The Portland daily press., 1884-11-27
NATIONAL BANKS.
Annual Report of the Comptroller of the
Curreacy.

CurreAcY
WASHINGTON, Nov. 26.-The annual report of
H. w. Cannon, comptroller Of the currency, shows
that during the year ended Nov Ist, 191 banks
have been organized with an aggregate capital of
Sl6 o42, $780, and that circulating notes have been
issued these new associations amounting to So
S66 230. Siuce the establishment of the national
banking system there have been organized G3 ,2Gl
rational banks. OF these 404 have gone into yolun-
tary liquidation for the purpose of winding up their
affairs, 40 have gone INTO voluntary liquldaion for
the purpose Of reorganization, 16 are in liquidation
by expiration Of their charter of which number six
have been reOrgauized and 100 have been placed i'll
the hands of receivers for the purpose of closing up
their affairs leaving the total number in existence
on Nov. l, 1854, 267l, which is the largest that
has been in operation at any one time. The cor
porate existence of 80 banks expired duting the
year ending Nov. 1st, of which 80 have been ex-
tended; the corporate existence of 154 banks will
expire during November and December of this
year and the corporate existence OF 20 banks ex-
pire during 1885. Eleven national banks have
failed and been placed in tue hands of RECEIVERS
during the year. The aggregate liabilities of ma
tional banks to uepostors and correspondents we're
reduced during the year npvard of S94 600, 900,
and this reduction of liabilities and the general re-
duction of loans by the bauks which amounted to
over S63 100000 during the year, the Comptroller
says, We're doubtless occasioned by the financial
troubles OF May and the general depression of busi
ness.
The Comptroller, discussing the effect upon the
national banks Of the extinction of the public debt
expresses doubt the pro liability of banking
soeatons being willing TO submit to the restrictions
OF la when the profit on circulation shall have
been reduced. The Time Of the final payment of
the debt is, however, yet distant. and with appro
priste legislation there will probably be for many
years no lack Of honds safe basis of circulation.
The banks held on Nov. 1st, Sl55 604, 400 of
per cent bonds of which S9,5S6, 200 have been
called, the interest ceasing Nov ], 1884. If these
bonds are not replaced by Others bearing interest
there will be an immediate further reduction in cir
cuiation Of 30 per cent Of this auOant. On
Der there were Outstanding S194, 190. SOC Of per
cent bonis payable at the pleasure of the govern
ment. These bonds win probably be paid within
the next two years, even ii considerable ch iDges
made in the tariff, and from 1887 to 1851,
when S25O,OOO 600 of 412 per cents, deposited by
the ba ks, mature, there will be no bonds which
the government can call ia for redemption. No
doubt the accumulation of surplus revenue, If it
four years between 1887 and 1891 together With
the revenues of 1892, will be more than sufficient
TO pay of the 412 per cents, and from 1892 until
1907 il sil be impossible for the government to
use any OF its surplus revenues for payment of
its bonds, except at the option of their holders.
1t is apparent the government cannot accumu
late and hold its surplus revenue. even during the
short period from 9S7 to 1892 without great dis
tul baace to the business interests of the country
and much less can it do so during the longer period
of 1892 to 1897.
It appears therefore that the foregoing considers
ons should be given due weight in any plan for the
funding OF per cent bonds maturing in 1907. iant
the comptroller therefore suggests that the princi
pal difficulties of the situation may perhaps be OBJ.
waited as well q reduction of interest effscted by
funding these bonds into others which shall ma
ture ia pr lportionate amounts at certain fixed in
tervais. Thus $f3S 100000 of per cents might
be funded inln equal amount of three or two and
one-half per cent bonds, one-hfth of which to
ture at intervals of five years the first installment
falling due July L, 1892 ana the average maturity
OF these hve classes of bonds would be the as
that @ OF the present per cents, namely, July l,
Whatever course may be deemed expedient by
Congres. in regard to funding future payment of
the public dect, the Comptroller is of the opinion
that it is perfectly safe and Will afford great benefit
to the public 10 permit the ias-e by national banks
OF circulation to the extent of 100 eer cent of the
par value OF the bonds deposited. 1t is further sub
mitted that the profit theie circulation may be
increased a point which will induce the banks 10
keep up their circulation to maximum aud stop
contraction OF their circulation, which is
cluipg by repeating the law taxiog such circulation
at the ra of oDe-half of per cent semiannual-
y and that if that be abolished the expense of
the system should be paid by assessments upon The
banks.
If it is for the be st interests of the United States
TO issue crcu alton based upon silver the Comp
troller believes That ihas circulation should be Is
sued upon co n or bullion which coatals a suffi-
cient mum Der of grsins OF silver to have extrnsic
value in the markets of the world to It's nominal
| value. The issue of currency based upon silver
should not however be unlimited. The present laws
are very perncious in their effect the unlimited
and continued issuance of full legal tender silver
cola and certificates based the intrinsic value
thereof less than the face has already caused the
boarding Of gold and will eventually drive it from
| the channels of tr ade.
| The Comptroller recon nmends that the expense of
existing banks be met oy assessment based upon the
capital AID average deposits instead OF capital alone
| as At present. he public frequently draw wrong
deductions as to the responsibility of the govern
| ment and bank examiners in particular cases; for
| instance in many cases wh4re failures occur the
pr neipal cause is found in the character of loans
made. which either excessive or made on i'm
| proper security. There 2 e7l national banks in
the country, and the loans and discounts of those
banks at the cose of business September 80 aggre-
gated more than 81 240 go o00 and it is of
| not the province of the bank examiners to super
wise matters of these loans, and it is exceedingly
difficult to add to the restrictions of the national
| bank without such interference with the busi-
ness of the banks as would be probably proLibitory
! In considering tho financial troubles of May.
1854, the Comptroller calls attention TO the fact
that while many banks and private banking firms of
excellent repute failed but one association organ
| lied under the national bank act failed aud but
| one suspended in the city of New York. The liza
bities of State banks and private bankers failing
during the month of May in that city, it is esli
| mated, exceeded in the aggregate $32 .0O0, ,000
while the liabilities of the only national bank ia the
| same vas about four and one-quaIter millions
Only II national banks failed in the United
| States during the year ending Nov. /, 1884, al
| though more than one hundred banks and bankers
other than national failed during the same period.
The records of this office show that many of the
transactions of the national banks which failed in.
| cludiGg the Marine and Metropolitan national
banks OF New York city were looked upon with
disfavor, and that these associations a rule had
been frequently reprmanded for their irregulari-
ties during the past few years, but of the dis
| closures made by the examiners reports however
gave the department an adequate idea Of the dan
gercus character Of the business which was being
carried on by the Marine National bank of New
York and this is not singular the directors of the
bank were equally deceived in regard to the situa
ton.
The failures of rational banks during the veal
ended Nov. l, 1884, have been more numerous than
for number of preceding years and this not sur
prsing considering the great depreciation in value
and tile consequent general liquidation which hai
resulted in failures among traders and others hav
ing an aggregate Indebtedness of about 100000,
OO0as nearly as can be estimated. The failures hav
eataed large losses upon banks generally, and tht
national banks mentioned las we'll as many Stat
banks and private bankers, have been unable t
meet the continued strain. 1t is however, surpris
| ing that the occasional failing of national banl
to whatever cause due with comparatively
small capital and liabilities should give rise to s.
much comment and excitement, when the numer
Gus failures of State banks and of private panks o
mercantile and manufacturing firms, of joint stoel
enterprises, causing Losses vastly larger than thos
occasioned by the failure of national banks, al
tract comparatively little attention or criticism.