National banking under the Federal Reserve System

Bibliographic data

Monograph

Identifikator:: 1757542345

URN:: urn:nbn:de:zbw-retromon-135097

Document type:: Monograph

Title:: National banking under the Federal Reserve System

Place of publication:: New York

Publisher:: The National City Bank of New York

Year of publication:: 1927

Scope:: 154 S.

Digitisation:: 2021

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Circulation

Collection:: Economics Books

CIRCULATION dealers in securities, such as The National City Company and others. Where a bank determines to issue currency, it purchases in the open market bonds having a par value equivalent to the amount of circulation to be issued, and sends these to the Comptroller of the Currency for deposit with the Treasurer of the United States. Only registered bonds are eligible as security for circulation, but where coupon bonds of either of the eligible issues are presented, they will be exchanged by the Comptroller for the registered bonds. The Comptroller authorizes payment of interest on the bonds of the bank depositing them, and the Treasurer of the United States will pay the interest, by check, to the order of the depositing bank. All details in connection with the issuance of bank circulation are cared for by the Comptroller’s office. This includes the engraving of plates, printing, ete. Ordinarily a period of about 30 days is required to engrave the plates and print bank notes, but at present (1927) about two months is required. No order for circulation is acted upon until bonds have been deposited to secure the proposed circulation and advanced payment of the cost of engraving ($130 per plate) has been made. The issue of national bank notes is authorized in denominations of $1, 82, $5, $10, $20, $50, $100, $500 and $1,000. Up until late in 1917 banks were prohibited from circulating notes of less denomination than $5, but, as the law now stands, the only limitation upon such denominations is that no bank may have in circulation at any one time more than $25,000 in $1 and $2 notes. However, up to the present time, no plate designs for notes of $1 and $2 denominations have been approved, consequently no national bank notes of these denominations have thus far been printed. The Comptroller of the Currency will supply detailed information as to forms that should be observed in ordering circulation and as to the mechanical details of which it is necessary to take cognizance in this connection. The profit which a bank makes upon its circulation is determined chiefly by two factors: the average rate of interest in the money market, and the price at which bonds to secure the circulation are purchased. Circulation secured by the 29, bonds is subject to a semi-annual tax of }4 of 19; circulation secured by bonds bearing a rate of 411

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