In his report for 1868, Mr. Hulburd urged upon Congress the establishment of an agency for the redemption of national bank notes at the principal center of trade. He stated that while objection was made to the location of such an agency at New York City on the ground that it would render the country banks tributary to New York, he did not believe that this objection was well founded, but if it were true, it could be readily obviated by authorizing the organization of a national bank in New York City, without circulation privileges in which every national bank should be required to become a stockholder. Such bank to have a capital of from one to twenty millions and be made the redemption agency for the whole country and the clearing-house for all national bank circulation.

It was suggested that this bank should be owned, controlled and managed by the banks themselves, with two departments, one for banking purposes, and the other for the redemption and exchange of national bank circulation. The latter department was expected to pay all the expenses of redemptions and exchanges, and in addition thereto, yield a revenue for the bank's stock-holders.

This plan, Mr. Hulburd contended, would not only insure the prompt and certain redemption of all the circulation, but would make it actually convertible at all times.

Mr. Hulburd also expressed the opinion that the establishiment of such a bank would remedy the evils resulting from the practice of payment of interest on country bank balances by making such balances immediately available for reserve, instead of being loaned on call to speculators and brokers.

This idea of a central redemption agency was subsequently partly carried into effect by the creation of the National Bank Redemption Agency and its location in the Treasury Department in Washington as a division of the United States Treasurer's office.