates for it by taking a larger proportion from banks with over $1,000,000 of capital. This leaves in the law what has always seemed to me to be its most objectionable feature in principle and the most dangerous provision in practice, that is, the authority to a national having not more than $500,000 capital to invest its whole capital in U.S. bonds as security for circulating notes; reserving no portion of capital for its business of banking. More than that, the law requires the bank to hold in lawful money 15%. of the amount of the notes as a reserve to secure their redemption on demand; but having in vested all its capital in bonds to secure the notes, the reserve required can only be obtoined, directly or indirectly, by borrowing. This seems to me objectionable in principle. In practice it is an invitation to organize banks cfourlatthee, sole object of obtaining the notes to cir without doing any business of banking. In other words, it simply provides a mode of obtaining from the Government withoutinterest $90,000 in notes that will circulate as money, and which, to all intents, are as good as the psaomsiet amount of legal tender notes, qa the deof $100,000 in U.S. bonds as security. One case has been brought to the knowledge of the committee, of a national bank in which the stockholders were rePresented to be the partners of a house in the brokerage business with some members of their families. The whole capital of the bank was invested in bonds deposited with the Treasurer of the U.S. as security for its circulating notes, with an additional amount of bonds in the Treasury as security for public money in the bank as a Government depository. It was found, on an official examination of this bank, that it was located in one of the desks in the brokers' office, and the only entry on its books was about 20,000 dollars, deposited to the credit of the Treasurer of the U.S. It seems to me that the allotment of circulation by the existing law, and as proposed by this bill, is wrong in principle. Comptroller of the Currency has addressed to me a letter in which he proposes an amendment, which I shall offer at the proper time, by which the margin of circulating notes for the organization of new banks will be increased to nearly 40 million dollars, and sufficient in the opinion of the Comptroller to meet all the requirements for new banks for several years to come. For the information of the House I will ask the Clerk to read the letter to which I have referred.