Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1878-11-26
National Banks.

National Banks.
The annual report of the Controller
OF the Currency contains large amount
Of information in relation to national
banks which should be generally dissem-
hated and read. There are at the pres
ent time 2.053 in existence. The business
of banking has not been so profitable but
that many banks have voluntarily given it
up. The Controller says the system has
been free from partisan or sectional innu-
ence, and it, benefits are open to all who
desire TO engage In the business. 1t was
intended that 1t should be permanent, and
that Treasury notes should only answer a
temporary purpose. Mr.. Knox declares
that il has been shown that the system was
not monopoly. Its privileges being free to
al. but that 1t uprooted many real bank
ing monopolies authorized by the several
States. After reviewing at some length
his former arguments in favor of the sys
tenn, be says:
The proposition fer the substitution of Treasury
pOtes In place Of national bank notes having beer
again revived and discussed, it is thought advita
BE again to answer the principal objections urget
against the National banking system, even at tn,
riek Of repeating to some extent, although will
more recent data. what has already appeared il
previous reports.
Under the Law then. Is il now stands, any mum
Der Of persons, not less than five, in any part o
the country, who, together. may have $50, 900 cap
ital st conmand. may organize . national banl
and receive circulating notes equal in amount 4
30 per cent Of such capital, the law discriminat
ing in the latter respect only against the large in
sttutions, - no bank since the passage of the &C
Of July IL, 1870, is entitled to a circslaton in ex
cess Of $50, 900. bank having . capital of be
tween $500. 900 and 81 10000 can receive In cir
cnlsdne notes but 70 per cent thereon; If be
tween 81 ,0O0, 900 and SO 1000 OOO it can receive
bat per cent; and il over 49, 900 900, but 60 pei
cent.
since the passage of the act of June 20, 1874
The national banks, 90 far from considering the
privilege Of issuing circulation profitable mOnop.
oily. have voluntarily surrendered S66 237 1923 OF
their notes, which is 500, 463. 467 more than has
been issued 70 oil of the banks organized since
that daAs; while ~ banks, with capital stock
amounting TO Sl5,5l7 900. and . circulation of
%. ls0, 7l6 have gone into voluntary liquidation.
The capital stock Of the national banks is not
largely 10 the hands Of capitalists. Among their
sharsholder may be found persons in every sta
ten Of life, and great numbers Of women and
children rely for their support upon the successful
management Of these institutions. 1t is not prob
able that the stock Of any other class Of corpora
tiens In the country 10 more widely distributed
anssg people Of moderate means than is that Of
pstional banks. 1t 10 also largely distributed
among members of all political parties, and Is .
rule ID free from the control of partisan influence.
Mr.. Knox denies that the national banks
have at any time monopolized the busi-
ness Of banking. They do not do so at
present. On May 81 of this year there
were In existence more than $500 State
banks and private banking houses. having
IN aggregate capital of 5000 900, 900 and
deposits Of e413, 000.0 900. These banking
establishments were located in all the
principal cities and villages of the coun-
try, and II is to be presumed that if the
privilege of issuing circulating notes is so
great as persistently claimed. the associa-
tons and individuals who have been en-
gagged in the business of banking, and
who have been free to enter the national
system, would have fastened to organize
under that system.
The amount of interest per year accru.
Ing upon the bonds held by the national
banks on November l, less the tax paid
BY them upon their circulation, is s14,-
1892 only. while the annual profit upon
the entire circulation of the national bank,
10 only es,96l. $40. or less than 2 1-2 pc,
cent upon their capital.
The Controller declares that the organ.
ixation OF banks without capital was one
Of the great abuses Of the former BANKING
systems. He says it is impossible for 8
bank Of circulation only. without capital
to be organized under the present system
Il proper precautions be exercised, and i
the examiner be competent and faithful II
the discharge of his duties. The proper
zion Of capital and Of capital and surplu
70 liabilities is much greater In this coun
try than elsewhere, which is undoubted
owing tothe fact that the law of the Uni,
cd States requires the full amount of au
thorized capital 70 be paid In actually.
The banks are not 70 profitable b,
any means ~ they have been said TO be
The surplus Of the national banks amount
ed on October to nearly $1i9 600, 900
A part Of this sum represents the profits
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