The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1899-11-28
COMPTROLLER DANES REPORT
TELLS OF THE CONDITION OF
THE NATIONAL BANKS.
Makes Suggestions Which VIII Be
Submitted to congress-Taxa-
ton of Institutions.

Washington. Nov. 27.-The annual re-
port of Charles G. Dawes. comptroller
of the currency. for the year ended
Oct. 81, 1899. has been prepared for
transmission to congress.
| With respect to the condition of ma
tional banks during the year. as shown
by the five reports required from the
banks, the comptroller says:
The number Of banks in operation
on Sept. /. 1899. was S,595. with a paid
in capital of s605.772.5 The individual
deposits on that date amounted to 81,
400, l25.31 and the aggregate resources
to 1850, S55, 1871. A comparison of the
Sept Z returns with those made on
Sept. 20, 1888, indicates an increase dur
| ing the year in individual deposits of
$19,271 .055.0s; in loans and discounts of
$50, IS9, $3.50 in amounts due from
other banks and bankers, s160, 39l, s96.6S;
in specie. s44. 691 .225.44. and in aggregate
resources, S646.Si4. 0SS.57. On ept. the
net deposit liabilities OF fhe national
banks of the country aggregated 3d.
031, i63. 016.6S, on which q reserve of
$500, SOS, $3.50, or 29.3S per cent was held.
The composition OF this reserve was as
follows: Specie, -s33S,57 ,3S3.SS; legal
tenders and United States certificates
of deposit for legal tenders. s127. 1884,
651; due from reserve agents. S414, u.s.
660.44; redemption fund with the treas
rurer of the United States. $40. lie. 81.
In recommending to congress i'm
provements in banking laws as direct
ted by section 333 of the revised stat
utes. the comptroller before making his
chief and new recommendation for a
bord-secured elastic circulation, re-
peats his recommendation of one year
ago for law providing for an unssr
cured emergency circulation TO lessen
the destructive power OF financial pam
les, and taxed so heavily that under
normal conditions ii must be retired
and can neither provide profits for the
banks nor serve as a basis for the ex-
pansion of commercial credits He en-
phasizes the necessity of such a circu-
lation, designed, like clearing house
certificates. simply as remedy for a
rare emergency, and not as an instru-
ment of current business.
The comptroller believes that. in ac-
cordance with the presidents recom-
mendation. national banks should be
allowed to issue circulation to the par
of the United States bonds deposited by
them for circulation, and that. in con-
nection with the law authorizing this,
provision can be made for a secured
emergency circulation.
The object of allowing the banks\to
take out circulation to the par of the
bonds is to induce them to furnish Tor
the use of the public a larger amount OF
circulation than is in existence at pres
ent. The present rate of profit to be
derived by the banks from their circu-
lation is net sufficient to justify them
in issuing a larger amount. but any
method of increasing the profits on cir
culation will result in an increase.
He also recommends legislation au-
thoriZing the issuance of national bank
note circulation to the par OF the de-
T,ff
the additional 10 Per cent circulation
thus allowed the banks be subjected to
a tax at the rate of or per cent per
annum for the time used, which will
tend to prevent its unrestricted use I'M
der normal conditions, and to save IL
for use at those periods of the year
when crops are to be moved, and in
those periods of panic when it is most
valuable both to the banks and the
business public as means Of assisting
the general liquidation of credits.
With the object of securing an in
crease in the present bank note circu-
lation, he would recommend the reduc.
ton or adjustment of the present tax
of 1 per cent per year<on the circulation
to 80 per cent of the deposited bonds
the amount of the reduction in the tax
on currency to be collected from the
necessary per cent Of tax on the capt.
tai and surplus OF national banks If re-
quisite to the public revenues
The comptroller believes that the le-
vying of a tax of one-sixth Of per
cent upon circulation to 80 per cent of
the par of the bonds and allowing the
banks to issue currency to the par of
the bonds by paying a tax at the rate
Of or 8 per cent per annum on the ex-
cess up to the par when outstanding,
will result in the desired increase in our
general bank note issues, and provide
a marked degree of elasticity in our cir
culation-
The COMPTROLLER believes that from
the passage of laws altering as suS-
gested. the rate and method of taxation
of national bank notes. an increase OF
at least S100,000000 may be reasonably
expected.
Based upon our present bond-secured
bank note circulation, which amounts
to about 500. 600. 000 and this added
amount. we would have. under such
laws. an available bond secured emer-
gency circulation of at least $4,000. 900.
Among other recommendations. the
comptroller strongly urges laws au-
thorizing the Incorporation of banks
for the purpose of carrying on inter-
national and intercolonial banking as
distinguished from domestic banking
He also recommends laws authorizing
the establishment in small communities
of national banks with capital of s2o,-
600. i
He repeats his Recommendation of
one wear ago relative to a modification
of the law restricting loans to any one
individual to 10 per cent Of the capital
of a national bank, aud advises the at
taching of penalty for making ex- !
cessive loans after the present section |
is modified.
He also gives in detail the results of |
an extended investigation into the de- |
yeIopment OF all the different banking |
systems of the United states during the |