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ANNUAL REPORT OF THE COMPTROLLER OF THE CURRENCY TO THE SECOND SESSION OF THE FIFTY-FOURTH CONGRESS OF THE UNITED STATES. DECEMBER T, 1896. IE" TWO VOLUMES V O L U M E I. WASHINGTON: GOVERNMENT PRINTING 1896. OFFICE. CONTENTS. Pago. Summary of the principal features of the national banking associations 3 Resources and liabilities of national banks from December 2,1891, to October 6, 1896 6 Analysis of national-bank reports of 1896 11 R view of reports of national banks, 1892-1896 12 Earnings and dividends of national banks. 14 Reports from State banks and banking associations , 15 Principal items of resources and liabilities of State banks from 1893 to 1896 15 Savings banks, condition of 16 Depositors in savings banks 37 Depositors in banks and banking institutions in the New England States and New York 17 Classification of deposits in savings banks 18 Loan and trust companies and private banks 19 P r i n c i p a l terns of resources and liabilities of all reporting banks 19 Capital stock and per capita average of reporting banks 19 Aggregate banking funds of national and other banks 19 Cash in national and other banks Id Investigation as to kinds of money and currency in banks 20 Total 4>ash and gold in banks in each geographical division 21 Gold in *B© United States Treasury and in banks on July 2 and October 31,1896 22 Depositors i» and cash holdings of reporting banks 22 Cash ^ New YdJ^s- City and other national banks on May 7 and October 6, ] 896. 26 Specie in New YorB>Cjty and other national banks from February 28, 1890, to October 6, 1896 26 Gold Treasury certificate fe«i& by national banks 26 Gold clearing-house certificates held by national banks 26 Gold and silver Seld by New York City tiational banks * 26 Stock of money in the principal countries of the world 27 Monetary systems oft the principal countries of the world 28 Maximum and minimum ratios between gold and full-tender and limited-tender silver 27 Amount and comparison of stocks of money in the principal countries of the world in 1873 and 1896 27 Uncovered paper 27 Money supply of the United States in 1873 and 1896 28 Population and stock of money of the United States in 1873 and 1896 compared 28 Monetary systems, population, and approximate stocks of money in the principal countries of the world in 1896 28 Approximate stock of gold, silver, and uncovered paper in the principal countries of the world in 1873 and 1896 29 Growth in number and deposits of banks and value"t>f banking associations to the public 29 Number of banks and their deposits, by geographical divisions, in 1863,1870,1880,1890, and 1896. 30 Changes in clearing-house returns 31 Clearings and balances of New York Clearing House 1863,1870,1880,1890, and 1896 31 Clearings of the clearing-house associations of the United States 31 Insolvent national banks, 1896 31 National banks placed in the charge of receivers during the year 32 % Assets and liabilities of national banks which failed in each State during the year 33 Number and percentage of failures of national and other banks during the year 33 National-bank failures from 1863 to 1896 33 Percentage of dividends paid by failed national banks 34 Causes of failure of national banks 34 Duty of directors of national banks 34 State-bank failures prior to 1863 36 Resources and liabilities of the B a n j of the United States in September, 1819 37 Resources and liabilities of Stofc#$jan£s in 1819 38 Organization and failure oj^£tate iftnfil 13 ^kPfeasibern Stages 39-42 Currency issued by b a n k ^ n t h e colonialcDeptod .\. 39 Bank of the United S t £ d ^ | ^ * y r » k M f \ Circulation issued by SjktdfditJWlm &feSjeBwfr tfleTi^olijponary war to 1836 40 I II CONTENTS. Page. Circalation outstanding and percentage redeemed of insolvent New York banks under the free banking system 42 Failures of State banks from 1852 to 1857 43 Loas by failures of State banks in Western States 43-45 Examination of State bank s 44 Loss on circulation and to shareholders of State banks in 1841 44 List of banks which failed in each State from 1811 to 1830 45 Estimate of loss on State-bank circulation . 4ij Number, circulation, and deposits of banks in each State for the nine years prior to 1863 19 Number of banks in the United States with circulation and deposits from 1834 to 1863 52 Insolvent State banks from 1863 to 1896 52 Failures of State banks in each year from 1863 to 1896 53 Capital, nominal assets, liabilities, and dividends paid by failed State banks in each State from 1863 to 1896 54 Percentage of dividends paid by failed State banks 54 Number of failed State banks which paid dividends at a specified rate 55 Failed State banks paying no dividend 55 Failed State banks having no capital stock 56 Time required to close affairs of failed State banks 56 Use of credit instruments in daily payments /.. 57 Prices and quantity of money -.., 58 Substitutes for money <T.. 59 Analysis of national-bank receipts 62 Deposits in national and other banks on J u l y 1, 1896 (J5 r Demand for an exchange medium met by use of credit instruments -i 88 Diagram illustrating the percentage of checks to deposits, retail trade i 90 Diagram illustrating percentage of checks to all deposits GO Comparative table of receipts and deposits of banks at different dates .f.. 92 Increase in the use of credit instruments SM Percentage of checks to deposits by States, geographical divisions, and cities ,.. - 95 Coin and paper-currency in deposits •, 96 Payment of wages . 96 Wages paid by check and wage period '. 97 Clearing-house returns for July * , 97 Clearings, kinds and amounts of money, etc., used in settlement of balances 98 Suggested amendments to the National Bank A ct -, 100 Arguments in support of amendments suggested r::,--,,. 101 Borrowing by officers and directors of national banks 101 Knowledge of bank's condition, by directors, to be enforced 101 Assistant cashiers of national banks 101 Administration of oaths 102 Organization of national banks with minimum capital stock of $25,000 102 Branch banks 103 Issuing notes by the Government and by banks 105 Profit on national-bank circulation 106 Cost of gold reserve, etc 108 Comparison of Treasury and bank note issues 109 Foreign and State banking systems." 110 National Bank Act and Digest of National Bank Cases Ill Appendix and Volume I I : Ill Conclusion ^ Ill C O N T E N T S OE A P P E N D I X . Foreign banking systems State banking systems National-bank act Digest of national-bank decisions - 115 195 255 337 APPENDIX TABLES. No. 1. Salaries and personnel of the Bureau No. la. Expenses of the Bureau 511 512 CONTENTS. Ill Page. No. 2. Number of national banks organized, in liquidation, and number, capital, bonds, and circulation of associations in operation October 31 513 No. 3. Number of national banks organized, in voluntary liquidation, insolvent, and number and capital of banks in operation on January 1, from 1864 to 1896 514 No. 4. Number of national banks in operation, in liquidation and insolvent, in each State and Territory since the organization of the system 514 No. 5. Number of national banks organized, in operation, and number passed out of the system since 1863 515 No. 6. Number and capital of national banks organized, in liquidation, insolvent, and yearly increase or decrease, annually, 1863 to 1896 515 No. 7. Number and capital of national banks organized in each State during the last year 516 No. 8. Number and capital of national banks extended in each State during the year 516 No. 9. Number, capital, and circulation of bank? the corporate existence of which will expire in each year from 1897 to 1906 516 No. 10. Capital, bonds, and circulation of associations the corporate, existence of which will expire during the year ending October 3], 1897 517 No. 11. Capital and circulation of association the corporate existence of which expire during the year, and of succeeding association 517 No. 12. Number, capital, and circulation of banks extended in each State during the year 517 No. 13. Capital and circulation of associations closed to business by voluntary liquidation or otherwise during the year 518 No. 13a. National banks closed and in charge of examiners 520 No. 14. Authorized capital stock of national banks on the first of each month from January 1, 1874, to November 1, 1896, bonds deposited, circulation secured by bonds, lawful money on deposit, and circulation outstanding 521 No. 15. Changes in capital, bonds, and circulation, by States and geographical divisions 525 No. 16. Decrease or increase of national-bank circulation on October 31,1889, to October 31,1896. 530 No. 17. Circulation issued, lawful money deposited to retire circulation, from June 20, 1874, to October 31,1896, by States 531 No. 18. Circulation outstanding, lawful money on deposit to redeem circulation, and bonds deposited to .secure circulation, on October 31, 1895, and September 30,1896 532 No. 19. Proh't on circulating notes during the past three years 533 No. 20. Quarterly increase or decrease of circulating notes from January 14, 1875, to October 31, 1896 534 No. 21. Amount, by denominations, of circulation issued, redeemed, and outstanding on October 31, from 1864 to 1896 536 No. 22. National gold bank notes issued, and outstanding October 31, 1896 539 No. 23. National bank notes issued during the year and the total amount issued, redeemed, and outstanding 539 No. 24. Additional circulation issued monthly on bonds, 1884 to 1896 539 No. 25. Number and denominations of national-bank notes issued since the organization of the system 540 No. 26. Yault account of national-bank notes received and issued during the year 540 No. 27. " Additional circulation'' issued and retired by States during the year 541 No. 28. Monthly redemptions of national-bank notes during the year 542 No. 29. National-bank notes destroyed yearly since establishment of the system 542 No. 30. Vault account of national-bank notes received and destroyed during the year ...' 543 No. 31. Tax on circulation, etc., for the year 543 No. 32. Taxes paid as semiannual duty on national-bank circulation, cost of redemption, plates, examiners' fees, annually, from 1883 to 1896 543 No. 33. Tax collected on capital, deposits, and circulation to June 30, 1896 543 No. 34. Capital and bonds of associations which do not issue circulation.., 543 No. 35. Specie and bank-note circulation of the United States from 1800 to 1859 544 No. 36. Coin and paper circulation of the United States from 1860 to 1896 545 No. 37. Bonds deposited as security for circulation and held for other purposes by national banks on June 30, from 1865 to 1896 546 No. 38. Bonds deposited as security for circulation and amount held for other purposes by national banks on October 31, 1882, to 1896 547 No. 39. Interest-bearing bonded debt of the United States from 1865 to 1896 548 No. 40. Opening highest and lowest market price of United States registered bonds by weeks during year ended November 6, 1896 549 No. 41. Investment value of United States bonds from 1885 to 1896 • 551 No. 42. Capital, United States bonds held, and minimum required on October 6, 1896, excess of bonds held on October 6, 1896, and September 28,1895 552 No. 43. Number and capital of national banks in each State and reserve city and Territory with capital of $150,000 and under, 1895 and 1896 554 IV CONTENTS. Page. No. 44. Number and capital of national banks in each State and Territory with capital exceed" ing $150,000, 1895 and 1896 556 No 45. Comparative statement of resources and liabilities of national banks from 1864 to 1896.- 558 No. 46. Abstract of reports of national banks in New York City, the central reserve cities, etc., on October 6,1896 561 No. 47. Highest and lowest points reached in the principal items of the resources and liabilities of the national banks during the existence of the system 562 No. 48. Percentage of loans bonds, United States, and specie to the aggregate funds of the national banks, 1866 and 1887 to 1896 562 No 49. Classification of loans made by national banks on approximate dates, 1892 to 1896 562 No. 50. Classification of loans by national banks in New York City in the last ten years 564 No. 51. Classification of loans and discounts made by national banks in each reserve city, State and Territory, on October 6, 1896 565 No. 52. Coin and coin certificates held by national banks in each State on or about October 1, 1892, to 1896 567 No. 53. Lawful money, classified, held by national banks in each State on October 6, 1896 569 No. 54. Lawful money, classified, held by national banks at date of each report from January 20, 1877, to October 0,1896 572 No. 55. Reserve held by national banks in each State, reserve city, and geographical division on May7, 1896 576 No. 56. Reserve held by national banks in each State, reserve city, and geographical division on October 6, 1896 578 No. 57. Silver Treasury certificates held by national banks in each State, geographical divisions, and city of New York on two dates in 1890 to 1896 580 No. 58. Specie held by national banks in New York City at date of each report from February 28, 1890, to October 6, 1896 582 No. 59. Deposits and classification of reserve held by national banks on or about October 1,1874, to 1896 584 No. 60. Lawful-money reserve of national banks on October 6,1896 586 No. 61. Deposits and reserve required and held by national banks at date of each report from December 13, 1895, to October 6, 1896 590 No. 62. Net deposits and reserve required and held by national banks on three dates in the past six years 591 No. 63. Net deposits and reserve required and held by national banks at date of each report from October 2, 1890, to October 6, 1896 594 No. 64. Lawful-money reserve requirod and held by national banks in each geographical division from March 4, 1887, to October 6, 1896 596 No. 65. "Weekly deposits, circulation, and reserve of the national banks in New York City, 1890 to 1896 606 No. 66. Classification of the reserve held by national banks in New York City, during October, for the past sixteen years 607 No. 67. Earnings and dividends of national banks, by States, etc., from September 1, 1895, to September 1, 1896 608 No. 68. Ratios to capital, and to capital and surplus, of the earnings and dividends of national banks by States, etc., March 1, 1892, to September 1, 1896 616 No. 69. Earnings and dividends of national banks arranged by geographical divisions from September, 1887, to September, 1896 618 No. 70. Capital, surplus, dividends, and net earnings of national banks annually, from 1870 to 1896. 620 Nos. 71, 72, 73, 74. National banks, dates of liquidation, capital, circulation issued, retired and outstanding, which have gone into voluntary liquidation under the various provisions of the Revised Statutes 621 639 No. 75. National banks which have been placed in the hands of receivers, capital and surplus at date of organization and at date of failure, cause of failure, dividends paid while solvent, circulation issued, lawful money deposited to redeem circulation, the amount redeemed and the amount outstanding on October 3L, 1896 640-655 No. 76. Insolvent national banks, dates of organization, appointment of receiver and closing, nominal and additional assets, collections from all sources, loans paid and other disbursements, loss on assets, expenses of receivership, claims proved, dividends paid, and assets returned to stockholders 656-675 No. 77. National banks which failed during the year, with their capital, surplus, and other liabilities 676 No. 78. National-banks receiverships in an inactive condition 677 No. 79. Insolvent national banks, the affairs of which were closed during the year 677 No. 80. Dividends paid to creditors of insolvent national banks during the year, etc 678 No. 81. Insolvent national banks, with capital of $50,000 or less, the affairs of which have been closed 681 CONTENTS. V Page. No. 82. Insolvent national banks with capital of over $50,000, etc., the affairs of which have been closed 683 No. 83. Insolvent national banks with capital of over $100,000, etc., the affairs of which have been closed 685 No. 84. Insolvent national banks with capital of over $200,000, etc., the affairs of which have been closed 687 No. 85. Insolvent national banks with cax>ital of over $500,000, the affairs of which haAre been closed 688 No. 86. Recapitulation of claims proved, dividends paid, losses, etc., of insolvent national banks, the affairs of which have been closed, to October 31, 1895 689 No. 87. Transactions of the New York Clearing House for the years ending on October 1, 1895 and 18% 600 No. 88. Transactions of the New York Clearing House for 43 years 690 No 89. Clearing-house transactions of the Assistant Treasurer, United States, New York, for the year ended October 1,1896 690 No. 90. Exchanges of the clearing houses of the United States for the month of October, 1896, and 1895 691 No. 91. Exchanges of the clearing houses of the United States for the weeks ended October 31, 1896, and October 25, 1895 692 No. 92. Exchanges of the clearing houses of the United States for the years ended September 30, 1896 and 1895 693 Abstract of reports of condition of the State banks, loan and trust companies, savings and private banks, 1895-96 695 Number, assets, and liabilities of banks other than national which failed during the year in each State 721 Abstract of resources and liabilities of the loan and trnst companies in the District of Columbia on October 6,1896 722 Summary of the condition of the Canadian banks on August 31, 1896 723 Aggregate resources and liabilities of the national banks from October, 1863, to October, 1896... 725 Summary of the state and condition of the national banks at date of each report since September 28, 1895, arranged by States and Territories and reserve cities 751 Index to the text of the report 805 Index to the Appendix -_ _ ..-„.. 