The times. [volume] (Richmond, Va.) 1890-1903, 1899-11-28

REC0MME NOATI0NS MADE
Would Provide for an Unsecured
Emergency Circulation for Rarc
Expcdiencics and Not for
Current Business.

WASHINGTON. Nov. Special-Thc
annual report OF Charles G. Dawes,
Comptroller Of the Currency. for the year
ended October 81. 1899. has been prepared
for transmission to Congress.
With respect TO the condition OF ma
eonal banks during the year as sh0"h
by the 1--WE reports required from the
banks. the Comptroller says.
The number of banks in operation on
September T. iS,a. was g. 595. with pald
IN capital OF S6o6.U2.9s0. The indiVluuAi
deposits on that date amounted to S@'aSo'-
T25.6S.Sl. and the aggregate resources 10
1859, 355. 1884 A comparison OF the sep
TENDER returns with those made on sep
TENDER %. 1898. indicates an increase our
ing the year in individual deposits OF
S4la27i CSC: IN loans and discounts OF
$40 7S9. e23. 70: In amounts due from other
banks and bankers. Sl6O. 5sl So g. in specie
s4s.6e7 1854. and I'm aggregate resources
SOS M. On 81. on September Z the net oe
post liabilities OF the national banks OF
the country aggregated S.o3l 4o3.olbbS, on
which n reserve of SS1,56NN'o. or -''"N
per cent. was held The composition %
this reserve was ass follows Specie,
SOS. 81. 3s3S3: legal tenders ana Chl'eu
States certificates OF dep. SIT Tor lesal WI
sfl4 ID. e0Df4: redemption fund with tne
Treasurer of the United states Sollo'-
1905.
EMERGENCY ISSUES.
In recommending 10 Congress improve
rnents in banking laws as directed by sec
ton SsS Of the Revised Statutes. the
Comptroller before making his chief ana
new recommendation for bOnd-seculen
elastic circulation. repeats his recommen-
dalton Of one year ago for law proNld-
ing for an unsecured emergency circula-
tion 10 lessen the destructive power OF
financial panics. and taxed so heavily that
under normal conditions 1t must be retir-
ed and can neither provide profits for
the banks nor serve as basis for the
expansion OF commercial credits. lie en-
phasizcs the necessity Of such circWa-
tion. designed. like clearinghouse ceru-
fcates. simply as a remedy for rare
emergency. and not as an instrument OF
current business.
HOW 1T WOULD OPERATE
The Comptroller therefore would
recommend legislation authorizing the is
suance Of natiOnal-bank note circulation
10 the par Of the deposited United States
bonds. and that the additional 10 per cent.
circulation thus allowed the banks be
subjected 10 tax al the rate of > or
per cent. per annum for the time used,
which will tend TO prevent its unrostrict-
ed use under normal conditions. and 10
save il for use az those periods OF the
year when CROPS are 10 be moved. and In
those periods Of panic when ii IS most val
uable both to the banks and the business
public as a means Of assisting the general
iiouidation of credits. With the object
of securing an increase in the present
banh-note circulation. he would recon-
mend the reduction or adjustment OF the
present tax of per cent. per year on
the circulation to A. per cent Of the de-
posited bonds-the amount of the reduc-
fion I'm the tax on currenct 10 be collect
ed from the necessary per cent Of tax on
the capital and surplus of national banks
II requisite 10 the public revenues. 10
allow the banks 20 issue up 10 the par OF
the bonds. unsolicited 10 additional tax
on the 10 per cent extra circulation, VIII
result in their Immediately taking out
their additional circulation for ne purpose
Of profit. Business credits viii be eX-
tended and adjusted 20 correspond with
such increase Of the currency, and practi-
cally the same inelasticity will charac-
terjze our bank-note issues then as now.
With the advent II a panic we would nave
10 addit .onal means Of lessening inc
necessity OF a call upon the business com
munity to furnish. by the repayment OF
loans. practically the bulk OF the deposits
drawn by frightened dcpositors