The true northerner., 1898-12-07
AN Increase ALL ROUND
Annual Report of the Comptroller of
the Currency on the Condi-
tion of the Banks.
RESOURCES GREATER THAN EVER BEFORE
Plans for Modification of the Cur
rency and banking systems Not
Considered I'm Detail-Interests al
DepOsitOrs Recommendations
Made I'm Regard tO Present Laws.

Washington. Dec. 5.-The report of
Charles q. Dawes, comptroller of the
currency, for the year ended October 81
saws with respect TO the condition of
national banks during the year, as
shown by the five reports required from
the banks:
Notwithstanding that the number of
banks I'm operation on September 20 is less
than at any date Of report since December
49, 1890, the amount of individual deposits,
loans and discounts and total resources is
greater than at any time during the exist
ence Of the national banking system. on
September 20, for the first time, the aggre-
gate resources reached and exceeded the
81, ,OOO, ,OOO, 600 mark, the increase since Oc-
tober 3, being $29S,S77S 1916.
4 Comparison.
"A comparison of the last returns with
those of October g. 1897, indicates an in
crease during the year of $lO4, ,952, 1874 in
loans and DISCOUNTS S79,194,SS0 in govern
ment securities on deposit with the treas
urer of the United States to secure circu-
lating notes and public deposits ana the
amount held by the banks $57, ,SO4, ,S27. "a in
specie and legal tender.
''The reduction of $25, $4,000 i'm the amount
of United States certificates Of deposit for
lawful money of $S1, ,S39, ,S27.34. on October
5, 1897 the deposits aggregated S,S53,S49,-
l2S 80 and on October 20, 1898, 81 03l 454 54O29,
the increase being $l7SlO5, ,4l1.79.
The balance due other banks and bankers
shows an increase of So, ,627, ,3SS09, and
United States deposits of $685. ,0l9.H."
Interests of DepositOrs.
The comptroller says that he does not re-
view in their details the plans for the modi-
fication of the currency and banking sys-
TENS which are now the subject or eco
nomic and general discussion throughout
the country, but confines his discussion to
the general principles underlying all of
them, because they seem TO ignore the In
terests Of bank depositors, with whose pro-
lection the comptroller is peculiarly
charged. He says that those plans which
are now most generally discussed may be
considered as based upon the following
propositions:
Il. That the disproportion between out
standing currency liabilities of the gov
ernment payable in gold and the gold held
for their redemption should be lessened by
a contraction in the amount of these de-
mand currency liabilities.
'2 That the void in circulation caused by
such contraction should be filled by an eX-
tension of the circulation of national
banks, which circulation, redeemable in
gold is ultimately to depend for its chief
security upon a first lien upon the CONNER
cial assets of the issuing banks"
He says that the assumptions which seem
10 underlie these plans are:
Il That unless we are 10 have a currency
contraction, some radical extension of
banknote issues is absolutely necessary TO
the securing of the proper adjustment of
government currency liabilities to it's gold
reserve, by which adjustment the greater
safety of the gold standard is subserved; !;
and
- Through this radical extension and
change i'm the present form of bank-note
issues alone is elasticity to be secured in
our currency"
Recommendations Made.
The comptroller makes the following
recommendations in regard to the present
laws governing the issue Of national bank
notes:
=. The existing bank-note system, based
upon deposit of government bonds as Sc
curity. should not now be abandoned.
80 For the purpose of allowing elasticity
to bank-note issues to protect the banks
and the community in time Of panic, a
small amount of uncovered notes, i'm addi-
tion to the secured notes, should be au-
thorized by law under the following limita-
tions:
"They should be subjected to so heavy a
tax that they could not be issued in normal
times for the purpose of profit, but would be
available i'm times of emergency. The tax
should be so large upon the solvent issuing
banks as TO provide fund which, in con-
nection. with the pro rata share OF the as
sets of an insolvent bank, would be suffi-
cient to redeem the notes in full without
necessitating any preference of note
holders over depositors Of any insolvent is
suing bank.
"The tax should be so large as to force
this currency into retirement as soon as the
emergency passes.
Such a currency should be used only TO
lessen the evil effects of the too rapid
liquidation OF credits which are collapsing
under a financial panic, but could not be
prohtably used as a basis Of business spec
ulation and imitation"