New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1889-11-26
THE NATIONAL CURRENCI'
NOTIFICATIONS SUGGESTED ~ THE Ma
TIONAL BANKING LAWS
REPORT OF CONTROLLER LAcEY-INcRbAsID
BANKING FACILITIES NEEDED-THE

REPORT OF CONTROLLER LAcEY-INcREAshD
BANKING FACILITIES NEEDED-THE
BOND QUESTION DISCUSSED.
washincton Nov 25.-Thc forthcoming rPor' Va
Mr. Lacey the Controller OF the currency oo''o ~"
vc.r ended October 81 1885, which time there were
n .x,stence 40 National banLs the largest numOer
in operaton since the beginning of the system ineso
associations possess an aggregate capital Oh 9o-0,'
365 The last reports OF condition cAhio'' NV" nj,
sources and liabilities on September 80 loo''
number reporting a. that time was 32oo a su''IN"'
NJ these reports shows Capital S6l2oo4 I9o' 'u'P'
s1o7 1874 761 undivided profits ss4 ooo.oooo Sc,
deposts Including amounts due banEs Si'9oo''o'
Ioans and discounts 81 sos 729, 739 all Of which re'
show an increase over any previous date. Inc amount
OF circulation outstanding was S2O3oo-''o-' Vi W."
s131 383. 1884 was secured by unlted otiIos "o'''
ard the rest $40 90 ,39s, was represented ny uoP'
of lawful money in the Treasury Iheso o"nAs NV
S1o4 972 900 in United States bonds lol "non 10
All 700 were 10 secure circulating notes. Slo4'-o'fa
of specie and $50 752, O83 OF legal tender notes.
Within the year Oil banks were organized having
an aggregate capital Of gel 100000 These Dahhs no
posted with the Treasurer To secure cii'u4'io'
81 37s $50 United States bonds upon which Werc Is
sued So s12, 075 in circulating notes fchhsS'N s'
has now the largest number Of associations III opera
finn Massachusetts leads in point OF capltal s'ocM
nsiness Within the year forty-one banks went mo
voluntary foundation and only two failed leaving lie
net additions TO the new system 100, dts dedIhs'
ninety last year. Notwithstanding this gray'hs III
crease the Controller says the system mas hot hop'
mace with the necessities Of the people for Increased
banking facilities This made evident by the marhol
increase in the percentage of State banks organized In
the last five years.
The Controller reports that OF the Alas associations
which have entered the system only 100 have become
nsolvent and that out Of total OF S53'3'4'ooo vi
claims proved S35 ,09o572 have been paid and asseS
remain undisrlbnted valued al S34303oO reducing
the loss to creditors of failed banks of the entire
system during the twentyseven years TO Sl4'S44'o7
upon average deposits for the twenty-seven years OF
s9g5 GA Sl5 making the average annual loss only
O SIS per cent upon the average annual deposits MOI
only are the interests Of depostors fully proutc'eu
In the National system, says the COnroler' out inc
minimum Of loss is realized In the handling OF u0c
checks drafts and certificates thai are used in the
transfer Of bank credits, and which form about %
per cent of the actual currency OF the country Con
grcss is therefore asked preserve system which
has so admirably served the purposes of the Govern
ment and Is 50 completely satisfactory TO the people,
by relieving It of the unnecessary burdens now I'M
posed by law.
1t is demonstrated by tables that there Is an actual
loss resulting TO National banks by reason of their
being obliged deposit bonds and take out rcua'ion
wherever tie current rate Of interest greater than u
per cent As the prevailing rate in all OF the states
west OF the Alleghanies Is Isl excess OF mat haheu
Il follows SAYS tho Controller, that, In the greater
number of States, the enforced deposit OF bonus
| secure circulation is an impairment IN the way
organization OF banks and has tendency directly
TO diminish the volume of currency Issued Dy the PAM
OH or The s146471 700 United States bonds held a
security for the ecIaon OF SSoHa a tSe SDmp
| requirements This excess Oh October A, loss. wa
$40 900, showing decrease during the lssC tWc!s
months of SOS $50 oO3 1t Is deesced certain by IN
Controller that this withdrawal of bonds hed IN eNccS
of the minimum requirements Will continue SO ION
as the present conditions exist. ana II IS assorou %
lec Station IS necessary 10 prevent contac'Dh OF IN
volume OF National bank currency ,.u,. ,oy.rDir
National banks should be amended as 10 produce III
I'M minimum deposit OF bonds to circulation
should be fixed per centum Of capital In respect
associations having capital OF $500 900 or less and for al
| banks having a greater capital, minimum deposit o
| $50 900 IN bonds should be required.
Q Circulation should be issued to the par value OF tn
| bonds deposited.
& semi.annua duty on circulation should be reduced
| as TO equal onefourth OF one per cent per annum.
These changes in the law. it Is held, would DO lta
more than National banks from loss On account
| circulation, IL the teAt premium on UhlSd ot"Vo
| bonds Is main ained.
Upon a careful survey OF the entire field It IS tn
opinion of the Controller that tho proposed leglsatio
| would tend arrest the present contraction rattle
than accelerate IT, because o. the present excess no,
| held at loss will probably increase If a profit
apparent; (2l the banks now holding al excess Wi
| not avail themselves Of the privilege of Withdraw
| conferred by the reduction OF the minimum; CD III
! organization of banks will be nearly or qu I
doubled and the deposit Of bonds received from I'M
source will be maintained even under the reduced r
ourements: "a the withdrawal OF bonds by reason
banks going into voluntary liquidation will be g1eail
reduced and 90 the addition of 10 per cent In crcnla
lion will apply to all bonds now on deposit, as we'll
those which NAV hereafter be pledged, and would al
nearly $1,000 900 TO the circulation upon presen
| hold ngs -, 49,. - .,... l., -
mended uIon the ground that the present tax IS unius
| 10 the banks because IL is imposed on account Of
| privilege now vauelcss, and the revenues OF tl
| Government are I'm excess OF lis requirements.
| Ire gain accruing TO the Government by r aso
~ National bank note. lost and unrc lcemed IS estl
mated al Rot more than one per cent. nor less thai
| one half OF one per cent of the total issue.
| in the Controllers opinion the adoption OF IN
amendments proposed will afford the relief how nece'
| Sary IIc-doos not recommend any issic Of lon
date bond. which would defer the payment OF IN
! present issues as they mature, but does favor
! reduction of interest upon existing bonds TO |"
per cent by the Prepayment 10 holders Of the diheI
cnce between that rate Of interest and the pc
| cat interest which the bonds now carry.