The record-union., 1899-11-28
CONDITION OF
NATIONAL BANKS.
The Annual Report Of Comptroller
Of the Currency Dawes
Shows a V-si Incress, in Aggregate
Resources the Past Year.

A Recommendation to Congress
Looking to Improvements in the
Banking Laws Providing for a
Bond-Secured Elastic Circula-
tion-Summary of Views OF the
COMPTROLLER on Propositions Re-
lating to the Subject.
WASHINGTON, Nov. 27.-The an
nual report of Charles G. Dawes, comp
troller of the Currency, for the year
ended October 81, 1899, has been pre-
pared for transmission to Congress.
With respect to the condition OF Ma
tional Banks during the year, as shown
by the five reports required from tif-
banks, the Comptroller says
The number of banks in operation on
September I, 1899, was 3,595, with
paid in capital of $500, 1I2,9'o. Ihe
individual deposits on that daIe
amounted to S2,450, 725 o93.3l, and the
aggregate resources to S46oO, 800, l5o 4f.
A comparison of the September ttn re-
turns with those made on september
90 1898, indicates an increase during
the year in individual deposits of S4l9.-
271, ,055.02; in loans and discounts OF
$40, ,7S9, 623 20; in amounts due from
other banks and bankers, Sl6O,39l, :
1896 6S; in specie, S44 ,697 ,22o44, and in
aggregate resources, $646, S44, 4,OSS.oI- On
September 1th the net deposit liabill-
ties of the National Banks of the coun-
try aggregated $3,031, ,463, ,016.6S, on
which a reserve of $500, ,56S,S2o.90, or
29.3S per cent. was held. The compo-
sition of this reserve was as follows:
Specie, S33S, 5I1 ,3S3.S3; legal tenders
and United States certificates of de-
posit for legal tenders, S12l, 154, COL !;
due from reserve agents, S414, u.s.
6GO Al; redemption fund with the Treas
urer of the United States, $40, 116,-
1868
In recommending to Congress i'm
provements in banking laws as directed
by Section 333 of the Revised Stat
utes, the Comptroller. before making
his chief and new recommendation for
peats his recommendation of one year
ago for a law providing for an unse-
cured emergency circulation to lessen
the destructive power of financial pam
les, and taxed SO heavily that under
normal conditions it must be retired
and can neither provide profits for the
banks nor serve as basis for the ex-
Iansion of commercial credits. He
emphasizes the necessity of such a cir
culation. designed, like clearing house
certificates, simply as a remedy for
rare emergency, and not as an instru-
ment of current business.
The Comptroller believes that in ac-
cordance with the Presidents recon-
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
connection with the law authorizing
this, provision can be made for a Sc
cured emergency circulation. He there
fore recommends legislation authoriz-
ing the issuance of National Bank-note
circulation to the par of the deposited
United States bonds, and that the ad-
ditional 10 per cent. circulation thus
at the rate of , or 8 per cent per an
mum for the time used, which will tend
to prevent it's unrestricted use under
normal conditions. and to save it for
use at those periods of the year when
crops are to be moved, and in those
periods of panic when it is most valu-
able both to the banks and the busi-
ness public as a means of assisting the
general liquidation of credits. With the
object of securing an increase in the
present bank-note circulation, he rec
ommends the reduction or abolishment
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 capital and surplus
of National Banks if requisite to the
public revenues. To allow the banks
TO issue up to the par of the bonds, un-
subjected to additional tax on the 10
per cent. extra circulation, will result
an their Immediately taking out their
additional circulation for the purpose
of profit.
In considering the probable effect on
standing which will result from a
change in rates of taxation it must BE-
remembered that the calculation would
properly include, if it could be safely
made, an estimate of the increased
price of Government bonds, which will
probably be incident to a greater de-
mand for these bonds from the banks
seeking profit on circulation under the
modified rate of taxation.
The Comptroller believes that from
the passage of laws altering, as sug-
gested, the rate and method of taxa
tion of National Bank notes. an increaxe
of at least S100,O00,00 may be reason
ably expected Based upon our pres
ent bondsecured bank-note circulation.
which amounts to about S207. 900, ,000.
and this added amount, we would have.
under such laws, an available bond Sc
cured emergency circulation of at least
$30.0C0.o00.
AS a summary of his views on this
subject, the Comptroller would call at
tention to the following propositions:
First-Whether or not legislation be
passed providing fer an uncovered
emergency circulation for needed pro-