The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1899-11-28
CURRENCY OF NATION
CONDITION OF NATIONAL BANKS
AND THEIR NEEDS
PLANS AS TO CIRCULATION

Comptroller Believes Banks Should
Be Allowed to Issue Circulation
to the Par of the United States
Bonds Deposited by Them to Cow
er OBSERVATION-DISCLOSURES of Bank
Taxation Are Suggested.
WASHINGTON, Nov 27-The annual
report of Charles G.. Dawes, comptroller
OF the currency, for the year ending Oct.
81, 1889, has been prepared for transmits
sion to congress. With respect to the
condition of national banks during the
year, as shown by the five reports re-
quired from the banks, the comptroller
says: The number of banks in opera
ton on Sept. Z, 1899, was 1856, with
paid in capital of $605, 772, go The in
dividual deposits on that date amounted
to w. $50, 725, 81, and the aggregate re-
sources to $4,650, 355, 1873. A. A comparison
of the Sept. returns with those made on
Sept. 20, 1898. indicates an in
crease during the year in
individual deposits of $419,271, 055.02; in
loans and discounts of $40, 7S9, ga. 20; in
amounts due from other banks and bank
ers, $6O,3s1, S96.68; in specie, $4, 697, 225.44,
and in aggregate resources, $646, S44, 0S8.57.
On Sept. the net deposit liabilities of the
national banks of the country aggre-
gated $3,031, 4e3, 016.68, on which q reserve
of $3.50, 56S, $3.50, or 2938 per cent was held.
The conn osition of this reserve was as
follows: Specie, $685. ST., 3S3. SO; legal ten
ders and United States certificates of de-
post for legal tenders, $127, 754, 651; due
from reserve agents, $414,126 66O.4; re-
demption fund with the treasurer of the
United States. $40 116, 13O.63
In recommending to congress improve
ments in banking laws as directed by
section 1873 Of the Revised Statutes, the
comptroller before making his chief and
new recommendation for a bond-secured
elastic circulation, repeats his recon-
mendation of one year ago for a law
providing for an unsecured emergency
circulation to lessen the destructive pow
er of financial panics, and taxed SO
heavily that under normal conditions
it must be retired and can neither pro-
vide profits for the banks nor serve as
a basis for the expansion Of commercial
credits. He emphasizes the necessity of
such a circulation, designed, like clear
ing house certificates, simply as a rem
edy for rare emergency, and not as
an instrument Of current business.
BANK CIRCULATION.
The comptroller believes that, in ac-
cordance with the presidents reconm nd
alton, national banks should be allow
ed to issue circulation to the par of the
United States bonds deposited by them
for circulation, and that, in connection
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 for the use
of the public a larger amount of clrcula-
ton than is In existence at present. The
present rate of profit to be derived by the
banks from their circulation is not su1fi-
cient to justify them in issuing a larger
amount, but any method of increasing
the profits on circulation will result in
an increase.
The comptroller believes that from the
passage of laws altering the rate and
method of taxation of national bank notes
an increase Of at least 100,000,0Q0 may be
reasonably expected.
Based upon our present bond secured
bank note circulation, which amounts to
about $207, 600, 600, and this added amount,
we would have, under such laws, an avail
able bond secured emergency circulation
of at least $50 1000, 900.
Among other recommendations the
comptroller strongly urges laws author
iZing the incorporation Of banks for the
purpose of carrying on international and
intercolonial banking as distinguished
from domestic banking. He also recon-
mends laws authorizing the establishment
in small communities of national banks
with capital Of $4,000.
He repeats his recommendation of one
year ago relative to a modification of
the law restricting loans to any one indi-
vidual at 10 per cent of the capital of
national bank and advises the attaching
of a penalty for making excessive loans
after the present section is modified.