Phillipsburg herald. [volume] (Phillipsburg, Kan.) 1882-1905, 1898-12-08
CURRENCY REPORT.
Comptroller Dawes Makes his AM
nual Report on Banking Matters.
ELASTICITY In BANK NOTE ISSUES.
The Comptroller Wants Power to Enforce
a Penalty for Excessive Loans by
Bankers-Banks Organized
and LiquIdatod.

bankors-Bhnkb OrKhnlAou
and LiquIdatod.
Washington, Dec. 5.--The annual re-
port of Charles G. Dawes, comptroller
of the currency, for the year ended
October 81, 1895, has been sent to con.
gress. With respect to the condition
of national banks during the year, as
shown by the five reports required
from the banks, the comptroller says:
Notwithstanding that the number OF banks
in operation on September 20, 1893 Is less than
at any date OF report since December 10, 1890,
the amount OF individual deposits, loans and
discounts and total resources Is greater than at
any time during the existence Of the
national banking system. On September
20, for the first time the aggregate
resources reached and exceeded the
four billion dollar mark, the In
crease since October 5, 1897, being t29S,377-
S3I l6 A comparison of the last returns with
those OF October 5, 1897 indicates an increase
during the year OF tl04, 952 1880 "a In loans and
discounts; $40, 1914, $50 in government securities
on deposit with the treasurer OF the United
States to secure circulating notes and public
deposits and the amount held by the banks;
81, 8O4 1874 in specie and legal tenders. The
reduction OF f25, 465 900 In the amount OF United
States certificates Of deposit for legal tenders
results in net increase of lawful money Of
S3I, 1899, 82Z 81 On October 5, 1897, the deposits
aggregated 81, 1853, 349, 1913 30, and on September
90 1898 t2,O5l 45454O,29 the increase being
Sl78 10j, 4li79 The balance due other banks
and bankers shows an increase OF S52 627, 1888 90
and United States deposits Of $50, 029 01927.
The comptroller discusses the ques-
ton of the elasticity needed in bank
currency, commenting upon the great
elasticity of the check and draft cir
culation of the country. In this con-
nection, and as embodying his recon-
mendations on this branch of his re-
port, he says:
The general principles and regulations under
which such elactlcity might be obtained are
not in any way inconsistent with the principles
and arguments we have endeavored to set
forth. AS covering these general principles,
and as conclusion from the views herenbe-
fore expressed the comptroller would make
the following recommendations in regard to
the present laws governing the issue Of national
bank notes:
l. The existing bank note system, based upon
deposit of government bonds as security, should
not now be abandoned.
2 For the purpose Of all owing elasticity to
bank note issues to protect the banks and the
community in time OF panic, small amount Of
uncovered notes, in addition to the secured
notes, should be authorized by law under the
following limitations They should be sub
jected to so heavy tax that they could not be
issued In normal times for the purpose ofproflt,
but would be available In times Of emergency.
The tax should be so large upon the solvent
issuing banks as to provide fund which, in
connection with the pro rata share Of the assets
OF an insolvent bank would be sufficient to
redeem the notes In full without necessitating
any preference OF note holders over depositors
of any insolvent issuing bank. The tax should
be so large as to force this currency into retire.
ment as soon as the emergency passes.
The comptroller, under the head of
Elimination of Loans" urges an amend
ment to section $500 of the national
banking law by which he will be given
power to enforce personal penalty
for infractions of the law prohibiting
excessive loans, something which the
law does not at present give.
During the year the comptroller has
extended over the cities of New York,
Boston, Philadelphia and Baltimore
the sysem of semi-annual visitations
by examiners, in force in all other Sec
tions of the country. He has utilized,
with some benefit, the examiners in
Investigations into the credit of heavy
debtors of banks, where such indebted
ness constituted a menace to the safety
of the banks, and where despite the
criticisms of the comptroller and the
efforts of the bank officials, no material
reductions in the amount of the in
debtedness could be had.
The comptroller, while recommend
ing that domestic branch banking
should be legalized in communities of
less than 1000 inhabitants, many of
which are now unable to support i'm
dependent banks, opposes the grant
ing of any more liberal privileges of
branch banking than these on
grounds of public policy.
The comptroller states shat up to
and including October 81, 1898, there
have been organized 5,151 national
banks, 90 per cent of which have been
placed in voluntary liquidation and
less than seven per cent. in the charge
of receivers. At the close of the year
there were in active operation 3,59S
associations, with authorized capital
stock of 1924, $50, 1876 The outstanding
circulating notes of the banks on that
date amounted to $239, SAG, 2s1, of which
S21O, O45, 456 were secured by bonds,
and the remainder-$9 500, S25-by
lawful money on deposit with the
treasurer of the United States for the
account of liquidating and insolvent
banks and those reducing circulation.
The circulating notes outstanding are
SO, $50, III in excess of the amount on
October 81, 1897.
During the year there were organ
lied So banks, with a total capital
stock of $685., 600. The number o.
banks leaving the system during the
year by voluntary liquidation was SO
one of which was subsequently placed
in the charge of receiver. The CAPT
tai of the IS banks which liquidatet
amounted to S12, 500, 900 and the circu
lation to So, 1874, sos.
| -----------
Call for Condition of National Banks.
Washington, Dec. 4-The comptrol