The Plymouth Democrat. (Plymouth, Ind.) 1869-1941, 1869-12-09
Renort Of the Comptroller Of.the Cur
rency.

IL
and one a conversion from a State bank,
making the total number organized up to
October, 1869, sixteen hundred and ninety
four. The number in active operation is
sixteen hundred and twenty.
The total amount of notes of all demon
nations outstanding on the Both of Sep
TENDER, 1869, was S299, 7S9, $685.. The
amount of United States bonds held by
the Treasurer of the United States to Sc
cure the redemption of the circulating
notes of National Banks on the goth dav
of September, 1869, was S342, 475, 100. Of
S17,56O of notes prepared in the usual man.
ner for issue for National Banks which
were purloined previous to the annual re-
port of 1867, only 81 400 of the same have
been recovered OF these 1900 were IN
fifty and one hundred dollar notes of the
National City Bank of Lynn, Massachu-
sets, and $4,000 in fifty and one hundred
dollar notes of the First National Bank OF
jersey City, in addition to- which several
thefts of single sheet had occurred. Inc
Comntroller saws it is a serious question
whether provision should not be made for
the payment of these stolen notes when
found in the hands of innocent holders.
Their similarity to the genuine issues 81
the same ard other National Banks,and the
difficulty, to any but the most expert and
skiIlful, in recognizing the forged sigma
lures, make it impossible for the great
majority of those who may handle money
to distinguish the spurious from the genu-
inc issues. The subject is respectfully
submitted to the consideration of Con-
gress.
The Comptroller cites attention to the
fact that, as the law now stands, bank
may, by vote of the shareholders owning
twO-thirds of its stock, go into liquidation
and close up its affairs. After the expira-
ton of one year from the publication OF
notice to its bill-holders and creditors, as
required by the statute, it may deposit
with the Treasurer of the United States
legal-tender notes for its outstanding Gil
culation, and take up the bonds held as
security therefor. This section was I'M
doubtedly intended to provide for the
winding up of banks under the ordinary
conditions incident to specie payments.
But under existing circumstances, banks
go into liquidation, and call upon note
holders to present their notes for redemp-
ton, by publishing notice, as required by
law. but, during the whole year that fol-
lows, are not obliged to redeem anything
except, now and then, WORKOUT or de-
faced note. This facility of circulation,
and the absence OF all cost of redcmptionS,
have probably induced some associations
to take the legal steps for going into llqul-
dation. with the expectation of continuing
TO reap the benefit of their standing
circulation, while they continue to do a
banking business under State laws, or as
private bankers. This is an abuse that
could only be practised under suspen-
sion of specie payments, and during the
absence of all demand for redemptions ;
but for the time it is none the less an abuse
that requires correction. The Comptroller
recommends that Congress should pass N
act in one section, uncOnnected with any
other subject, recurring all banks that go
into liquidation TO deposit legal-tender
notes for their outstanding circulation, and
take up their bonds deposited with the
Treasurer of the United States as security
for such circulation, within sixty days
from the date of the vote of the share
holders to go into liquidation.
1t is recommended that all taxes imposed
on National Banks by the United States
be made returnable and payable to the
Treasurer of the United States, in the same
manner that the larger portion of them
now are.
The employment by the government OF
agents 10 eAdlUluc iuJO tHc vi ->d
tional Banks, without previous notice, has
done more than any other one thing to
promote the safety and sound management
of the banks, and the good results brought
about. directly and indirectly, by such ex-
aminations, have fully vindicated the wis
dom of the provision. Congress is urged
to make provision for an incres Sc in the
compensation of these examiners, as mat
ter Of necessity as well asa matter OF jus
..ct
The salaries of the clerks employed in
the COmptroller's office are inadequate to
the abilities and integrity required, anC
the Comptroller recommends that they b'
increased He recommends that the Dep
uty Comptroller be paid a salary of So,
500; the head of each division, s., 400; TIVE
correspondents, $4,000 each; and tive
bookkeepers, $4,000 each.
The recommendation contained in hi
last preceding annual report, lookin:
to the establishment of an agency il
the city of New York in the interest o
the National Banks, owned and controlled
by them, for the redemption of all thei
issues and for the transaction of all thci
business, is again submitted to the cOnsid
Grafton of Congress.
Concerning the interest on deposits AM
call loans, the Comptroller says that tn
law for the organization of Nationa
Banks defines their power with precision
They are empowered to exercise unde
the act, "all such incidental powers a
shall be necessary to carry on the bust
ness of banking, by discounting and he
gOtiating prOlnissOry notes, drafts, bills O
exchange, and other evidences of debt b.
receiving deposits; by buying and selling
exchange, coin, and bullion; by loanin,
money ON personal security; by obtaining
issuing, and circulating notes." &c.-frOn
which it will be seen that National Bank
are authorized, among other things, 81 to ri
cesCe deposits - that is when money
brought to them they are authorized t
receive it. They are not, however, au
thOrized to hire deposits, and the law doe
not contemplate that they should sOlici
loans, under the guise of deposits, by tn
offer to pay interest on them. This praC
tice, however, prevails extensively; an
although by implication, the law forbid
1t, the prohibition is not sufficiently eN
plicit or positive to prevent it. If bank
pay interest on these deposits, they mus
of course, use them and, as they are pay
able on demand, they must be loaned o
call Call loans, as a rule, are made {
brokers and operators in stocks and golC
Men engaged In trade cannot ordinarl
afford to borrow money which they ma
be called upon to refund at an hours no
tice. The facility with which large loan
can be effected, payable on call, at 10,
rates Of interest, while commercial pape
is only done at high rates, or i
declined altogether, fosters speculation
The delegation by the government t
banking associations of the power to issu
notes to circulate as money, has tendenc
TO lower the rate of interest, and so {
furnish cheap money to the business CON
munity. The incorporated bank, doin
business and issuing circulation under tn
authority of the government, is uniforml
regarded as the most reliable and reasons
BILE source of accommodation by the bus
ness community. The private banke
doraaI,dir,cr Tho act;rzo g IL