Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1889-11-26

troller Of the Currency in his Forthcoming
report The methods he suggests to bring j
about, the flaws in the present national banl
laws, and many new and interesting com
parisons lead up to his deductions.
WASHINGTON, November 25. - TIT
forthcoming report of Controller of the Cur
rency Lacey covers the year ended October
81, 1889, at which time there were in exist
ence {, ,319 national banks, the largest nun
Der in operation since the Inauguration o
the system. These associations possess al
aggregate capital of $500, ia, ,S65. Th'
last reports OF condition exhibit
their resources and liabilities oil
September 80, 1885, The number re
porting at that time was {, ,29O. A summary
of these reports shows: Capital, S612, 5S4,
O95; surplus, Sl97. .394 76l; undivided profits
SS4 S69; gross deposits, including amounts
due banks. sL950,9S5, ISL loans and discounts
Sl,SO5,729, ,7S9, all of which items show an in
crease over any previous date.
The amount of circulation outstanding was
SOS. .662 7S2. of which slSl, ,SS9 SS4 was secured
by United States bonds, and the remainder,
s72, ,279. 396 was represented by deposit of law
Sl94, ,9729OO in United States bonds, of which
STAG. 200 were to secure circulating notes
(Sl64, .449 of specie and $50 52.593 Of legal
tender notes..
A THIRD OF ALL THE CAPITAL.
Within the year I'll banks were organized,
having an aggregate capital of $2ll- 240, ,000
These banks deposited with the Treasurer. to
secure circulation. s.. 4.S7s,55O in United States
bonds, upon which were ISSUED SSSl2975 in cir
culating no es. Thirty-six of the new banks
were organized in Texas, the largest number in
any one State. The State of Pennsylvania has
now the largest number OF associations IN ope-
ration; Massac usetts leads in point of capital
stock, and New York In point of deposits and
volume of business.
The large number of new hanks entering the
system, and their wide distribution, is an evi-
dence, the Controller says that the system is
adapted to the varied conditions existing with
in the extreme limits of the national domain
Within the year II banks went into voluntary
liquidation; only failed; leaving the net addi.
nOns to the system l68, as against so last year
and l23 the annual average increase since the
inauguration of the system Notwithstanding
this increase, says the Controller, the system
has not kept pace with the needs Of the people
for increased banking facilities.
IT DOESN'T PAY so WELL.
This growing tendency to incorporate under
the statutes of the several States is not at
tributable to any change in the law affecting
either national or State institutions; but is
charged directly TO the fact, SAYS the Con-
troller, that no profit results to the banks by
reason of the deposit of bonds and issue of cir
culating notes. 1t is claimed in fact, he says
that an actual loss results in many Western
States and Territories, where the interest is
highest and banking facilities most needed 1t
is deemed certain by the Controller that with
drawal of bonds held in excess of the minimum
requirements will continue SO long as the
present conditions exist, and it is asserted that
legislation is necessary to prevent a con-
traction of the volume of national bank cur
rency.
In the opinion Of the Controller the laws gov
erning national banks should be so amended as
to produce the following notifications:
First-he minimum deposit of bonds to secure
circulation should be fixed at 10 per centum of
capital In respect to associations having capital
Of 500. GOO or less, and for all banks having a
greater capital minimum deposit Of so. OGJ in
bonds should be required
second-,C Circulation should be issued to the par
Third -Semi-annual duty on circulation should /
per annum. Il is held that these changes in the |
law would do little more than save the national /
tained. 'O'-N9 - ---''H-
THE MINIMUM DEDUCTION.
Taking as basis of computation the capital |
stock as it appears in the summary of reports |
for September 80. 1859, the present minimum of |
deposit of bonds is found to be s95 2g7 2S3. If |
the law is amended as proposed, the minimum |
of bond deposit required will be reduced to |
SIS, SCI. .5Sl, making possible a withdrawal of
SOL, ,4O5.7O2 in bonds, upon which is based S46,-
265 IS2 in circulating notes 1t is asserted thar
this would greatly exceed the limit of probable
contraction, it being fair to presume, says the
Controller, that the banks now maintaining a
deposit In excess of legal requirements would /
not withdraw the bonds thus released UDon
careful survey OF the entire field, it is the
opinion of the Controller that the proposed
legislation, taken as whole, would tend to ar
rest the present contraction rather than accel-
crate it, for the following reasons:
WHY IT WOULD OPERATE.
Flrst-The present excess now held at loss will
probably increase ira profit is apparent.
Second-The banks now holding an excess will
not avail themselves OF the privilege of with
drawal conferred by the reduction Of the mini
mum.
TIlird-The organization of new banks will he
nearly or quite doubled, and the deposit of bonds
received from this source will be maintained even |
under the reduced requirements.
Fourth-The withdrawal of bonds by reason of
banks going into voluntary liquidation will be
greatly reduced.
Fifth-Ihe addition Of 10 per cent in circulation |
VIII apply 70 all bonds now deposit as well as |
tisose NnlGn may nereatter be pledged and would
aoo nearly Sl@ OG GOO 10 the circulation upon |
present holdings.
The operation of these various influences the
OOnbIOllGI says, WOulQ tend to prevent ar |
siderable reduction in the amount of bonds
held to secure circulation, while the Increased
percentage Of new issues would operate to neu-
Iralze the erect of anv possible withdrawal
and might initiate rather than contract the
total volume OF national bank circulation In
any event the provisions of section of the act
2t July Y IoS5 he says win still be in operation.
limiting the deposit of lawful money or with.
travail of bonds to IS. 600 900 during any calen
lar month, which would limit possible con
traction TO SS6,OO0OOO, which is less than the
Of fa1r loff
ust closed.
A BAD TAX ON CIRCULATION.
The reduction of the duty on circulation Is
upon the ground that the present
ak is unjust to the banks, because it is i'm
,osed on account Of privilege now valueIess
nd the revenues of the Government are in ex-
ess of its requirements. This semi-annual
uty during the last fiscal year amounted to
l. .3Sl. and the total amount paid in Federal
axes to June 80. 1889, by the system, on capital
eposirs and circulation, is stated at SIy7. .664
IS 81. The reduced rate of duty would pro-
uce a sum in excess of the expenditures made
y the General Government on account of the
anks.
In submitting this recommendation, the Con-
roller states, that he has been largely iniu-
need by the increased accessious 10 The svs
IN frUm Western and Southern States and
be evidence daily accumulating that il is not
My adapted TO the wants of that vast area now
i1ACAAesSi- CNDPAlSN WIN Bd0klOR 1dclllIleS, /
ut that its adaptation has become more fully
ppreciated. II being of the greatest import
nee to those regions that the abundant capital
the older Stares be utilized, and through no
her agency can it be so well accomplished,
The gam accruing to the Government bv rea
n of national bank notes lost and unredeemed
estimated at not more than per cent nor
SIS than one-balf of / per cent of the local
sue. This is based upon the amount now
Of circulation issued to groups of
nks which have been closed by reason Of in
lYency for ten or more years.