813 REPORT OF THE COMPTROLLER OF THE CURRENCY. TREASURY DEPARTMENT, OFFICE OF THE COMPTROLLER OF THE CURRENCY, Washington, December 7} 1896. SIR : In compliance with law, I herewith submit for the consideration of Congress the annual report of the Comptroller of the Currency. It constitutes the thirty-fourth report made, and is for the year ended October 31, 1890. The total number of national banks organized from the date of the granting of the first certificate of authority, on June 20, 1863, to the close of the year embraced in this report has been 5,051, making an average for each year of 153. On the 31st of October last there were in active operation, of this number, 3,679, having an authorized capital stock of $650,014,895, represented by 288,902 shareholders. The average capital stock of each bank in the system was $176,682, the number of shares to each, 2,296, and of shareholders, 78. The total outstanding circulating notes of the banks in active operation was $211,412,820, of which $208,988,172 was secured by bonds of the United States and the balance by lawful money deposited with the Treasurer. The total of all national-bank circulation outstanding on October 31 was $234,553,807, of which amount $7,091,205 was secured by bonds still held for account of insolvent and liquidating banks and $18,747,430 by lawful money deposited for their account, and by active banks reducing circulation. The net increase in the amount of circulation secured by bonds during the year was $-6,329,053, and the gross increase in the total circulation, $21,099,429. On October 6, 1896, the date of the last report of condition, the total resources of the 3,676 banks then reporting was $3,263,685,313.83, of which $ 1,893,268,839.31 represented their loans and discounts and $362,165,733.85 money of all kinds in bank. Of their liabilities, $1,597,891,058.73 represented individual deposits, $336,342,834.70 surplus and net undivided profits, and $209,944,019.50 outstanding circulating notes secured by bonds. In geographical divisions the 3,679 banks in operation are divided as follows: 1,539 banks with capital stock of $401,145,135 in the Eastern States, including Delaware and Maryland; 1,583, with capital stock of $110,241,660, in the Western, and 557 with capital stock of $138,628,100 in the Southern States. In point of number of active banks Pennsylvania, New York, Massachusetts Ohio, Illinois, and Texas lead with 420,328,268, 248,221, and 3 4 REPORT OF THE COMPTROLLER OF THE CURRENCY. 206 banks, respectively. Arranged according to capital stock, Massachusetts is first with $97,017,500; New York second, with $86,036,060; Pennsylvania third, with $74,753,129; followed by Ohio, with$45,770,338; Illinois, $38,746,000, and Texas $21,863,090. There were organized during the report year 28 banks, located in 15 States and the District of Columbia, with an aggregate capital stock of $3,245,000. Of this number 8 were in Pennsylvania, 2 each in New York, Georgia, North Carolina, Ohio, and West Virginia, and 1 each in Alabama, Illinois, Kansas, Kentucky, Maine, Missouri, Texas, Virginia, Wisconsin, and District of Columbia. The number located in the Eastern States is 12, the capital stock aggregating $1,180,000; in the Western States 6, with a combined capital stock of $875,000, and in the Southern States 10, having a total capital stock of $1,190,000. The State of Georgia is first in amount of capital stock represented by new banks, having $600,000; Pennsylvania has $520,000, and the District of Columbia $500,000. The number of banks organized was 18 per cent of the yearly average. The corporate existence of 26 national banks in 16 States, with capital stock of $3,153,800 and a total circulation of $1,175,400, has been extended during the year. Pennsylvania has 5; New Jersey and Illinois 3 each; Delaware and North Carolina 2 each; and in the following States 1 each: Alabama, Colorado, Connecticut, Georgia, Iowa, Maine, Maryland, Massachusetts, Minnesota, New York, and Ohio. Of the totai capital, Pennsylvania aggregates $690,000; New Jersey, $272,000; Illinois, $150,000; Delaware, $140,800; North Carolina, $151,000; Alabama, $100,000; Colorado, $100,000; Connecticut, $100,000; Georgia, $100,000; Iowa, $400,000; Maine, $50,000; Maryland, $75,000; Massachusetts, $100,000; Minnesota, $50,000; New York, $75,000; and Ohio, $600,000. Under the act of July 12,1882, providing for the extension of national banks, the corporate existence of 1,633 banks, representing an aggregate capital stock of $403,247,115, has been extended. Of these New York has 233, with capital stock of $73,572,460; Massachusetts 228, with capital stock of $92,592,200; Pennsylvania 204, with capital stock of $53,776,000, followed by Ohio with 112 and an aggregate capital of $18,479,000. The number of banks leaving the system by reason of the expiration of their corporate existence was 1, having capital stock of $100,000 and circulation of $90,000. This bank was located in North Carolina, and was succeeded by a new association with capital stock of $100,000 and circulation of $22,500. During the year ending October 31,1897, the corporate existence of 19 banks, with a capital stock aggregating $2,289,000 and circulation of $783,900, will expire. They are located in 13 States, 4 of them being in New York, 2 each in Colorado, Michigan, and Ohio, and 1 each in Georgia, Indiana, Iowa, Maine, Massachusetts, Nebraska, New Hampshire, Pennsylvania, and Texas. In the succeeding ten years, from 1897 to 1906, inclusive, the corporate existence of 993 banks, having capital stock of $146,461,150 and circulation of $39,003,872, will expire. The number of banks leaving the system during the year through voluntary liquidation was 37, having capital stock of $3,745,000 and circulation of $1,262,815. It has been found necessary to appoint receivers for 27 banks during the year. Their aggregate capital stock was $3,805,000 and circulation $761,500. Of this number 4, with capital stock of $995,000, were among those which closed their doors in 1893 and subsequently resumed REPORT OF THE COMPTROLLER OF THE CURRENCY. 5 business, but through continued business depression and the slow character of their assets were unable to meet their obligations, and were thus compelled to go into insolvency. A comparison of the data of this year with that set forth in the report of this Bureau for the year 1895 shows the number of active banks to have decreased 36, with a decrease in capital stock of $4,305,000. The number of banks organized is 15 less and the number going into voluntary liquidation 14 less. There has been a decrease of 9 in the number of receivers appointed and 45 in the number of extensions of corporate existence. The loss through expiration of charters decreased 3, and the number of banks organized to succeed expiring associations remaiDS unchanged. The following abstracts of the reports made by the banks in response to the five calls required by law indicate the changes which have characterized the status of the banks at different periods covered by the report. In addition thereto are given abstracts of the reports of 1892, 18&3,1894, and 1895, for purposes of comparison. The rapidity of ekange in condition from time to time during these years has been so marked that it is deemed worth while to call attention thereto. REPORT OF THE COMPTROLLER OF THE CURRENCY. SUMMARY OF THE STATE AND CONDITION OF EVERY NATIONAL BANK REPORTING DURING THE YEAR ENDED SEPTEMBER 30; 1892. Dec. 2,1891. Mar. 1,1892. May 17,1892. July 12,1892. Sept. 30,1892. 3,692 banks. 3,711 banks. 3,734 banks. 3,759 "banks. 3,773 banks. KESOUECBS. Loans and discounts. $2,001,032,625.05 $2,058,925,167.12 $2,108,360,340.54 $2,127,757,191.30 $2,171,041,088.11 U. S. bonds to secure circulation 153, 838,200.00 158,109, 300.00 160, 634, 550. 00 161, 939,800.00 163, 275,300. 00 TJ. S. bonds to secure deposits 19,186,500.00 17,416, 500.00 16,386, 000.00 15,447, 000. 00 15, 282, 000. 00 U. S. bonds on band.. 4, 279, 750. 00 4,638,190. 00 5,412,000. 00 600.00 4, 882, 250. 00 Stocks, securities, 4,854, claims, etc 823.17 154, 535, 514.54 128,440, 959.39 138, 055,947.09 144,058, 062.77 151,125, Due from approved reserve agents 640.18 236,434, 330.89 196,319,537. 81 250, 750, 998.13 250, 249, 071.26 252, 473, Due from other national banks 158. 05 140, 516, 353. 09 124,827, 315. 25 131,258, 888.45 130,124, 510. 01 137,125, Due from S t a t e banks and bankers 034.87 32, 572, 735.51 32, 425, 379. 39 32,171, 053.96 32,006,102.99 33.497, Banking house, furniture, and fixtures 537.83 71, 900, 286. 72 70,113, 901.51 70,271,609.84 71, 258, 998. 96 71,179, Other real estate and mortgages owned . 777.73 15, 961, 625.14 13,935,485.39 14,855, 351.90 15,303, 680. 35 15.498, Current expenses 100.02 10, 317,125. 23 and taxes paid 13,279,136.79 10, 340, 571. 29 11,574,071.41 4, 567, Premiums on U. S. 560. 54 14, 029, 616.43 bonds 14,695,279.96 14, 405, 799.74 14, 390, 888.43 13, 997, Checks and other 439.46 17,705, 961. 31 cash items 17,939,023.04 17, 644,105. 99 15,036, 575.86 16,849, Exchanges for clearing-house 108,243,483.92 129,515,655.34 99,954,483.17 300.19 105, 522, 711. 81 90, 364, Bills of other na22,014, 231.00 20,225,104.00 19,765,178.00 tional banks 840.00 19, 557, 474. 00 21, 325, Fractional paper currency, nickels and cents 924,866.86 924, 375. 50 939, 382.87 837,175. 54 934, 648. 37 Gold coin 95, 021,952.77 84,200,589. 75 88,426,189.58 95,104, 913.95 96,723,083.13 Gold treasury certificates 85, 091, 060.00 97,841,160.00 96, 656, 060.00 85, 530,100.00 71, 050,180. 00 Gold clearing-house 7, 689, 000.00 8, 066,000.00 8, 530,000. 00 8,498,000.00 7, 860, 000. 00 certificates 7,304, 242.00 7,259,640.00 7,152,798.00 7,466, 596.00 6, 785, 084. 00 Silver coin, dollars.. Silver treasury cer18,816, 462.00 22,954,656.00 26,040,211.00 25,523, 399.00 22,993, 451. 00 tificates Silver coin, fr a c 5, 579,302.28 5,405, 710. 92 5,555, 720. 70 5,453,283. 20 tional 4,948,124.97 Legal-tender notes.. 93,854,354.00 99,445, 735.00 107,981,402. 00 113, 915, 016.00 104, 267,945. 00 TJ. S. certificates of deposit for legaltender notes 8,765,000.00 24, 080,000.00 26,405,000.00 23,115, 000.00 13,995, 000. 00 Five - per - cent redemption fund with Treasurer 6,898,132.04 6,990,517.09 7, 092, 591. 94 7,139,564. 69 6,682,280.10 Due from Treasurer other than redemption fund 1,106,987.93 926,158.95 1,409, 312.15 1,047,684.18 1,051,339.53 Total 3,237,866,210.07 3,436,672,358.56 3,479,035,128.44 3,493,794,586.713, 510,094,897.46 LIABILITIES. Capital stockpaid in. 677, 356,927.00 679,970,110.00 682,232,158.00 684,678, 203. 25 686,573,015. 00 Surplus fund 228, 221,530.31 234, 069, 984.34 235,192, 004.95 238, 239,970. 94 238, 871,124.84 Undivided profits . . . 108,116, 263. 56 96, 574, 522.85 103,376,029.20 88, 227, 388.88 101, 652, 754. 66 National-banknotes outstanding 134,792,873.25 137, 627,107.25 140, 052, 343. 50 141,061,533. 00 143,423,298. 00 State-bank n o t e s 75,076. 50 outstanding 74,118. 50 75*097.50 71, 507.50 75,076.50 Due to other national banks 292,480, 956.07 372,985,405.11 361,593,119.06 367,143, 324.53 352, 046,184.05 Due to State banks 149, 334,721.20 181,688,074.58 181, 538, 222.87 188, 683,254.94 178, 607, 018. 34 and bankers 3, 904, 292. 83 3, 888, 865.78 1, 503, 539.69 1,470,937.98 1,657, 310.34 Dividends unpaid . . . L, 765, 422,983. 68 02 0052,766.591,702,240,957. 5 2 7 6 6 5 9 0 2 2 4 0 9 5 7 668 8 1, 743, 787,545.10 Individual deposits . 1, 602, 10 1, 753, 339,679. 86 1, 9, 828,144.24 14,478, 542.91 12,757, 046.94 11, 911, 030.77 10,823,973. 08 TJ. S. deposits Deposits of U.S. dis3, 625,107.19 3,356,091. 88 4,044, 734. 04 bursing officers 3,955,227.37 3,806, 323.51 Notes and bills re16, 325,642.89 9,181, 650.14 17,132,487. 71 discounted 8, 517, 205. 36 9,090, 080.27 6, 549,163. 65 7, 994, 514.30 3,816,163.49 4,581,163. 01 Bills payable 3, 876,404.20 L i a b i l i t i e s other than those above 1,979,746.97 1,092,506. 20 498, 983.87 1,178,586.43 1,013,181.26 stated 3,237,866,210.07|3,436,672,358.56 3,479,035,128.44 3,493, 794,586.71 3, 510,094, 897.46 Total REPORT OF THE COMPTROLLER OF THE CURRENCY. 7 SUMMARY OF THE STATE AND CONDITION OF EVERY NATIONAL BANK REPORTING DURING THE YEAR ENDED OCTOBER 3, 1893. Dec. 9,1892. M a r . 6,1893. M a y 4,1803. J u l y 12,1893. Oct. 3,1893. 3,784 banks. 3,806 b a n k s . 3,830 b a n k s . 3,807 b a n k s . 3,781 b a n k s . RESOURCES. Loans and discounts. $2,166,615,720.28 $2,159,614,092.48 $2,161,401,858.59 $2,020,483,671.04 $1,843,634,167.51 U. S. bonds to secure circulation 166,449, 250. 00 170,096, 550.00 172,412,550. 00 176, 588,050. 00 206,463, 850.00 IT. S. bonds to secure deposits 15, 321,000. 00 15, 351, 000. 00 15, 261, 000. 00 15, 256. 000. 00 14, 816, 000. 00 3,519,550.00 3, 078, 050.00 2, 760, 950. 00 4,148,600.00 U. S. bonds on hand. 4, 372, 600.00 150, 747, 862.86 149, 690, 701. 61 Stocks, securities, etc 148, 569, 950.46 153, 648,180.71 153,420, 770. 68 Due from approved 174, 312,119.44 159, 352, 677. 33 reserve agents 158,499, 644.28 Due from other na- 204, 948,159.79 202, 612,051.30 121, 673, 794. 24 111, 956, 506. 81 tional banks 94, 740,014.97 Due from S t a t e 142, 623,106. 36 124, 384, 884. 35 32, 681,708. 27,211, 234.32 banks and bankers. 24, 229,106.82 34, 403,231.75 30,126,300.21 Banking house, fur73, 386,921. 79 72, 750. 830.15 niture, and fixtures 72, 322, 826.08 72,294,364.78 72,680, 344.23 Other real estate and 16, 646,853.69 16, 632,446.13 mortgages owned.. 16, 828, 949.40 15,926,687.47 17,030.064.31 Current e x p e n s e s 11, 746,470. 23 4, 892, 772.88 and taxes paid 11, 071,996. 65 14, 204, 970.25 10,992, 932. 60 Premiums on TJ. S. 12, 935, 077. 74 11, 933,004. G9 bonds 13,981, 867.44 13, 913,289. 71 13, 270, 691.10 Checks and other 17, 546, 973. 93 cash items 16,707, 680. 61 15, 359, 764.56 16, 755, 332.09 18,755,010. 52 Exchanges for clear114, 977, 271. 08 107, 765, 890. 44 ing house 106,181, 394. 59 Bills of other na- 110, 522,668.49 125,142, 839.74 20, 085, 688. 00 20,135,054.00 tional banks 22, 402,611.00 20,488, 781. 00 18,248, 706. 00 Fractional currency, 952, 810.90 952, 632.48 nickels, and cents.. 893, 909. 82 1, 026,813.90 945, 532. 50 Gold coin 94,754, 328. 05 99, 857, 235. 09 101,006, 531. 58 95, 799, 861.68 129,740,438.19 Gold Treasury certificates 73,118, 480.00 69,198, 790. 00 62, 783,410.00 50, 550,100.00 47, 522,510. 00 Gold clearing-house 4, 939, 000. 00 5, 073,000. 00 4, 285, 000. 00 certificates 6,237, 000. 00 5, 080, 000.00 7, 615,574. 00 7, 212, 800. 00 7, 380, 457. 00 Silver coin, dollars .. 7, 593, 084. 00 7, 965,844. 00 Silver Treasury certificates 22, 556, 689.00 21, 695,114.00 24, 603, 511.00 22, 626,180.00 28,385,889.00 Silver coin, frac6,140,115.23 5, 438, 877. 33 tional 5, 635, 679.71 6,119, 574. 63 6, 009,178. 88 95, 833, 677.00 114, 709, 352.00 Legal-tender notes.. 102, 276,335. 00 90, 935, 774. 00 103,511,163.00 TJ. S. certificates of 14, 675, 000.00 12,130, 000.00 6,470, 000.00 6, 660, 000. 00 7, 020,000.00 deposit Five per cent re7,401,830.74 7,467,989.77 7, 282, 413.90 7, 600, 604.72 8,977,414.18 demption fund Due from Treasurer, other than 5 per 1, 556, 891.28 1,322,444.60 1, 268,405.03 1, 019 074.42 1, 262,749. 85 cent fund Total 3,480, 349, 667.19 3,459, 721, 235.78 3,432,176,697. 25 3, 213, 261,731.94 3,109, 563,284.36 LIABILITIES. Capital stock paid in. 689, 698,017. 50 688, 642,876.00 688,701, 200.00 685, 786, 718. 56 678, 540, 338.93 239, 931, 932.08 245,478, 362. 77 246,139, 133. 32 249,138, 300. 30 246, 750,781.32 Surplus fund Undivided profits... 114, 603, 884. 52 103, 067, 550.15 106, 966, 733. 57 93,944,649.73 103,474, 662. 87 National-bank notes 145,669,499. 00 149,124,818.00 151, 694,110.00 155, 070,821.50 182,959,725.90 outstanding State-bank n o t e s 75, 075. 50 75, 075.50 74,176.50 75, 072.50 outstanding 75, 069.50 2, 579, 556. 38 1, 350, 392.19 3, 879, 673. 50 1, 308,137. 97 2, 874, 697.59 Dividends unpaid... Individual deposits - 1,764, 456,177.111, 751,439, 374. 1 4 1 , 749,930, 817. 511, 556, 7G1, 230.17 1, 451,124, 330. 55 673, 349. 92 10, 379, 842. 66 9, 813, 762.17 9, 657, 243.49 TJ. S. deposits 10,546,135.51 Deposits of TJ. S. dis4, 293, 739. 93 3, 927, 760. 44 4, 034, 240. 37 3,321,271.84 bursing officers 3, 776, 438.21 Due to other national 323, 339,449. 03 304, 785, 336. 62 275,127, 229. 28 238, 9.13, 573. 51 banks 226, 423, 979.06 Due to State banks 160, 778,117.18 166, 901, 054. 78 153, 500, 923. 94 125, 979, 422.16 and bankers 122, 891, 098. 21 Notes and bills re18, 953, 306. 98 14,021,596.4?, 29, 940, 438. 56 21, 066, 737. 01 discounted 15, 775, 618. 63 21, 50G, 247. 53 18,380,228.71 31,381,451.27 27,426, 937. 54 Bills payable 9, 318, 249. 82 2, 913, 047. 88 3, 051, 379.82 28, 689, 265. 68 31, 632, 352.16 Other liabilities 1, 688, 817. 56 Total 3,480, 349, 667.19 3,459,721, 235. 78 3,432,176, 697. 25 3, 213, 261, 731. 94 3,109, 563, 284.36 REPORT OF THE COMPTROLLER OF THE CURRENCY. SUMMARY OF THE STATE AND CONDITION OF EVERY NATIONAL BANK REPORTING DURING THE YEAR ENDED OCTOBER 2, 1894. Dec. 19,1893. Fob. 28,1894. May 4,1894. July 18,1894. Oct. 2,1894. 3,787 banks. 3,777 banks. 3,774 banks. 3,770 banks. 3,755 banks. RESOURCES. Loan8 and discounts. $1,871,574,769.95|$1,872,4O2,0O5.96 $1,926,686,824.98 $1,944,441,315.10 $2,007,122,191.30 U. S. bonds to secure circulation 204, 809, 350. 00 200, 808, 850.00 200, 469,250.00 201, 335,150.00 199,642,500.00 U. S. bonds to secure 14,445, 000.00 14, 720, 000. 00 14, 926, 000. 00 15, 226, 000.00 14,430, 000.00 TJ. S. deposits 17, 250,150.00 14,805,200.00 12, 875,100.00 10, 662, 200.00 3,040,000.00 U. S. bonds on band.. Premiums on TJ. S. 13, 800,470.18 15,606,786.13 15,133, 458.23 14,930, 896.78 14, 624, 279. 03 bonds Stocks, securities, etc 159,749, 3G3.92 174, 305, 552. 50 185, 324, 549.67 191,137,435. 66 193,300,072.44 Banking bouse, furniture, and fix74,143,833. 68 74,802,956.73 74,929, 982. 52 75,183, 745.64 73,642,314.14 tures Other real estate and 18, 679, 746. 30 20,145, 599.88 21,174,855.07 21, 877,508. 2! 22,708, 391. 20 mortgages owned.. Due from national banks (not reserve agents) 108,265,460.75 112, 672,823.41 119,303,798.52 Ill, 775,552.18 122, 479, 067.98 Dae from State banks 28, 682, 998. 64 27,335,317.15 29, 628, 495.01 27,063, 816. 38 27,973,911.86 and bankers Duo from approved 212, 630, 636. 30 246, 891, 926. 63 257,854,100.32 258,089,227.51 248, 849, 607.59 reserve agents Checks and other 13, 519,016.51 12, 633,797.31 12, 549, 614. 34 11, 865,939.23 15, 576,975.25 cash items Exchangee for clear71,043,16.5.75 70, 299, 653. 62 76, 002, 055.47 66, 511,835.77 88, 524, 052.17 ing house Bills of other na21,497,840.00 19, 866, 610.00 20, 754, 988.00 19, 650, 333.00 18, 580, 577. 00 tional banks Fractional p a p e r currency, nickels, 1, 061,927. 79 988, 602. 5' 1,014, 037. 51 1, 041, 630. 44 952, 932. 95 and cents 143, 928,989.41 124, 904, 820. 