Los Angeles herald., 1890-11-25
Comptroller Lacey's Annual
Report.
The Largest Growth in Banks
Since 1865.
The Issue of Circulating Notes Is
Unremunerative.
The Lack of Currency Greatly Agra
waited by the Retirement of
National Bank Notes.
Associated Press Dispatches.

WASHINGTON, Nov. 24.-The annual
report of Comptroller of the Currency
Lacey covers the operations of the
bureau during the twelve months end
ing October 31st. During this period
3O7 new banking associations were Or
ganized, fifty went into voluntary liqui-
dation, and nine were placed in the
hands OF receivers; net increase, 26S,
constituting larger growth than in any
similar period since 1865. The number
of active banks, October 31st, was 1867.
These banks have d paid in capital
stock of $659, ,7s2 1865; bonds deposited
to secure circulation, $3.50, 100, 300, and
bank notes outstanding, $179, 755, ,643,
including $54, 1860 represented by
Lawful! money deposited to redeem Cir
culation still outstanding.
The gross decrease of circulation dur
ing the year was 500, ,267, ,772, and the
decrease in circulation secured. by
United States bonds was So, ,24S, $40. At
the last report the gross deposits in
these banks were $2,023, SOP ,067; loans
and discounts, $1,970, 1922, ,6S7. Both
these items show great increase over
any previous reports.
The comptroller again calls attention
to the fact that the issue of circulating
notes has become unremunerative on
account of the high premium
commanded by federal bonds. He
renews his recommendation that
the obligatory deposit OF bonds be re-
duced, and a circulation issued equal in
amount to the par value of the bonds
pledged, and the semi-annual duty be
fixed at one-fourth of one per cent. per
annum. The passage of the bill to this
effect, now pending in both houses,
would, he says, at once increase the
value OF the paper money by about
SIS 200, 900, which would in a marked
degree relieve the present monetary
stringency. New associations would
form more rapidly without advancing
the premium on the bonds necessarily
purchased by the secretary of the treas
ury for sinking fund.
The passage OF the act providing for
the purchase of silver bullion is consid-
cred by the comptroller tantamount to a
declaration that the national banks will
not be called upon to furnish the addi-
tional circulation evidently needed, and
the discussion of measures providing for
JlC CAtcuSlOI dul pCi pCtudIlOl VI llOlc
issues based upon the new form of Sc
curity, is deemed inopportune.
An exhaustive statement of the pro-
portion OF coin, paper money, etc., used
in banking operations in 1881 and
1890, shows an increase in money
equal to IS per cent, which
is deemed significant when considered
in connection with the present apparent
insufficiency in the amount OF coin and
paper money in circulation. The comp
troller says the evident lack of currency
is greatly aggravated by the retirement
of the national bank notes, which form
of paper money, alone, possesses that
elastic property so essential in perfect
circulation. All the money issued direct
by the government is necessarily non
elastic by reason of being in all cases
available for the lawful money reserve of
national banks, and in most cases pos
sessing the legal tender quality. The
comptroller says if rapid extension is a
correct criterion, the national banking
system is more favorably regarded than
heretofore, and the transactions of the
year have been attended by more than
the average degree of success.