Democratic Sentinel, Volume 7, Number 45, Rensselaer, Jasper County, 7 December 1883 — THE CURRENCY. [ARTICLE]

THE CURRENCY.

Extracts from Controller Knox’s Report. Controller of the Currency Knox reports the organrivticn of 262 banks for the year ending with list month, leaving 2,522 in operation, the system extending into every territory. The bonds outstanding, which can only be redeemed by purchase in the market, aggregate $1,052,•70,062. The Government has gained about $4,090,000 bv the accidental destruction of bank notes, and the whole costofthe system in twenty ye irs has been but $5,610,669. Controller Knox thinks the true policy to avoid contraction .of bank circulation is to reduce the redundant revenue. As to’ the extension of the corporate existence of National banks, the Controller says: At the date of my last report the corporate existence of eighty-six National banks had exmired, and thirty of these banks had extended their existence under the act of July 12, 1882, fifty-two banks went into voluntary liquidation, ana were succeeded«by other associations organized in place thereof, chiefly previous to the act of July 12, 1882, which authorized the extension of the corporate existence for a new period of twenty years of National banks whose franchises were about to terminate. The four remaining banks expired by limitation, and did not effect new organizations. The number of National banks organized under the act of Feb. 25, 1863, which were in operation at the date of my last report in December was 307. Of these banks, 273 have extended their corporate existence under the act Of July 12.1882, seventeen have been placed in liquidation by vote of shareholders of the bank, and four have expired by limitation. AU of these banks which have been placed in liquidation and have expired by limitation, with the exception of two, nave been succeeded by new associations, organized in the same localities with different titles. The whole number of banks now In operation which organized under the act of June 3, 1864, whose periods of succession will terminate during each year previous to 1900, is 195. The number, capital and circulation of banks expiring in 1884 and 1885 is as follows - Years. No. of banks. Capital. Circulation. 1884249 $ 89,611,570 $ 60,526,825 1885727 185,936,715 124,807,450 As to the relation of the banks to the bonds, the Controller of the Currency says: , The average rate of Interest now paid by the United States on the bonds deposited as security tor circulating notes is about 3>6 per cent, upon their par value, but it is equal to about 3.19 per cent, only of the current market value of the bonds. The banks now hold-$41,000,000 of $106,000,000 of 4s, and $21,000,000 of 3 per cents, which have been refunded from 3)4 per cent. More than one-half of the bonds now held by the National banks are 3 per cents. If the public debt continues to be paid as rapidly as it has been during the past all of these bonds will certainly be called within the next three years. Those of the lower numbers, which it is safe to estimate will not be called within the next ten years, cannot be purchased for a premium of much less than 2 per cent., and at that price there will be a loss upon circulation based on this class of bonds if they are redeemed within three years. The profits on circulation based on other bonds held by National banks are merely nominal. STATISTICAL. * Of the amount of United States bonds held by the National banks and bv banks organized under State laws the Controller says: Through courtesy of State officers, the Controller has obtained official reports made to them under State laws by State banks in twentytwo States, by trust companies in five States, and by savings banks in fourteen States at different dates during the year 1883, and from these returns the following table has been compiled: Held bv 754 State banks in twentytwo Statess 5,287,606 Held by thirty-four trust companies In five States 17,437,990 Held by 630 savings banks in fourteen 5tate5219,017,313 T0ta1.*5211,742,909 The interest-bearing funded debt of the United States was November 1, last, $1,273,475,450. The total amount of bonds held by the National ($379,486,350) and State and savings banks ($211,742,909) was $621,229,259, which is not greatly less than one-half of the interest-bearing debt. The U nlted States bonds held by State banks is given by geographical divisions for the years 1880, 1881 and 1882, 1883, as follows: Geographical Divisions. 1880. 1883. Eastern Statess 45,230,098 $ 37,399,819 Middle States 157,563,757 182,847,588 Southern States 958,470 646,500 Western States 2,672,242 3,105,024 Pacific States 7,240,835 17,743,978 T0ta15213,665,402 $241,742,909 Illinois has advanced from sixth to fifth place In the National-bank capital. Kentucky has displaced New Jersey, and Minnesota is now the fourteenth State, taking the place of Vermont and displacing lowa and New Hampshire. Virginia is superseded by Wisconsin, Texas, and California. The Controller says the section qf the Revised Statutes which places restrictions upon loans i should be so amended as to exclude from -the ! limitation mentioned legitimate loans upon produce or warehouse-receipts and some other classes of collateral security, os well as loans upon United States bonds. ;