09 128,180,158.36 125, 051, 677.14 125, 020, 290.92 Gold coin Gold Treasury cer44,877,100.00 41,516,110.00 41, 928, 330.00 40,560, 490.00 37, 810,940.00 tificates Gold clearing-house 14,702,000.00 32,705,000.00 34, 721, 000.00 34,023,000. 00 34,096, 000.00 certificates 7, 741, 205.00 7,530,135.00 7, 489, 931. 00 7,016, 489.00 6,116, 354.00 Silver dollars Silver Treasury cer34,776, 253.00 43,181,166.00 41,580,654.00 38, 075, 412. 00 28, 784, 897. 00 tificates 6, 038,278. 25 6, 041, 850.15 5,439,171.02 5, 943, 584.19 5, 422,172.58 Silver fractional coin Legal-tender notes.. 131, 626,759.00 142,768, 676.00 146,131,292.00 138, 210, 318.00 120, 544,028.00 U. S. certificates of deposit for legal31,255,000.00 35,045,000.00 46, 030,000.00 50, 045, 000. 00 45,100,000.00 tender notes Five per cent redemption f u n d 8,713,498.44 8,87<5, 042.35 8,751,434.40 8,791,946.90 8,723,223.16 with Treasurer Due from U.S. Treas2,029,141.92 2,132, 772.09 2,301, 480.28 1, 920, 783.31 897, 645.20 urer Total. 3,242, 315, 326. 70 3, 324, 734,901.89 3, 433,342,378. 08 3, 422,096,423.33 3, 473,922, 055. 27 LIABILITIES. Capital stock paid in 681, 812,960.00 678, 536,910.00 246,739,602.09 246,594, 715.96 Surplus fund Undivided profits, less expenses and 100,288,668.05 86,874,385.87 taxes paid National-bank notes 179,973,150.50 174,436,269.10 outstanding State-banknotes out75,059.50 71,483.50 standing D ue t o other n ati on a 1 298,805,834.56 343,143,745.59 banks Due to State banks 151,313,715.25 173,942, 000.98 and bankers 1, 536, 354. 03 1, 217, 903. 90 Dividends unpaid ... Individual deposits . 1, 539, 399, 795. 23 ,1.586,800, 444.50 9, 925, 967.44 10,391,466.00 U.S. deposits Deposits of U.S. dis3,643,346.71 3,469,398.77 bursing officers... Notes and bills re11,465,546.18 7, 729, 558. 98 discounted 9,234,205.50 14,388, 362.94 Bills payable Liabilities other than 2,265, 513.73 2,973,863.64 those above stated Total 675,868,815.00 246, 314,185. 63 671,091,165.00 245,727,673. 71 668,861,847.00 245,197,517.60 89, 394,262.20 84, 569,294.46 88,923, 564. 50 172, 626, 013.50 171,714,552.50 172, 331, 978. 00 71, 480.50 66, 290. 50 66, 290. 50 359, 539,488. 04 352,002, 081.10 343, 692, 316. 63 182, 937, 307.10 181,791,906.23 183,167,779.62 2, 332,506. 97 2, 586,504. 77 2, 576, 245. 95 ,670, 958, 769. 07 1,677,801,200.851,, 728, 418, 819.12 10, 538,305.64 10,024,909. 62 11,029,017.29 3, 317, 341.85 3, 099, 504. 08 3,716,537.80 7,905,541.10 9,224,464.78 8,195,566.99 9,999,093.81 11, 453, 427. 95 12, 552,277.78 2,313,836.70 2,422, 567. 04 2, 938, 543. 20 3,242,315, 326.70 3,324, 734,901.89 3, 433,342, 378.083, 422, 096,423.33 3,473, 922,055.27 REPORT OF THE COMPTROLLER OF THE CURRENCY. 9 SUMMARY OF THE STATE AND CONDITION OF EVERY NATIONAL BANK REPORTING DURING THE YEAR ENDED SEPTEMBER 28, 1895. Deo. 19,1894. Mar. 5,1895. May 7,1895. July 11,1895. Sept. 28,1895. 3,737 banks. 3, 728 banks. 3,711 banks. 3, 715 banks. 3, 712 banks. RESOURCES. Loans and discounts $1,991,913,123. 45 $1,965,375,368. 94 $1,989,411,201.90 $2,016,639,535. 53 $2,059,408,402.27 TT. S. bonds to secure circulation 195, 735, 950. 00 195,787,200.00 203, 648,150. 00 206, 227,150.00 208, 682, 765. 00 U. S. bonds to secure deposits 15, 878, 000. 00 15, 051, 000. 00 26, 405, 350.00 28, 615,550. 00 15,328,000.00 14, 465. 400. 00 25,115, 540. 00 17, 734, 200. 00 U. S. bonds on hand. 20, 760, 350. 00 10, 790, 350. 00 Premiums on U. S. bonds 16,130,000. 69 16, 511, 917. 36 17, 451, 432.71 16, 440,418. 57 16, 469,109. 73 Stocks, securities, etc 197, 328, 354. 09 196,927, 758. 03 193, 841, 727.63 194,160, 466. 61 195, 028, 085.35 Banking house, furniture, and fixtures 75,400,976.70 77,075,488.01 77, 856, 597. 68 77, 340,348.27 78,244,849.75 Other real estate and mortgages owned. 25, 082,548.41 24,193, 994.18 24,674,154. 09 23, 258, 812.77 25, 527, 027.04 Due from national banks (not reserve agents) 124, 798, 322. 39 114,702,531.22 117,720,533.90 127, 329, 742. 98 123,521,087.26 Due from State banks and bankers 30, 962, 557.31 29, 273, 688. 00 30, 248,003. 98 31, 089, 231.72 30,830, 482. 60 Due from approved reserve agents 234, 331, 340. 54 222,467, 685.14 218, 799,491. 90 235, 308, 761.15 222, 287, 251.45 Checks and other cash items 13, 051. 055.46 13,598,841. 41 12,424,519.77 12, 557, 940.30 13, 056, 424.53 Exchanges for clearing house 80, 869, 202. 29 82,868,297.07 77, 343, 972.17 83,833,118.09 57, 506, 787. 60 Bills of. other national banks 18,522,596.00 19,402,179. 00 18,436, 845. 00 19,247, 043.00 15, 537,100.00 Fractional p a p e r currency, nickels, and cents 885, 072. 59 1, 002, 373. 06 1,007,766.10 1,023,441.43 936, 484.44 Gold coin 114, 898, 047.13 120, 855, 575. 38 123,258,436. 89 117,476, 837. 32 110, 378, 360. 22 Gold Treasury certificates 29, 677, 720. 00 25, 400,860. 00 23,182, 950. 00 22, 425, 600. 00 21, .525, 930. 00 Gold clearing-house certificates 31, 219, 000. 00 31, 904, 000. 00 30, 823, 000. 00 31, 315, 000.00 31, 021, 000.00 Silver dollars 6, 954, 778. 00 7, 245, 537.00 7, 248,059. 00 5, 505,459. 00 7, 263, 610. 00 Silver Treasury certificates 29, 743, 446.00 28, 519, 277. 00 29, 550, 637.00 30,127,457. 00; 22,914,180. 00 Silver fractional coin 5, 548, 231. 62 5,956, 959.18 5, 617, 398.91 5, 834, 241.11! 4, 892, 381. 95 Legal-tender notes.. 119, 513, 472. 00 113, 281, 622. 00 118, 529,158. 00 123,185,172. 001 93, 946, 685. 00 U. S. certificates of deposit for legal37,090, 000.00 26, 930, 000. 00 tender notes 31, 655, 000.00 45, 330, 000. 00 49, 920,000. 00 Five per cent redemption fund 8, 542, 386. 94 with Treasurer 8, 527, 580. 65 8, 748,239.53 9, 094, 047.82 9, 085, 606. 08 Due from U.S. Treasurer 1, 289, 077.14 1, 080,461. 66 1,146, 281.47 1, 017, 832. 04 1, 285, 534. 36 Total. 3,423,474, 873.11 3, 378, 520,536.75 3, 410, 002,491.24.3,470, 553, 307. 28 3,423, 629, 343. 63 LIABILITIES. Capital stock paid in. 666,271, 045. 00 662,100,100. 00 Surplus fund 244, 937,179. 48: 246,180,065. 97 Undivided profits, less expenses and taxes paid 95, 887,, 436.80 920,338.80 National-bank notes outstanding 169, 337:,071.00 169 755,091.50 State-banknotes outstanding 66. 290. 50 66,173. 50 Due to other national banks 334, 619, 221.24 314, 430,137. 22 Due to State banks and bankers 180, 345, 566. 50 180, 970, 705. 84 Dividends u n p a i d . . . 1, 287, 568. 67 1,130, 390. 38 Individual deposits . , 695,489, 346. 08. 1,667, 843, 286.28 1. U. S. deposits 24, 563,195.79 10,151, 402. 66 Deposits of U. S. disbursing officers . . . 3, 865, 339.58 3,491,787.60 Notes and bills re853, 317.73 discounted 7, 682,, 509. 06 645, 026. 23 Bills payable 11,471, 551.05 Liabilities other than 2, 220, 523.72 3,413, 741. 62 those above stated. 659,146, 756. 00 246, 740, 237. 34 86,571,194.99 175, 653,500.50 66,144.50 313,614,314.8 658, 224,179. 65 247, 782,176. 23 657,135, 498. 65 246,448,426.38 81, 221,960. 54 90,439, 924.48 178,815, 801. 00 182,481,610.50 66,133.50 66,133. 50 336,225, 956. 52 320, 228, 677. 38 180,360, 313.93 190, 447,130. 70 174, 708,672.88 3, 030,371. 57 387, 221. 94 1, 670, 927. 89 .. 961,299.03 1,736,022, 006.83 , 701, 653,521.28 23, 501, 952. 80 9,114,372.65 10,075, 924.97 3, 745, 923. 09 3, 091,408. 55 8, 944, 917. 94 13, 603,610.99 9, 697, 555. 94 12, 250, 671. 25 5, 004,703. 39 3, 602, 030. 03 4,426,966.48 13, 396,107. 85 17, 813, 360.01 4,045,143.70 423, 474, 873.11 3,378, 520, 536.75 3,410,002, ,410, 491.24 3,470, 553,307.28 3,423,629, Total. 343.63 10 REPORT OF THE COMPTROLLER OF THE CURRENCY. SUMMARY OF THE STATE AND CONDITION OF EVERY NATIONAL BANK REPORTING DURING THE YEAR ENDED OCTOBER 6, 1896. Dec. 13,1895. Feb. 28,1896. May 7,1896. July 14,1896. Oct. 6,1896. 3,706 banks. 3,699 banks. 3,694 banks. 3,089 banks. 3,676 banks. RESOURCES. Loans and discounts. $2,041,499,137.57 $1,966,211,736.86 $1,982,886,364.29 $1,971,642,011. 65 $1,893,268,839. 31 U. S. bonds to secure I circulation . 210,479,500.00 215, 637,100. 00 225, 017,500.00 227, 213, 650. 00 237, 291, 650. 00 U. S. bonds to secure U.S. deposits 15, 358, 000. 00 34,922, 000. 00 «5, 573, 000.00 15, 928, 500. 00 15, 793, 000. 00 U. S. bonds on band.. 8, 655, 900.00 13, 210,400. 00 12,491,420.00 12,835, 655. 00 9, 342, 500.00 Premiums on U. S. bonds 16,698, 340. 04 18,648, 677.87 18, 875, 424. 94 17, 579,015.44 17, 629, 994.81 Stocks, securities,etc 193, 383, 321. 52 192, 036, 933.71 190, 938, 097.11 190, 262,918.13 188, 995, 352.93 Banking house, furniture, and fixtures 78, 697,728.91 78,927, 684.22 77, 975, 409.98 78, 227, 350.23 78,046,817.'28 Other real estate and j mortgages owned.. 25, 574,482.13 26, 315, 910.05 27, 009,127.98 27, 221,722.40 27,403,155.46 Due from national banks (not reserve agents) 131, 007, 238.63 114, 676,360.32 114, 073, 966.82 116, 328,082. 38 111, 830,935. 50 Due from State banks and bankers 33, 341, 627.38 29,432,178. 87 28,285, 698.29 28, 388,424.7! 29, 583, 299.70 Due from approved reserve agents 203,002,116. 01 189,344, 601.12 195, 752, 733. 58 204,384,106. 92 190, 077, 533. 04 Checks and other cash items 12,939, 318.30 12, 275,771.88 12, 295,435.30 13,601,452.76 13,913,129. 68 Exchanges for clearing house 86,557, 507.77 89,996,450. 95 85,503, 719.81 75,926,122.93 76, 760,416.77 Bills of other na16,798, 271. 00 19,183,691.00 17,444,746.00 tional banks 17,114,290.00 18, 055, 536.00 Fractional paper currency, nickels, and cents 1, 019, 409. 50 925, 289.14 986, 263. 57 966, 835. 38 999,427. 31 113, 843,400.97 108,165,900.88 105,938, 779. 74 110,133,159. 67 114, 921, 270.01 Gold coin Gold Treasury certificates 20,936,030.00 20,935,130. 00 21, 383, 020.00 20, 336,400.00 19, 706,620. 00 Gold clearing-house certificates 33, 465, 000. 00 27, 793, 000.00 30, 440, 000.00 31, 384,000. 00 26, 096,000. 00 6,984, 382.00 7, 406,130.00 Silver dollars 7,285,043.00 6,867, 060. 00 6,721, 871.00 Silver Treasury cer25, 878,323.00 25,869, 370.00 31. 512, 287. 00 29,495, 375. 00 28,057,695. 00 tificates 5,605,274.26 5, 847,928. 53 5| 814, 316.48 5, 619, 454. 44 5,305,176.46 Silver fractional coin. Legal-tender notes. 99,209,423.00 112, 507, 513.00 118, 971, 652.00 113, 213, 290.00 110,494,730.00 U. S. certificates of deposit for legal31,440,000.00 28,735, 000.00 28,035, 000. 00 27,165, 000. 00 31, 840, 000.00 tender notes Five per cent redemption f u n d 9,231,153.24 9,922,944.49 10, 373, 622.18 with Treasurer . . . 9,194, 625.78 9,775,478.73 Due from U. S. 1,209,333.32 1,719, 586.58 Treasurer 1, 744,071.85 1, 635, 392.62 1,677, 206.43 Total. 3,423, 534,328.26 3,347, 844,198.58 3, 377, 638, 822.24,3, 353, 797, 075.97 3,263,685,313.83 LIABILITIES. Capital stock paid in. 656,956,245.00 653,994,915.00 652, 089, 780. 97 651,144, 855. 00 648, 540, 325. 00 Surplus fund 246,177,563.53 247,178,188.87 247, 546, 067.10 248, 368,423.63 247, 690,074.96 Undivided profits, less expenses and taxes paid 87,041,526.42 89, 378, 085. 39 83,483, 208. 76 88, 652, 759.74 94,501,758.19 National-bank notes outstanding 185,151,344.00 187, 217,372. 50 197,382,364. 50 199,214,049.50 209,944, 019. 50 State-bank n o t e s 61,071.50 60,393. 50 outstanding 60, 383. 50 60, 393. 50 63,504.50 Due to other national banks 302, 721,578.57 285,976,811.90 285,314, 203.16 291, 990, 811.77 269, 043, 386. 73 Due to State banks and bankers 167, 303, 670.19 162, 394, 344.71 157,980, 455.20 162,311,142. 23 146, 058,794. 35 1, 091,869.14 Dividends unpaid... 1, 233, 515.47 2, 069,104. 01 2, 833, 357.12 1,665,571.90 Individual deposits.. 1,720,550,241.031., 648, 092, 868. 88, 1, 687, 629, 515. 37, 1668, 413, 507. 62, 1597, 891, 058.73 9,699,120.46 29,876, 217.36 21, 015, 358. 71 12, 556,149. 50 11, 091,241.86 U. S. deposits Deposits of U.S. dis2, 848,176.20 4,080,236. 63 3, 910, 629.72 3,416, 397. 99 4,059, 468.83 bursin g officers Notes and bills re11, 359, 771.49 11,465, 835.06 11, 563, 851. 93 11, 3-16, 960.72 14,881. 060. 90 discounted 20,492, 304.21 20,104, 667. 81 17,137, 274. 80; 15, 920, 902.16 20,431.426. 62 Bills payable Liabilities other than those above 2, 805,138.26 3, 654,963. 41 3, 405, 889.12 9,296, 233. 38 5, 055, 979. 6l| stated Total. 3, 423, 534, 328. 26 3,347, 844,198.58 3, 377, 638,822.24 3, 353, 797, 075. 9713, 263, 685, 313.83 EEPORT OF THE COMPTROLLER OF THE CURRENCY. 11 ANALYSIS OF REPORTS OF 1896. The change in the item of individual deposits during the report year of 1898 is shown to be as follows: It increased from $1,701,653,521 on September 28, 1895, to $1,720,550,241 on December 13, 1895; declined to $1,648,092,868 on February 28, 1896, then slightly increased on May 7, 1896, again decreased from $1,668,413,507 on July 14, 1896, to $1,597,891,058 on October 6,1896, being almost $104,000,000 less than the amount shown on September 28, 1895. The number of banks holding these deposits on September 28, 1895, was 3,712, with capital stock of $657,135,498, as against 3,676 on October 6, with capital stock of $648,540,325. The surplus fund of the banks on September 28,1895, was $246,448,426, and their net undivided profits $90,439,924. On October 6, 1896, the former had increased to $247,690,074, while the latter had decreased to $88,652,759. On September 28,1895, national-bank notes outstanding secured by bonds deposited amounted to $182,481,610. The returns under each call showed a continued increase during the year, the amount on December 13, 1895, being $185,151,344, on February 28, 1896, $187,217,372, on May 7,1896, $197,382,364, on July 14,1896, $199,214,049, and on October 6, 1896, $209,944,019. The amount due to other national banks, which on September 28, 1895, stood at $320,228,677, decreased to $285,314,203 on May 7,1896, increased on July 14,1896, to $291,990,811, and then fell to $269,043,386 on October 6, 1896. The amount due to State banks and bankers, which on September 28, 1895, was $174,708,672, decreased to $157,980,455 on May 7, 1896, increased to $162,311,142 on July 14, 1896, and fell to $146,058,794 on October 6, 1896. The liabilities of the national banks for money borrowed, in different forms, aggregated on September 28, 1895, $35,254,611, had increased on February 28 to $40,866,736, decreased to $30,573,001 on July 14, increasing to $38,967,450 on October 6. The total liabilities, which on September 28,1895, were $3,423,629,343, decreased to $3,377,638,822 on May 7, 1896, and to $3,263,685,313 on October 6. On the side of resources, the loans and discounts, which on September 28,1895, amounted to $2,059,408,402, decreased to $1,966,211,736 on February 28, 1896. They increased on May 7 to $1,982,886,364, only to decrease to $1,893,268,839 on October 6, indicating a falling off in this item of about $166,000,000 as compared with the aggregate of loans and discounts on September 28, 1895. The amount of United States bonds to secure circulation, which on September 28, 1895, was $208,682,765, increased to $237,291,650 on October 6, 1896. The banks held, on September 28, 1895, $26,118,350 United States bonds, other than those securing circulation. On December 13 the amount decreased to $24,013,900, then increased on February 28,1896, to $48,132,400, and decreased on October 6 to $25,135,500. The investment of assets in stocks, securities, etc., on September 28, 1895, was $195,028,085. It had decreased on October 6 to $188,995,352. The investment in banking-house, furniture, and fixtures, which on September 28^ 1895, was $78,244,849, showed but slight variations during the year, being on October 6, $78,046,817. Other real estate and mortgages owned on September 28, 1895, Digitized foramounted FRASER to $25,527,027, and increased to $27,403,155 on October 6. 12 REPORT OF THE COMPTROLLER OF THE CURRENCY. The amount due from other national banks (not reserve agents) on September 28, 1895, was $123,521,087, increased on December 13 to $131,007,238, then decreased to $114,073,966 on May 7, increased slightly on July 14, 1896, and decreased to $111,830,935 on October 6. The amount due from State banks and bankers on September 28, 1895, was $30,830,482, increased to $33,341,627 on December 13, and decreased on October 6 to $29,583,299. The amount due from approved reserve agents decreased from $222,287,251 on September 28,1895, to $189,344,601 on February 28, afterward increased to $204,384,106 on July 14, and decreased to $190,077,533 on October 6. Exchanges for clearing house, which on September 28,1895, amounted to $57,506,787; on February 28 had increased to $89,996,450, but decreased, on October 6, to $76,760,416. The specie held by the banks on September 28,1895, was $196,237,311, while on October 6, it was $200,808,632. The amount of legal-tender notes and United States certificates of deposit for such notes which on September 28, 1895, aggregated $143,866,685, decreased to $130,649,423 on December 13, increased to $147,006,652 on May 7, decreased to $140,378,290 on July 14, and increased to $142,334,730 on October 6. REVIEW OF REPORTS, 1892 TO 1896. As a supplement to the analysis of the bank returns of 1896, it is not out of place to undertake a brief review of those of the past four years, marking as they do the most trying conditions through which the national banking system has been called to pass. Such review, it is believed, will best illustrate the very great changes which have occurred within a period so comparatively brief. On September 30, 1892, the aggregate resources, as also the aggregate liabilities, of the national banks rose to the highest mark in the history of the system, viz, $3,510,094,897. On the side of liabilities, individual deposits stood at $1,765,422,983, and on the side of resources, loans and discounts were $2,171,041,088, being respectively the maximum amount ever registered, either before or since September 30, 1892. Along the lines of these two items of receiving deposits and lending money, representing, as they do, the principal functions of banking in this country, the greatest fluctuations have occurred during the years under consideration. The item of deposits showed very little variation in amount from September 30, 1892, to May 4, 1893, when it was $1,749,930,817. After the latter date, however, it shrunk suddenly and rapidly to $1,556,761,230 on July 12, 1893, and on October 3, 1893, touched $1,451,124,330, the lowest point since December 11, 1889. From this shrinkage of deposits, amounting to nearly $300,000,000, from May 4 to October 3, there was a rapid and steady recovery, until on October 2, 1894, just a year after the date of lowest depression, they were $1,728,418,819, or but $21,000,000 less than on May 4, 1893. There was thereafter for a brief period a slight decrease in the volume, but it rose again on July 11, 1895, to $1,736,022,006, falling to $1,648,092,868 on February 28,1896, and standing at $1,668,413,507 on July 14, 1896. Between this date and October 6, 1896, decrease was marked, being nearly $71,000,000, leaving the deposits at the latter date at $1,597,891,058. The resources of the banks showed loans and discounts to the amount of $2,161,401,858 on May 4, 1893. They had fallen on July 12 to $2,020,483,671, and on October 3 to $1,843,634,167. It is noticeable that REPORT OF THE COMPTROLLER OF THE CURRENCY. 