The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1884-12-04

Extracts from the Annual Report
Of tho Controller Of the
Currency.
Statistics of the Business Performed by
the National Banks---R ecom-
mendations.
Bonds and Their Payment a. They Be-
come Due-Interesting
Information.

The annual report of the Comptroller of tho
Currency shows during the year ended Nov I,
1884, 10l banks have been organized, with an
aggregate capital Of sls.042.2So. Circulating
notes have been issued to these new associations
amounting tn g., s66. $50. These banks are To-
Gated by geographical divisions as follows:
Eastern States 10 banks, with capital OF $780,
600; Middle States Is, capital 1912 $50; Southern
States 80, capital 81 991 100: Western States l02
capital S. 905, $50: Pacific States g. capital $780,
600: TeIrtoes ~ &c; capital since the
Feb. IS, 1863, there have been organized 1891
national banks. The total number in existence
Msy lssl time Essen IN
banks, with aggregate capital Of 81, 2S5, 900,
have failed and been placed In the hands Of re-
The differenr items OF resources and liabilities.
as tabulated, indicate that the business of the
national banks during the last eleven years has
generally increased. The items OF United States
bonds and circulation thereon decreased during
the last two years. The aggregate liabilities Of
national banks to depositors and correspond
ents were reduced during the year upward OF
$94 900 900. This reduction of liabilities and the
general reduction Of loans by banks. which
amounted to over $63, 900 600 during the year,
by the financial troubles of May and general de-
preston Of business. During the same period
national banks increased their cash resources
by about s2l 100000 specie and sll 100000 legal
tenders and United States certificates Of deposit
for the same.
The total number of banks still in operation,
organized under the act of June 3, 1864, and
the provisions of the Revised Statutes, In Pc
RODS Of succession, which will terminate un-
less hereafter renewed during the years previ-
to 1900, is l4s8, with capital OF 1921, las
and a circulation of $l94 745,305.
The banks held Nov !, 1884, $l65, G04.400 per
cent. bonds, payable at the pleasure of the Gov
eminent, of which S9,5S6,2G0 have been called
for payment, interest ceasing Nov. ], 1884.
III these bonds are not replaced by others bear
ing interest. there will be an immediate reduc~
ton In circulation OF 80 per cent. OF their
amount Nov. there were So, 500 per
cent. bonds payable at the pleasure of the Gov
eminent. These bonds Will probably be
paid within the next two years. even IL con-
siderable changes are made in the tariff; and
from 1887 to 1891, when S15o, 5000 of AZ per
cents mature, there will be no bonds which the
Government can call in for redemption No
doubt the accumulation OF surplus revenue, IL
1t 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 AZ per cents, and from
1892 until 1907 it will be impossible for the Gov
eminent to use any of It's su plus revenues for
the payment of its bonds except at the option
of their holders 1t is apparent that the Gov
eminent cannot accumulate and hold its sur
plus revenues, even during the short period
from 1887 to 1892, without great disturbances to
the business interests Of the country, and much
less can 1t do so during the longer period from
1t appears, therefore, that the foregoing con-
siderations should be given due weight in any
plan for funding the per cent bonds maturing
IN 1907, and the Controller therefore suggests
that the principal difficulties OF the situation
may. perhaps, be obviated well as reduce
ton Of interest effected by funding these bonds
into others which shall mature in proportionate
amounts at certain fixed intervals. Thus the
$738, 0O0, 900 per cents might be funded into an
equal amount OF or 2l2 Ter cent bonds, one
fifth of which, or S147, 6O0, 900, to mature at in
tervals OF five years, the first installment due
July l, 1897. and the remaining installments OF
STAT. 100000 each of the LIST of July in the last
year each succeeding period of five years. viz
1902. 1907, 1872 and 1917. The average MAJ
turity Of these five classes Of bonds would DO
the same as that of the presents per cents-viz:
July l, 1907.
Whatever course may be deemed expedient by
Congress in regard to the funding or future
payment of the public debt, the Controller Is OF
opinion that it Is perfectly safe and will afford
great benefit TO the public TO permit an issue
by the national banks OF circulation to the ex-
posted, instead of 90 per cent. Even admit
ting that bonds representing the public debt
when funded at lower rates might at times In
the future be below par in the market, the Gov
eminent would, If forced to redeem the notes Of
insolvent national banks always have right to
cancel bonds on deposit securing the same. and
thus extingufsh an amount OF Its debt equal,
dollar for dollar, to the notes redeemed. 1t Is
further submitted that the profit on circulation
may be increased to point which will induce
banks to keep up their circulation to the maxi
mum, and stop contraction oe their circulation,
which Is now occurring, by repelaing the law
taxing such circulation at the rate of one-half Of
/ per cent. semi-annually. The expenses Of
keeping up the national banking system by the
Government are at present paid in part from the
on banks. II this tax be abolished all these ex-
penses should be paid by the last named
method.
In concluding this subject the COMPTROLLER
wishes to have 1t distinctly understood that he
Is not In favor Of any measure which will cause
imitation. He is of opinion that the present ag-
gregate paper circulation, made up of legal
tender and national-bank notes and gold and
silver certificates, Is ample for all the needs of
business. He believes, however, that sudden
contraction of national bank circulation, which
without appropriate legislation Ia imminent will
seriously embarrass the business of the country,
and that IL this contraction Is permitted to go
on IL may result in the entire discontinuance of
the issue of notes by national banks. The
Comptroller believes that this form of currency,
which can be increased or diminished in accord
ance with natural laws which control business,
should be continued in preference to any other
now permitted by law.
In regard to the circulation based on silver.
the Controller says the people OF the United
States now hold paper circulation based upon
silver dollars in amount equal TO more than one
third the national-bank circulation. II It Is
to issue circulation based upon silver the Con-
troller believes circulation should be issued
upon coin or bullion which contains sufficient
number of grains of silver to have intrinsic val
ne equal in the markets Of the world to its nom
inal value. Some writer's have suggested that
the circulating medium might be based upon
bullion, both gold and silver, and the Controller
is of opinion that under certain restrictions and
regulations 1t would be far more correct in prin-
ciple to issue silver certificates based upon
the deposit of bullion. to be valued IN exact
proportion of silver TO gold, than to continue
the issue of certificates under the present law.
II this were done, silversbars might be stamped
at their market value and held In the Treasury
for the redemption Of certificates which would
call an amount OF silver equal In value to their
nominal or face value expressed In gold. The
bullion represented by certificates should be
periodically valued at it's market price In gold.
and n certain proportfonate amount OF silver so
held might perhaps be coined TO provide means
for the redemption of certificates, IL redemption
required for business purposes. The Con-
troller believes that the of silver money In
this manner, and its periodical valuation would
have more influence In approaching the market
value of silver among the nations of the world
than the present arbitrary coinage of 412h
grains of silver as a dollar The issue Of cur
rency based upon silver should not however, be
unlimited, and the present laws making the
purchase and coinage Of affixed amount Of silver
bullion mandatory are very pernicfous I'm their
effect. "a the unlimited and continued issuance
of full legaltender 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. There are many indications
OF this, notably the uueasiness In financial cir
cles in June and July last caused by the reserve
OF gold In the Treasury fall ng so near TO
point at which under the law tho issuance OF
gold certificates ceases IL will also be observed
that during the present year national banks
throughout the Country have increased their