xpenses of the comptroller's office, are met by a tax of 1 per cent
per annum, paid semi-annually, upon the average amount of notes in
circulation during the previous six months. Such notes are not a legal
tender, but are received at par for all dues to the United States except
duties on imports, and for all demands against the United States except
interest on the public debt and in redemption of currency. Any other issue
of notes is prohibited, and worn out notes are cancelled and burned in the
Treasury of the United States, being replaced by new.

The banks in sixteen principal cities are required to hold a reserve equal
to 25 per cent of their circulating notes in lawful money of the United
States, namely coin or treasury notes, and all other banks must have a
reserve equal to 15 per cent of their circulating notes in the same form.
This reserve is held for the redemption of the notes, provision being made
for such redemption at the Sub-treasury of the United States in New York
city, bank balances and clearing house certificates in the larger cities
being counted as part of the reserve. The object of this is to secure
ready redemption of any note in all parts of the nation.

The comptroller's office includes expert examiners, and to it each bank
must report at least five times a year, with other special reports as
called for. Each bank is subject to examination at the pleasure of the
comptroller, and in case of failure to redeem bills or comply with the
law, the comptroller has power to take possession of the bank and close
its business. The usual banking business of any national bank proceeds
according to the laws of the state in which it exists, the legal rate of
interest of the state being compulsory.

_Advantages and disadvantages of national bank currency._--The advantage of
such a uniform system of bank notes is evident. The bills are secure
beyond the possibility of doubt as to their final redemption, and
therefore circulate freely without reference to the failure of the bank
issuing them. In case of failure, all the banks form a ready machinery for
collecting the bills for final redemption at the United States treasury.
The frequent reports and expert inspection give as satisfactory means of
maintaining safe management as can be secured by law. The possibility of
connivance between examiners and bank officers is reduced to a minimum.

At the same time, there are disadvantages from several sources. First,
Un