13 after this date there was a steady expansion of loans and discounts until October 2, 1894, when the amount was $2,007,122,191. As the deposits held by national banks are the chief source of supply for the funds from which loans and discounts are made to their customers, and as the law requires the banks, in the interest of depositors, to keep on hand in money a stated proportion of the funds deposited with them for safe-keeping, known as lawful money reserve, this reserve is necessarily affected by the movements of deposits and loans, and an examination of its ebb and now during the four years under review is of equal interest. On September 30, 1892, the lawful money reserve of all the banks, consisting of specie, legal money notes, and certificates for legal tenders deposited, amounted to $327,000,000; on December 9, 1892, it was $318,000,000; on March 6, 1893, $313,000,000, and on May 4, 1893, $322,000,000. The variations during this period, it thus appears, were slight; but owing to the extraordinary demands of depositors occurring suddenly and unexpectedly after May 4, the reserve on July 12, 1893, fell to $289,000,000, the banks being compelled to pay $193,000,000 of deposits during that period, $141,000,000 of which were j>rovided by the calling in of loans and discounts, which the banks, under the force of such withdrawals, were compelled to demand. The drain of deposits continued after July 12, and by October 3,1893, $105,000,000 additional had been withdrawn, these and prospective withdrawals being provided for by the collection of $177,000,000 of loans and discounts, with the result that the reserve on hand reached on October 3, $346,000,000. After October 3,1893, with returning confidence, deposits rapidly returned to the banks and there was gradual expansion of loans and discounts, though in smaller proportion. There was again an increase in reserve. From $346,000,000 on October 3 it went to $414,000,000 on December 19, 1893; to $433,000,000 on February 28, 1894, touching on May 4,1894, $452,000,000, the highest point it has ever reached. It decreased to $439,000,000 on July 18, to $402,000,000 on October 2, and $374,000,000 on December 19,1894. On July 11, 1895, the amount stood at $382,000,000, after which it fell to $340,000,000 on September 28, 1895, since which time, and up to October 6, 1896, the reserve on hand has not been subject to sudden fluctuations. The variations are measured by a limit of $12,000,000 between the highest and lowest amounts held. With a more settled condition in business affairs there was seen a greater expansion of loans and discounts and a consequent gradual decrease in the amount of reserve held. The amount of circulating notes of the national banks outstanding on September 30, 1892, was but $143,423,298. The increase thereof was very slight and gradual, due mainly to the compulsory obligation of new banks to deposit bonds, up to July 12, 1893, when it stood at $155,070,821. Under the stress of a currency famine the issues expanded by October 3, 1893, to $182,959,725, but thereafter steadily decreased, falling to $169,337,071, on December 19,1894. With the new issue of bonds, the lessened price of bonds, and an apparent increased margin of profit in issuing notes, the volume began to increase, until on October 6, 1896, it amounted to $209,944,019, or about $66,000,000 greater than on September 30, 1892. In the matter of capital stock, the maximum in the history of the system was reached on December 9, 1892, being $689,698,017 for 3,784 banks. This amount had decreased to $688,701,200 on May 4,1893, while the number of banks had increased to 3,830, the largest number doing Digitized forbusiness FRASER at anytime since the establishment of the system. After May 4, 14 REPORT OF THE COMPTROLLER OF THE CURRENCY. 1893, there was an almost steady decrease in capital stock as well as in the number of banks, and on October 6,1896, there were but 3,676 banks doing business with capital of $648,540,325, a falling off of 154 in the number of banks and of over $40?000,000 in capital stock. It is, however, noteworthy that in the face of this substantial decrease in the number of banks and their capital stock, they had, on October 6, 1896, a surplus fund of $247,690,074, and net undivided profits of $88,652,759, making a total of $336,342,833 as compared with an aggregate of $340,524,178 on September 30,1892, of which $238,871,424 was surplus fund and $101,652,754 net undivided profits. In view of the heavy losses sustained by the banks during four years of severe liquidation and shrinkage in values, reflected in the figures showing largely reduced net earnings (only 5 per cent for the year ended March 1, 1895, and 5.4 per cent for 1896), these figures bear tribute not only to the efficiency of the law compelling banks to lay aside a certain percentage of earnings as a surplus fund, but also to the prudence and courage of bank managers in strengthening the security of depositors by doing more than the law requires in this respect in the face of a largely reduced earning capacity. The complaint has been not infrequently heard during the past years that those engaged in banking have been unfair toward the business public in the matter of withholding credit. A careful study of the returns given show that such restriction has resulted from necessity and not from choice. The unsettled currency conditions which have so marked the course of the country of late have made depositors more easily frightened into demanding their deposits, and to meet such calls on demand large amounts of idle money had to be constantly kept in bank. In such case it could not be otherwise than that loans on the one hand should be called in and new credit denied on the other. The profits of banking have thus been curtailed, for such profit arises only where the largest portion of a bank's deposits :are in the hands of borrowers. The course pursued resulted in diminished profits to those interested as shareholders, but it in turn afforded the depositor the opportunity of obtaining his deposit whenever desired. EARNINGS AND DIVIDENDS. The act of March 3,1869 (section 5212, Eev. Stat.), provides that each national banking association shall report to the Comptroller within ten days after declaring a dividend the amount of such dividend and the amount of net earnings in excess of such dividend. Abstracts of these reports btv semiannual periods from associations in each State, reserve city, and geographical division for the current and prior years, will be found in the appendix, and also a table showing, from March 1, 1870, to March 1, 1896, the number of banks, capital, surplus, dividends, net earnings, and ratios of dividends, etc., to capital, etc., for each year, and the average for twenty-seven years. The average number of banks for the current year was 3,698; capital, $655,960,855; surplus, $248,203,540; net earnings, $48,566,794; dividends paid, $45,551,673. The average rate per cent of dividends paid was 6.9; the per cent of dividends based on caj)ital and surplus, 5; and the per cent of net earnings on capital and surplus, 5.4. A comparison with the reports of the previous year indicates a decrease of 37 in number of banks, $8,751,510 in capital, and $700,872 in dividends paid; while the surplus fund increased $2,597,285 and net earnings $3,006,485. The surplus fund at its maximum, prior to the current year, was $247,732,601 in 1894, when the number of banks was 3,764. This fund now exceeds that amount by $470,939, while the number of banks is 66 less. The maximum rate of dividends paid was 10.5 per cent in the year ended March 1,1870, and the REPORT OF THE COMPTROLLER OF THE CURRENCY. 15 minimum 6.8 per cent in 1894. The aggregate amount of net earnings and dividends paid during the twenty-seven years was $1,475,063,464 and $1,200,699,576, respectively. The average rate of dividends based on capital for that period was 8.3 per cent; net earnings on capital and surplus, 7.9 per cent; and dividends on capital and surplus, 6.4 per cent. REPORTS FROM STATE BANKS AND BANKING ASSOCIATIONS. The information obtainable by the Comptroller relative to resources, liabilities, and condition of banks, banking companies, and savings institutions organized under State and Territorial authority is given herewith, and is substantially complete, except from the following-named States and Territories: Delaware, Maryland, South Carolina, Georgia, Alabama, Louisiana, Texas, Arkansas, Tennessee, Washington, Oregon, Utah, Nevada, Idaho, New Mexico, and Indian Territory. To the official returns from State officers is added such information as has been furnished by State banks and bankers doing business in the States and Territories above named. In view of the fact that reports sought, relative to the condition of State and other banks and in the various investigations undertaken, were not confined to national banks alone, the courtesy of replies received from those without the jurisdiction of the Comptroller is doubly appreciated. The gathering of these reports and the making of these investigations, however, show that very great good might be accomplished if, in the various States of the Union, there could be had uniformity as to date and form of reports of condition of banks, reports of earnings and dividends, and classification of money in bank. With this end in view, it is proposed to send at an early date from this office a circular addressed to the chief executives of the States, requesting them to call the attention of the legislatures to the desirability of taking such action as will bring about this result. At present there is a failure to present in one general report much valuable information as to banks other than national, owing to this want of uniformity in method and time in calling for statistics on the part of the various States. In justification of the suggestion, it is to be said that the Comptroller of the Currency is the only officer who lias to do with the gathering of information relative to banks, who is required by law and who attempts to present a general summary of the banking condition of the whole country and of all classes of banks. CONDITION OF STATE BANKS AND BANKING ASSOCIATIONS. On or about the close of the fiscal year ended June 80,1896, the number of banks incorporated under State authority and in operation was 5,708 and the number from which reports have been received 4,956. Keports have also been received from 824 private banks, making a total of 5,780 reporting banks, or 323 less than reported in 1895. Abstracts of the reports by classes and States with the sources of information indicated will be found in the appendix. The following statement shows the principal items of resources and liabilities of these banks in 1893,1894,1895, and 1896: Items. Loans Bonds Cash Capital , Surplus and undivided profits Deposits Resources 1893. 1894. 1895. $2, 348,193, 077 1, 009, 604, 350 205, 645, 203 406, 007, 240 346, 206, 287 3, 070, 462, 680 3, 979, 008, 533 $2,133, 628, 978 1,010, 248, 230 229, 373, 004 398, 735, 390 352, 424, 784 2,973,414,101 3, 868, 474, 997 $2, 417, 468, 494 1, 375, 026, 025 227, 743, 303 422, 052, 618 370, 397, 003 3,185, 245, 810 4,138, 990, 529 $2, 279, 515, 283 1, 210, 827, 389 169,198, 601 400, 831, 399 3fi2, 602, 702 3, 276, 710, 916 4, 200,124, 955 16 REPORT OF THE COMPTROLLER OF THE CURRENCY. An analysis of the foregoing statement shows an increase in the aggregate resources in 1896 over those of 1895 of about $61,000,0005 over 1894 of $331,000,000, and over 1893 (from reports received prior to the monetary stringency of that year) of $221,000,000. Loans and discounts, which in 1893 amounted to $2,348,193,077, declined in 1894 to $2,133,628,978, increased in 1895 to $2,417,468,494, and fell in 1896 to $2,279,515,283. The cash held in 1893, amounting to $205,645,203, increased in 1894 to $229,373,004, declined in 1895 to $227,743,303, and to $169,198,601 in 1896. In 1894 the capital stock, which in 1893 amounted to $406,007,240, had declined to $398,735,390, increased to $422,052,618 in 1895, and declined to $400,83 L,399 in 1896. The deposits in 1896 are greater in amount than at any time during the four years under consideration, being $3,276,710,916. In 1893 deposits amounted to $3,070,462,680. They declined in 1894 to $2,973,414,101, and increased to $3,185,245,810 in 1895. The number of State banks which reported is 3,708, a decrease of 66 from the number reporting in 1895. The principal items of resources and liabilities of these banks are: Loans, $702,505,798; stocks and bonds, $97,234,561; capital, $240,133,835; deposits, $695,659,914. The aggregate resources amount to $1,107,187,508. These figures compared with those of 1895 show the decrease as follows: Capital, $10,270,460; deposits, $16,750^509; aggregate resources, $40,358,310. Loans and discounts and investments in stocks and bonds have increased $4,817,730 and $5,245,865, respectively. The reports of dividends paid by State banks and loan and trust companies have been received from 1,310 institutions located in 32 of the States and Territories. State banks to the number of J,195, with capital of $87,985,913, reported the payment of dividends to the amount of $5,985,222, the average rate being 6.8 per cent; loan and trust companies to the number of 115, with capital of $52,715,402, paid dividends amounting to $5,254,200, an average rate of 9.9 per cent. The aggregate capital of the State banks and Joan and trust companies reporting this information is $110,701,315, dividends paid $11,239,422, and the average rate 7.9 per cent. CONDITION OF SAVINGS BANKS. Savings-bank reports to the number of 988 have been received, of which 677 are from mutual institutions and 311 from stock savings banks, the latter being operated for the benefit of both shareholders and depositors. The aggregate resources of the latter class of banks are only about 14 per cent of the resources of all reporting savings institutions. With the exception of 4 banks located in Ohio, 5 in Indiana, 1 in Wisconsin, and 1 in West Virginia, the mutual savings banks are confined to the New England and Eastern States. The aggregate resources of this class of banks amount to $1,849,906,921; loans and discounts, $845,788,348; United States bonds, $147,761,264; other bonds and stocks, $717,416,244; surplus and undivided profits; $158,595,655; and deposits, $1,688,190,603. The aggregate resources of both mutual and stock savings banks are $2,143,307,163; loans, $1,055,187,769; United States bonds, $148,525,375; other bonds and stocks, $756,676,312; surplus and undivided profits, $174,714,993; deposits, $1,935,466,468, of which $1,907,156,277 are savings deposit accounts. An increase over 1895 is noted in each of these items, as follows: Loans, $19,590,627; stocks and bonds, $63,393,988; surplus and undivided profits, $605,094; deposits, $91,108,670; total resources, Digitized for$89,542,835. FRASER REPOET OF THE COMPTROLLER OF THE CURRENCY. 17 The number of depositors in savings banks has increased since 1895 from 4,875,519 to 5,065,494, and the average deposit from $371.3G to $376.50. In view of the fact that nearly 80 per cent of both number of depositors and amount of deposits in savings banks is represented by banks in the Kew England States and New York, the following statement isof interest as showing the percentage of population in the States named who are depositors in savings banks: State. M^in e UGW Hampshire Vermont Massachusetts .Rhode Island Connectic ut New York - . Number. 