Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1905-09-10
NATIONAL RANK GRoWrn.

Since the legislation was enacted
authorizing the organization of national
banks, in towns of a certain population,
with capital of $4,000 there has been
great increase in the number of such
banks. The remarkable prosperity of the
also stimulated the organization of
banks with a larger capital, so that the
banking interest of the country has
fully doubled i'm that period Authentic
figures show that the growth in the cir
culation of national banks since 1900 has
been from $4,000 600 to $47S,000,o0O,
based on government bonds, or about
S5O,OOO,OOO per annum.
According to reports from Washing
ton the large increase in national bank
organization which has taken place,
with the consequent expansion of circu-
iation, is being discussed by experts III
the government financial service. 1t is
stated that some of these experts think
there is danger attending the unlimited
expansion of bank note circulation,
though they do not consider the danger
as yet serious. They believe the coun-
try is able to absorb all the bank note
circulation that is likely to be issued on
the basis of the present national debt. If
this view be correct there is a POSSIBLE
ity Of the circulation being very nearly
or quite doubled within the next five or
4 l..
whether conditions continue to be favor
able to the organization of national
banks. Capital will go into this business
only so long as there appears to be OPP
portunity for successfully carrying it on.
Banking depends upon and therefore
follows other business. If the prevail
ing prosperity continues, as there is IA
vorable promise that it will, more banks
will be organized and the volume of cir
culatiOn increased. A business reaction,
on the other hand, would not only check
the growth of national banks, but would
promptly bring about a curtallment in
circulation.
1t is evident that there is no excess Of
bank circulation at present. All Of it is
Icing absorbed in carrying on the in
dustries and commerce of the country.
Doubtless it is quite sufficient for all pres
ent demands, but it might not be a few
years hence and certainly will not be If
the business of the country goes on
growing at the rate of progress during
the last five or six years. A Washington
dispatch to the st. Louis GlObeDemo-
crat says; Bank circulation based on
government bonds has the best security
in the wOrld-the faith of the federal
government. But II is urged by those
who question the desirability of unlim-
ordinate extension of this pledge that
faith even of the United States govern
ment might in some time Of financial
distress meet difficulty in removing to
the treasury vaults the mountains of
gold that might be demanded to main
tain the parity of this immense circula-
ton, together with the silver certificates,
treasury notes and subsidiary coinage
outstanding" We are unable TO see in
this. which is presumed to reflect the
view of some treasury official, anything
to warrant apprehension. 1t is not easy
to conceive of any situation that would
involve the government in the difficulty
suggested. There is no more conclusive
evidence of the great prosperity of the
country than the national bank growth
and it will 90 on while prosperity con-
tinues.