Oxford Democrat. [volume] (Paris, Me.) 1833-1933, 1879-02-11

NafiOnaI Banking.

es the opinion that the present Is NJ
time for journals to give their readers al
possible information on the subject Of IA
tional banking, since that present system
Is likely to be called in question as
political issue. In the same connection
he propOunds a number o. questions in
order to draw out such information as he
desires himself and thinks will be valu-
able to others. AS briefly as possible We
viii try to answer the questions proposed.
ia what Is bank stock, and how sre nations.
ba- 49, gAnlzed
Bank stock as the money actually Palc
In by tie shareholders OF national banks,
and Constitutes the capital which Is the
basis of the business Ii Is bona 6d,
capital. The law provides that any mum
be- Of persons not less than Eve. citizens
Of the United States, and living chiefly il
the State where the association i 20 be
located, may form company to do bank
ibg 10 cities Of more than $4,000 H.
habi,Aots the shareholders must subscribe
100000: IN cities OF icsS than 10000
and uore than 5000 the stock must amount
Z 100000 but IN towns OF 5000 bank
en- be organized with $4,000 Of stock.
Waen the parties make their application
they must give the names, residences snc
amount Of stock subscribed By each per
scr O. the proposed association. When
the application Is sent 70 the Comptroller
o. the Currency, and he has satisfied him
s,e that the parties are intending and
have the means TO engage ~ the business,
be issCcs them charter, but does not
permit them 70 begin the banking business
unit he j. satisfied that oae-haI the cap
itai stock Is paid IN. Thereafter the cor
poration IL 70 Sc that 10 per cent. o.
the balance Of the stock Is paid in every
mouth until each share Of 500 Is repTe-
seated 5y 500 OF lawful money. But
before beginning business the corporation
Is required to deposit with the Treasurer
OF the United States at least oDe-third Of
the amount OF the entire stock Of the
bsnk. and in no case less than $4,000 Of
United States bonds, 20 he increased a.
the capital stock Is paid IN When the
bonds have been deposited the Comptroller
must deliver 70 the banking association
900 Of bank notes Tor every Sl0O Of
bonds deposited, and these notes constitute
the circulation Of the bank. Thus it vii.
b. seen that the greater portion OF the
STOCK Of the banks i represented by the
bonds deposited 70 secure circulation.
Th- balance Is devoted to banking pur-
poses These bonds are 10 secure circuia-
tion. and. in case a bank fails, the Comp
troHer rederms its bills with the proceeds
Of .1e bonds
. What are "loans anl discounts .'
The money loaned By the bank 10 It's
customers-loaned either upon names or
colIaterals ike bonds and stocks which
have a market value.
s. ThAt IL the present bank circulation
The amount Of National bank notes
outstanding February I, 1879, was 1922
CSC. $40. The amount Of this oatstani-
ing circulation available to the banks Is
considerable less than the above figure
since the banks are required TO keep
deposit Of > per cent. Of their circulation
ID the Treasury for the redemption Of
their bills Deducting the 5 per cent.
from the above and the amount available
for the Use OF the banks Is not far from
1905 100000. The banks pay all the
cost Of printing their bills and redeeming
AMI renewing their notes, which averages
ao0U. SIS, geo per year.
= What Is he amount OF bonds the bans are
obliged 70 deP0slJ 20 'hc Treasury % secure circu-
iAuou@
As before stated the banking assOcia-
ton gets $50 OF bills for 500 OF bonds.
Then the banks are required TO keep >
per cent. OF their circulation on deposit
at Washington IN lawful money, 50 that
practically the bank gets but $50 IL
notes for each 500 OF bonds. The total
amount Of bonds deposited 70 secure cir
eulauon October l, ISIS, Was S347 $50
65U At the present time the greater
part Of these bonds bear ., - aud 4 per
cent. interest, the . per cent? held by the
banks having been largely called in.
e. What is the meaning OF deposits" and
why are the hsnSs re4 u.rel 90 mold IRON u Co -
D.. cent. Of the amount thereof a. q reserve
The bank is the agent Of the borrower
and the lender s1d the medium through
which business men discharge debts The
merchant keeps an account with the
bArk and every day deposits the mouey
he -cc-.Tes IN the bank, both for safe
ksro.c- and Ior convenience IL paying Cut
o. checks on the bank. The deposits OF
5ank, therefore, Is the money entrusted
10 n by its customers. The Government
requires the bank to hold from 10 to -
per cent. of the money entrusted 10 1t by
individuals for the security Of such per-
sons, and 50 that there shall not, Uhder
ordinary circumstances, be such an over
iOaning BY the bank that it cannot meet
the demands OF its depOsitOrs. II banks
should be allowed 70 loan all the money
10 their possession, it would frequently
happen that they could NOT pay deposi,ors
as hey required their funds failure
which would result IN frequent embarrass-
nent and sometimes II panic.
s Upon what are the bank taxed, by whom
and now mUChe
National banks are taxed BY the United
States Goyernmen, on circulation, deposits
ant capital. Ia 1873 the United States
tax x4s s6,7Sl 1886, and since 1864
the .otal amount OF taxes collected Of the
IL IL. III n --r-..-..r.,nrA - : -