160, 216 162, 444 103, 281 1, 302,479 135, 252 346, 758 1,695,787 Per cent. 23.9 41.3 30.9 50.1 34.6 41.5 25.4 It will be noticed from the foregoing table that 23.9 per hundred of the inhabitants of Maine are depositors in the savings banks. The proportion is slightly greater in New York, increases to 30.9 in Vermont, and reaches the maximum, 50.1, in Massachusetts. On July 1 last reports were received from national banks, and also partial returns from State banks and loan and trust companies, relative to the number of depositors and amount of deposits held by them on that date. The actual deposits being known, the number of depositors in the two latter classes have been estimated. Adding the number of shareholders in building and loan associations (taken from information appearing in the last report of the Commissioner of Labor on building and loan associations) to the number of depositors in the banks and banking institutions, the aggregate is obtained of the number of individuals in the States named who are creditors of these institutions. It is probable that some persons have accounts in more than one bank, but the number presumably is not large enough to materially affect the results. From a comparison of the figures in the table immediately preceding with those in the one following it will be noticed that the States maintain the same relative positions; that is, the proportion in Maine, 29.7, is the least; New York follows with 35.8; Vermont, 36.3; Rhode Island, 43.9; New Hamx)shire, 47.1; Connecticut, 47.8, and Massachusetts, 59.2. The average for the seven States is 42.04. The number of depositors and tl;e percentage of the population who are depositors in the various classes of institutions mentioned appear in the following statement: Number of depositors. Per cent. Maine New Hampshire Vermont Massachusetts. Rhode Island .. Connecticut . . . ]STew York 198,737 185, 057 121,176 ,539, 500 171, 739 398,857 !, 2, 393, 625 29.7 47.1 36.3 59.2 43.9 47.8 35.8 Total 5, 008, 691 42.04 Similar information relative to the other geographical divisions of the country would be of great value, but from none other are the returns complete enough to enable satisfactory results to be shown. Elsewhere CUB 96, PT 1 2 18 REPORT OF THE COMPTROLLER OF THE CURRENCY. ill the report, in connection with the statement of cash held by banks on July 1, is shown the number of depositors and amount of deposits of national and such other banks as reported in each State and Territory. In connection with the usual reports from savings banks an attempt was made to obtain information relative to the number of depositors having to their credit specified amounts, that is, $500 or less, over $500 and less than $1,000, etc. Such information as was obtained relates to Maine, New Hampshire, Massachusetts, Khode Island, and Connecticut, but as the classifications are dissimilar, comparisons are not possible, except with respect to Maine, New Hampshire, and Rhode Island. In Maine 77.52 per cent of the depositors are in the class having to their credit $500 or less; in New Hampshire 74.92, and in Ehode Island 71.26. The class ranging from $500 to $2,000 represents 19.92 in Maine, 21.49 in New Hampshire, and 28.74 in Ehode Island. In Connecticut 87.86 per cent have to their credit less than $1,000; 8.5 per cent over $1,000 and less than $2,000, and 3.64 per cent over $2,000. The returns from Massachusetts are for the year ended October 31, 1894 (none more recent having been compiled), and relate to the number of deposits made in that year. The banking law of Massachusetts restricts deposits, to one individual, to $1,000, but interest may be allowed to accumulate until principal and interest amount to $1,600, beyond which sum interest ceases. The number of deposits in the class of $500 or less represents 97.56 per cent and 70.05 per cent of the amount of deposits; 2.44 per cent of the number of deposits represents 29.95 per cent of the amount of deposits. These figures indicate that wage earners are the principal patrons of savings institutions. The following table shows in detail the foregoing information: CLASSIFICATION OF DEPOSITS IN SAVINGS BANKS IN THE STATES NAMED. Classification of deposits. Depositors. Number. Percent. Deposits. Amount. Per cent. MAINE. $500 or less Over $500 and less than$2,000 $2,000 and less than $5,000 $5,000 or more 124,202 31,918 3,915 181 77.52 19.92 2,45 .11 122,763 36,221 5,211 645 74.92 21.49 3.20 .39 1,011,406 14,314 10,968 97.56 1.38 1.06 96, 389 17,689 21,174 71.26 13.08 15.66 304,666 29,484 12,608 87.86 8.50 3.64 $15,187,629 30,798, 974 8,850,741 1,538,800 26.94 54.63 15.70 2.73 50,062,087 10,078, 782 11,331,324 70.05 14.10 15.85 59,173,835 39,548,150 44,437,138 41.33 27.63 31.04 NEW HAMPSHIRE, $500 or leas Over $500 and less than $2,000 Over $2,000 and less than $5,000 $5,000 and over MASSACHUSETTS. $500 or less Over $500 and less than $1,000 Over $1,000 EHODE ISLAND. $500 or less Over $500 and less than $1,000 Over $1,000 :.- CONNECTICUT. Less than $1,000 Over $1,000 and less than $2,000 Over $2,000 Information with respect to the rate of interest paid by savings banks is but partial, but it is noted that from vhe returns it is exceedingly difficult to maintain the rate of interest which has been paid during the past few years, and indications arc that a reduction in the rate REPORT OF THE COMPTROLLER OF THE CURRENCY. 19 is inevitable in the near future. The latest returns indicate that the average rate paid is a fraction less than 4 per cent. LOAN AND TRUST COMPANIES AND PRIVATE BANKS. Loan and trust companies to the number of 260 have submitted reports. The principal items of resources and liabilities are as follows: Loans, $462,158,337; United States bonds, $37,400,637; other bonds and stocks, $163,763,9145 capital, $111,146,973; surplus and other undivided profits, $84,313,612, and deposits, $586,468,156. Private banks to the number of 824 have reported, showing an aggregate capital of $22,310,086; undivided profits, $7,799,625; deposits, $59,116,378; loans, $59,663,379; United States bonds, $2,386,416; other stocks and bonds, $4,840,174, and aggregate resources, $94,348,131. PRINCIPAL ITEMS OF RESOURCES AND LIABILITIES OF ALL BANKS. A condensed statement is herewith given for the purpose of comparison, exhibiting the principal items of resources and liabilities of each class of banks referred to: Items. Loan and trust Savings banks. companies. State banks. Loans United States bonds Other bonds Cash Capital Surplus and profits. Deposits Total resources $702, 505,798 726, 888 96,507, 673 101, 038, 641 240,133, 835 95, 774,472 695, 659, 914 1,107,187,508 $462,158,337 $1, 055,187, 769 37, 400, 637 148, 525, 375 163, 763, 914 756, 676, 312 26,800, 871 35, 201,528 111, 146, 973 27, 240,505 84,313,612 174, 714, 993 586,468,156 1, 935, 466, 468 855,282,153 2,143,307,163 Private banks. $59, 663, 379 2,386,416 4,840,174 6,157,561 22,310, 086 7,799,625 59,116, 378 94, 348,131 Similar information relative to national banks, banks other than national, and the total of all banks appears in the following table: Items. Loans United States bonds Other bonds, etc Cash Capital Surplus and profits Deposits Total resources , 3,676 national banks. 5,780 other banks. 9,456, all banks. $1,893, 268,839 $2,279,515,283 $4,172,784,122 280,057,145 189,039,316 469,096,461 188, 995, 353 1,021, 788, 073 1,210,783,426 343,143,362 169,198, 601 400, 831, 399 1, 049,371,724 648,540, 325 362,602,702 336, 342,834 698, 945, 536 1, 613, 062, 537 3, 276,710,910 4,889,773,447 3,263, 685, 314 4, 200,124,955 7,463,810,269 The capital stock of national banks on July 14 and of all other banks at date of latest returns to this Bureau aggregates $1,051,976,254, an average of $14.71 per capita of population. The averages in 1893,1894, and 1895 were $16.29, $15.61, and $15.44, respectively. The aggregate banking funds, which include capital, surplus, undivided profits, and individual deposits of national and all other banks, are shown to be $6,695,486,521, an average of $93.69 per capita. The per capita averages in 1893, 1894, and 1895 were $95.68, $93.57, and $95.83, respectively. The specie and other currency held by national banks on July 14 and by other banks about the same date amounted to $531,856,513. The classification of this amount was but partially made by the returning officers, except as to the national banks, and therefore appeared as follows: Gold, including certificates, $200,980,831; silver and silver certificates, $48,832,667; national-bank notes, legal-tenders? and currency 20 REPORT OF THE COMPTROLLER OF THE CURRENCY. certificates, $206,522,953; fractional currency, $999,427; specie, not classified, $2,413,485; cash, not classified, $72,107,150. The Appendix contains an abstract of the reports of each class of banks by States and geographical divisions for the past and prior years and tables covering in detail the subjects hereinbefore mentioned. These tables are followed by a summary of condition of the Canadian banks on August 31 last, and the latest reports of the loan and trust companies of the District of Columbia. The Comptroller, through the courtesy of Mr. Albert C. Stevens, editor of Bradstreet's, has been placed in possession of a statement showing the assets and liabilities of the banks other than national which failed in each State during the year ended August 31 last, which also appears in detail in the Appendix. INVESTIGATION AS TO KINDS OF MONEY AND CURRENCY IN ALL BANKS. The importance of obtaining a proper classification of the money and currency held by the banks throughout the country led to the sending out of a circular addressed to the individual banks—national and other— together with trust companies, requesting them to furnish this office with a correct classification of the amount and kinds of money held upon the 1st day of July last. The number of banking houses and trust companies inquired of was 12,962, and replies were received from 5,723. The information, while in a measure incomplete, is of such a character as to enable a thoroughly fair and correct result from all to be approximated. Heretofore in reports received from banks other than national there has seldom been made any attempt to separate into classes the kinds of money held by such banks, and consequently the amount of gold, for instance, has appeared as a very insignificant sum for all of such concerns. In the Comptroller's report for 1895 the returns, as made up from State and other reports, showed the amount to be but $10,000,000 for all banks other than national. The reports received under this request were from 3,458 national banks, 1,494 State banks, 457 savings banks, 230 private banks, and 84 loan and trust companies. The number of each kind not reporting were: National banks, 231; State banks and trust companies, 3,366; savings banks, 307; private banks, 3,322. The total number of banks, by geographical divisions, the number reporting, and the number not reporting, is as follows: Geographical division. New England States: Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, iuid Connecticut Eastern States: New York, New Jersey, Pennsylvania, Delaware, Maryland, and District of Columbia... . Southern States : Virginia, West Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Mississippi, Louisiana, Texas, Arkansas, Kentucky, and Tennessee Western States: Missouri, Ohio, Indiana, Illinois, Michigan, Wisconsin, Iowa, Minnesota, Kansas, and Nebraska Pacific States and Territories: Nevada, Oregon, Colorado, Utah, Idaho, Montana, Wyoming, New Mexico, North Dakota, South Dakota, Washington, Arizona, Oklahoma, and Indian Territory Total United States.. Total. Reporting. Not reporting. 1,226 829 397 2,137 1,275 862 2, 053 676 1,377 6,266 2,434 8,832 1,280 509 771 12, 962 5,723 7,239 REPORT OF THE COMPTROLLER OF THE CURRENCY. 21 The total amount of cash in the 5,723 institutions reporting was $413,124,849, divided as follows: Gold coin, $134,077,003; gold certificates, $55,481,338; silver dollars, $8,254,012; fractional silver, $7,399,073; silver certificates, $39,663,596; Treasury notes, 1890, $13,126,018; United States notes, $110,469,375; currency certificates, $20,858,000; nationalbank notes, $23,795,834. Of this total cash the 3,458 national banks reporting held $335,174,616, and the 2,265 State, etc, banks $77,950,233. The amount of gold coin and gold certificates held by these national banks was $155,073,604, and by these State, etc., banks $34,484,737. In this connection it may be stated that the total number of national banks, viz, 3,689, held on July 14, the date of the report nearest July 1, $361,658,485 cash, of which amount there was in gold coin and gold certificates $161,853,560. The total cash and the part thereof of gold and gold certificates held by reporting banks in each geographical division is as follows: Geographical division. New England States Eastern States Southern States Western States Pacific States and Territories Total Total cash. Amount of gold and gold certificates. $35,689, 272 213,129,569 29,086, 601 109, 584, 645 25,634,7S2 $15,403, 768 88, 580,133 9,558,183 56,410,427 19., 605, 830 413,124,849 189, 558,341 A comparison of the money holdings in these geographical divisions shows that the 829 reporting banks in the New England States held but $6,602,671 more total cash and $5,845,585 more gold and gold certificates than the 676 reporting banks in the Southern States, not including Missouri; the 1,275 banks in the Eastern States $103,544,924 more total cash and $32,169,706 more gold and gold certificates than the 2,434 banks in the Western States; the 676 banks in the Southern States $3,451,841 more total cash and $10,047,647 less gold and gold certificates than the 509 banks in the Pacific States and Territories; the 829 banks in the New England States $10,054,510 more cash and $4,202,062 less gold and gold certificates than the 509 banks in the Pacific States and Territories. It has been deemed necessary to indicate the location of banks reporting and not reporting in order to give a proper measure by which to estimate the amount and character of cash of banks not reporting. It is a fair estimate to be drawn from reports received, and in view of their general distribution and character, and the proportion of cash of those reporting to total cash held in all such banks, that as 2,265, or 24.4 per cent of all banks and companies other than national banks held $34,484,737 in gold coin and gold certificates, the whole number of banking institutions and companies in operation in the United States on July 1, other than national, viz, 9,260, held on that day in gold coin and gold certificates $140,939,807. Adding to this amount $161,853,560, the total gold coin and gold certificate holdings of the national banks on July 14, as being the same as held by all of them on July 1, the total gold and gold certificate holdings of the banks of the country on that day was $302,793,367. A comparison of the cash holdings of banks other than national, as shown by the Comptroller's report of 1895, shows that on July 1, 1895, the 6,093 then reporting held in cash $227,743,303. As in this report 22 REPORT OF THE COMPTROLLER OF THE CURRENCY. 2,265 of sucli banks report $77,950,233 of cash, it is evident that the importance, capital, etc., of the banks not reporting equals that of those reporting, and the estimate made is fairly borne out. The correctness of this conclusion is further evidenced by the cash holdings of the 5,780 banks of this character reporting to this office on or about the close of the fiscal year ended on July 1 last, the amount being $169,198,601. These figures were not obtained from the special reports of July 1, but from reports of the general condition of the banks made to the Comptroller. The report of the Treasurer of the United States shows that upon July 2 there was free gold in the Treasury to the amount of $101,648,103. It is evident from all these facts that the available gold and gold certificates in the banks and the free gold in the Treasury on or about July 1 was $404,441,470. On October 31 it was larger, as the free gold in the Treasury amounted to $118,443,021, making the total in the Treasury and in banks $421,236,388. If the reports heretofore given in the Comptroller's report as to the gold holdings of the banks could have been made from individual reports from the individual banks of the country, as in this instance, the showing would have been as it now is as to the character of the cash held by banks other than national. NUMBER OF DEPOSITORS IN, AND CASH HOLDINGS OF, REPORTING BANKS. In order to present in a condensed form the results of the replies received from the 5,723 reporting banks respecting the number of depositors, amount of deposits, and cash holdings, on July 1,1896, the following table (pp. 24 and 25) is given. An examination of the returns shows that the total number of depositors in the national banks reporting on July 1 was 2,315,333, with individual deposits aggregating $1,586,087,193. On July 14 the total individual deposits of all the national banks were $ 1,668,413,508 and the estimated number of depositors 2,435,625. The total number of depositors in the 2,265 reporting banks other than national was 3,614,630, with deposits aggregating $1,668,352,673. In 1894 an investigation showed the number of bank depositors to be about 9,000,000. A conservative estimate, in view of the fact thatthe number of depositors in national banks shows an increase of abou't half a million and of savings-bank depositors of over 287,000, would make the total number now not less than 10,000,000, with total deposits aggregating over $5,000,000,000. 24 REPORT OF THE COMPTROLLER OF THE CURRENCY. NUMBER OF DEPOSITORS, AMOUNT OF DEPOSITS, AND CASH HELD BY NA NumAmount of States and Territories. ber of Number of deposits. Maine , New Hampshire. Vermont.. Massachusetts— Rhode Island..... Connecticut , 112 81 60 376 74 126 Total. 829 New York New Jersey Pennsylvania Delaware Maryland District of Columbia. Total. 527 128 507 18 79 16 1,275 Virginia West Virginia.. North Carolina. South Carolina . Georgia Florida Alabama Mississippi Louisiana Texas Arkansas Kentucky Tennessee 127,742 102, 459 60, 268 761. 906 88; 637 216,141 1,357,153 $51, 579, 942 44, 219,495 21, 253, 632 408,914,212 54, 950, 634 110, 397, 059 Cash held. Gold coin. $828, 844 305,289 453,865 9, 044,474 625, 713 1, 834, 243 691, 314, 974 13,092,428 1,357,567 il, 037,151, 799 247, 521 91, 943, 471 762, 684 379, 276, 515 4, 215, 553 84,047 42, 275, 410 74,842 15, 111, 725 40, 808 Gold certificates. Silver, dollars. Silver, fractional. $34, 534 43,415 38, 220 305, 793 30,138 64,696 43,573 45,088 549,164 108, 425 174, 829 2, 311, 340 516, 796 999, 088 $17,475 4,050 25, 310 1,709, 718 163,160 391, 627 24,064, 623 39, 509, 357 518,714 1,259, 276 100, 929 251, 500 258,976 1,829, 361 14, 273, 939 5, 091, 534 1, 214, 631 1, 067,104 28,108 132, 632 17, 000 31,875 82,761 130,156 1,840,105 370,410 15,143 543,766 648, 430 33,788 2,567,469 1,569,974,473 | 42,684,426 45, 895, 707 1, 990, 286 2, 773, C 48 37 27 18 44 29 25 20 29 199 19 113 38, 904 29,109 13, 461 9,368 16, 579 11,910 15,885 8,757 19,901 158,162 8,908 69, 792 48,587 11,291,467 I 433, 55S 7,927,198 396, 752 4, 714, 704 343, 969 3, 597, 979 83, 073 7,508,412 311,829 4,114, 805 86, 744 5, 930, 806 433, 940 3, 081, 867 113,107 16, 066, 083 497, 229 50,184, 013 3, 266, 944 3, 035, 727 150,448 19,076,172 1, 332,922 19,169,755 1,127, 509 7 47, 325 5,532 900 19,440 950 63, 010 18,440 145, 043 398, 674 5,040 82, 465 165, 075 68, 256 46, 317 55, 518 62,803 230, 440 80, 670 117, 690 60,052 138,113 48, 083 118, 882 181, 876 77,904 31, 951 43, 577 38, 365 60,133 39,531 32, 218 33,073 96,192 356, 558 28,458 89, 329 110, 411 Total. 676 449, 323 157,498, 988 8, 578, 024 Missouri Ohio Indiana Illinois Michigan... "Wisconsin.. Iowa Minnesota.. Kansas Nebraska... 277 310 159 306 175 183 355 161 229 278 139, 262 244, 341 113,342 190,115 139,156 80,543 113,769 70, 706 68, 269 52,376 59, 628, 361 111, 260, 084 36,121, 856 168, 419. 810 60, 044,737 45,881,199 41, 712, 998 49, 734,138 19, 595, 899 25,193, 967 3, 885,106 6, 084,965 4,106, 525 18, 751, 083 3,491, 611 4, 054,182 2,245, 343 4,788, 861 1,257, 286 2, 087,455 Total . 