Evening star. [volume] (Washington, D.C.) 1854-1972, 1900-04-09
INCREASE IN BANK NOTES
DEPOSITS OFBONDS INDICATE 1T TO
BE S50s80e,880.
n
Applications fa
Applications Tor ever Five Hundred
Charters--On1y Three Have
Il
Been Granted.

Been Granted.
G75G-
An increase in the bank note circulation
of about $50.O00,40O is already in sight. This
is the increase based upon actual deposits
of bonds in the treasury under the new law,
without any estimate for further deposits.
The circulation has not yet shown this in
crease in full because the controller has
not been able to issue notes to all the
banks entitled to them and asking for their
allowance. The proof that the increase of
| nearly s5o,oo0,ooo is assured as soon as
the notes be issued is afforded by COM
parison of the bonds on deposit and the
| total circulation January 81 last and at
the close of last week. The deposit of
bonds increased considerably during Feb
ruary and early March before the new law
TOOK erect In anticipation of the benefits
expected from the refunding law and in
oroer to be ready to exchange the old bonds
1or new. The bonds on deposit to secure
circulation January 81 were $235, $50 TO
The amount increased Saturday last to
s259,945.95O, an increase Of more than s24,-
100000. The increase to the par value of
| the bonds already pledged January 81 would
add $2a,aeo,ooo to the circulation, making
d total obvious and certain increase of
about S47,5OO,C00.
The total bank note circulation January 81
was S246,9S1, 1913, including $36,S2O 4O4, COW
ereu py lawful money and in process of re-
IRE ae1 e. The total Saturday last was
cred by lawful money with the purpose of
retirement. The bond-secured circulation
acme, which stood January 81 at 500, 1885,
100. mas increased so only to 1924, 644 100, which
IS ABOUT S23,0oo,O00 less than the increase
Woula De II the notes had been issued to
Whlch the banks are entitled. Putting the
oodl o circulation, therefore, at $780,
oO,oo when the notes are all issued and
allowing $350O0,OOO for notes in process of
retirement, the total circulation within a
Re" weeks, without any further increase
edL,- o " deposits, should stand at about
January 81. --'ote 'HS'ii
Further Increase in CfrcuIat,on
What the further increase in hank not,
circulation will be in the near future ts a
subject Of some difference of opinion. 7,
IS not likely to exceed another sum Of $780,
""''o within year, and will probably be
less. bonds are still being deposited to
SOME extent for new circulation, but not so
rapidly as was the case for a few DAYS
Inc deposits reported for Saturday Iast
were $so6,50o, while the bonds withdrawn
We're s1U.50O, leaving a net Increase of
s629ooo This rate of increase would re
quire about four months to add another
sum of $4,000 900 to the circulation bnt if
is not at all probable that the deposit will
continue so large.
The fact that the treasury is somewhat
behlnd In shipping currency will In itself
delay deposits of bonds even where naw
circulation is desired. Many of the banks
are likely to delay action in any case in re-
Sard TO new bond deposits until the effects
of the refundinS law are clearer than AT
present or until the approach of the autumn
suggests pressure at that time for cur
rency The Substitution of the 2 per cent
bonds for the old classes as a basis for cir
culation is being rapidly pushed under the
whip of the discrimination in taxation.
which makes the tax twice as much upon
the old bond as upon fthe new.
The 2 per cent bonds pledged to secure
circulation have, risen to $l36 ass 300 and
those pledged to secure public deposits to
SIG 30. 100. Thef manner in which the old
bonds have BEEN withdrawn may be judged
from the decline Off the old tours on dc
post on January 81 from s127 652 $50 to 500
11O.SJO on April I; the per cent bonds,
from So. &C., 800. to s23, 145 900 the S. frorn
sl6,656.1oo to $7f4fS,S5o and the long As
from $17,9F, 80. to s11, 722,3JO. The latter
class of bondss are not available for re-
funding, but suffer as a basis for bank note
circulation by the double tax on the notes
as compared with the new bonds.
Charters to Three Small Banks.
The authority to create small banks under
the new law does not seem likely to cause
so large an increase in bank note circu-
lation as was looked for in some quarters
The number of bank charters applied for
has already exceeded five hundred, and if
they took the entire circulation to which
they are entitled, upon the basis of a CAPT
tai of $4,000 each. the increase In circula-
ton would be $500, 600. Even this COM
paratively small amount will not be called
for at present by the small banks. The
process of incorporation is somewhat SLOW
and only three charters have az yet been
completed and issued. These three banks
lation to which they would be entitled have
taken practically only the minimum of %
per cent of their capital. One of them, with
a capital of s23, 600, took circulation TO the
amount of only $4,000; the second with a
capital of $40, 600. took circulation to the
| amount of $4,000; and third, with a
capital of S25 600, took circulation to the
amount of $1,000. Some of these banks
may increase their circulation hereafter If
the price of bonds declines. but from pres
ent indications the increase of circulation
the result of establishment of the new
banks will be very few millions of dollars
The application for five hundred national
banking charters does not by any means
represent an increase by this amount in the
banking institutions of the country The
extension of the national system to small
banks is leading many welI-established
state and private banks to enter the system
and 1t is estimated that at least go per
cent Of the applications come from these
existing Institutions. The applications In
some other cases may never be carried to
while others are practically owned by
| larger banks and will possess much of the
character. although not the official stamp,
OF branch banks.