The statement which follows shows the daily fluctuations in the price of American gold coin at the Exchange Gold Room during the month of October: COURSE OF GOLD AT NEW YORK-OCTOBER, 1867. have remitted comparatively little, and with a fair supply of produce bills rates have been weak. Toward the close the demand for bills for remittances against receipts of coupons from foreign bondholders caused a firmer market. Cotton bills have been at a heavy discount owing to the want of confidence in Liverpool cotton houses. The following table shows the course of Foreign Exchange, daily, for the month of October: Days. 1... 2. 3... 4. 5. 6.. 7. 8. 9.. 10. 11. 12 13. 14. 15 .6 17. 18. 19 20. 21. 22. 23. 24.. 25 26.. 27. 28. 29. 30. 31. COURSE OF FOREIGN EXCHANGE (60 DAYS) AT NEW YORK-OCTOBER. 109%@109% 517@515 109 @109% 517@515 40%@41 109@109% 517@5164 40%@41 109%4@109% 5184@517% 40%@41 108%@1094 520 @5184 40%@41 109 @1094 5184@517 40%@41 Bremen. 78%@78% 35% @36% Oct... Sep Aug. J'ly Jun. May. Apr Amsterdam. Bremen. Hamburg. London. Paris. Mar. Feb. Jan... Since Jan. 1.... 108 @110% 525 @510 Berlin. 71%@72 71@72K 71@72 K 71@72K 72 @72% 40@41% 78% @80 36 @36% 71%@72% 71% @72 K 71%@72% 36 @361⁄2 JOURNAL OF BANKING, CURRENCY, AND FINANCE. Letter of Mr. Jay Cooke to National Bank Officers.-Returns of the New York, Philadelphia and Boston Banks. The elaborate letter addressed by Mr. Jay Cooke to certain National Bank officers in Ohio has been widely published by the newspapers, and has brought into a clearer light the fact that throughout the country a very uneasy feeling prevails as to what Congress will do next in regard to the monetary situation generally, and to that of the National Banks in particular. The momentous importance of the crisis through which the finances of the nation are passing weighs heavily on the public mind, and never probably have monetary problems of such magnitude and difficulty offered themselves to any deliberative assembly in the world, as those to be forced on the attention of the Congress which will meet at Washington on the 21st of November. We do not profess to be cognizant of the purposes of the leaders of parties, but there are a few points as to practical legislation which may, we think, be pretty confidently relied on. And of these one is, that Congress in its financial arrangements will act in a very conservative spirit, and will do nothing to destroy or impair the National Banking system. From the general tone of Mr. Cooke's letter, it would seem that he is apprehensive of some such mischance. There are, no doubt, a few persons to be found who would use their influence with Con. gress to this end. Possibly the rigid demands of the National Bank law as now administered, the care it takes to discover and cut off every unsound part of the system, and to enforce the solvency, strength and good repute of the individual banks, may have made some dissatisfied persons long for the license and ill-regu. lated freedom of the old exploded State-banking system. We grant also that other enemies of the National Banks may oppose the new and more efficient system from purer motives, but the prevailing impression among the people everywhere is that the banks are entitled to have a fair trial, and that sufficient time has not elapsed, nor sufficient hostile evidence accumulated to enable an impartial jury to give a verdict against them. We observe, however, that Mr. Cooke falls into the error which prevails in some quarters, of supposing that the banks are the recipients of a charter from the nation, which in some way secures the privileges they enjoy, and prohibits curtailment for an indefinite time in the future. To set this question at rest, it s only necessary to refer to the closing section of the National Currency Act, which specially provides that any provision in that law may be changed or cancelled at the pleasure of Congress. But this National Currency law is the charter of the banks, and so far as that instrument is concerned, it is clear that the claim set up in behalf of these institutions by some of their friends falls to the ground. It is well known to our readers that we have steadily advocated the solid interests of the National Banks. In coinmon with a large part of the nation we did not approve of the system before it was adopted, but our argument is, that now the banks are established, we are bound to guard and to improve them as a vital part of the financial machinery of the country. They are indispensable aids to business, and having turned out to be a much more stable and efficient organization than many even of their friends ventured to anticipate, we shall give them a hearty, zealous support as long as they seem to us to deserve it. In giving this support we will not knowingly adopt invalid arguments; and this we think is the character of such as are founded on the claim that Congress has conferred a franchise in this case, which it cannot revoke at any moment when the recall is clearly for the good of the country. But we go one step beyond this, and we unhesitatingly claim for the National Banks that, in the existing state of our finances, our commerce and our trade, the highest interests of the country require that these institutions shall be sustained, and their efficiency as far as possible augmented. We support the cause of the banks, then, not because as private institutions they have received a valuable franchise which confers vested rights that cannot be meddled with, out because they have important public functions entrusted to them by the nation, and because, on the whole, they execute their functions so as to justify confidence and to merit protection. In this opinion we are at one, we believe, with Congress. During the last session an attempt was made to revoke the privileges in question, and several bills introduced for that purpose failed and were rejected. It will be remembered that the complaints then brought against the banks were various, and were founded partly on the fact that these institutions have the privilege of issuing notes for which the credit of the Treasury is pledged, and which the Government therefore might just as well derive the pecuniary benefit of, so as to relieve the country from the pressure of taxation. To this the obvious reply was that this is not a new complaint. It had been discussed and overruled before the system was established. In his letter, Mr. Cooke argues very justly that the benefits which the National system has conferred on the country are well worth all they have cost by the grants made and the privilege conceded. Among these benefits he reckons the unification of the bank currency in every State of the Union, and the destruction of the issuing powers of a multitude of irresponsible ill-regulated banks all over the country whose unsafe currency, had it not been destroyed, would have brought on us during the past three years panics and financial disaster-, exemption from which is chiefly purchased by the franchises conferred. He also claims that this exemption, without the establishment of new banks, would have been impossible. Another argument against the banks is, that if allowed to issue currency at all, they should not be permitted to draw from the National Treasury eighteen millions of