Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1882-11-30
coNrrRoLLER's REPORT.

Inc OompIolier OF the Currency in his
report says: The capital of the 2239 nation
al banks on July l, 1882, was SAT-, 81 800,
not including the surplus, which ippd Ar N Al
| date amounted to mcTe tban sIa1 o00. 0no
while the average capital of all the State
oankss, private bankers and savings banks
/ i'r the six months ending May 81, 1882. was
but S234, ,02p, ESQ, the latter amount Iess III an
two ffths of the combined capital ard sur
plus Of the national banks. The total num-
Der OF banks and bankers in the country in.
cluding savings banks, 1902; total banking
capital. s,012, ia, 1856; total deposits, 81, $50,
678,17S.
Comptroller Kuox states that the propo-
sitlon fof the issue OF circulation without
the fullest security cannot be too carefully
considefed. The security of the national
bank note under the present system is per-
tect. In twenty years not a single bank
note has failed to be redeemed at its face
value. Banks organized under the general
law, located so often at great distances from
commercial centers render security for cir
culaIion, ii uniform, and positive, and safe,
an absolute necessity.
There are in this country, says Comptrol-
Ter Knox, more than 1000 Stale banks and
trust companies, and more than $500 private
BANKERS. The temptation would be strong
on the part OF these corporations and indi-
viduals to organize banks of circulation, If
circulation could be obtained without depos-
iting bonds as security therefor. The value of
the different notes issued would depend upon
the management of the bank and character
aud standing of the diff. rent stockholders.
Many notes would be at discount In ex-
change for coin, and the failure of one bank
TO pay its notes would throw discredit upon
the whole volume of bank circulation and
the system under which said banks
were organized. If the issue of cir
culation were confined to few
banks, organized by men of char
acter, integrity and means, such asso-
Citations would be characterized as
monopoly. Even If corporations are organ
lied upon the condition that all should con-
tribute percentage of the circulation 10
safety fund for the protection of the agere-
gate circulation, there is danger that the
issues OF fraudulent or badly managed banks
would soon consume the ssfety fund.- and it
is evident that the circulation would be paid,
if at all, at the expense of the depositors,
who would be stripped of the small
dividends which, under existing laws,
are distributed 10 the unfortunate
creditors. Under the national banking sys-
tenn it is provided that circulation issued
shall frat be paid from the proceeds of bonds
deposited 10 secure the same. The proceeds
OF the remaining assets are distributed pro
rata among the creditors. E ghty-seyen ma
tional banks in al, having an aggregate cap
ital of SO ,262 800, have failed during the last
twenty years, and since the organization of the
system the amount of circulation 10 which
these banks were entitled under existing
laws, namely, ninsty per cent. upon the capi-
tai, is $17 1856 $40, which is a less amount in
the aggregate than The amount of dividends
which was equally paid to the creditors of
these insolvent institutions. Forty-four of
these banks, having capital of SlO,O94,-
600, would each have paid in full
their circulation if ninety per cent. had
been issued on their capital from
the proceeds of their aeseis, and would also
have paid small dividends 10 their deposit
tors. The remaining forty-three insoIvent
banks, having capital of s9,1ss, 800, would
in the aggregate have paid, il is estim tied,
seventy i've per cent. only from the avails of
their assets upon the circulation authorized,
eutailing loss upon bill-hoIders of over
81 100000 and leaving no assets whatever for
The benefit Of depositors, whose claims are
~, ,O43, sos, and upon which dividends will be
paid averaging, 1t Is estimated, sixtv-eight
per cent. While these forty-lhree banks |
would in the aggregate have paid seventy
i've per cent. to bill-holders, about one.half |
1t this number would have paid, on the |
average, from the avails OF their assets, not |
over fifty per cent. of the amount of their cir |
~ ating notes. The losses which holders of |
notes of the insolvent banks would have ex- |
under the national banking sys-
em, if securities had not been required 10 |
rave been deposited, would have been small |
n comparison with the whole circulation, |
,ut the fact that such losses would |
lave occurred in 30 many banks, |
md that, too, at the expense OF |
lepositors under the system With so many |
afeguards and restrictions, is an argument |
rom experience against any proposition to |
ssue notes for circulation under any general |
ystem without requiring sufficient security, |
which cannot easily be answered. If the |
'ublic debt is TO be paid hereafter as rapidly |
IS during the past three years, all |
# the inter st bearing bonds will |
oon bes surrendered and cancelled, aud |
here is danger that the bank circulation ]