The progressive farmer. [volume] (Winston, N.C.) 1886-1904, 1890-04-08
NATIONAL BANKS.

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mence business before it has deposited
at least $500 600, and not less tnan
one. third of it's capital stock paid in.
Sec. $3.50 provides for the increase of
bonds as the capital is paid up.
These and other similar provisions
apply to banks whose capital exceeds
$3.50, 900. &C.
The last section quoted from makes
it necessary to have registered bonds
of the United States to N third Of its
capital sock actually paid in, but is
modified by the proviso of Sec. 4 of
the act of 1874, which reads: PRO
vided that the amount of the bonds
on deposit for circulation shall not be
reduced below $5O,O00." .. .
The act of July 18th, 1882, Sec. 8,
a further modification was made,
namely: Blanks now organized or
hereafter organized having a. capital
of $3.50, 900 or less shall not be re-
CURED to keep on deposit, etc., bonds
in excess of one fourth Of their capital
stock as security for their circulating
notes, etc"
The Comptroller has interpreted
the words capital stock when used in
Sec. 8 as meaning the capital stock
paid IN.
Under date Of March 4th, 1889,
the Comptroller of the Currency,
Hon. E. S. Lacey, writes: You will
understand that the deposit of bonds
is for the security of the C regulating
notes obtained from the u. S. Treas.
ury by the association, and that it, the
association, a only obtain notes to
| the extent of 80 per cent. of the par
value of the bonds deposited"
The words and such of those
banks having on deposit bonds in ex-
cess of that amount, ETC." were evi
IDENTIFY intended for the purpose of al
lowing banks, after the Introduction
of this act to withdraw or reduce their
encess bonds, if they wished.
Very many, judging by their
articles, seem to have the idea that a
bank with-for example, capital of
$50, 900 necessarily had $45,O 600 in
government bonds. In order that
they may know that their ideas are
erroneous, l introduce the following,
in addition to the law and the quota
ton from the Comptroller:
Report Comptroller Of Currency, page
1872, 1888.
Citizens National Bank, Raleigh,
N. c., w. E. Anderson, President, J.
G. Brown, Cashier.
Capital stock paid in, 500, 900
u. S. bonds to secure circu
lation, $4,000
Nat. Bank notes outstanding, $22,5OO
American National Bank, Bir-
mingham, Ala, S. T. Barnett, Presi
dent, R. M. Melford, Cashier.
Capital stock paid in, $25O,OOO
U. S. bonds to secure circu-
lation, $4,000
Manufacturers National Bank, Ra-
cine, Wis, J. 1. Case, President, BIB.
Northrop, Cashier.
Capital stock paid in, $250,o0O
U. s. bonds to secure circu.
l~ation, $4,000
These selections were taken at
random and prove that it is the prac-
tice as well as the law for banks to
have only ne-fourth of their capital
stock as security for their circulating
notes. The act of 1874 makes the
maximum $50, 600 of bonds, so that
banks having a capital in excess of the
said $3.50, 600 need not have more
than bonds to the amount of $50, 900,
but a only have notes issued to 80
per centum Of bonds deposited.
The tables already given exemplify
this, but [ add another.
Report Comptroller, 1888, p. 943.
Kansas National Bank.
Capital stock paid in, $500, 900
y. S. bonds to secure circu-
ton, $50, 600
In this instance it is but one-tenth
of the capital paid in.
Croker Woolworth National Bank,
San Francisco, Cal.
Capital stock, $1,000, 900
y. S. bonds to secure circulation, $780,
600, or one tenth.
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