Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1882-07-26
NATIONAL BANKS.
Interesting Interview with Comptroller
Of the Currency Knox-Changes
Made by the Recent Act.
New Institutions Organized Since Its
Passage-The Proper Remedy to
Prevent Counterfeiting.

| Currency Knox, being asked what number Of
banks had reorgauized on expiration of theil
charters previous to the passage of the act Of
July 18th, said since the date of the attorney.
generals opinion last March to the effect that
| national banks, whose corporate existence
was about to expire, could be put IN liquida.
ton, and that stockholders could form Other
| organizations with the same title, forty-nine
banks have placed their affairs in iquida.
| ton and organized new institutions. AL
these, except three, organized under the
same title under which they ad their former
corporate existence. These banks all for.
| feited their organization previous TO the pas
! sage of the act of July 18th. OF these forty
nine banks thirteen were organized in New
| England and the Middle States, eleven in
Ohio, nine in Indiana and the remainder in
| other Western States. Since the passage OF
the act extending the corporate existence of
national banks three have been continued
under its provisions. A section of that act
authorizes national banks having S150,000
or less to reduce their bonds on deposit
10 one-fourth of their capital. Thus far only
one national bank has applied for reduction
under this section. A large portion of these
banks having $4,000 capital or less, are
organized in States where the rate of interest
does not exceed six per cent. The profit to
those banks on their circulation is about one
per cent. While many small new institu-
tons will be organized in Western States,
where rates on interest are high, by deposit
ing minimum of bonds, there will net be
any considerable contraction of currency
under this section. The national banks In
the aggregate now have nearly 500, 000, 900
less circulation than they would be entitled
under the provisions of the new law which
authorizes all banks 10 have ninety per cent
oil the circulation upon the amount of bonds
deposited. Previous TO this act no new bank
zfC n M
and banks having 81 900 900 capital were
only entitled to seventy-fve per cent. on such
capital. Banks having between $500, 900
and 81 100000 were entitled only TO eighty
per cent, but even under these provisions
banks already organized and in operation
did not avail themselves of the privilege
of circulating notes to the full amount
authorized by law, the amount issued
being some $4,000, 900 less than the amount
they could have obtained by deposit of bonds
required by law. Mr.. Knox adds he does
not anticipate any considerable increase in
circulation in banks under the operations of
the act. The reorganization of so many
national banks with the same titles that
they had under previous organization made
it necessary that new National bank notes
be issued by these Institutions in order that
the circulation accounts OF each bank should
be closd as rapidly as the old notes should
come iu for redemption-the law requiring
that all banks going into liquidation shall
deposit lawful money for their circulation
within six months after the date of notice of
such liquidation. Accordingly slips were
taken some weeks previous to the passage of
the late act for the issuance of notes with
new designs. The comptroller advised with
the secretary of the treasury, and it was de-
cided that the new five-dollar note should
be issued in place of the old one, as
that denomination was considered the
most Objectionable note of the series.
Directions for the new iye.dollar
note were accordingly given, having
for its Distinguishing feature the portrait of
the late President Garfield. Mr.. Knox says
this was deemed appropriate as the first vote
cast by General Garfield in Congress was for
national banks-July 8, 1S64-and for the
additional reason that he has always been
an earnest friend of the national bank sys-
tenn. In the other denominations of SlO.
$50, $50, $50 and 500 there is no change in
vignettes, but the seal charter and number
of all banks aressto be printed in brown
instead of green as heretofore, The backs OF
all notes are to have brown in the work,
with brown laid work in the center In place
of the engravings of paintings in the capitol
As heretofore much difficulty has |
been encountered in ascertaining from frag-
ments OF worn notes the particular banks BY |
which they were issued, and upon his sug- |
gestion the charter number of the bank to |
which the note is to be issued is to be re-
peated six times on the border of each new
note OF every denomination, and upon the |
center OF each new note the charter number |
is TO be printed in large green letters, so that |
each banks notes hereafter published will /
have distinctive characteristic. Comptrel- |
er Knox says he has never believed |
hat an issue of new notes, with new designs,
would have the effect of preventing counter
letting. An increase in the number of designs
n the same denominations is likely to in
crease counterfeiting, as has been the case in
issues of legal-tender notes. The
proper remedy, he thinks, to prevent coun-
erfeiting is this: Ii note OF bank be
counterfeited all notes of the de-
nomination SO counterfeited should be with
lrawn, and no more of such notes issued to
hat particular bank, but in place thereof
ssue notes OF other denominations, and the
notes of each bank of the denomination
should be retired as fast as
presented for redemption. New national
,ank notes are expected to be issued between
he LIST and 18th of August.