THE SILVER QUESTION.

A MOVEMENT has lately been set on foot which has resulted in the formation of an association, under the presidency of Mr. Henry Hucks Gibbs, for the establishment of an International Monetary Standard.

The object of the association is concisely stated to be

THE PROMOTION OF THE STABILITY OF VALUES:

By establishing the free coinage of silver and its use as money,
under the same conditions as gold.
By advocating and furthering an International agreement,
whereby a fixed relative value between gold and silver may
be established, and the two metals may jointly form the
currency of civilized nations; thus facilitating the adjustment
of International balances, and lessening the excessive and
needless risks which have now become attendant on home
and foreign trade.

Without entering in any way into the question at issue, there can be no doubt that advantage will arise from the establishment of such an association. The question is one which few people, comparatively, understand, and on which accuracy, both in statement and reply, is peculiarly desirable; whilst truth compels the admission that the opponents of bi-metallism have too often adopted a tone which is not that of candid discussion. It is well, perhaps, that those who hold the views advocated by the association should more distinctly declare themselves; and, whether they fail or succeed in obtaining assent to these views, nothing but good can result from their being more clearly enunciated, and by a more complete sifting of the arguments by which they are refuted or upheld.

THE ANNUAL REPORT OF THE COMPTROLLER OF THE CURRENCY OF THE UNITED STATES.

WITH A FURTHER INVESTIGATION INTO THE PROPORTIONAL USE OF COIN, NOTES AND CHEQUES.-WASHINGTON, DECEMBER, 1881.*

THIS annual report to Congress, which may be briefly described as an official review of the working of the Currency and Banking System of the United States, is an important publication, and stands alone, it is believed, for comprehensiveness. The extent of the field under review will best be understood from the nature and extent of the powers entrusted to the Comptroller. He tells us that

"The law authorises the Comptroller to call for statements of the resources and liabilities of the National Banks, and also for special reports, whenever in his judgment such reports are necessary. It also requires him to prepare an exhibit of the resources and liabilities of State and Savings banks from such official or other sources as are attainable. The penalty of one hundred dollars each day for non-compliance with his request has been but rarely enforced." Under such a system, information, which, in England, must be sought from individual bankers, is asked for as a matter of right, and certainly results in the gradual accumulation of a body of exact information of great value to economists. That bankers do not, in America at least, find this system of annual and special reports press too heavily upon them, is evident from the cordial reception which awaited the comptroller at their last conference at Niagara, and the welcome given to the paper he contributed. Much, no doubt, of the harmonious working of the system and the value of these reports is due to the intelligent use which Mr. Knox, the present comptroller, makes of the powers he possesses. A proneness to attach a high estimate to the results attained by earnest efforts, is perhaps a weakness from which even eminent staticians are not altogether free; Mr. Knox, however, does not shrink from claiming an educational value of a high order for these and other such statistics. He says

"The frequent publication of all these details, and of similar statements made by others on economic subjects, as well as the discussion throughout the country during the period of suspension of specie payment, of the matters to

A copy of the Report will be found in the Library.

which they refer, has had a wonderful influence in educating the people, and has revolutionized the method of instruction upon these subjects in the larger schools and colleges and universities."

When it is said that this report not only places the working of the national banks of America before the reader in almost every possible light, but touches also upon savings banks and foreign statistics and branches out into essays on proposed legislation, substitutes for money, and the duties of directors and examiners, it will be manifest that any critical examination of it here would be impossible. Much indeed, would have but little interest for an English reader, and much will, it is hoped, find a fitter place in a paper on American banking, promised to the Institute.

It will be remembered, however, that in the December number of this Journal (pp. 673-75, vol. 2,) attention was called to the results of a partial enquiry which Mr. Knox had instituted in the month of June last, into the proportional use of coin, notes and cheques in the American national banks, and to his intention to repeat the enquiry from replies to be furnished by the banks on the 17th of September last. He has carried out this intention and the results

The differences in the first table are only fractional, and go far to prove that the method of testing the proportionate use of the several forms of currency, by taking a given number of days as representative of longer periods, is a sound one. Evidence of a similar character was afforded in the close agreement between the figures compiled by Sir John Lubbock, in 1864, and those quoted by Mr. George H. Pownall, in the paper read by him before the Institute in October last.

The second table shows that New York is the banking centre of the United States in the same sense that London is the centre of English finance. The amounts passing through the hands of the New York banks were, in June, 1881, 58.81 per cent., and in September following 56 per cent. of the whole; whilst the estimate. made by Mr. Pownall in his paper in December last (see p. 657, vol. 2,) showed that the proportion borne by London is 56.1 per cent. to 43.9 per cent. in the country.

QUESTIONS ON POINTS OF PRACTICAL INTEREST.

THE COUNCIL desire to express their readiness to receive at all times questions which are of general interest, and in regard to which it would appear desirable to assimilate the practice of bankers.

The following questions have been received, and answers are appended, which, after careful deliberation, the Council have approved:

Forged Cheque.-Delay.

QUESTION I.-On 23rd June, a tradesman receives from a stranger a cheque for £20 on a neighbouring town, in payment for goods sold over the counter, and next day pays it into his own bankers, who duly forward it to the drawees, and it is paid in the ordinary course. A month afterwards the drawee bank discover the cheque to be a forgery and return the same to the bank, demanding repayment. Can they legally do this, or does the lapse of so long a time affect their right to do so?

ANSWER: It has already been decided in the case of a banker who had paid the amount of a bill purporting to have been accepted by his customer, but the acceptance to which proved to have been forged, that the banker was not entitled, where the forgery was discovered and notified the day after the payment was made, to recover back the money. The same principle seems to apply to the case of a cheque.

It is manifest that great hardship might result if a banker were entitled to recover back the amount of a cheque he had once honoured. The banker presenting the cheque might, for instance, in the ordinary course of business, have paid the amount when received to a person from whom it might be difficult or impossible to get it back. If any one is to suffer loss, it necessarily should be the paying banker, who is bound to know his own customer's signature.

We think that after the lapse of even a day, the paying banker's claim would be barred, and it seems even doubtful whether, if the forgery were discovered and notified on the day the cheque was paid, the money could be recovered back unless it could be proved that the position of the party receiving payment had not been altered before the discovery and notification of the mistake.