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mach as it applies to only one case out of several, other omissions seem by implication to have the sanction of Congress, which I am sure they have not, because, as the law now stands, a director who swears falsely as to his qualifications for such position, or a president or cashier who makes oath to a false statement of the dividends and earnings of his association, cannot be convicted of perjury.
Twelfth. That, in the absence or disability of the cashier, all certificates required by law to be made by him may be made, with the author. ity of the board of directors, by the assistant cashier, if the bank has such an officer, and if it has no such officer, then by some one appointed by the directors to perform the duties of the cashier; provided, howerer, that no assistant or acting cashier shall be authorized to sign circulating notes. The want of such a provision in the banking law is the cause of considerable inconvenience and annoyance to the banks.
Thirteenth. I renew the recommendation of my predecessor for further legislation to ascertain and protect the rights of shareholders desiring to withdraw from national banks which are extending their corporate existence.
Upon the security of its bonds deposited with the Treasurer, each bank is entitled to receive, and the Comptroller of the Currency is by law required to issue to it, circulating notes to the amount of 90 per cent. of the market value, and not more than 90 per cent. of the par value of the bonds. Aný bank may deposit more than the minimum of bonds, and may take out circulating notes for 90 per cent. of its deposit, provided its entire outstanding circulation against bonds does not exceed 90 per cent. of its capital stock actually paid in. The circalating notes when issued by the Comptroller are in sheets, and are not valid until signed by the bank officers designated by the statute.
Under the present law the minimum deposit of bonds required to be made by the 2,852 national banks in operation in the United States on October 7, 1886, in order to continue as national banking associations, would be but $84,365,312.
Tables in the Appendix*'show by States and geographical divisions the national banks in operation on October 7, 1886, separated into two classes, namely, banks of which the capital does not exceed, and banks of which the capital exceeds, $150,000. The first class contains 2,001 banks, with an aggregate capital of $167,261,245; the second 851, with an aggregate capital of $380,979,485. The minimum of bonds required to be kept on deposit by the entire body of banks in the first class is 841,815,312; the minimum for the 851 banks of the second class is $42,550,000. If all banks held only the minimum of bonds, the total national-bank circulation would be $75,928,781, while the possible maxi. mum of circulation, being 90 per cent of the aggregate of the nationalbank capital, would be $493,416,657. The actual circulation on October 7, 1886, was $303,176,776, inclusive of $71,953,145 still outstanding, but which is no longer represented by bonds, but by that amount of lawful money deposited with the Treasurer of the United States to redeem it. The $231,223,631 of circulation for which the banks are responsible is composed of $86,517,585 secured by the bonds deposited by the 2,001 banks having $150,000 capital and less, and $144,706,046 secured by the bonds belonging to the 851 banks of which the capital
*This Appendix, which is omitted for want of space, will be found in the bound voiame of the Comptroller's report.
exceeds $150,000. The first class of banks have therefore $48,883,805 more than their minimum, and $64,017,536 less than their possible maximum circulation, while the larger banks have $106,411,046 more than their minimum, and $198,175,491 less than their maximum.
The following table shows the number of banks organized from July 1, 1882, to July 1, 1886, their capital stock, amount of bonds deposited, and the circulation issued thereon:
From the foregoing table it appears that 774 banks have been organized between the dates given, with a capital of $79,254,300; that they have deposited $18,840,800 bonds, upon which circulation to the amount of $ 16,956,720 has been issued. The minimum deposit of bonds as required by law for such banks is $15,637,250, and it will be observed that whilo the actual deposit has in the aggregate exceeded the minimum absolutely required, yet this excess steadily decreased during the first three years covered by the table, and during the years ending July 1, 1885, and July 1, 1886, the percentage of excess remained the same, namely, 8 per cent. Of the 163 national banks organized during the past fiscal year, 96 have a capital of $50,000 each, amounting to $4,800,000; 44 have a capital of over $50,000 and not exceeding $150,000, amounting to 84,218,000; and 23 have a capital of $8,535,000. The latter class of banks deposited only $100,000 of bonds in excess of the minimum required by law.
Tables have been prepared, and will be found in the Appendix, show. ing for the national banks in each State, Territory, and reserve city the minimum amount of bonds required by law, the bonds actually held, and the circulation issued thereon and outstanding October 7, 1886; also all other information deemed useful, as to circulation.
