New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-11-28
THE NATIONAL CURRENCY
.NNrrAL REPORT OF CONTROLLER
DAWES READY FOR CONGRESS.
vposPERrTy SHOWN BY NATIONAL BANK RE-
ruRNs-CBANeEs IN THE LAWS


vo,b,nston. Nov. 27-The annual report OF
1N~les @ Dawes Controller OF the Currency. for
che year ended October 81. 1899 has been prepared
Cor transmission TO Congress
with respect to the condition OF National banks
,,,s the wear as shown by the 1ve reports re-
CURED from the banks the Controller says:
The number Of banks in operation on septem;;
.ss 779 90 The individual deposits on that date
smounted to s. $50 1855 g. and the aggregate re-
ssSSpteber returns with those made on septem.
ber 20 1895 indicates an insress o 6Srs .ne year
Il ndyieua al qsPGsss 20 IL amounts due from
other banks and bankers NSoSs SS SS IN SPECIE e
az On September the net deposit liabilities
Of The &c, S SS on S %bSs al OF $50 So or
S per held The cosm Tp Isl Sy 90 Of this
!eS6dors and United States certificates OF deposit
for legal tenders 1927 75t 6Sl due from reserve
Treasurer OF the United States. N0,1l6lSO6S
IN recommending to Congress improvements In
banking laws as directed by Section SS3 Of the Re
,.ised statutes the Controller, before making his
chief and new accommodation for a bond secured
elasu, circulation. repeats his recommendation OF
ono YEAR ago for a law providing for unsecured
emergency circulation 10 lessen the destructive
mower Of financial pancs and taxed so heavily that
under normal conditions II must he retired and can
neither provide profits Tor the banks nor seTnS as
Io enonh9szes the necessity OF such circulation,
a
ment Of current business. repeating the words of
bis former recommendation.
Nj In ;Jntroducing his new recommendation the Con,
,roler then says that If such a law be not passed
oen in connection with the present system Of bond
secured National bank notes, and should be pro- pro,
vided for by law whether the former law is passed
OF The Controller believes that in accordance with
The Presidents recommendation. National banks
should be allowed TO issue circulation to the par
NJ the United States bonds deposited by them Tor
fiOD connection
authorizing this provision can be made FOR Sc
The object Of allowing the banks TO take out cir
the par rs. of Of me the eG p Is arge
~ circulation than is In existence at present Inc
G aGs to he not 9y 10 1s
Them in issuing larger amount, but any method
Of Increasing the profits on circulation viii result
It is true that the authorization, Of Issue of
N me present rate OF tax is one method OF induc-
INK larger circulation, but It is not the only
method BY modification Of the present rate of
taxation bank notes coupled with the an h
GR OF can be offered for larger circulation
and vet provision be made for secured emergency
circulation.
INCREASE OF CIRCULATION
The Controller therefore would recommend legis-
iaton authorizing the issuance OF National oaaK
note circulation to par OF the deposited United
States bonds and that the additional 10 per cent
circulation thus allowed the banks be subjected to
a tax at the rate OF or per cent per annum Tor
the time used which will tend to prevent It's I'M
restricted use under normal conditions and TO save
81 for use those periods of the year when crops
are to be moved and in those periods Of panic when
81 ts most valuable both TO the banks and the busi
ness public a means OF assisting the genera neiLa.
90 increase in the present bank note circulation he
would recommend the reduction or abohsnment OF
the Sc % t SSr OF Cent Of the deposited
amount of the reduction in the tax on currency 10
be collected from the necessary percentage OF tax on
the capital and surplus Of National banks. II re-
ouisie to the public revenues To allow me na d
additional tax on the 10 per cent extra circulation
will result in their mInedatey IaHs OF 11l proSt
Business credits will be extended and adJusteo 10
ppactcay the same ineasticy will characterize
bank note issues o heh b Ss no additional
Of Iessening the necessity OF cal upon me ~
ness community 10 IuTn ii ~ the ne deposts drawn
by frightened depositors. ,.,,,, ,,a
For The purpose of indicating that within the
range OF the possible modification Of taxation on
circulation to 90 per cent OF the ponuS, oS ~
per cent 10 the par of the bonds, while amply en-
couraging the increase in genera nOtS CT rest Of
Calculations given more in detail hereafter .,on
Profit upon circulation against deposit OF sI S0
90 2ssenf p4ee BEING GEM the
rsafzed under different rates OF taxaton IN augI-
lion TO per cent the capital invested IN Dohus'
with money worth per cent;
On $50 600 circulation being 90 cent Of 500 900
bonds per circulation under pres so7o ca
on 10000 circulation to par of bonds uniform TO 50
on S Ss5 Geo cent ci-cSlaon TO 90 per cent bonds
taxed fournnths OF per cent inaS cpsafsn
70 be taxed at the rate OF OF pe, 77s So
On 10000 circulation - to P Psr ol
bonds taxed onesixth Of per cent nsnng
IA he taxed at the rate OF or per cent FOR 100 90
On 10000 ciTc.Iao,1 TO 0e par Gen Of bonds
On o S ShouS tsSao sHs possible an Issue
o. to" ., or ner cent for issued LIE SO
In The foregoing figures no profit is calculated
as accruing upon the emergency clrcuIauolss .ax
Inc nf per cent upon circulation to 80
ger zen, of the par Of the bonds and allowing
bonds by having tax at the rate OF or per
cent nsT annum on the excess up TO the par
when % bank NIX note issues and provide
marked degree Of elasticity In the circulation.
TAXATION OF BANKS.
The Controller says he cannot properly DISCUSS
the question OF taxation of banks as related 10
the public revenues further than TO say thdt tho
imposition Of tax upon the capital ana surplus oi
the banks TO offset any reduction In the tax on
cur,erc, will remove any objection to his recon-
nendstIon on the ground that It lessons the share
OF the n1lblic burden which the banks should prop
erly bear.
The Controller believes that from the passage OF
laws altering as suggested the rate ana ihe'nou
OF taxation of National bank notes, an increase
Of at least 500 100000 may be reasonably expected
Based on the present bond secured bank note
circulation which amounts to ABOUT SZo"ooo'o'
and this added amount, there woud De unuer euch
laws an available bond secured emergency circu-
lation Of at least $50 10000
SUMMARY OF THE CONTROLLERS VIEWS.
As a summary OF his views on this subject the
Controller calls attention TO the following PROPOSE
tons
First-Whether or not legislation be passed pro-
v!dng for an uncovered emergency circulation TOT
needed protection from the disastrous e1ects OF
panics a very much larger degree or elastlcly can
be impaired to present bond secured Daik mose
currency thus making II Of greater use In seasons
Of the year in which the demand for currency rs
above the normal. and OF Invaluable assistance Ill
times Of panic. -, .,.o,,od 81, tb. A,act-