2,433 1, 211,879 43 52 15 13 30 14 9 47 60 55 6 146 10 7 1,060 13,794 40,173 5,107 3,050 20,291 4,172 3, 406 9,171 4,930 21, 203 2,549 210, 337 2, 607 2,289 703, 683 81, 495 6,421, 392 1,252,419 26, 907, 659 3, 997, 829 2, 812, 619 426, 691 1, 591, 513 164, 917 13, 814, 713 741,015 1, 282, 530 169, 747 1, 846, 922 109, 798 3, 727,120 184, 897 1, 542, 299 205, 898 7, 548, 580 954, 025 1, 268,170 172,349 148, 503, 632 10,446,970 583, 025 24,618 504, 545 37, 040 16,394 108, 870 5,280 270 5,155 190 7,000 12,190 2,740 22, 015 300 444,6G8 10, 230 820 7,475 46, 910 135,119 10, 356 8,635 52,600 10, 721 18, 592 14,442 11,715 60,985 6,748 264, 675 12,586 9,746 5,532 74, 095 81, 822 8,605 4,549 34,186 8,392 .8, 544 11,107 9,651 32, 570 5,641 253, 336 2, 9S2 7,936 510 344,139 218, 058,382 18,969, 708 636,122 671,035 548,948 Nevada Oregon Colorado Utah Idaho Montana Wyoming New Mexico North Dakota South Dakota Washington Arizona California Oklahoma Indian Territory., Total. Grand total.. 980,159 2,147, 681 1, 037,700 383, 510 741, 555 232, 230 3,461, 075 186,425 94,150 193, 680 253, 714 51, 906 59, 765 366, 604 515,016 252,405 556, 778 211, 522 163, 846 261. 931 200,303 199,318 201,091 163,181 331, 479 158,914 510, 026 220, 808 121,076 182, 989 1.67, 542 94,442 89,182 617,593,049 | 50,752,417 5, 658, 010 2, 928, 814 2,039, 638 .,723 5,929796JF 3, 254,439, 866 134,077, 003 55,481,338 8, 254,612 7, 399, 073 REPORT OF THE COMPTROLLER OF THE CURRENCY. 25 TIONAL AND OTHER REPORTING BANKS IN EACH STATE, ETC., ON JULY 1,1896. Cash held. Silver certificates. $207, 919 164, 565 118, 302 3,210, 492 387,160 589, 612 Treasury notes of 1890. Legal-tender notes. $50, G49 56,814 31, 046 980, 043 48,735 288,155 $243,696 220, 865 122,139 6, 201, 991 425,203 662, 088 Currency Nationalcertificates. b a n k n o t e s . $10, 000 $285, 815 209,677 158,219 2, 502, 905 342,025 551,.505 640, 000 Total. $1,756, 941 1, 048,248 992,189 25, 204, 580 2,130, 559 4,556, 755 4,678, 050 1,455, 442 7, 875, 982 650, 000 4,110,146 35, 689, 272 9,717,797 1,133,977 7,430,614 112,116 1,375,192 701,643 3, 269, 501 340. 546 1,130,182 17,135 158,527 20, 434 56, 796, 236 *1, 607, 531 8,352,521 101, 865 1,499,130 556, 062 13, 777, 000 5,000 2,275, 000 4,163, 489 442, 017 2, 869, 570 56,126 390,143 27, 097 153,104, 993 5, 969, 837 43, 705, 095 496,857 7, 296, 424 2, 556, 363 20, 471,339 4, 936, 325 68, 912, 345 17, 517, 000 7,948, 442 213,129, 569 234, 721 137, 8S5 94, 235 41,899 275. 970 100,399 81,416 70, 990 628,950 1,107, 527 94, 569 309, 344 726, 492 27,841 40, 880 40,180 7,562 70,142 107, 009 84, 847 76,136 624,835 700, 978 29, 812 84, 297 435, 701 575, 87G 299, 434 147, 974 164, 065 328,188 143, 602 159, 467 62, 505 1, 322, 234 2, 441,139 101,466 406,165 602, 542 287, 000 260, 000 135,981 97,215 89, 732 27, 417 294, 997 113, 381 72, 006 28, 684 194, 731 968, 629 71,596 336, 843 357, 551 1, 582,402 1, 097, 759 820,717 426, 084 1,606,137 672, 287 1, 047, 594 462,987 3, 647, 327 10,179,430 529, 472 3, 047,247 3, 967,157 3, 907, 397 2, 330, 220 6, 754, 657 562,000 2,788, 763 29,086,601 2, 024, 828 1, 744, 706 643,141 3,163,117 519,992 444,699 494, 237 362, 560 270,943 275,732 932, 493 657, 864 236,893 978,898 280,453 110, 984 185, 987 1G2, 685 116, 862 105,509 4, 508, 633 4, 952,119 1,447,147 8,752, 385 1,275,901 1,049,690 985,090 834, 977 535, 213 365,453 280, 000 130,000 676, 605 1,568, 230 994, 949 2, 396, 045 539,940 310,600 496,294 298, 896 361,161 204, 855 13, 220, 960 16, 725. 934 8, 072, 204 40, 063, 406 6, 726, 652 6, 349,227 5, 045,551 7,104,538 2,887,131 3, 389, 042 9, 943, 955 7, 847, 575 109, 584, 645 2,467 39,986 360, 851 28, 662 23, 428 111, 310 15, 503 34,022 56,483 . 34,129 76,301 13, 935 271,789 21, 266 10, 776 97, 511 1, 495,118 6,461,050 561,456 271, 624 1,426,377 236,521 231, 742 422, 266 306, 231 1, 355,182 207, 099 12, 354, 842 112, 666 95, 076 1,450, 000 10,000 • 15, 000 1, 494, 000 35, 000 1, 939, 000 3, 768, 628 24, 706, 608 100 24,146 262, 933 17,838 14, 288 61, 844 8,773 14, 500 34,320 17, 932 52.115 4,107 117, 977 15, 834 16,148 8,485 348,197 199 4,050 131, 616 2, 541 3, 654 19, 451 6, 543 33, 231 1,223 65,958 6,610 3,645 442 32, 684 1, 065, 429 63, 825 51, 487 273, 651 20,654 35, 632 89,376 17, 623 68, 939 3,066 469,469 18, 541 8,965 662,855 635, 403 2, 219, 783 190,000 1,100, 908 25, 634, 762 39, 663,596 13,126,018 110,469,375 20,858, 000 23, 795, 834 413,124, 849 100, 000 15, 000 55,000 20, 000 States and Territories. Maine. New Hampshire. Vermont. Massachusetts. Rhode Island. Connecticut. Total. New York. New Jersey. Pennsylvania. Delaware. Maryland. District of Columbia. Total. Virginia. West Virginia. North Carolina. South Carolina. Georgia. Florida. Alabama. Mississippi. Louisiana. Texas. Arkansas. Kentucky. Tennessee. Total. Missouri. Ohio. Indiana. Illinois. Michigan. Wisconsin. Iowa. Minnesota. Kansas. Nebraska. Total. Nevada. Oregon. Colorado. Utah. Idaho. Montana. Wyoming. New Mexico. North Dakota. South Dakota. Washington. Arizona. California. Oklahoma. Indian Territory. Total. Grand total. 26 REPORT OF THE COMPTROLLER OF THE CUPvRENCY. CHANGES IN MONEY AND CURRENCY HOLDINGS OF NEW YORK CITY AND OTHER BANKS. The frequent reference to the relative holdings of moneys by the banks of New York City and elsewhere has led to the preparation of tables bearing upon that subject, which will be found in the Appendix, on pages 569 to 583. These tables show the different kinds of money held by the national banks of the United States, by geographical divisions, Western, Southern, and Eastern, as compared with the holdings of the national banks of New York City on the same dates, viz, May 7, 1896, and October 6, 1896; the holdings of specie by the New York City banks from February 28,1890, to October 6,1896, inclusive, and the amount of silver certificates held by the banks in the late spring and early winter of each year from 1890 to the present time as compared with amounts held on same dates by New York banks. By this last table is shown to some extent the inflow and outflow of the different kinds of money between New York and the different geographical sections of the country. From the table showing specie held by the national banks of New York from February 28, 1890, to October 6, 1896, inclusive, it is noted that the holdings of gold have always been largely in excess of the amount of silver dollars, silver certificates, and fractional silver coin. It also appears that the holdings of gold Treasury certificates, with slight fluctuations, increased steadily from 1890 to March 1, 1892, but from that time to October 6, 1896, they rapidly decreased (except on February 28^ 1894, at which time the financial stringency of 1893 had operated to increase the reserve in banks), owing to the fact that such certificates are no longer issued by the Treasury, until, on October 6, 1896, they amounted to only $8,997,540, as against $70,144,740 on March 1, 1892, and $52,481,770 on February 28, 1894. To offset this marked decrease caused by cessation of issue, the New York Clearing House,for its own convenience, first issued gold clearing-house certificates, and on May 4,1894, the New York banks held such certificates to the amount of $26,100,000. The amount slightly decreased from that time until October 6, 1896, when it was $22,265,000. Gold coin, on the other hand, has increased since February 28 ^ 1890, when it amounted to $9,007,097, until, on October 6, 1896, it amounted to $13,895,591.15, having fluctuated between those dates, reaching its highest point December 19, 1893, viz, $45,544,117.50. Standard silver dollars decreased, with slight variations, from $267,449 on February 28, 1890, to $75,699 on October 6,1896. Silver certificates also decreased from $4,224,685 on February 28, 1890, and $15,559,127 on February 28, 1894, to $3,835,775 on October 6, 1896. Fractional silver increased from $356,433.37 on February 28, 1890, to $492,252.37 on October 6, 1896. The reports of specie held during this period by the banks of New York City show that, while slightly greater in volume than in 1890, the amount has steadily decreased since 1894, when the highest point was reached, to the present time, silver having increased and decreased in about the same ratio as other kinds of money held. From the tables showing the different kinds of money held by national banks in the different sections of the country on May 7,1896, and October 6.1896, it will be seen that the total holdings had decreased between these two dates $11,500,000, of which $9,000,000 came from the New York City banks, and the balance from banks in the Eastern States. REPORT OF THE COMPTROLLER OF THE CURRENCY. 27 The holdings of banks in the Western States had increased $1,000,000 and in the Southern States $700,000. The balance of the withdrawals can be accounted for by the money hoarding on the part of the people, thus withdrawing a large amount from circulation. MONETARY SYSTEMS AND STOCKS OF MONEY IN THE PRINCIPAL COUNTRIES OF THE WORLD. Through the courtesy of the Director of the Mint, the Comptroller is enabled to present herewith statements exhibiting (1) the monetary systems, the population, and the approximate stocks of money in the principal countries of the world in 1896, and (2) the approximate stock of gold, silver, and uncovered money in the countries named in 1873 and 1896, and the changes which have occurred between those dates. From the first table it is noted that of the thirty-four countries seventeen are on a gold and silver basis, ten on a gold basis, and seven on a silver basis. The ratio between gold and full-tender silver ranges from 1 to 16J in Mexico to 1 to 15 in India. The ratio between gold and limited-tender silver ranges from 1 to 15J in Turkey to 12.9 in Eussial The aggregate stock of gold in the countries named is shown to be $4,143,700,000; the total stock of silver is $4,236,900,000, of which $3,616,700,000 is full tender and $620,200,000 limited tender. The amount of uncovered paper is $2,558,000,000. Over 77 per cent, or $3,191,800,000, of the stock of gold is held in five countries, namely: France, $772,000,000; Germany, $675,000,000; United States, $672,200,000; United Kingdom, $584,000,000, and Eussia, $488,600,000. Seventy-seven per cent, or $3,272,600,000, of the stock of silver is held by the following-named countries: India, $950,000,000; China, $750,000,000; United States, $631,400,000; France, $492,200,000; Straits Settlements, $242,000,000, and Germany $207,000,000. There is no other country which has a stock of silver in excess of $100,000,000, except Siam, which has $193,300,000. The South American States, Eussia, United States, and AustriaHungary have outstanding $1,646,100,000, or about 64 per cent of the uncovered paper money. The amount outstanding in each of these countries is as follows: South American States, $550,000,000; Eussia, $467,200,000; United States, $424,400,000; Austria-Hungary, $204,500,000. The second table is of special interest as showing not only the amount of the various kinds of money in each country and in the aggregate in 1873 and 1896, but also the changes between those dates. Information is shown with respect to 13 countries. The amount of gold held by them in 1873 was $1,209,800,000 and in 1896 $3,698,700,000, a net increase of $2,488,900,000. It is noticeable that there has been an increase in every country named, with the exception of Norway, in which the reduction has been slight, namely, $100,000. The stock of silver has increased from $1,057,700,000 in 1873 to $1,732,300,000 in 1896, a net increase of $674,600,000. The only countries which show a reduction in the amount of stock of silver are France, $7,800,000; Germany, $99,200,000; and Denmark, $2,100,000. The amount of uncovered paper has decreased from $2,322,500,000 in 1873 to $1,713,900,000 in 1896, a net decrease of $608,600,000. The following countries show an increase: Great Britain, $52,000,000; Germany, $35,300,000; Italy, $80,700,(300; Belgium, $37,400,000; Netherlands, $17,200,000; and Norway, $1,500,000. It is noted that Australasia had no uncovered paper money outstanding at either date, 28 REPORT OF THE COMPTROLLER OF THE CURRENCY. and that Sweden, which had in 1873 $6,000,000 outstanding, has none in 1890. While there has been a material decrease in the amount of uncovered paper outstanding, the net increase of all kinds of money was $2,554,900,000. The information, as shown by these tables, with respect to the various kinds of money in the United States on the dates named is of special interest. In 1873, the stock of gold amounted to about $135,000,000, and in 1896, to $672,200,000; silver increased from $6,200,000 to $631,400,000, of which $555,600,000 is full tender, and $75,800,000 limited tender. The amount of uncovered paper has decreased from $749,400,000 to $124,400,000, but the aggregate money supply has increased $837,400,000. The supply has more than kept place with the growth of population, for while the gain of population since 1870 has been 85.2 per cent, the increase of the stock of money has been 94 per cent. The table exhibiting the monetary systems is herewith given. MONETARY SYSTEMS, POPULATION, AND APPROXIMATE STOCKS OF MONEY IN THE AGGREGATE IN THE PRINCIPAL COUNTRIES OF THE WORLD IN 1896. Ratio between gold Monetary and full system .* legaltender silver. Country. United States a United Kingdom France G. ands.. G G. and s.. G G. and s.. ....do . . . . ....do . . . . ....do . . . . .. do Belgium Italy Switzerland Greece Spain Portugal ...... G Rotunania G. ands.. do Servia G Austria-Hungary G. and s.. Netherlands 1 G ...do ... do Denmark . . . ...... Turkey... Australasia Central American States South American States Japan / India China Straits Settlements Cuba Haiti Bulgaria . . . Siam .... Hawaii lto — lto — 14.95 15. 98 14.28 14.38 15* 13.957 14.38 14.38 1 5 A14.38 14.38 14.38 14.08 It! 15f S 15* 16* s 16* G. and a.. G do do doe ... G. ands.. ....do . . . . S . .. ....do.... G G. and s . do . . . . . do ........ S G. and s.. Stock of silver. Ratio between Uncovsjold and Popu- Stock ered limited- lation. of.gold. Full Limtender ited Total. paper. tender. silver. tender. 13.69 15 14.88 14.88 14.88 12.90 14.28 15.68 5.6 36 44 16.18 296 15 360 03.8 ""14*28" 5.8 1.8 15* 1 15* 3.3 14.38 15* 5 .1 15.98 14.95 SI Total * G. (gold) S. (silver). a November 1,1896; all other countries January 1,1896. 6 Estimate Bureau of the Mint. c Information furnished through United Slates representatives. a Haupt. Millions. 71.9 39.3 38.4 52.3 6.3 30.9 3 2.2 18 5.1 5.4 2.3 44.5 4.8 2 4.8 2.3 126 22 4.9 7 12.6 Millions. 672.2 c584 c772 6 675 b 50 clOO.4 c 16 b .5 c 38.6 c 5.1 c 38.6 c 1.5 cl67.2 c 26.8 c 7.5 c 8.5 c 16.5 C488.6 b 50 &130 c?129.3 6 5 Millions. 555.6 c434.3 692 6 50 c 12.5 6 .5 c 25 c 52.9 c 3.5 6 30 Millions. 75.8 C121.7 c57.9 6115 6 7 c 26.5 c 2.1 6 1 c 49.3 c 7.4 c 10.6 c 1.7 c 40 c 3.3 c 2 c 4.9 c 5.4 6 40 d 10 6 7 d 5.2 c 97 b .5 c 12 6 40 6 35 c 79.5 c 69.2 c 18.5 ft 950 6 750 di cl "Vie"*" c5 61.5 615 c3 61.5 c4 63.4 6 3.4 6.8 c.6 c193.3 cl c4 4,143. 7 3, 616.7 Millions. 631. 4 121.7 492. 2 207 57 39 2.1 1.5 49.3 7.4 10.6 1.7 65 56.2 2 4.9 5.4 43.5 40 7 5.2 97 Millions. 424.4 clll.8 c98 c 126.1 c 72.5 c 168.5 c 14.3 c 14.2 c 103 c 59.7 c 11.8 c 3 c 204.5 c 32.5 c 3.8 c 4.6 c 467.2 c 4 12 c 8 35 6 550 87.7 950 i37 750 242 - - - - - 6 1.5 4.5 c4.1 6.8 193.3 1 620.2 4, 236.9 2,558 <? Except Venezuela, and Chile. /Actually the silver standard. g Includes Aden and Perim, Ceylon, Hongkong, Labuan, and Straits Settlements. h F. C. Harrison. i Indian Currency Committee Report. ' REPORT OF THE COMPTROLLER OF THE CURRENCY. 29 The stock of money and the changes in the amounts, 1873 and 1896, appear in the following table: APPROXIMATE STOCK OF GOLD, SILVER, AND UNCOVERED PAPER MONEY IN THE PRINCIPAL COUNTRIES OF THE WORLD IN 1873 AND 1896 AND CHANGES BETWEEN THESE DATES. Gold. Country. United States Great Britain France Germany Russia Italy Belgium Netherlands Austria-Hungary . Australasia Denmark Sweden Norway Total 1873. 1873. 1896. Uncovered paper. In- 1873. 1896. MilMilMilMilMilMilMilMillions. lions. lions. lions. lions. lions. lions. lions. $135 $672. 2 $537. 2 $6.2 $631.4 $625. 2 $749.4 $424. 4 160 584 424 121.7 111.8 95 26.7 59.8 450 772 322 492.2 98 500 7.8 385.3 160.2 675 514.8 306.2 207 99.2 90.8 126.1 149.1 488.6 339.5 43.5 18.6 24.9 618.4 467.2 20 100.4 39 80.4 23 16 87.8 168.5 25 50 57 25 15 42 35.1 72.5 12 26.8 56.2 18.9 15.3 14.8 37.3 32.5 35 65 25 265.8 204.5 167. 2 132.2 40 50 7 4 130 80 3 4.1 5.4 2.1 6.5 16.5 12.4 7.5 4.6 1.8 4.9 .6 6 8.5 4.3 6.7 7.6 2 .4 2.3 1.6 7.5 .1 3." 8" 1,209. * Net increase. 1896. Silver. In- In- Millions. 52 287.3 35.3 151.2 80.7 37.4 17.2 61.3 1.9 6 1.5 3, 698. 7 *2,488.9 1,057.7 .1,732.3 *674.6 ;2,322.5 1,713.9 T608J6 Figures in bold-faced type signify decrease. fNet decrease. VALUE TO THE PUBLIC OF BANKS AND GROWTH IN NUMBER AND DEPOSITS. The use of substitutes for money by the public in making payments has resulted from the improved facilities of exchange, brought about by the employment of better methods of banking and the increased deposits gained through the growth in the number of banks. In previous reports from the Comptroller's Office attention has been called to the advantage thereby gained to the general public, but in more than one instance and from more than one section general and sweeping denunciation is made of the whole system. The great body of the people, however, can not but know that since the inauguration of the national banking system there has been a direct and immense money saving to all classes. It is unnecessary to enter into a detailed discussion of the question, but in a general way it may be stated that this bettered condition has been seen in the saving in heavy discounts on the bank currency prevalent before 1863; the saving in the rates of interest on loans and discounts; the saving in making of exchange, and the saving to customers in charges for making collections. If the subject could be freed from all connection with politics and never enter as an issue into a political campaign all would readily admit these things and insist upon the benefits being enlarged instead of restricted. It is worthy of notice that despite political opposition all sections of the country show a greater public demand for their establishment and a larger use of the agencies which they afford in transacting the daily affairs of life. This statement is best illustrated by the following table, compiled from as accurate statistics as can be obtained, and while the total number of banks set forth together with the total amount of deposits fall short of the actual number and amount, owing to the failure to receive reports from all banks, the figures as given indicate that the increase been proportionate to the increase in the country's population: Digitized forhas FRASER 30 REPORT OF THE COMPTROLLER OF THE CURRENCY. NUMBER OF NATIONAL AND OTHER BANKS AND THEIR DEPOSITS, IN EACH GEOGRAPHICAL DIVISION, IN THE YEARS 1863, 1870, 1880, 1890, AND 1896. 