Banks are privileged to change their deposited bonds from time to time, to increase and to reduce the amount, within limits, and are required to inspect once a year, the bonds held for them in trust by the Treasurer. The Comptroller of the Currency is the agent and medium of all such changes, his indorsement on the bonds establishes their ownership and alone validates their transfer. Section 5163 of the Revised Statutes requires him to record every act of deposit, transfer, and withdrawal, and to keep a set of books for the purpose.
INTEREST-BEARING FUNDED DEBT OF THE UNITED STATES, AND THE
AMOUNT HELD BY NATIONAL BANKS.
The connection between the banks and the distribution of the fanded debt of the United States renders the following statement appropriate.
The public debt, at its maximum on August 31, 1865, amounted to $2,844,649,626; of which, obligations not bearing interest amounted to $461,616,311, leaving $2,383,033,315, carrying an average rate of interest of about 6.33 per cent. On November 1, 1886, the interest-bearing debt amounted to $1,153,443,112.
The total issues of incomplete currency during the year are shown by the vault account, as follows: National-bank currency in vaults October 31, 1885...
$78, 601,550 Amoant received from Bureau of Engraving and Printing during the Fear ending October 31, 1886
46, 872,850 Total .......
125, 474,400 Amount issued to banks during the year...
$62, 026, 940 Amount canceled during the year, not having been issued.
62,987,740 Dalance in vaults ....
$62, 486, 660 . The duties devolving upon the clerical force in the Division of Issue of this office are of great responsibility, requiring absolute accuracy and promptness on the part of those to whom these duties are assigned. The records of receipts and issues are balanced daily with the vault accoants, and the work of each day completed before that of another day is begun. During the past year 42,478 packages of currency were forwarded to banks by express, the same number of receipts prepared for signature and return by the banks, and a large amount of correspondence was conducted.
Prior to the act of June 20, 1874, national banks were required to redeem their circulating notes, either at their own counters or through redemption agents in certain designated cities.
That act abolished redemption agencies, made the circulation redeemable only at the banks of issue and at the Treasury in Washington, and required the banks to keep on deposit at the Treasury a redemption fand of 5 per cent. upon outstanding circulation.
Under the operation of this law the redemption agency at the Treasury has received, up to November 1, 1886, $1,711,850,786 of nationalbank currency
During the past year the receipts amounted to $117,485,048, of which annount $44,755,800, or 33 per cent., was received from the banks in the city of New York, and $25,042,300, or 21 per cent., from banks in the city of Boston. The amount received from Philadelphia was 87,232,500, from Chicago $6,254,600, from Cincinnati $1,886,400, from Saint Louis $3,533,300, from Baltimore $3,662,100, from Providence $1,309,500, from New Orleans $1,193,400, and from Pittsburgh $491,500.
The amount of national-bank notes fit for circulation returned by the redemption agency to the banks of issue during the year was $41,180,010. The amount received by the Comptroller of the Currency for destruc. tion, from the agency and from the banks direct, was $47,154,430, and ou account of reducing, insolvent, and liquidating banks, $26,865,577.
The act of June 20, 1874, provided that any national banking association might withdraw its circulating notes upon the deposit of lawful Inoney with the Treasurer of the United States in sums of not less than $9,000. Under this act, and on account of liquidating and insolvent banks, and under the act of July 12, 1882, which provides for a deposit of lawful money to retire the old circulation of national banks whose corporate existence has been extended, $310,495,460 of lawful money has been deposited with the Treasurer. This includes $2,663,720 for redemption of the notes of national gold banks, and $52,253,177 for the redemption of national-bank notes under section 6 of the act of July 12, 1882.
During the year ending November 1, 1886, lawful money to the amount of $71,148,392 was deposited with the Treasurer to retire circulation, of which $2,201,310 was deposited by banks in liquidation, $30,819,725 by banks reducing circulation under the act of June 20, 1874, and $38,127,357 by banks retiring old circulation under the act of July 12, 1882. The amount previously deposited under the acts of June 20, 1874, and July 12, 1882, was $191,516,297; by banks in liquidation, $62,075,581; making a total of $324,740,270. Deducting from the total the amount of circularing notes redeemed and destroyed without reissue, which was $24:9,921,036, there remained in the hands of the Treasurer on November i, 1886, $81,819,233 of lawful money for the redemption and retirement of national-bank circulation, including $296,069 for the redemption of the circulating notes of national gold banks.
Prior to June 20, 1874, there were redeemed and destroyed $10,431,135, ·and since that date $232,489,901 of bank notes have been redeemed, destroyed, and retired. This latter amount includes $2,367,651 of the notes of national gold banks and $15,414,458 of the notes of national banks whose corporate existence has been extended under the act of July 12, 1882.
