Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1882-11-30

CORNER OF THIRD AND N
While these forty three banks would in the
aggregate have paid Is per cent. to bill
| holders, about one-haf of this number
would have paid an average from the
| avails of their assets not exceeding so per
cent. of the amount of their circulating
notes. The losses which holders of notes
of insolvent banks would have experienced
under the national banking system if Sc
| curities had not been required to have
been deposited, would have been small
in comparison with the whole circulation,
but thefact that such losses would have
| occurred in so many banks, and that, too,
at an expense to depositors under system
| with so many safeguards and restrictions
| is an argument from experience against
any proposition to issue notes for circula-
| ton under any general system without re-
curing sufficient security, which cannot
be easily answered. If the public debt is
to be paid hereafter as rapidly as during
the last three years, all of the interest
| bearing bonds will soon be sur
| rendered and cancelled, and there is
danger that the bank circulation will
be so rapidly retired as to cause
! contraction of the currency which will
affect the price of commodities and create
embarrassment in business, but there is
| now no such pressing necessity for speedy
payment of the public debt as there Is for
| the reduction of redundant revenue. 1t is
| believed congress will soon provide fer SO
large reduction of the revenue that q srf-
ficient amount of bonds will remain for
security of bank circulation. If the whole
public debt is reduced to uniform rate OF
8 per cent, the present high premium OF.
bonds would almost entirely disappear.
and the volume of circulation would re-
spond more readily to the demands of
business. The temptation to sell
such bonds for the purpose of
| realizing the premium would no longer
remain. If it shall be the policy of the
government to accumulate revenue instead
of largely reducing it, thus rendering it
necessary to continue rapid reduction of
the debt, even if it is to be purchased at
price fixed by the holders,it is of the great
est importance that the basis upon which
bank currency is issued should be enlarged
SO as to include some other form of securi-
ty besides tho government credit. While
he believes it for the best interests of the
government to continue the national bank
ing system. subject to such Improvements
as shall thereafter be authorized by con-
gress, he is after all of opinion that it
would be better that the circulation should
not be increased at the risk of placing in
tho hands of the poorer classes uncurrent
and irredeemaSle circulation, or Of giving
to associations organized by inscriptions
men, an opportunity to use an excellent
system of banking for bad purposes.
Upon the subject of restricting loans, the
report says: The attention of congress
has previously been called to section $500.
revised statutes, which places restrictions
upon the loans, and to the difficulty of en-
forcing its provisions. In cities whore
large amounts of produce are received and
stored, it is represented it is impossible for
banks to transact this class of business if
restricted to loans for en- amount not ex-
ceeding in any instance one-tenth of their
capital. It is true that the limitation
does not apply to loans upon pro-
duce in transit where drafts are
drawn on existing values, but, if produce
is stored instead of being shipped, large
loans cannot be made except in violation
of law. In such case the comptroller has
no means of enforcing the law except by
bringing suit for forfeiture of charter, and
this course might result in great embar-
rassment to business, as we'll as loss to
many innocent stockholders of bonds. It
is evident that the laws should be SO
amended as to exclude from the Limitation
mentioned legitimate loans upon produce
or warehouse receipts and some other
classes of collateral security, as we'll as
loans upon United States bonds.'' The
comptroller called attention to the "grsat
neglect Of national bank officers" in fail
ing to stamp the word "counterfsit' or
altered on worthless bank notes present
ed at their counters, as they are required
to. by law. He also refers with disappro-
baton to the custom in many
national banks of issuing notes with
printed or autographed signatures of the
president and cashier. He also repeats his
recommendations that the law imposing a
tax on bank capital and the duty of re-
curing stamps on checks be repealed.
State laws imposing tax upon national
banks are also asked to be repealed. For
the year 1882 the proportion of dividends
to capital in banks of the United States
was per cent; of dividend to capital and
surplus, 6.8 per cent. and of earnings to
capital and surplus, 80 per cent. One
hundred and seventy three banks having a
capital of $17,O0O,OOO paid no dividends
during six months ending March l, 1882
and 2l9 banks with capital of $26,O0O,-
600, paid no dividends during the month
ending Sept. 1, 1882. 1t is estimated the
total currency of the country Nov. 1 ar-
pears to have been more than
S1,4ss, 100000, which is $433,00O,00O
in excess of the amount
Jan. 1, 1879, $685. 100000 in excess of the
amount two years ago, Nov. l, 1880. The
gain in the gold currency and restriction
of specie payments alone has been $685.
100000, and in gold and silver coin 1884,
100000. The increase in national bank
notes is nearly $39,OOO,OOO. No change
! has been made in the amount of legal ten
der notes outstanding. It remains at
$346,681,O16.
The same causes which operated to bring
about the above rapid reduction of the
public debt also tended to increase the Cir
culating medium. Large imports of coin
in excess of exports, together with the pro-
ducts of the mines, have filed the channels