The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1899-11-28
COMPTROLLER DAVIES REPORT.
Revision of she National Bank and the
Currency situation.

l
| Currency situation.
| Washington, Nov. 27.--The annual re.
port of Charles c. Dawes, comptroller
| of the currency, for the year ended Oc-
tober 81, 1899, has been prepared 70,
transmission to congress With respect
to the condition of national banks dur
ing the year, as shown by the five re.
ports from the banks, the comptroller
says:
The number of banks in operation on
September z, 1899, was 1886. with paid
in capital of s605, ,970. The individ-
ual deposits on that date amounted to
50, 450, ,725,595 and the aggregate re-
sources to $3.50, 1866 1894. The COM
parison of the September returns with
those made on September 20, 1898, in
dicates an increase during the year in
individual deposits of S419,271, ,055,02; in
loans and discounts of S34O, 789, ,6232O; /;
in amounts due from other banks and
bankers, $3.50, 1891, ,S966S; in specie, $44, =
697,225.44, and in aggregate resources,
s646,S44OSS.57. On September Z the net
deposit liabilities of the national banks
of the country aggregated S3,091, i63,-
016.6S, on which a reserve of $S9G,5GS, >
$3.50, or 29.3S per cent was held. The
composition of this reserve was as fol-
lows: Specie, $685., ,571, $685. legal ten
ders and United States certificates of
deposit for legal tenders, $127,754b b5t;
due from reserve agents $414, 1875, ,660.44;
redemption fund with the treasurer of
the United States, $10.116, 1903.
In recommending to congress i'm
provements in banking laws as direct
ed by section 333 of the revised statutes
the comptroller before making his
chief and new recommendation OF one
year ago for a law providing for IN
secured emergency circulation to lessen
the destructive power of financial PAN
les, and taxed so heavily that under
normal conditions it must be retired,
and can neither provide profits for the
banks nor serve as d basis for the ex-
pansion of commercial credits He en-
phasizes the necessity of such a circu-
lation, designed as a remedy for a rare
emergency, and not as an instrument
of current business, repeating the
words of his former recommendation,
to wit:
For the purpose oftallowing elas-
ticity to bank note issues to protect the
banks and the community In times 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
subject to so heavy tax that they
could not be issued in normal times for
the purpose of profit, but would be
availa BILE in times of emergency. The
tax should be so large upon the SOL
vent 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 necessitat ting any
preference of note holders over deposit
ors of any insolvent issuing bank. The
tax should be so large as to force this
into retirement as soon as the
passes. Such currency
could be used only to lessen the evil
effects of the too rapid liquidation of
credits which are collapsing under a
financial panic, but could be profitably
used as a basis of business speculation
and imitation"
In introducing his new recommenda-
tion, the comptroller then says that if
such law be not passed. marked de-
gree of elasticity is possible of attain
ment in connection with our present
system of bond-secured national bank
notes and should be provided for by
aw whether the former law is passed
u not.
The comptroller believes that, in ac-
,ordance with the presidents recon-
national banks should be
lllowed to issue ejaculation to the par
If the United States bonds deposited |
~ them for circulation, and that, in
with the law authorizing |
his provision can be made for a secur-
d emergency circulation.
The object of allowing the banks to
AXE out circulation to the par of the
,onds is to induce them to furnish for
he use of the public larger amount
# circulation than is in existence at
resent. The present rate of profit to
he derived by the banks from their cir
ulation is not sufficient to justify them
n issuing a larger amount, but any
Method of increasing the profits on cir
ulation will result in an increase.
1t is true that the authorization Of
n issue of currency to the par of the
eposited bonds, subject to the present
ate of tax, is one method of inducing
larger circulation, but it is not the
My method BY modification of the
resent rate of taxation on bank notes,
oupled with the authorization of issues
0 the par Of the bonds, the same in
ucements can be offered for Il larger
REGULATION and yet provision be made
Or a secured emergency circulation. A
along this line is made.
r1TERBURY dRMORY VAS CLOSED.
ot 10 be Opened to Enlisted Nlcn on