Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1884-11-27
FROM WASHINGTON.
NATIONAL BANKS.
Annual Report of n. w. Cannon, Comp.
trOIler of the Currency.
WASHINGTON. Oct. 2e

WASHINGTON. Oct. PC
The annual report of X. w. Cannon. comp
troller currency, shows that during the year
ended Nov. lst. l9l banks have been organ
lied with an aggregate capital OF 9,042 $50
and that circulating notes have been issued
to these new associations amounting to
S3, 500. $50 Since the establishment of the
National banking system there has been
organized 3.26l national banks; of these
404 have gone into voluntary liquidation for
the purpose of winding up affairs; 20 have
gone into voluntary liquidation for the pur-
pose of reorganization; l6 are in liquidation
by expiration OF charter, OF which number, 6
have been organized. ard 100 have been
placed in the hands of receivers for the pur-
pose of closing up their affairs, leaving the
total number in existence on Nov. LIST, 1884,
267l, which is the largest that has been in
operation at anv one time. The corporate
existence of 80 banks expired during the
year ending Nov /, of which 50 have been
extended The corporate existence of l54
banks will expire during November and
December OF this year, and the corporate
existence of 720 banks expire during 1885
Eleven national banks have failed and have
been placed in the hands of receivers during
the year. The aggregate liabilities of national
banks to depositors and correspondents were
900. This reduction of liabilities and general
reduction Of loans by banks which amounted
TO over S63 600 900 during the year, the
comptroller saws, were doubtless occasioned
by the financial troubles of May and general
depression of business.
The comptroller discussing the effect on the
national banks, on tie extinction of public
debt. expresses doubt as TO the probability
of the banking associations being willing TO
submit to the restrictions of the law when
the profit on the circui 4tion shall have been
reduced The time of the final payment of a
debt is vet distant and with the appropriate
Legislation, there will probably be no lack of
bonds as a safe basis of circulation The
banks held Nov. lst, Sl55. .604, 400 of three
per cent. bonds, of which 80 $50, 200. have
been called, interest ceasing Nov. l, 1884. If
these bonds are not replaced by others bear.
ing interest, there will be an imme1iate fur
ther reduction in tie ejaculation of 80 per
cent. OF ,nis amount on Nov. lst there were
the outstanding Sl94, 1870, 800 of per cent.
bonds payable at pleasure of the government.
These will probably be paid within the next
two years even il considerable changes are
made in the tariff, and from 1887 to 1891
when $3.50, 900, 900 of Al per cents, deposited
by the banks mature there will be no bonds
which the government can call in for redemp-
ton. No doubt the accumulation of the
surplus revenue, if it continues to accrue at
the present rate during the four years between
1887 and 1891, together with the revenues of
1892. will be more than sufficient to pay off
the AS, and from 1892 to 1907 it will be
impossible for the government to use any of
its surplus revenue for the payment of bonds,
except at option of the holders. Ii is appar-
ent that the government cannot accumulate
hold
the short period from 1887 to 1892 without
great disturbances to the business interests
of the country, and much less can it do so
during the longer period of 1892 to 1907. 1t
appears, therefore, that the foregoing con
sidcra;inns should hc given full wCi-h, in any
plan for the funding of 4 per cent bonds
maturing in 1907, and the comptroller. there
fore, suggests that the principal difficulties of
the situation may perhaps be obviated as well
reduction of interest effected by funding
these bonds into others which shall mature
into proportionate amounts at certain fixed
intervals thus S738, ,000, 900 of per cents
might be funded into equal amount of or p
per cent bonds, one fifth of which to mature
at intervals of five wears, the first nstallment
falling July lst, 1897. The average maturity
of these five classes of bonds would be the
same as of the present 4's, namely July 1st,
lJUG. HdtSNeT COURSE may ne deemed
advisable by Congress in regard to the fund
ing or future payment of the public debt the
comptroller is of the opinion that it is per-
fectly safe aud will afford great benefit to
the public to permit the issue, by national
banks, of circulation to the extent Of 100 per
cent of par value of the bonds deposited
1t is further submitted that the profit on
circulation may be increased to a point which
will induce the banks to keep up the circu-
lation to a maximum andstop the contraction
of their circulation, which is now accruing
by repeating the law taxing such circulation
at the rate of one half of one per cent semi.
annually. If the tax be abolished the ex-
pense of the system should be paid by
assessment Oh banks. If it is for the best
interests of the United States
to issue circulation based on silver,
the comptroller believes that circulation
should be issued on coin or bullion, which
contains a sufficient number of grains of sill
yer to have an intrinsic value, equal in the
markets of the world to a normal value The
issue of currency based on silver should not
be unlimited. The present laws, very perni-
cious in effect unlimited, and the continued
issuance of full legal tender, silver coin and
certificates based thereon, of intrinsic value
less than their face, has already caused the
boarding of gold and will eventually drive il
from the channels of trade, thereby causing
practical suspension of gold payments
Comptroller recommends that the expense of
examining banks be met BY an assessment
based on the capital and average deposits.
instead of the capital alone, As at present.
The public frequently draw wrong deduc-
tions, as to the responsibility of the gov
eminent and bank examiners in particular
cases, for instance. in many cases where fail
ures occur, the principal cause is found in
the character of loans made, which are either
excessive or made in improper security
There are 267l national banks 10 the country
The loans and discounts of the banks at the
close of business September 30. aggregated
to more than 81 ,240, 600 900, and il l. of
course. not province of the bank examiners
to supervise the matters of these loans. 1t
is exceedingly difficult TO add materially to
the restrictions of the national bank act
without such intefereEce with the business
of banks would be probably prohibitory.
In considering the financial troubles of
May, 1884. the comptroller calls attention to
the fact that while many banks and private
banking flrms of excellent repute failed but
one association organized under the national
bank act failed, and but one suspended in the
city of New York. The liabilities OF State
banks and private bankers failing during
May, in this city. is estimated exceeding in
the sggre gate S32, GOO 600, while the liabilities
of the only national bank in the same was
ohnur Fsrtr nd ~ ~