Wessington Springs herald. (Wessington Springs, Aurora County, Dakota [S.D.]) 1883-1891, 1884-12-12

mort Of the Comptroller of the Currency
shows that during the fiscal year ended
November 1, 191 National banks we,s
organized, with q capital of SIC, o42, 200;
circulating notes issued, So, 500, $50. The
West followed by the South leads in the
number of new organizations. Since the
establishment of the system on February
%. 1868, there have been organized
1921 National banks, of which 2,671
are now in existence. Eleven National
banks, representing S1,2S5, 900 capital, nave
failed during the year. During the past
eleven years the business of the banks has
greatly increased. OF their sources of spec
ulation only the items of United States
bonds and the circulation thereon have de-
creased during the last two years. Bank Ii
abilities to depositors and correspondents
were reduced S94, OOO, 900 during the year.
There was a general reduction of loans
amounting to 500, 1000. 900 during the year,
doubtless due to business depression. For
the same period the National banks in
creased their cash resources by about
S21. 900, 900 specie and $11, 1000, 900 legal
tenders and certificates of deposit. The
banks held OH November 1, 1884, $55,604,-
400 of 3 per cent bonds payable at the
pleasure of the Government, of which
50, $50, 200 had been called for payment, the
interest thereon ceasing November /, 1884.
If these bonds are not replaced by others
bearing interest, there will be an immediate
reduction in the circulation of ninety per
cent. of their mount.
On November 1 there were S194, 100, 500
8 per cent. bonds payable at the pleasure
of the Government. These bonds will prob
ably ..be paid within the next two years,
even if considerable changes are made in
the tariff; and from 1887 to 1891, when
$3.50, 600, 600 of the ~ per cents. mature,
there will be no bonds which the Govern
ment can call in for redemption. No
doubt the accumulation of surplus revenue,
ii it continue to accrue at the present rate
during the four years between 1887 and
1891, together with revenues of 1892, will
be more than sufficient to pay off the ~
per cents; and from 1892 until 1907 it will
be impossible for the Government to use
any Of it's surplus revcnu for the payment
of its bonds except at the option of their
holders. 1t is apparent that the Govern
ment can not 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
it do so during a longer period from
1891 to 1907. 1t appears. therefore, that
the foregoing considerations should be CIV
en- due weight in any plan for funding the
4 per cent. bonds maturing in 1907, and the
Comptroller suggests that the principal diff
culties of the situation may perhaps be obvi-
ated, as we'll as the reduction of interest eff
fected, by funding these bonds into others
which shall mature in proportionate amounts
at certain fixed intervals. Thus the S73s,-
900, 900 of 4 per cent. might be funded
into an equal amount Of 3 or az per cent.
bonds, one-fifth of which, or S147, 600, 900, to
mature at intervals of five years, the first
installment falling due July 1, 1897, and the
remaining installments of $147,G 600, 900 each
on July l in the last year of each succeed
ing period of five years, viz, 1902, 1907,
1912 and 1917. The average maturity of
these five classes of bonds would be the
same as that of the present 4 per cents
July 1, 1907.
Whatever course may be deemed expe-
dent by Congress in regard to the funding
or future payment Of the public debt the
Comptroller is of the opinion that it is per-
fectly safe and will afford great benefit to
the public to permit an issue by the Nation
al banks of circulation to the extent of 100
per cent. par value of bonds deposited in
stead Of 80 per cent.
In concluding this subject the Comptroller
wishes to have it distinctly understood that
he is not in favor of any measure which will
cause initiation. He is of the opinion that
the present aggregate 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, however, that a sudden
contraction of National bank circulation
which, without appropriate legislation, is
imminent, will seriously embaryass the
business of the country, and that if this con
traction is permitted to go Oh it may result
i'll 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 bust
hess, should be continued in preference to
any other now permitted by Law.
The Comptroller concludes his report
with a discussion OF the subject of bank ex-
aminations, and a consideration of the fnan-
cial troubles of Nav. 1884.