The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1900-10-15

comprehend, has been to secure to tho
government o, more favorable rate Of
interest on Its debt, than would have
been the case had there not existed this
special demand for part OF It's oblisa-
tlon.
At the present time the bonded debt
OF the United States amounts In round
numbers to 1000 millions. or this total.
$3.50, 100000 is now owned by the nation
al banks. All the other banks OF the
country Outside Of savings banks and
loan and trust companles)l own only
IS, 10000. Repeal the national banking
act and there would be no special mo-
tive for the national banks to continue
their Investments in United States
bonds. They would naturally dispose
Of their holdings. or large proportion
thereof. What they would thus sell
would be added to the market supply.
with q seriously depressing influence
upon the price Of our securities. II 1t
made no difference to the treasury when
1t had no need to borrow, that dlfter-
ence would be experienced In a higher
rate Of interest, whenever the public
need should rqulre such borrowing. The
value Of the factor here suggested can
not be specifically stated. but that 1t
has been very great is clearly percepti-
Bile. The fact that United States bonds
as an Investment security yield a lower
return of interest to the Investor than
do the bonds Of any other nation can
not be accounted for by the operation
of any other perceptlble Influence than
the one Just indicated.
Note Issue Not q Valuable Privilege.
Nevertheless, at the outset there was
no rush on the part OF the banking
community TO avail Itself OF what are
now derided. by some as extraordinary
privileges.
At the present time there are more
than $1,000 banks and banking institu-
lions, exclusive Of savings banks. ills
a striking fact that only 1898 of these
institutions have ,availed themselves OF
the privileges Of the national bank act.
the others, more than 5000 in number;
preferrins to operate under the sane
lions of stnte authority. even II they
forego all the privileges Of note issue
Almost year after the act was pass,
ed, only 65,000.0 900 millions Of circulating,
notes had been ISSUED, while the banks
newly organized under the law were en-
titled to circulation Of sos, 100000. And
so 1t has been from that day to this.
The banks as q whole have never avail
cd themselves Of more than so or 60 per
cent OF their note-lssuing privileges.
March II last. the date OF the approval
of the new financial law, the national
banks of the United States were enti-
tied to bank note circulation of S5Ti,-.
100000. On that day the amount OF
notes actually outstanding was only
S2iG,Ooo,0O0. Plainly, II the popular i'm
preston that ,note-issulng is an exceed
irSly profitable thing were true. banks
would have ave!iad themselves of 1t to
the fullest extent. That they did not Is
proof OF what was actually true,
namely, that there was either so little
profit, or, as in soma cases It may be
shown, such n loss involved In issuing
circulating notes that the national
banks did abou: as little OF It as they
could.
Why, then, has the national bank sya-
TEN developed In spite of the fact that
there was llttle or no profit, and some-
times loss, In issuing circulating notes?
The answer is to be found In the fact
that rigid government. supervision. of
national banks. under the restrictions
of the act. gives them a standing and
credit much to their advantage In the
public mind, The main incentive, then
for the organization of national bank
rather than q private Or state bank I'M,
der the present regime Is to gain the
prestige which attaches to national
institution. The privilege Of note issue
Is not the incentive, Tor, as has been
shown on other occasions. 1t has some
times meant an actual Impeachment
of 4 community to organize n national
bank. this because more money has
been sent out OF the community to
purchase government bonds at q higher
premium than could be brought back
Into the community in the shape OF cir
culatlnr- notes OF the bank. -fsfs
The Recent Currency Act.
The new financial law corrected the
llliberal restriction OF the old act. which
authorized the issue Of circulating notes
to the extent Of 80 per cent only OF the
par value Of :he bonds deposited as Sc
curity. Now national banks may Issue
their notes to the par value OF the Uni
ted States bonds deposited with the
government. Under the new law. there
fore. community organizing a bank
stands little better change of coming
out even on the issue of circulating
notes than II did when only 80 per cent
of the bonds 1t was compelled to buy
was allowed for circulation.
An important provision in the new
act respecting national banks is that
which authorizes their organization
with a capital OF $4,000 in places not
exceeding 5000 poplatlon Heretofore
the minimum capital had been $4,000,
and this sum was sufficiently large TO
prevent the extension of banking facll-
tiles 10 many communities which really