The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1872-12-04

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reserves 81 asas I,eaa natt.o nal banks
socasen elsesghe ghasf lii she city or New
orE are held TO ID Great ext tent I'd that city.
For the inest os The time during the past
yeaf a,s amount equal To- more than onesafth
OK the capital OF an these national banks has
been held on deposit by the national banks
of the city OF New York 10 the credit OF their
corresp dents.s) In many cases these credits
amount TO ice the capital of the bank with
which they ARE ticpositeti; Id other cases the
amount Of deposits is three, four, and even
five times the capital, which amount has beef
attracted thither largely by the payment of
interest on depcsits.t The failure of one Of
these New York city banks Ia q time of
monetary stringency would embarrass,
If not-ruin, many banks in the. redemp-
ton cities, and, in turn, the country CORE
.spondents Of these banks would suffer from
the iinprudcnGe Of the New York bank,
which would be responsible for widespread
disastet. 1t is clear that bnhk having such
excessive liabilities has 10 right; even If
there were no law, to increase Its loans to
such an unreasonable extent as to lead to
embarIassments, If unexpectedly called upon
for the reserves Of its correspondents. A.
provision Of law prohibiting banks from
extending their loans beyond three times
their capital would seem to be not unreason-
able, but such provision would be much
more restrictive than the present require.
ments Of the law In reference to reserve.
INsoLvENT BANKS.
T@snty.ohe national banks, organized in
eleven States, with an aggregate capital of
1886, 100, have failed since the organization
of the system in 1868. The total circulation
of these banks was $2,942,7o3; Of which
S2.441, 430 has been redeemed in full, leaving
a balance still outstanding Of 500, 1853, which
will also be redeemed, upon presentation to
the Treasurer of the United States, from the
avails of the United States bonds held US
security for that purpose. OF these banks,
FIVE have been finally closed two during the
pust YEAR,, having paid dividends to their
creditors. r.. RI
Six national banks have failed during the
past year. OF these, the Union Square Ma
tional Bank, New York; the Fourth National
Bank, Philadelphia, and the Waverley Ma
tional Bank, New York, have paid their cred
itors in full--a settlement, it Is believed,
without precedent prior to the establish
ment OF the national system. The Eighth
National Bank, New York, has paid diyl-
dend of 80 per cent; the Ocean National
Bank, New York, dividend of 10 per cent:
and the receivers Of the Ocean National Bank,
and of the First National Bank Of Fort Smith,
Ark, estimate that the creditors of both these
banks will ultimately receive dividend Of
100 cents on the dollar.
SURPLUS AND spECIE-EXTENDING THE LIMIT
OF SURPLUS.
The law requires that every national bank
shall carry one.tenth part Of its profits to
surplus. fund account before the declaration
Of dividend until the same shall amount to
20 per cent. of its capital stock. This wise
provision has been generally observed, and
tie returns show that the banks now have
surplus of more than 800, 00O, 900, and con-
Siderably more than one-tfth of their capital
in surplus account. The act also limits the
liabilities oil any association, person, company,
or corporation, for money borrowed. to one
tenth of the capital stock paid in. The Con-
troller recommends that this limit be e.
tented to one-tenth of the capital and sur
plus, which will have tendency 10 increase
the surplus fund beyond the limit required
by the law.
EXAMINATIONS.
1t is the intention of the Controller that
every national bank shall be thoroughly eX-
amned once year by j competent bank eX-
aminer. Every director and shareholder is
personally interested in these examinations
il properly conducted. No well-managed
| bank will object to confidential scrutiny of
its affairs, but will welcome at all times, as is
generally the case, a competent and courteous
agent Of the Department. Many valuable
suggestions may be obtained for the expert
ence Of an intelligent examiner, and in
not a few instances banks have been
saved from ruin by timely Interior
ence in the correction of abuses. In some in
! stances information is received at this office
of violations of law which cal! for special eX-
| aminations, but which cannot be made be-
cause there is no means Of paying the
| expense of conducting such examinations.
If the bank is found in fault it will respond
to an asse: sment; if not: it should not be
subjected t. III expense not authorized by
law. Tie Controller, therefore, respectfully
asks for I'LL appropriation Of $1,000, in order
that he may at all times be flee to pursue
such Inquiries rs he shall consider cXpedicnt
for the protection of the creditors OF such
associations. Prompt action in cases Of this
kind is very desirable, and the expense in.
Cured is triding when compared with the
public interests involved.
| THE TREASURY.