Helena weekly herald. [volume] (Helena, Mont.) 1867-1900, 1884-12-04
Report of the Comptroller.

WASHINGTON, November 27-The an
nual report of the Comptroller of the Cur
rency shows, during the year ending No
vember 1st, 1884, that 191 banks have
been organized with an aggregate capital
of S16,042, ,23O. Circulating notes have been
S3S6623O Total number of banks in ex-
istence November 1st, 1884, 2,671 largest
number in liquidation at any one time II.
The national banks with an aggregate cap
ital of 81 1884, 900 that have failed and have
been placed in the hands of receivers dur
ing the year. The different items, resources
and liabilities tabulated, indicate that the
business of the national banks during the
past II years has generally increased,
while it seems that the United States
bonds and circulation thereon have de-
creased during the past two years. The
! aggregate liabilities Of the national banks
! to depositors and correspondents were re-
duced during the year upwards of $94,-
! 100000. This reduction of liabilities and
! the general reduction of loans by the
banks which amounted to over $63,000,000
during the year, the Comptroller says, was
doubtless occasioned by the financial
! troubles made by the general depression of
business. During the same period the ma
tional banks increased their cash resources
by about $21 100000, specie, and 81 ,O00,-
600 legal tenders of United States or certifi-
Gates of deposit for the same. The total
number Of banks still in operation organ
lied under the act of June Sd, 1864, and
the provisions of the revised statutes of
cedes the succeeding sessions which will
terminate, unless hereafter renewed
during the years previous to 1900,
is 488 with a capital of $321,-
! 461 Jas, and circulation Of 1914, ,745,
3O5 The banks had, November 1st, 1884,
| S155604 400 in three per cent. bonds paya-
BILE at the pleasure of the government of
which S9,5S6200 have been called for the
payment of interest ceasing November 1st,
1884 If these bonds are not replaced by
others bearing interest there will be an
immediate reduction in the circulation Of
80 per cent. of their amount. On November
1st there were S194, ,190,500 three per cent.
bonds payable at the pleasure of the gov
ernment. These bonds will probably be Paid
within the next two years, even ii consid-
cradle changes are made In tariff and from
I
cent mature there will be no bonds which
the government can call in for redemption
! 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 4 per cents, and from 1892 to 1907
it will be impossible for the gOvernmet to
-,
payment of its bonds, except at the option
of their holders 1t is apparent that the
government cannot commute and hold
its surplus revenue, even during the short
period from 1887 to 1891 without great
disturbances to the business interests of
the country, and much less can it do SO
during the longer period from 1891 to 1907.
1t appears, therefore, that the foregoing
considerations should be given due weight
in any plan for the funding of the 4
per cent. bonds maturing in 1907, and the
Comptroller therefore suggests that the
principle difficulties in the situation may
perhaps Be obviated as well as the reduc-
tion of interest affected by refundiDg these
bonds into others which shall mature in
proportionate amount at certain fixed in
tervals and thus the S738, 100000 of four
per cents might be funded into an equal
amount of 3 or p per cent bonds, one-fitth
of which, or $147 100000, 20 mature at in
tervals of five years The first installment
of S147, 900 each, on the 1st Of July in
the last year of each succeeding period of
years, viz 1902, 1907, 1872 and 1917, |
The average maturity of these five classes !
of bonds would be the same as that Of the
present 4 per cents, viz: July 1, 1907. |
Whatever course may be deemed expedi- !
ent by Congress in regard to the funding or
future payment of the public debt, the !
Comptroller is of the opinion that it is |
perfectly safe and will afford great bene-
fit to the public to permit an issue by the |
natiOnol banks of circulation to theaeX-
tent of 100 per cent. of the par value of
the bonds deposited instead of 80 per cent. |
Even admitting that the bonds represent |
ing the public debt when funded at lower |
rates might at some time in the future be |
below par in the market, the government |
would be forced to redeem the notes of in
solvent national banks, it always have |
the right to cancel the bonds on deposit |
securing the same and thus extinguish an /
amount of its debt equal dollar for dollor |
to the notes redeemed. 1t is thus fur
ther submitted that the profits on the cir |
culation of money would be increased to a |
point which will induce the Comptroller |
of Banks to keep up their circulation |
to maximum and to stop the contrac-
tion of their circulation, which is now oc-
curing, by repeating the law taxing such
a circulation at the rate of One-half of one
per cent semi-annually.
The expenses of keeping up the National
banking system by the government are at
present paid in part from the proceeds of
this tax, and in part by an assessment of
the banks. If the taxes are abolished all
these expenses should be paid by the last
named method In concluding this sub
ject the Comptroller wishes to have it dis
tinctly understood that he is not in favor
of any measure which will cause initiation.
He is OF the opinion that the present aggre-
gate of 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, how
ever that sudden contraction of the
national circulation, which, without appro-
pirate legislation, is imminent will serious
ly embarrass the business of the country,
and that if this contraction is permitted to
90 On it may result in the entire diScOn-
tinuance of the issue of notes by the nation
al banks. The Comptroller believes that
this form of currency, which can be in
creased or diminished lin accordance with
the 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 Comp
trOller says the people of the United States
L ell