There are at present no national gold banks in existence. Of those which had been organized three went into voluntary liquidation, and the others became currency banks, under the provisions of the act approved February 14, 1880.
The following table exhibits the amount of national-bank notes received monthly for redemption by the Comptroller of the Currency during the year ending October 31, 1886, and the amount received dur. ing the same period at the redemption agency of the Treasury, together with the total amount received since the passage of the act of June 20, 1874; *
Received by the Comptroller of the Currency
From na- From the redemption agencytional banks
in connection with re
banks. Dew potes.
Received at United States
1885. November December
$225, 010 $2,774, 710
4, 522, 680
$681, 760 $1, 924, 660 $5, 606, 140
1874, to October 31,
35,000 136, 780
15 105 1,050 1,020 31, 300
40 1, 120 99, 030
4, 876, 260 5,578, 220 5, 414, 470 3, 182, 570 4, 264, 725 4,771, 400 3, 9:33, 760 2, 675, 800 2, 404, 740 2, 088, 880
944, 60 1, 217,510 1,388, 040
1, 258, 040
7, 113, 910 8,447, 500 8, 455, 342 5, 250, 112 7,084, 931 8, 048, 769 6,687, 755 4,892, 075 4, 245, 768 3, 587, 519
17, 485, 298 12, 206, 474 10, 825, 508 8, 420, 691 11, 480, 256 11, 140, 326 9, 261, 571 6, 296, 341 5, 438, 047 5, 918, 363
546, 215 46, 608, 215 12, 946, 850 15, 918,727 | 76,020, 007
117, 185, 018
15, 519, 590 693, 664, 885 158, 918, 301 42, 303, 509 910, 400, 285 1,594, 305, 739 16,065, 805 740, 273, 100 171, 805, 151 58, 222, 236 986, 420, 2921, 711, 850, 786
* Notes of gold banks are not included in the table.
The following table exhibits the amount of national-bank notes reeeired at this office and destroyed yearly since the establisbment of the system :
Prior to November 1, 1865
$175, 490 During rear ended October 311886
1,050, 382 1857
3, 401, 423 1888
4, 602, 825 1809
8. 603, 729 1870
14, 305, 689 1871
24, 344, 047 1272
30, 211, 720 1373
36, 433, 171 1874
49, 939, 741 1875
137, 697, 696 1876
98, 672, 716 1877
76,918, 963 1878
57, 381, 249 1879
41, 101, 830 1880
35, 539, 660 1881
51, 941, 130 1883
74, 917, 611
82, 913, 766 1884
93, 178, 418 1885
91, 048, 723 1886
59, 989, 810 Additional amount of insolvent and liquidating national banks
69, 778, 364 Total.
1, 146, 148, 153 Notes of gold banks are not included in the above table. There was in the vanlt of the Redemption Division of this office, awaiting destruction, at the close of business, October 31, 1885
$173, 930 Received during the year ending October 31, 1886.cas
76, 110, 047 Total....
76, 283, 977 Withdrawn and destroyed during the year..
75, 996, 737 Balance in vault November 1, 1886 ....
$287,240 Received from the Treasurer of the United States $75,563,832, in 88,717 packages; received from banks direct $546,215, iu 26 packages.
The work in this division, in handling this vast amount of mutilated notes, requires great accuracy, skill and precision.
In connection with this subject I respeetfully present a series of tables, for which I am indebted to Mr. E. B. Elliott, Government actuary, whose widely.extended reputation is a guarantee for their accuracy. They are intended to show, as fully as the data permit, how long, on the average, the national-bank notes of the several denominations remain out.
REPORTS. The law imposes upon the Comptroller of the Currency the duty of exereising a supervision over the national banks, and to that end requires him to exact reports from them as to their condition on at least five days in cach year, and reports of the dividends and earnings of each bank as often as it declares dividends, and in all cases at least every six months.
In addition, the Comptroller may call for special reports from any or from all of the banks as often as he thinks proper, and may from time to time cause examinations to be made into their books, cash, securities, and general condition.
The proper performance of the duty of supervision is essential to the maintenance of the high character and credit to which the national Lanks have attained, as well as to the protection of their depositors and stockholders against fraud and wismanagement.
The multiplication of banks, and the wide area over which the system now extends, renders the discharge of these duties more and more difficult every year, and requires the maintenance of a large force of expert clerks in the office of the Comptroller.