coin a year as interest on three hundred millions of bonds deposited as security for circulation. To this Mr. Cooke replies by attempting to show that these eighteen millions and more are paid back again to the Government ie various ways, and chiefly by taxation of several kinds. This is decidedly the weakest part of Mr. Cooke's ingenious paper, and his statements will be sharply criticized. If, as we suppose, it is intended that the letter should be republished in pamphlet form for the information of members of Congress and of the people generally, we would urge that this part of it undergo careful revision. The argument as to the superiority of bank notes for greenbacks should also be pruned away as irrelevant and unsound. A bank note can never be worth more. than what it is redeemed in, and the bonds deposited at Washington are placed there not as security to the public, who take the notes, but to the Government, which endorses them. It is supposed by many persons that the special claims of the National banks to superiority over the State organizations which it superseded, rest almost exclusively on the security of the bank notes, which is the most perfect ever devised, consisting as it does of a deposit of Federal bonds, a guarantee from the Government founded on that deposit, and a reserve of legal tender money to the amount of fifteen or twenty-five per cent. on the liabilities of every bank in the country. We should do injustice to the National system, and overlook some of its chief merits, if we were to ignore the fact that the safety of the circulating notes is only one of its advantages, and by no means the most perfect, although it may be the most prominent. The bank note, it is true, is secure of ultimate payment, because the Government endorses it, and if the bank fails the Treasury is liable for the amount, and is empowered to sell the pledged bonds to obtain funds to meet the endorsement and make the dishonored payment. But security for ultimate payment is not the only safeguard needed by notes which are to pass as current money. There must also be redemption in specie or other lawful money. And this redemption must be provided in the metropolitan centres as well as at the counter of the issuing bank. How defective our system is in this respect none have shown more clearly than Mr. Hulburd, the Comptroller of the Currency, who will no doubt propose again some adequate remedy in his forthcoming report for Congress, as he did in his very able report of last year. The National banking system has, however, as we said, other distinctive features to commend it, unconnected with the security of its notes. And one of these is the light of publicity which it sheds on the business which the banks are doing. It may be taken as a fundamental maxim of banking that bad business requires covering up, and can only thrive by secrecy. Now, the banks of this country are so closely united and bound together, that each is as it were a guardian of the solvency of others, and all the sisterhood partake of the general security to which each contributes. Every member of the organized whole is interested in keeping every other member strong, and in cutting off and removing the unsound and rotten parts of the system. Moreover, the frequent visits of competent inspectors, and the monthly and quarterly reports which are sent to Washington and published in the newspapers; the discipline which the department is empowered to inflict on institutions which are guilty of shortcomings and financial misdemeanors, and the severe penalties which are denounced against officers who are convicted of corruption, peculation or fraud; these and other provisions with which our readers are familiar, are exercising a powerful influence to strengthen the banking system, and to keep it strong. A careful scrutiny of the quarterly returns, which we publish in another part of this number of the magazine, will show to what a gratifying extent these appliances have succeeded in furthering the ends for which they were devised. There is, no doubt, much remaining to be done. Some of the old State banks which were in an unsound condition for years before they were changed into National Banks, have not yet succeeded in shaking off their incubus which has long weighed them down. They are still suffering the effects of old sins, and are laboring to conquer them with less success than might be desired. Of the 1.200 State institutions which have been converted, some are in this struggling condition; and of the 400 new banks, a few may have been drift d by ignorant or by speculative officers into troubled waters. We do not deny or conceal these facts. But what we claim is that the number of these defaulters is relatively smallthat that number is diminishing-that it is smaller now than six months $90and that, with very inconsiderable exceptions, our 1,600 National Banks are at this hour in a sounder, safer position than ever they have been since this great experiment of National banking was fairly established in the United States. Perhaps the most satisfactory showing in the reports before us is in the reserves which are kept up with sedulous care, and which no bank which values its credit will allow to run down, except as a temporary accident. In reserves of the banks we observe that the Compound Notes amount only to fifty-six millions, while the greenbacks are one hundred millions. Further changes will be made in the reserves during the current quarter by the fifty millions of Three per Cent. Certificates, which appear for the first time in the November debt statement, the amount of $11,560,000 having been issued last month. These securities are designed to counteract any tendency to spasmodic contraction of bank credits and of general business which might arise from the withdrawal of the Compound Notes, of which fourteen and a half millions were cancelled in October. These certificates, like the compounds, can be held as lawful reserve, and were authorised for that purpose by the act of 2d March, 1867. As it may be useful to our banking readers to have on record for easy reference the rules which regulate the availability of these certificates in print, the following official letter covers nearly all the subjects on which information is likely to be required: TREASURY DEPARTMENT, OFFICE OF COMPTROLLER DEAR SIR-Your letter of the 17th inst. is received, inquiring what portion of the three per cent. certificates is available as a reserve for the National Banks. The act of March 2, 1867, authorizing the issue of three per cent. certificates and their use as a part of the reserve of National banks, also provides that not less than two-fifths of the entire reserve of such bank shall consist of lawful money of the United States. The country banks are required to have a reserve of fifteen per cent. of circulation and deposits, two-fifths of which must be in lawful money, and three-fifths of which may be in three per cent. certificates, or in cash deposits with the redemption agent selected by the bank. The banks of Boston and of the other cities designated in section thirty-one of the National Currency Act, are required to have a reserve of twenty-five per cent. of their circulation and deposits, two-fifths of which must be in |