The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-08-29
THE GOLD STANDARD ACT.
Has Proved Good Thing for Small
Communities, Especially i'm West.

Communities, Especially i'm West.
Washington Letter in Brooklyn Eagle.
The daily reports of the office of the con-
troller of the currency show that the en-
actment of the gold standard act of March
IA, 1900. with its provision for the organiza-
ton of national banks with small capital,
has accomplished all that was claimed for
it in the way of providing additional bank
ing facilities for small towns and villages.
During the two years and five months that
this law has been in operation over 1000
banks have been organized and taken out
national charters
THE law" said Controller Ridgley to the
Eagle correspondent to-day, has proven a
good thing for the small communities all
over the country, as well as for the larger
cities. The middle West and the far West
have been especially benefited by the act.
for a majority of the recently organized
banks with small capital are located in
those parts of the country. They are scat
tered all through the agricultural districts
in places where there would never have
been national banks under the old law AL
though the act has been in operation only
snort time our experience shows that the
small banks are prospecting and are all well
managed. There have been but two ma
IlOnal Dank FAILURES since L came INTO ONCE
last october. One was a bank in Alabama,
which was looted from the inside and had
been rotten for good many years. The
other was a small bank in Ohio, which was
also robbed by its officials Under the OPP
Grafton OF the new law there has been
large increase in national bank circulation,
being the natural result OF the establish
ment OF more banks. There has been
slight decline of late in the volume of ma
tional bank circulation, but this is caused
by the high prices which the new per
cent bonds are bringing, which has induced
the banks TO withdraw them from deposit
in the treasury in order TO realize on them"
Every day the controller of the currency
receives anywhere from one to dozen re-
quests Tor authority to eStd bliSh national
banks under the terms of the law of March
IA, 1900. Up to date 1899 banks have taken
out charters in accordance with the pro-
visions OF that act, but OF this number l43
were converted from state banks. Three
hundred and forty-three state and private
banks liquidated for the purpose of reor-
| Sanizing so as TO be eligible for the new
national bank charters, and 613 new banks
were organized solely because of the in
| ducements held out by the gold standard
| law. The total organizations effected under
| this law have an aggregate capital stock or
| $64,U4,0D. The l43 associations which were
| formerly state banks have capital of S1O,-
$4,000; the 343 reorganiZed state and private
| BANKS nave total capital or $3U,U60,1J0
| while the 613 associations of primary or
| SANITATION have an aggregate capital OF
| $33, 50i 600.
|
| banking law has been Of the greatest ben
! eft 10 the agricultural districts is borne
| out by the table showing the location, by
States of the newly organized banks.
Seven hundred and thirty, or about two
! thirds of the 1,099 banks that have been or
/ ganized under the law. have a capital of
/ $4,000 or less and are in towns with pOpu-
! lation Of less than 5000 inhabitants each.
! 1t appears that there is not much of field
| in conservative New England for the es-
Establishment of new banks. only eighteen
| ORG ar,iz afi hai ha RI in no (
| States of Maine, New Hampshire, Vermont,
| Massachusetts, Rhode Island and Connecti-
! cut during the period under consideration
| The Eastern States of New York, New
Jersey, Pennsylvania, Delaware. Maryland
! and District of Columbia put 19S new banks
! into the field, evenly divided between or
| ganizations of the smaller and larger class
es, and with an aggregate capital of ST.
$4,000. Thirteen Southern States organized
total of 2S5 new banks, but with an aggre-
gate capital less than the 1913 banks in the
| Eastern States. The States Of Ohio, Indi-
ana, Illinois, Michigan. Wisconsin. Mime
sota Iowa and Missouri organized 325 new
! banks in the last two years and five
months. of which 223 had a capital Of less
| than $4,000 each.
The people of Texas seem TO apprecia te
! the advantages afforded in the new bank
ing act, for al additional banks have been
| put in the field there since the adoption OF
! the gold standard act. The thrifty State OF
| Pennsylvania is next in line, with 121 new
banks. Oklahoma and Indiana Territory
each organized about fifty banks. with a
| capital OF less than $1,000 each. The spring
| ing up of so many new banking institutions
| has naturally increased the volume of ma
| tional bank circulation, although the au-
| thority given by Congress for national
| banks to increase their circulation TO the
| par value of the bonds deposited with the
| government aided somewhat in swelling
the total amount of such circulation. The
| increase in this department has been ovel
500 600. 900. 1t would be even more but fol
! the high price that the per cent bonds
are now bringing. In order to stimula Il
the original sale of these bonds it was pro
vided that when they should be deposited
! with the treasury to secure national bank
| circulation such circulation should be taxed
only y of 1 per cent. instead of 1 per cent
as is the case when other bonds are used
| These securities are bringing high prices
at present, which has caused many banks
to withdraw them from the treasury in
order to realize on them.