The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-11-26
Privileges OF Directors and Execu-
tive Officers of Banks should He
CurtaiIed, the Controller Says.
AMENDMENT TO SECTION $500
GIVING BANKS IN CITIES SAME PRIV
ILEGEs AS THOSE IN TOWNS,
And Enabling the Former to Make
Greater Loans, Urged I'm Interest Of
Justice-General Cash Reserve.

WASHINGTON. Nov. 25.-The annual re-
port of Charles G. Dawes. controller OK
the currency. for the year ended Oct u,
1900. has been prepared for transmission
to Congress.
The report starts with a summary OF the
reports made during the year by the ma
tional banks In response 10 the call OF the
controller, which shows the aggregate re-
sources OF the ASH national banks report
ing on Sept. s, 1900, to be s5.04s, l3S, %.
Between the September call OF 1899 and 1900
loans and discounts increased s'79.oos, ssl-4 6-
The loans and discounts on < 5. 1870.
were s.. $50, US. 64257. and individual deposits
were s2,5OS. 24s. 557.5s.
The capital stock of national banks re-
porting on Sept. was seso. 2ss. $50.
In the review OF the operations of ma
tional banks under the currency act OF
March IA, 1900. the report shows that out
os approximately one thousand informal
applications for authority TO organize ma
tional banks, filed In anticipation OF and
as a result OF the law, sos have been made
formal and have been approved by the con-
troller between March IA and Oct 81. 1900.
From the sos formal applications came 3sS
actual organizations Of banks between
March IA and Oct. 81. OF these 3iS banks
actually organized. 2is were banks OF less
than $4,000 capital, representing total
capitalization Of $6,575.o0o. and ninety-nine
were banks which could have been organ
lied under the old law with an individual
capital OF $4,000 or over, representing a
total capitalization of slo,soo.ooo. The bonds
deposited to secure circulation by these
new institutions between March IL and Oct.
81 was s5,s4s, 2OO or only about 30 per cent.
of the maximum which might have been
deposited.
The total increase In the circulation Sc
cured by government bonds of all national
banks In the system since March IA.
1900 has been So, 4.2U. The total out
standing circulation on Oct 81, 1906. was
1881 e13, 26s. of which So. 7sL2o4 is secured
by lawful money and is in process OF re-
tirement The total bond-secured circula-
ton on Oct. 81, 1900, was s29S ,s2s.04-
On Oct. 81, 1900 there were 1885 national
banks in operation. with a combined cap
ital of $s32 So, 395. The combined resources
OF the national banks being over $780,
100000 is greater than at any time here
tofore.
In complying with the requirements OF
section 1888, providing that the controller
shall suggest amendments for the i'm
provement of the banking law. he first
calls attention to the fact that under
Section 1 of the act of July u. 1882 under
which extensions OF national bank char
tiers may be granted by the controller.
he is limited by the act to one extension
of twenty years duration.
EXTENSION OF CHARTERS.
Under this section the charters OF l7S7
national banks were extended for a term
of twenty years from the date of ex-
piration OF their first charter. The first
of the extended charters Will expire on
July IA, 1902, and the others win follow
in due course. The controller then says:
without additional legislation author
izing a further extension, a bank desir-
ing to continue In business under the ma
tional system whose corporate existence
has been once extended will be compelled
u go into liquidation at the expiration OF
the period OF it's extension and reorganize
as a new association. This course will
render necessary the complete winding
UP of the affairs of the expiring bank. the
retirement of its circulation. the with
drawal of it's bonds. and the issuing OF a
new certificate OF authority by the con-
troller, with distinctively new title and
charter number as Is at present the case
with an entirely new organization. While
the reorganized association might con-
tinue TO be in all respects the same bank.
with practically the same stockholders.
directors and officers. the legislation here
matter recommended would render UNI
necessary these steps. which would be at
tended with inconvenience both 10 the
business public and the banks. / therefore
respectfully recommend an amendment OF
Section OF the act OF July u. 1sS2. author
izing the controller Of the currency TO
extend for a further period OF twenty
years, under the conditions and limita-
lions imposed by said act. the charter Of
such expiring association as may desire
TO continue in the national banking
system"
The most important recommendation
made by the controller. and that which il
the chief feature OF the report. is one for
additional restrictions upon loans 20 direc-
tors and executive officers of banks. The
controller states that the large percentage
of bank failures attributable TO excessive
loans TO directors and officers. which
amounted to sixty-two failures. or II per
cent. OF the total failures OF national banks.
led him to a careful investigation as TO
all directors loans now outstanding IN tho
national banks OF the country.
This Investigation showed that on June g.
is0o the date OF the controllers call for
a statement OF condition from the national
banks. that OF &7O9 directors OF national
banks IN the country 1854 we're directly or
Indirectly indebted TO national banks under
their management.
The aggregate sum owed by these is.5ss