Los Angeles daily herald., 1889-11-26
NATIONAL BANKING.
Remarkable Growth of the system
IN the Past Wear.

WASHINGTON, November 25.-The
forthcoming report Of Comptroller OF the
Currency Lacey covers the year ended
October 81, 1889, at which time there
were in existence 1919 national banks,
the largest number since the inaugura-
ton of the system. These associations
possess an aggregate capital oi
$62O, ,I74 365. The last reports
of their condition exhibit their
resources and liabilities September
30th. The number reported at that time
was 1920. The summary Of tnvse re.
ports shows: Capital, $6l2 2,5S4 ,Oa5 ; sur.
plus. $197 1894 ,76l; undivided profits,
ISL, ,se6, 1853; gross receipts, Including
amounts due banks, 81 $50, ,935, 100; loans
and discounts, $l,s05, ,729,739 all Of
which show 80 increase over any pre-
vious date.
The amount of circulation outstanding
was $203 1862, 732, of which $13l 1888. .334
wss secured by United States bonds,
and the remainder, $72, 2,279 1896, repre-
sented by deposits Of lawful money In
the Treasury. These banks held $lD4,-
927 900 in United States bonds tof which
| SAG 700 were to secure circulation
notes), $l64, 1926, ,449 Of specie, and $SS,-
752, ,093 of legal tender notes.
Within the year 211 banks were organ
lied, having an aggregate capital of $2l,-
240 GOO. Thirty-six of the new banks
were organized in Texas, the largest
number in any one State. Within the
year forty-one banks went into voluntary
liquidation. and only two failed, leaving
net additions TO the system of l6S, as
against ninety last year, and 1913, the an
nual average increase since the inaugu-
ration Of the system.
Notwithstanding this increase, says the
Comptroller, the system has not kept
pace with the needs of the people for
increased banking facilities. The grow.
ing tendency to incorporate under the
statutes of the several States is not
attributable to any change in the law
affecting either national or State institu.
tons, but is charged directly to
the fact, says the Comptroller, that
no profits result to banks by reason of
the deposit of bonds and the issue OF
circulating notes. 1t is claimed, in fact,
he says, that an actual loss results in
many of the Western States and Terri
tories, where interest is highest and
banking facilities most needed. It is
deemed certain by the Comptroller that
the withdrawal OF bonds held in excess
of the minimum requirements will con-
tinue SO long as the present conditions
exist, and that legislation is necessary to
prevent the contraction OF the volume OF
the national bank currency.
The Comptroller makes a number of
recommendation for amendments Of the
law governing national banks. Among
other things reduction,of the duty on
circulation is commended, on the
ground that the present tax is un-
just to the banks, because i'm.
posed On account of privilege
now vslueless. and because the revenues
of the Government are in excess of Ii e
requirements. The burden of enforced
deposits is felt most severely where the
current rate of interest is highest, and
where banks organize with the smallest
capital.
The Comptroller has avoided the dis
cussion of the various plans which have
been suggested for substituting other
securities for United States bonds as the
basis of circulation, being of the
opinion that the consideration of
propositions looking to the adoption of
untried measures would involve delay
fraught with danger to the national
banking system in its present exigency.
He favors reduction of the interest
upon the existing bonds to % per cent,
by the prepayment to the holders of the
difference between that rate and the
four per cent. interest bonds now car
ried.