1863. Section. Number. New England States . Eastern States Southern States Western States Total Deposits. 892 587 64 282 $173,068,994 370, 302, 227 14, 612,189 28, 429, 538 1,825 586, 412, 948 187O. New England States Eastern States Southern States "Western States Pacific States and Territories. $354,027,716 660, 382,031 17, 035, 869 89,168, 940 38, 708, 768 Total . * 2, 494 1,159, 323, 324 188O. New England States Eastern Stages Southern States Western States Pacific States and Territories $546,242, 620 1, 093, 842, 729 94, 648, 937 350,102,620 107,795, 307 Total 2,192,632,213 189O. New England States Eastern States Southern States W©stern States Pacific States and Territories . - . . Total 1,104 1,463 1,073 4,022 728 $946,149, 713 1, 843,854, 667 226,108, 277 818,096, 894 281, 806, 400 8,390 4,116, 015,951 1896. New England States Eastern States Southern States Western States Pacific States and Territories Total 1,141 $1,183,448,229 1,682 2,260,500,294 1,259 220,416,947 4,730 930,916,128 644 279,320, 377 9,456 4,874,601,975 * The figures for 1870 include State bank reports for 1873, no figures for 1870 being obtainable. T h e number of banks other than national in each geographical division is not shown in the reports from which the statement of number of banks and deposits was taken. REPORT OF THE COMPTROLLER OF THE CURRENCY. 31 CHANGES IN CLEARING-HOUSE RETURNS. Upon the same lines have been the changes in the transactions of the clearing houses during the same periods. The early reports of the Comptrollers do not contain information with respect to the operations of any except the clearing house of the city of New York. The clearings and balances for that association, which represent from 55 to 60 per cent of the aggregate clearings of all associations, for the respective years of 1863, 1870, 1880, 1890, and 189G, were as follows: Tear. 1863. 1870. 1880. 1890 1896. Clearings. $14, 867, 597, 849 27,804,539, 406 37,182,128, 621 37t 660,686, 572 29, 350, 894,884 Balances. $677,626,483 1,036,484,822 1, 516, 538, 631 1, 753,040,145 1,843, 289,239 The largely increased balances shown as between the years 1880 and 1890 and the year 1896, with a lessened total of clearings, are due to the disturbed monetary conditions characterizing the events of the past year. The general lack of confidence in the stability of business credit could not be better illustrated than by this marked difference, nor could the great and sudden fluctuations in the conditions of the banks be made more manifest. The clearings for the whole country in 1884, when the statistics were first published in the Comptrollers' reports, were $47,387,408,275. In 1891 they amounted to $56,803,253,957, in 1895 to $50,872,674,108, and in 1896 to $51,977,799,114. INSOLVENT NATIONAL BANKS, 1896. The number of banks placed in the hands of receivers during the year was 27, located in 15 States, having an aggregate capital stock of $3,805,000 and circulation of $761,500, of which amount $132,608 has been destroyed and $628,892 is yet outstanding. Of these banks 4 were temporarily closed during the financial stringency of 1893 and subsequently resumed business. Their location and capital stock are shown in the following table: Name of bank. First National Bank First National Bank Bellingliam Bay National Bank Eattitas Valley National Bank. Location. Orlando, Fla Helena, Mont New Wh atcom, W ash. Ellensburg, Wash Capital. $85,000 800,000 60,000 60,000 The banks which failed during the year are nine less in number than those which were placed in the hands of receivers in 1895, and $1,430,020 less in amount of capital stock, but the nominal assets and the ascertained liabilities are more, the former by $1,638,077 and the latter by $1,965,334. 32 REPORT OF THE COMPTROLLER OF THE CURRENCY. The following table sets forth in detail the names, location, capital stock, and condition of the assets of failed banks of the year at the time of the appointment of receivers therefor: THE NATIONAL BANKS IN EACH STATE AND GEOGRAPHICAL DIVISION WHICH WERE PLACED IN THE HANDS OF RECEIVERS DURING THE YEAR ENDED OCTOBER 31, 1896, WITH THEIR CAPITAL, NOMINAL ASSETS, AND LIABILITIES AT DATE OF SUSPENSION. Assets. Name and location of bank. Port Stanwix National Bank, Eome, N. Y Yates County National Bank, Penn Yan,N.Y First National Bank, Springville, N. Y. Capital. EstiEstimated mated good. doubtful. Estimated worthless. Total.' Liabilities.t $150,000 $320,685 $140,493 $494,443 $955, 621 $653,041 50, 000 50,000 58,005 21,210 52,842 195,413 104,475 54,112 215, 382 270, 735 154,525 185,448 250, 000 399,960 388, 748 653,030 1,441, 738 993, 014 50,000 24,516 83, 920 92,812 201, 248 129,243 100,000 85, 000 107,360 74, 579 57, 812 100,801 162, 437 49,838 327,609 225,218 190, 557 144, 691 200,000 100, 000 263, 997 84, 267 68, 900 156, 697 602,408 54,323 935,305 295,287 761,162 172,947 100, 000 100, 000 15,982 48,978 48, 428 163, 403 100, 613 63,255 165, 023 275,636 57, 822 177, 398 735,000 Southern States. Farmers' National Bank, Portsmouth, 250,000 Ohio First National Bank, Hillsboro, Ohio.. 100,000 First National Bank, Mount Pleasant, 50, 000 Mich 50, 000 First National Bank, Ithaca, Mich Sioux National Bank, Sioux City, Iowa. 300, 000 Grand Forks National Bank, Grand 200, 000 Forks, N. Dak First National Bank, Minot, N. Dak 50,000 Humboldt First National Bank, Humboldt, Kans 60, 000 Sumner National Bank, Wellington, 100,000 Kans First National Bank, Lamed, Kans 50, 000 German National Bank, Lincoln, Nebr 100, 000 619, 679 079,961 jl, 125, 686 2, 425, 326 1,633, 820 110, 639 261,906 50b, 367 41,295 111, 445 74, 835 727,451 378,036 349, 057 258, 945 26, 013 62,494 231,104 83,203 39, 999 383,813 10,567 34,176 278, 638 119,783 136, 669 893,555 57,032 76, 760 599,021 130,796 22, 594 318,580 66,618 128, 069 37,632 577, 445 126, 844 375, 845 84,439 17,852 62, 428 36,614 116, 894 46,877 15,130 36,712 22,438 55, 734 56, 673 135, 894 84, 808 12, 781 23, 861 155,672 106,166 182,193 61, 621 47,193 82, 703 Middle States. First National Bank, Bedford City, Ya. Chattahoochee National Bank, Columbus, Ga First National Bank, Orlando, Fla American National Bank, New Orleans, La National Bank of Jefferson, Tex Citizens' National Bank, San Angelo, Tex City National Bank, Tyler, Tex 937,678 1,749,604 833,426 3, 520,708 2,039,493 639, 021 407, 574 2,064, 048 1, 639, 425 621, 874 463, 799 1, 668,469 4,167,272 895, 065 3,175,524 24,942 15,932 138, 931 56, 890 36, 611 2,463 200,484 75, 285 105,763 19,632 9,197 47, 826 48,138 105,161 54,125 26, 090 90, 725 24,162 140, 977 84,890 Pacific States., 1,510,000 2, 547,783 2, 612, 818 '1,197,047 6, 357,648 4, 334, 999 "United States. 3, 805, 000 4,505,100 5,431,131 13,809,189 13,745, 420 9,001, 326 1,310,000 Western States. American National Bank, Denver, Colo. 500,000 First National Bank, Helena, Mont 800,000 Bellinghani Bay National Bank, New Whatcom, Wash 60,000 First National Bank, Cheney, Wash .. 50,000 Kittitas Valley National Bank, Ellen50, 000 burg, Wash Bennett National Bank, New What50,000 com, Wash •Exclusive of United States bonds on deposit to secure circulation, t Exclusive of capital, circulation, surplus, and undivided profits. REPORT OF THE COMPTROLLER OF THE CURRENCY. 33 The number, capital, assets, and liabilities of national banks, in each State, which failed during the past year are shown in the following table: Assets. State. Banks. Few York Virginia Georgia Florida Louisiana Texas Ohio Michigan Iowa. Forth Dakota Kansas Nebraska Colorado Montana Washington j Total Capital. Estiinated good. Estimated doubtful. $250, 000 $399, 960 $388, 748 50, 000 24, 516 83, 920 100, 000 107, 360 57,812 85, 000 74, 579 100, 801 200, 000 263, 997 68, 900 300, 000 149, 227 368, 528 350, 000 372,545 546, 662 100, 000 88, 507 123, 202 300,000 231,104 383, 813 250, 000 153, 390 385,198 210,000 69, 694 174, 835 100, 000 22, 438 135, 894 500, 000 407, 574 639,021 800, 000 2, 064, 048jl, 639, 425 210, 000 76,161 ! 334,372 Estimai cd worthless. $653, 030 92, 812 162, 437 49, 838 602, 408 218,191 186, 280 44,743 278, 638 165, 701 134, 203 23, 861 621, 874 463, 799 111,374 Total. Liabilities. $1,441, 738 $993, 014 129, 243 201, 248 190, 557 327, 609 144, 691 225, 218 761,162 935, 305 408,167 735, 946 608,002 1,105,487 133,792 256.452 599,021 893, 555 460, 284 704, 289 155, 691 378, 732 82, 703 182,193 1, 668, 469 895, 065 4,167, 272 3,175, 524 264,410 521, 907 27 3,805,000 4,505,100 J5,431,131 3,809,189 13, 745, 420 9,001, 326 EXISTING BANKS, AND BANK FAILURES. The number of national banks in existence on October 31, and of all other banks at date of latest returns prior thereto, with the number and per cent of failures of each class and of all, is shown in the following table: Class. National banks State banks and trust <o};,p:mi Savings banks Private banks Total Failures. Number of banks in existence Oct. 31,1896. Number. Percent. 3,679 4,944 764 3,552 .73 1.01 1.18 1.18 12, 939 1.06 INSOLVENT NATIONAL BANKS FROM 1863 TO 1896. From the date of the organization of the first national bank, in 1863, up to and including October 31, 1896, as shown by the table on page 515 of this report, 330 banks, or about 6J per cent of all created, have failed. They are located by States as follows: In New York, 34; Kansas, 29; Washington, 22; Texas, 21; Pennsylvania, 20; Nebraska, 17; Illinois, 16; Ohio, Indiana, and Montana, 11 each; Missouri and Colorado, 9 each; Iowa and South Dakota, 8 each; Tennessee, Michigan, and North Dakota, 7 each; Virginia, Florida, and Alabama, 6 each; Oregon and California, 5 each; Vermont, Massachusetts, New Jersey, Georgia, Louisiana, Arkansas, and Minnesota, 4 each; New Hampshire, Connecticut, District of Columbia, I?7orth Carolina, Wisconsin, and New Mexico, 3 each; Mississippi and Wyoming, 2 each, and South Carolina, Kentucky, Nevada, Utah, and Oklahoma, 1 each, being an average of 10 failures a year. Thirteen of the 330 associations placed in the hands of receivers as insolvent have been restored to solvency and resumed business, and one permitted to go into voluntary liquidation; the affairs of 154 have been finally closed, and of the remaining, 162 are still open, 32 of which, Digitized forhowever, FRASER are on the inactive list. OUR 96, PT 1 3 34 REPORT OF THE COMPTROLLER OF THE CURRENCY. The total capital stock of all these failed national banks amounted to $55,775,920, circulation to $19,641,909, and the total claims proved against them to $98,322,170. The receivers appointed to administer upon the assets of such associations reported $65,220,676 as good, $61,329,555 as doubtful, and $43,072,192 as worthless. The total assets aggregated $187,328,774. To this must be added the assessment upon shareholders, amounting to $29,067,070, making an aggregate total of assets and assessments of $216,395,844. To the creditors of these insolvent associations has been paid in the form of dividends up to the present time the sum of $62,766,144; loans paid and other disbursements, $12,809,437; legal expenses, $2,628,365, and all other expenses, $4,631,801. The amount of offsets allowed and settled amount to $13,569,732, and the losses on assets compounded or sold under order of court aggregate $39,512,525. The nominal value of assets returned to shareholders was $4,902,023. There has been returned to shareholders in cash $1,117,384. The amount in the hands of the Comptroller undistributed is $1,854,798. The nominal value of unliquidated assets is $55,488,836, and the uncollected assessments on shareholders, $17,114,799. The number of banks which failed during the last four years was 149, having a total capital of $22,745,020, nominal assets amounting to $65,534,381, and claims proved $25,594,603. PERCENTAGES OF DIVIDENDS PAID BY FAILED NATIONAL BANKS. The lowest percentage of dividend paid to the creditors of any failed national bank whose affairs are closed was that of fourteen and a fraction to the creditors of the Cook County National Bank, of Chicago, 111., being No. 38 on the list of banks placed in the hands of receivers. The next lowest percentage of dividend was seventeen and a fraction, to the creditors of the Tennessee National Bank, of Memphis, constituting No. 5 on the list. The average percentage of dividends paid to creditors of insolvent national banks whose affairs are entirely closed is about 75 per cent. Of the total dividends paid to creditors of all the insolvent national banks from the beginning of the national banking system in 1863, amounting, as above stated, to $62,766,144, the sum of $2,451,959 was paid during the past year. The average percentage of all cost of conducting insolvent trusts to assets other than those collected has been 5.51. The difficulties attendant upon the liquidation of the assets of failed banks during the past four years have arisen through many of such assets being of a character not to be reduced to money in a season of financial depression. Many indeed would be worthless under any financial condition. It is contemplated that real estate beyond an amount needed for banking purposes shall constitute no part of a bank's assets, and yet under the plea of having acquired it for a debt previously contracted, many failed banks are found to have a great amount of it, either wholly unsalable or salable only at a very great sacrifice. The weakness of banks holding assets of this character has been developed during these years, and in consequence a large number of them have passed into the hands of receivers to be dealt with according to law. CAUSES OF FAILURE OF NATIONAL BANKS AND DUTY OF DIRECTORS, A careful examination has been made into the causes of failures of national banks and the number failing from each cause, from 1863 to 1896, with the following result: Three have resulted from defalcation of officers; 22 from defalcation of REPORT OF THE COMPTROLLER OF THE CURRENCY. * 35 officers and fraudulent management; 1 from defalcation of officers and excessive loans to others; 2 from defalcation of officers and depreciation of securities; 13 from depreciation of securities; 19 from excessive loans to others, injudicious banking, and depreciation of securities; 18 from excessive loans to officers and directors, and depreciation of securities; 6 from excessive loans to officers and directors, and investments in real estate and mortgages; 3 from excessive loans to others, and depreciation of securities; 4 from excessive loans to others, and investments in real estate and mortgages; 1 from excessive loans and failure of large debtors; 4 from excessive loans to officers and directors; 4 from failure of large debtors; 8 from fraudulent management; 15 from fraudulent management, excessive loans to officers and directors, and depreciation of securities; 12 from fraudulent management and depreciation of securities; 24 from fraudulent management and injudicious banking; 8 from fraudulent management, defalcation of officers, and depreciation of securities; 5 from fraudulent management, injudicious banking, investments in real estate and mortgages, and depreciation of securities; 9 from fraudulent management, excessive loans to officers and directors, and excessive loans to others; 19 from injudicious banking; 54 from injudicious banking and depreciation of securities; 12 from injudicious banking and failure of large debtors; 13 from investments in real estate and mortgages and depreciation of securities; 43 from ,general stringency of the money market, shrinkage in values, and imprudent methods of banking; and 8 were wrecked by the cashiers. The inevitable conclusion to be drawn from a study of the causes resulting in these failures is that in the great majority of instances those directly responsible for the management of the banks involved, both directors and executive officers, have been negligent of their duties and wanting in insisting upon the employment of methods of ordinary safety and prudence. It follows that every bank failure has caused more or less loss to creditors and shareholders and subjected those connected with these institutions to criticism. The relation which the Comptroller's office bears to the banks and its method of examinations have been so much a matter of public discussion that it seems wise at this time to call the attention of both Congress and the public to these relations and the duties which it is believed rest directly upon and should be discharged by those whose oaths make it obligatory on them to conserve the interests of the bank, The duties resting upon directors are not in contemplation of law merely formal ones, to be met in a formal manner only. It is expected that they shall be thoroughly conversant, both in general and in detail, with the manner of the conduct of institutions with which connected and the methods employed. Bank directors should know whether the best bookkeeping methods are used in their banks, whether precautionary measures in the verifying of entries upon ledgers and pass books are taken, and whether employees from president to bookkeeper are engaged in speculative enterprises and employing the bank's funds, thus endangering the safety of those trusting the bank. The character^ the internal management necessarily makes the institution a safe or an unsafe one. In so far as the Comptroller is concerned, nothing more can be done in this regard than to suggest changes for the better, and by examinations made under his direction ascertain whether or not the capital stock of the bank is impaired either through the taking of worthless paper, overextending credit, or through defalcations. These examinations are made but twice a year, and are in no wise designed to relieve the directors from their responsibility in the premises. is often assumed that they do, but the assumption is erroneous. Digitized forIt FRASER 36 REPORT OF THE COMPTROLLER OP THE CURRENCY. They but emphasize the necessity of examinations and the duty of directors to make them. The Comptroller, through his examiners, inspects the paper of a bank only