Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1905-12-11
Luna
Troubles

thereafter steady and slight increase
10 1873 per cent in December, 1899.
The act of March IA. 1900. resulted in
an increase Of the rate to 3S.3 per cent.
on April % of that year, and 473 at
the close of the year. With the ex-
ception of July. 1902. when the rate was
Al per cent, the proportion Of circula-
ton to capital has exceeded As per
cent since the date last named, and
reached maximum of $50 per cent. in
August, 1905.
The annual summary which appears
in the appendix of the report shows
that from 1869 to 1876, inclusive, divi-
denGs were paid at an average rate of
approximately 10 per cent. The
liquidrtion following the strngency
of 1892 is reflected in the decline in
the rate of dividends on capital from
I Y per cent. in the year named to 81
III 1897. Since the last date there has
been Il gradual recovery and the divi-
dcnd rates have fuctuated from
minimum of SO per cent. in 1898 TO
maximum of 80 i'm 1904. with d slight
falling off in 1905 to go.
The comptroller says that the history
OF the national banking system has
been marked by Very few failures, only
80 per cent. of the total humble. Of as
sociations chartered from 1863 to Octo-
Der 81, 1905. having been closed as the
result of insolvency. The failures, with
few exceptions. were due to fraudulent
management or violations of the re-
stricuve provisions of tie national
banking laws.
lie aggregate stock of gold, silver.
and uncovered paper currency is re-
ported as amounting 10 al2,oi9, Don. 900
classified as follows: Sold, $685. 100 900:
silver, $S130, 100000; uncovered paper
cur''. ICY, 70 506.OO'. The god rep
rescn:s Is per cent. of he sto,k and
the silver and uncovered paper cur
renc; - and - per cent, respectively.
Comparing this statement with that
relating to the stock of money at the
close of 1903, it appears that the hold
ings OF gold have increased to the ex-
tent of $353, 600. but that silver and
uncovered paper currency have de-
creased $I.0O0,000 and SOL, O00,GGO, re-
Spectively, the net increase in the
stock of money being 1896, 100000 Tie
greatest mass of gold is held in the
United States and is stated rs amount
ing 10 S1.3lS, 100000. France is second
in the list. with Il stock Of 1926. 400. 900;
followed by Germany with $3.50, 100 900;
Russia, $lS3.700,000: United Kingdom,
1898 900; Austria Hungary, $3O5, OoO,-
200; India. S2G3 800 900; Italy. $131, 400
900; aid Australasia. S12S, 900. 900. At
the close of the fiscal year ended June
80, 1865. the stock of money in the
United States amounted to $3.50, 109,-
S64, of which s2.O31. 2a6.O42 was lincoln.
including bullion in the Treasury, and
1851 ,Sl3,S22 United States and national
bank notes.
The comptroller comments upon the
decided distur bance in the money
markets within the last few weeks, in
spite of the great increase i'm the vol
ume of the national bank circulation
and a considerable increase in the
amount of money of all kinds in circu-
latiUn. This led to the usual call upon
the treasury department to relieve the
situation. He thinks it reflects seri-
ously upon banking and financial con-
ditions in the United States that this |
should have occurred when every line
OF business in all parts of the country
was in most prosperous condition. It |
emphasizes again the necessity for |
some remedy or safety valve for our |
banking and financial machinery to be |
used in time of emergency. He re-
news his recommendation of plan
for uncovered emergency bank notes, to |
add elasticity to the currency.
Regarding the law forbidding a ma
tioiial bank to lend to any one borrower
more than 10 per cent. of the amount of |
its capital stock in its relation to
changed modern conditions the comp
trolier makes comment and recon- |
mendation as follows: when the loan |
limit was originally placed at 10 per |
cent. of the capital stock of the bank |
few banks had any large surplus 1t |
Was lot expected that new banks then !
organizing would nay in surplus with |
their capital: and by many it is |
claimed that the capital was meant TO !
include surplus, which only differed |
from it through a bookkeepers entry, |
and that this is now the meaning and |
intent of the law. However that may
be, il would seem il it is safe for u |
bank with 100000 capital and no sur
plus to loan $4,000 it should be safe |
for one with $25O,OOO capital and $780,
600 surplus to loan as much. After
much consideration and discussion of |
this subject with many able and con-
servative bankers and business men,
the comptroller is satisfied that this is
A reasonable view OF it and that banks
may safely loan 10 per cent. of their
unimpaired capital and surplus, and
recommends that the law be amended
to that effect"