The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1900-03-08
A FLOOD OF MONEY.
VIII Follow the Inauguration
of the New Currency Law.

New York, March s.-Advices re-
ceived by local banking interests today
from small towns and villages through
out the United States indicate that
state banks in all sections of the coun-
try are preparing to take out charters
nnder the national system as soon as
the current bill becomes a law.
New York banks are already making
effort to secure the business of these in
situations, one bank in this city alone
receiving more than thirty inquiries
upon the subject. One man from a
western town told a bank officer that
he expected to start eight banks with
a capital of $4,000 each. Reports of
similar preparations in other sections Of
the country led to a. prediction by an
officer of one of the best known banks
that fully 1000 national charters would
be applied for after existing restrictions
were modified.
The Evening Post says:
1t was estimated today that anyone
with $4,000 capital could start ma
tional bank under the new system. All
that is required is $25, 900 in two per
cent government bonds, which could
be secured at ruling rates for about
$780, $50. These, representing the capital
of the bank could be sent to Washing
ton and circulation for the full amount
of the capital Immediately taken out.
Inc organizer OF In6 Dank In0n mas
only 81, $50 tied UP in the enterprise, but
could take deposits in the regular way.
Whether the system can be properly
safeguard under such require
ments is not known, but local bankers
are watching the experiment with great
interest and more or less concern.
Such extension of the national sys-
TEN is expected to yield large profits to
national banks of this city, since state
banks at interior points keeping their
balances with state banks or trust COM
panies in this city will have to trans
fer their accounts to national banks Off
they wish them counted as reSerVe) as
soon as the new charters are taken out
This, it is thought, may result in a SER
ious loss for some of the large state
banks, since such accounts in the, aggre-
gate represent a large volume of bust
ness
A bank president cited the difficulties
of the present system as the reason why
New York banks, with their enormous
volume of business, found it expedient
to take not only about ST., 100000 in cir
culation. A bank paying 100 or 100 for
a four per cent bond on which only 80
per cent of circulation could be issued
would have to tie up $50 or $40 on each
S10O so invested, besides paying double
On that basis the transaction would be
decidedly Improbable to say nothing
of the expenses incident to printing, etc,
which would still further cut into the
income. This is why local banks, carry
ing the greatest number of out of town
accounts, and shipping millions of cur
rency each year to western, eastern and
southern correspondents when crop
moving demands cut down interior
money supplies, took out little or no cir
culation, although it might have ma
terially protected their reserves during
periods of money stringency.
Some of the large state banks of this
city have considered informally the
advisability of taking out national
charters, and it is not improbable that
certain changes of this sort may be
made later on. But the provision of the
banking law in this state allowing state