New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1892-10-05

broken banks bore the losses-no' u'e '""n''' VIM
sued or the brokers who traded In them'
such wore some OF the features and results OF the
cu-rencv system which the Democrats hold Ill III
fectionate remembrance and high regard ana return
10 which they demand. They ihSis' mat the TIA VII
state bank circulation shall be fepe'ied ou' 'cs a."
bitterly opposed to the repeal OF 'he lux Oh Na"on'
bank circulation. This Is one iaet III rcGau 10 INC
attitude of the Democratic party which does ho' up
near thus far TO have attracted the attention OF
nrovoked the discussion which It deserves OF course
Tho intent "a well as the desire Of that party Is 10
destroy the National banking system and restore the
system which during the period OF Its existence roooeu
note holders and other creditors OF the u'hS Vi
hundreds OF millions Of dollars, system upon WHICH
dishonest bankers and shrewd note bankers httehed
and counterfeitcrs forgerS and 90 showers OF the
oncer- thrived this relation 1t is important as wei
as pertinent 10 submit facts In regard to the op
crafions of the system which the Democratic parry
now seeks to overthrow and bring them INTO contrast
with the corresponding facts in regard to the opera
lions OF the system which that party demands that
the country shall return.
THE GROWTH OF TIE NATIONAL BANKS
The National banking system was established III
s03 but owing TO defects In the orglna INV II vi"
not 20 into full operation until the latter part Vi 'ie
following year. In July, 1868, the outstanding CIR
culation OF the State banks In the loyal o'a'es
amounted 10 s23s 6772ls. Two years later many OF
| hanks and the state bank circulation had shruhleh
10 sl420I9 G;I6 while the National bank Hrcuauoh
had Increased to s146.137,66O On October 3l' lao'
four months later. this amount had risen 10 S-o4
$50. 2Oj. No circulating notes were lSSu'1 ny W"
,,onaI hanks prior 10 .anuary l. 1864 and the total
amount outstanding october 81 OF that year was
S5ssI30sO. The total amount OF National bank
notes Issued during the eight years from 1904
In 1891 was 81 CAT. $50 49, OF which T14'1 ofo3'3
had been redeemed prior october 81 1901, ana inc
United states Treasury that date held *'o'f o 81
deposited by National banks to redeem outstanding
notes which had not yet been presented Tor reoehp
ton.
The average total yearly circulation outstanding OF
National banks from 1s64 to 1901, based on the OUT
standing circulation on October ~ Of each year. was
s2ss 400 SOC Suppose that this calculation had been
Issued under the old state bank .ystem; that here
had been no National banks how would n0tehoiders
have farcdi Their average annual losses on account
Of failures Of banks. according to the estimate OF the
late Controller Knox would have amounted to sli.-
i24 $50 at per cent and the aggregate LOSSES curing
the entire period Of twenty cight years would have
reached the enormous Of sf03 $1,000, n loss
which would have fallen mainly the persons least
able TO bear II.
II ia true that some National banks failed during
tho period mrntloned-lN out of aGfS banks organ
i1ed-but the number Infinitely small COMPARED
with what II would have been under the delightful
system which the Democrats now clamoring TO
restore Why In the single year l84l no less than
nftyh banks failed. with total circulation OF 3D..
507.752, and that four years after the panic OF
1897 In 1858. year after the panic Of 1897, tho
notes Of 500 broken and worthless banks were in
circulation according 10 the editor of "Thompsons
Bank-Note Reporter q the 1Gi National banks
which failed prior 10 October II. 1901, was re
stored 10 soycncy and the total amount OF cIrcula
ton issued by the remaining l63 was &c. S3.7J1.
which s7.304.Ol7 less than the total circulation
Of the fifty five banks which failed In the year ls4l.
no LOSSES on NATIONAL BANK CIRCULATION.
Again si4sa1 900 Of the circulation Of the 1913
insovent National banks had bccn redeemed prior TO
October II, 1891 and every dollar OF the remainder
Will he redeemed when pr,~''r'ed How much ~ tho
circulation Of the fifty five STAT" banks winch failed
IN is4l was REDEEMED As everybody knows, every
National bank note that has ever been ever may
be isqued VIII De promptly redeemed when presented.
az is face value no matter whether the bank that
issued DO solvent insolvcnt, whether 1t be in
existence or when the note reaches the Treasury
Of the United -ta'es.
The arairs Of VI the i14 National banks which
became insolvcnt during the cutire period Of twenty
eight years had been finally settled prior T. october
81. l-oi. Those represented s.:,3ii092 OF proved
claims 81 creditors aside from claims account OF
notcholders which, az already shown have boon or
Will De paid In fl. upon which the credit pri received
an average OF - 1900 per cent. leaving net loss
Of only ~ B72 O3G. The aiIalis OF sixtytwo Of =
insolvcnt banks SIN unsettled The date men
TONED. They represented proved clnml amounting
10 S29. "a .O3J Oh which had been paid Si7,f55iG1
leaving assets estimated at S3.7O2. J2j sim to be
distributed which would leave net loss 10 creditors
amounting 10 S-.0s7.0i4 The aggregate losses Of
creditors Of National banks during the entire pcri0
therefore. amounted TO only @l3,ij9e30, being an
average 81 1888, 100 year daring the life Of tho
system The average amount Of liabilities o. all
the National baDk' since 500 approximates I,065,
434 o22 aud the annual average loss to dcposltors
and Other creditors during the entire pcrOd wa, hcro
fore only one twentieth Of l per cent. Moreover
the percentage OF dividends proved cnlms against
lnsovent banks has steadily increased, showing that
the system OF srpcrvi on Is growing more effective
The ratio Of dividends 10 claims In the nvc years
from 1865 10 1909 o. 3i-i0O per cent: In the
five years from 1850 10 lrOO II 10 G5-I0o per
cent. In the former period the ratio Of legal ex
pcnses, receivers salaries and All other expenses to
total collections IL 1900 per cent in the Inter
period 1t only 300 per cent.
II may be added that Of the l6l National banks
which became insoycnt no fewer Tran fifty two, or
nearly ope-third OF the whole number had paid 100
cents Oh the dollar to creditors prior october 81
1901
CONTRAST OF TWO RECORDS.
Now, let W. try 10 compare this record OF n system
which the Dem oratic party would destroy with that
w ich It Is anxious to restore In the year 1871 OF
n total bank capital Of l7642G 500 more than one
nfth or s67 03GCB5. swept away by the failure
Of nfty-hvc banks. How much, II anything WAS saved
from the wreck for the benefit Of creditors. including
noteholdcrs II Is impossible TO ascertain. In ths
six years beginning with 1897, year Of financial
panic the bank circulation contracted more than
saO,OO0OOO by failures OF banks, and the losses OF
notcholdeH. dcposilofs and every body eJ1 con
cerncd were enormous. The panic OF 1857 caused
the failure Of more than 800 banks. and n contrac
ton Of bank circulation amounting to $j9570,47o In
u single year. Again. t.e losses OF noteholdcrs aud
other creditors enormous. In his annual report
for the year 1870 ContrJler Knox said
There is OF definitely determining the
amount OF losses sustained through the failures of
bnnks operating under Systcms In vogue during III,
early periods Of the history 81 this country The
losses under these systems. both 10 the notcWlderl
TO whom there he no loss under the National
system. and 10 tie genera creditors and shay hoderS
are known 10 have been large. NUMEROUS failures OF
I'm,