The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-03-08
At Least 1000 Charters May he Issued
10 People Who Wish To Start
Small National Banks.
ONLY $4,000 is REQUIRED
STATE INSTITUTIONS WILL PROB
ABLY BE REoRGANIZED.
New York Banks Anxious to Secure
Their Business-sumerous In
qufries Received.

NEW YORK, March 7.-Advices received
by local banking interests to-day from
small towns throughout the United States
indicate that state banks in all sections OF
the country are preparing 10 take out char
tiers under the national system as soon as
the currency bill becomes law. New
York banks are already making efforts to
secure the business Of these institutions.
one bank in this city alone receiving to-day
more than thirty inquiries on the subject
One man from a Western town told bank
officer that he expected TO start eight
banks, with a capital OF $4,000 EACH Re-
ports of similar preparations In other sec
lions 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 esti-
mated to-day that any one with $500 cap
ital could start a national bank under the
new system. All that Is required Is $4,000
in per cent government bonds, which
could be secured at ruling rates for about
$26, $50 These, representing the capital OF
the bank could be sent to Washington.
and circulation for the full amount of the
capital Immediately taken out. The or
ganizer of the bank then has only 3. $50
tied up in the enterprise. but could take
deposits in the regular way. Whether the
system can be properly safeguarded under
such requirements is not known, but local
bankers are watching the experiment with
great interest and more or less concern
Such extension of the national system 10
expected to yield large profits to national
banks of this city, since state banks at In
terror points. keeping their balances with
state banks or trust companies In this citys
will have to transfer their accounts 10 ma
tional banks Off they wish them counted as
reserve) as soon as the new charters are
taken out. This, IL is thought, may result
in serious loss for some of the largest
state banks. since such accounts represent
a large volume Of business.
A bank president cited the difficulties or
the present system as the reason why New
York banks, with their enormous volume
of business, found IL expedient TO take out
only about ST. 100000 in circulation. A bank
paying 40 or $50 for per cent. bonds, on
which only 30 per cent. of circulation could
be issued. would have to tie up $50 or $40
on each 500 so invested, besides paying
double the tax called for In the proposed
law. On that basis the transaction would
be decidedly Improbable, 10 say nothing OK
the expenses incident to printing. ETC.,
which would still further cut into the In
come. This is why local banks carrying
the greatest number of out-of-town ac-
counts and shipping mllnons OF currency
each year TO Western, Eastern and South
ern correspondents, when crop moving de-
mands cut down interior money supplies.
took out little or no circulation, although
IL might have materially protected their
reserves during periods Of money strin-
gency.
Some Of the largest state banks OF this
city have considered informally the advisa-
bility of taking out national charters. ana
II 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 banks TO establish
branches in this city may deter some insti-
tutions from making the change