The sun. [volume] (New York [N.Y.]) 1833-1916, 1878-12-15
Report of the Comptroller of the
Currency.

The report submitted to Congress last
week by Mr.. KNOX contains some data Of
peculiar interest at this time when the sub
stitution OF Treasury notes for the issues Of
national banks is In some quarters siren
uously urged. The Comptroller of the Cur
rency undertakes to answer the principal OBJ
iectlons to the national banking system, and
some Of the facts adduced will undoubtedly
command attention.
The chief reasons pressed by the oppo-
nents Of the banks point TO the special priv
ileges which these institutions are alleged
10 enjoy at the cost Of the people, and 20 the
large profit said to be- derived from the issue
OF circulating notes. OF course the inference
IL that n considerable saving might be made
by authorizing the Government to put forth
on its own account ali the paper currency Of
the country. Now we need not examine the
immunitcs and rights which may have been
conceded 10 the national banks during the
war and for some years aftcrward. Our
concern il with the present state OF things.
Under the law a. it row stands, any num-
Der OF persons not less than five, in any part
OF the country who can jointly command a
capital OF $4,000, may organize a national
bank. and receive circulating notes equal in
amount to ninety per cent. of that sum. The
Comptroller reminds us that the only dis
elimination made by the statute Is levelled
against the larger institutions, since no
bank created since July II, 1870, is entitled
10 circulation in excess Of $500, 900. So, too,
banks previously organized, If their capital
exceed half a million, can only receive cir
culating notes on q diminishing scale,
ranging from 50 10 60 per cent. Of their
capital. That all OF the paper issued
under such conditions is fully secured
by a deposit Of Government bonds at
Washington Is a fact too well known to
need advertence, but for the recent admis-
sions Of London newspapers in view Of the
Glasgow Bank catastrophe that the Ameri-
can precedent might be followed with adj
vantage in Great Britain. With the restric-
tions introduced in 1874, the privilege Of
issuing circulating medium would not
seem to be highly priced among US, since in
the interim more than SGO,OOO,0OO of notes
have been voluntarily surrendered
nearly thirty millions more than have been
issued TO all OF the banks organized since
that date.
There are two or three other misconcep-
tions on this subject which it is worth while
10 correct, IL Is not true, Tor instance, lndL
the national banks have now or at any time
monopolized the business of banking. There
nre some 800 outside institutions, organ
lied under State laws, possessing an aggre-
gate capital Of more than 5000, 100000, or
more than two-fifths Of the amount invested
In the so-called national establishments It
Is reasonable TO suppose that were the right
Of Issuing circulating notes so valuable as
II Is affirmed TO be, these State and pri-
waite associations would hasten TO comply
with the conditions attached TO the privi-
lege. What is the privilege really worth 2
An analysis Of the Comptrollers statistics
shows that the annual profit upon the entire
circulation OF the national banks is less than
two and one-half per cent. upon their cap
ital This fact sufficiently explains why so
many banking corporations have refused to
transfer their business TO system bur
dened with such onerous restrictions and
bristling with such stringent penalties.
The data collected by MI KNOX seem "a
rcfute another widespread notion, namely
that the capital stock of the national banks
is mainly in the hands of large capitalists
According TO some elaborate tables compiled
Tor his report there were, at recent date