after it has been taken. The executive officers and directors should know of its character before it is taken. The Comptroller can not detail who in the bank shall verify the entries made upon ledgers and pass books of depositors. He can only suggest the wisdom of having another than the one who makes such entries verify them. The frequent changing of bookkeepers from desk to desk and the calling in of pass books at frequent intervals are suggestions sent from this office, but the carrying into effect of them falls upon those who at all times have to do with the active management of the bank. If directors delegate the powers they alone should discharge to the executive officers, the executive officers are apt to delegate them to others, and a condition is reached which, if it does not bring about scandal, results in loss. The security of the bank depositor is certain to be maintained if bank officers and directors cooperate with the supervising officers and insist that both the spirit and the letter of the bank act be carried out. It can never be made absolutely sure, however, if the examining is all done by the governmental officers and none by the directors. Examinations by both, thorough and complete, are essential, and the depositor has a right to demand of the latter as much attention to official duty and official oath as of the former. He is entitled to the very best service of both. HISTORY OF STATE BANK FAILURES PRIOR TO 1863. The recent discussion of many questions connected with banking and currency and the probability of still further discussion have made it seem advisable to collect as much data as possible covering the experience of the American people in dealing with banks and methods of banking. It is safe to say that at some time in the history of this country nearly every theory evolved in connection with the business of banking has been tried and its development attempted. It is equally true that at all times in the country's history, in all sections of it, and among all classes false principles of monetary science and bad practices in finance have without exception resulted disastrously to all concerned. A complete history of these experiments, carefully compiled, would furnish a thoughtful field for study on the part of the practical banker, as well as the political economist. If it did not free the country wholly from erroneous notions of banking and finance, it would certainly tend to lessen them. It is to be regretted that more satisfactory statistics on the subject of early bank failures are not to be obtained. The general history is known, but the specific items of loss in many instances are entirely wanting. At the best, it is but fragmentary. While it is probable that the historical facts here collected are far from complete, they can not but be of some benefit, and with that end in view they are made a part of this report as proper information to be submittedfcoCongress. They make more complete the history of failed banks in the United States, and added to such as follow, concerning the history of failures from $363 to the present time, State and national, give material value to the whole record. The laws of the several States have permitted the widest latitude, but with records so incomplete much of their value is lost, as it is impossible to draw comparisons which can be considered reliable. The great value of public information regarding the banks of the country was early appreciated. During the war of 1812 and the period imme REPORT OF T H E COMPTROLLER OF T H E CURRENCY. 37 diately following, the suspension of specie payments by most of tlie banks and the unsatisfactory condition of their circulation drew special attention to their inix^ortance as factors in conducting' the fiscal operations of the Government and of the communities where located. On March 1, 1*819, the House of Representatives passed a resolution directing— The Secretary of the Treasury to transmit to Congress at an early period in tlie next session a general statement of the condition of the Bank of the United States and its offices, similar to the return made to him by the bank; and a statement exhibiting as nearly as may be practicable the amount of capital invested in the different chartered banks in the several States and the District of Columbia, the amount of notes issued by those banks and in circulation, the public and private deposits in them, the amount of loans and discount made by them and remaining unpaid, and the total quantity of specie they possess; and also to report such measures as, in his opinion, may be expedient to procure and retain a sufficient quantity of gold and silver coin in the United States, or to supply a circulating medium in place of specie, adapted to the exigencies of the country and within the power of the Government. On February 12, 1820, the then Secretary of the Treasury, Hon. William H. Crawford, presented his report, which shows the condition of the Bank of the United States in September, 1819, to be as follows: RESOURCES. Funded debt of the United States (various) Bills discounted, viz: On personal security On personal security and funded debt On personal security and bank stock, etc Bills of exchange, viz: Foreign Domestic $7, 252, 501. 34 $21,228,128.56 229, 024. 00 7, 937, 515. 83 29,392,668.39 138,470.66 1, 375, 087. 86 1,513,558.52 Baring Brothers & Co., for bills in favor of J. L:ic]iai\ls 94,864.37 Offices of discount and deposit 32, 267, 712. 09 State banks 2, 964, 860.65 Real estate, permanent expenses, and bonus 780, 992. 59 Expenses 79,936.61 Cash, viz: : Deficient at Baltimore -1140, 454. 74 Notes of the Bank of the United States and branches 10, 582,147. 09 Notes of State banks 1,133,923.86 Specie 3,254,479.91 15,117, 005. 60 Total 89,464,100.16 Capital stock 34, 973, 828.63 Bank, branch, and post notes 14, 392, 258. 49 Dividends unclaimed 33, 814. 60 Discount, exchange, and interest 465, 088.28 Profit and loss .' 1,104, 932. 94 Due the Bank of the United States and offices of discount and deposit. 32,101,135.24 Due State banks 675,818. 30 Due Baring Brothers & Co., and Thomas Wilson & Co 142, 040.03 Premium and damages on bills purchased on account of Baring Brothers & Co 43,410.20 Bills of exchange received of S. Smith & Buchanan 37, 355.55 Deposits, viz: On account of the Treasurer of the United States. $1, 097,163. 33 On account of public offices 1, 765, 800.81 On account of individuals 2,631,453.76 5,494,417.90 Total '. 89,464,100.16 88 REPORT OF THE COMPTROLLER OF THE CURRENCY. The condition of the other banks in the United States, in the year 1819, is shown in the following tables: RESOURCES. State. Maine Massachusetts New Hampshire . . i. , Vermont Rhode Island Connecticut New Jersey Pennsylvania Delaware Maryland District of Columbia. Virginia North Carolina South Carolina Georgia Alabama Tennessee Kentucky Ohio Indiana Illinois , Missouri Mississippi Due Loans and from other discounts. banks. $2,512,716 12, 928,188 1,446, Q89 77, 326 3, 269, 044 496, 453 291,405 13,183, 861 1.509, 999 127, 579 6, 823, 374 7, 326, 777 6, 355,928 2,165, 639 1,175, 397 858, 729 2, 214,729 5, 859, 262 2, 779,314 300, 278 206, 694 456. 946 1,257,859 73, 623, 595 (*) New York Specie. 136, 325 353, 033 218,060 243, 737 422, 289 395, 932 59,332 447, 941 56, 361 $339,749 901,700 153, 831 49,690 406,867 44,645 21,413 1, 061, 067 115,502 21,030 265,234 993, 672 705,582 245, 487 3-0,445 192, 708 343, 884 693, 381 433,612 86, 350 74,715 252, 5fi3 79, 608 7, 616, 252 <*) 7, 828, 745 2, 000, 000 $251, 730 1,461, 303 129,587 135, 2fi9 288, 256 52,683 53,780 1,208,828 120, 500 10,835 749, 269 250,988 506, 388 63, 832 United States stocks. $128, 844 131, 660 109, 600 411, 676 1, 285 100,443 622, 811 Other stocks, etc. Eeal estate. $6,294 48, 498 14, 714 91, 539 88,040 40,125 405, 631 75, 920 635,931 87, 302 152, 093 75, 399 60, 688 18, 905 150,610 294,765 25,000 6,614 1, 516, 320 (*) 2, 278, 075 (*) $90, 780 421,320 51,112 137,474 10, 988 2,200 351, 537 91, 684 2,925 301, 970 330,965 190,620 76, 341 11, 700 4,675 40, 423 6,367 02, 999 2,656 175 11,667 32, 338 2, 262, 923 (*) 9, 828, 745 * Not stated. LIABILITIES. State. Capital paid in. Notes in circulation Maine Massachusetts New Hampshire Vermont Rhode Island Connecticut New Jersey Pennsylvania Delaware Maryland District of Columbia Virginia North C a r o l i n a . . . . . . South Carolina Georgia Alabama Tennessee Kentucky Ohio Indiana Illinois Missouri Mississippi $1, 536, 666 $1,336,783 10, 475,116 2, 474,107 1, 005, 276 589,114 44, 955 185, 342 2, 982, 026 738,192 467, 937 138, 234 214, 740 110,624 8, 595, 788 3,919, 894 974,900 405,972 86, 290 44, 435 5,525, 319 838,030 5,212,192 2,733,745 2, 964, 887 3, 851, 919 1,800, 000 788, 200 600, 000 705, 203 321,112 166, 686 1, 545, 867 898,129 4,307, 431 1, 403,404 1, 697, 463 1, 203, 869 202, 857 276, 288 140, 910 52, 021 250,000 135, 258 900, 000 275, 447 NewYort 51,851,737 23, 270, 903 20, 488, 933 12, 500, 000 Deposits. Public. $34, 609 106, 341 38, 857 22,348 23,417 37, 322 980, 510 37,396 1,165 888,138 17, 003 191, 454 191,484 119, 036 700, 679 Private $253, 582 2, 510,194 117,441 46,121 464, 654 53, 431 127,186 2,880,928 211, 454 27,153 464,393 844, 659 635, 761 377,163 202, 481 70, 243 262, 866 1,035, 653 262, 999 25, 264 32, 568 72. 973 212,980 3,391, 766 11,192,155 (*) (*) 72, 340,770 35, 770, 903 * Not stated. Due other Undivided banks. profits. $4, 860 953 1,748 15, 772 , 009, 565 177, 237 1,727 765,510 88,931 142, 5€8 6,047 109, 215 29, 884 1, 752 578,891 104, 737 3, 039,403 (*) $39, 629 319,134= 68, 789 581 100, 059 9,116 24, 784 279,192 145, 326 2,763 302,460 72,780 315,476 278,102 51, 801 23, 653 82,253 205,117 88,283 9,586 2,994 10,207 37, 740 2, 469, 836 (*) REPORT OF THE COMPTROLLER OF THE CURRENCY. 39 In further pursuance of the attempt to obtain information on the subject the House of Representatives, on July 10, 1832, adopted the following: Resolved, That the Secretary of the Treasury be directed to lay before the House at the next and each successiye session of Congress copies of such statements or returns, showing the capital, circulation, discounts, specie, deposits, and condition of the different State hanks and banking companies as may have been communicated to the legislatures, governors, or other officers of the several States within the year and made public, and where such statements can not be obtained, such other information as will best supply the deficiency. In accordance with this resolution, reports were made for the year 1833, from 1835 to 1841, 1846 to 1848, 1850, 1852 to 1859, and from 1861 to 1863. These reports, though of interest in showing the general condition of the banks, are wanting in details which would be of value. In 1873 the Comptroller of the Currency was charged with the preparation of an annual report on the condition of the banks and banking companies of the several States and Territories. These returns have been given in the reports of this office since that time. While it has been difficult to collect the statistics for going banks of this class, the information concerning the failed banks has been almost unobtainable. In nearly all the States the affairs of insolvent banks are administered by trustees or receivers appointed by the courts, the same as for other insolvent institutions. These receivers make special reports as called for by the appointing court, and a final report when their accounts are settled and they are discharged. Such reports are prepared in various ways, and frequently do not contain detailed information. They are usually filed with the clerk of the court, and from that time are, without spdcial efforts, inaccessible. With renewed agitation of the subject the Senate again adopted a resolution on July 26, 1892, calling upon the Secretary of the Treasury for information concerning State banks, and directed a report on "the number and names of State banks, banking institutions, or savings banks that have suspended or failed since 1830, and the loss severally of stockholders, note holders, and other creditors of said banks." The response to this resolution was almost entirely confined to information contained in reports to this office. In 1875 the then Comptroller of the Currency, the Hon. John Jay Knox, made an exhaustive effort to secure statistics of failed State banks, and the same appeared in the reports made by him. Further attention was given to the affairs of such banks in the Comptrollers7 reports for 1876,1878,1879,1891,1892, and 1895. The period prior to the establishment of the national-banking system may be divided into that which pertains to colonial history, and from the Revolutionary war to 1863. It is stated that the first private bank in America was established in 1686, in Massachusetts, while its organizers were "persons of estate and known integrity and reputation." It is reported to have been a failure, resulting in loss to those interested. During the colonial period a number of other banks were established in different colonies, for the purpose of providing currency with which to transact the daily business of the people, but sooner or later the circulating notes of a majority of these institutions were at a discount, and they resulted in loss to creditors and note holders. Several of the colonies also engaged in the business of loaning money, or, more properly, circulating notes, on real estate or other security, always, however, with certainty, as has been aptly said, "the more the issues the greater the depreciation ol the notes." Massachusetts, Rhode Island, Pennsylvania, New Jersey, South Carolina, and Georgia 40 REPORT OF THE COMPTROLLER OF THE CURRENCY. participated in this plan of attempting to relieve the business necessities of their citizens; and while at the outset, owing to the great scarcity of metallic money in circulation during this period, the currency of the banks, together with notes of private individuals, were forced into general use and temporary aid furnished, the general effect of the experiment could not from any point of view be considered as a successful one. From the close of the Revolutionary war to 1863 the amount of circulation issued by the banks varied largely. During the entire period, with now and then a brief interval, the notes, with the exception of those of the banks of New England and a few others, were continually at a discount. Losses to note holders, other creditors, and stockholders were extremely large. The first Bank of the United States did not result in any loss, but its successor, failing to secure a renewal of its charter from Congress, after continuing in business under an act of the legislature of Pennsylvania until 1841, did. At the closing of its affairs in 1856 it appears that the creditors had been paid in full, but the stock investment of $28,000,000 was a total loss. In 1782 the first State bank in Massachusetts was authorized. From 1805 to 1810 the bank notes in the State were depreciated and very unstable in value, and a number of the banks failed. In 1814 nearly all of the banks outside of New England were compelled to suspend specie payments, and most of them were either closed or continued with great loss to their creditors. In 1829 the Farmers' Bank of Belchertown suspended, with a capital of $100,000; the Sutton Bank, with a capital of $100,000, and the Brighton Bank, with a capital of $150,000, failed. In 1836 the Nahant Bank of Lynn, with a circulation of $242,965, failed. From 1837 to 1840 the Chelsea, the Kilby, Middling, Interest, La Fayette, Franftlin, Commonwealth, Middlesex of Cambridge, American, Commercial, Fulton, and Hancock banks failed. It is claimed that during the period from 1837 to 1844 32 banks suspended, the circulation of which was redeemed, with the exception of the Roxbury Bank; but as the circulating notes were a first lien upon their assets, it is probable, from the information at hand, that other creditors, as well as stockholders, lost their entire interests. From 1844 to 1855 only two banks failed; in 1857 one more was added, but it is understood that the circulating notes of these three were redeemed in full. The total failures in Massachusetts during the whole period was 52. The first State bank organized in Rhode Island was in 1791. In 1809 the Farmers' Exchange Bank of Gloucester failed, with a circulation of $580,000 and assets of but $86.46; in 1829 the Farmers and Mechanics' Bank of Pawtucket failed. No loss was sustained because of its circulating notes. In 1832 the Burrillville Bank failed, with a circulation of $49,000, which was finally redeemed without interest. The other creditors and the shareholders received nothing. In 1836 the Scituate Bank failed, but redeemed its circulation in full, and thereafter reopened. In 1843 the Rhode Island Agricultural Bank failed, and a part of its circulating notes was finally redeemed. In 1857 five banks failed, and in 1858 three others, some of which redeemed their circulation in full, while others defaulted. The total failed banks in Rhode Island was 13. In 1792 the first State bank was organized in Connecticut. In 1825 the Eagle Bank failed, with a circulation of $1,163,237, and assets estimated at the time of failure to be worth $300,000. The result was a large loss to note holders. The Derby Bank also failed, with a circulation of $80,000, entailing almost a total loss. In 1799 the first bank was organized in Maine. By 1829 the Castine, REPORT OF THE COMPTROLLER OF THE CURRENCY. 41 tlie Hallowell, and Augusta banks, with a total circulation of $460,000, failed. Before this time the Wiscasset, the Kennebec, and the Passamaquoddy banks had also failed. A large amount of the circulation of these banks was a total loss to note holders. From 1837 to 1839 the Globe Bank, the Washington County Bank, the Frankfort Bank, the Still water Canal Bank, and the Bank of Oldtown failed, with heavy losses except to note holders. Eleven other banks failed prior to 1854, of which it is stated the circulation was redeemed in full. In that year the Shipbuilders' Bank and the Canton Bank failed, with heavy losses to the holders of their notes. In 1855 the Mousam River Bank and the Grocers' Bank failed. Most of the circulation of these two banks was redeemed. In 1856 one other bank failed, and in 1857 five others, but their circulation was largely redeemed. The total failed banks in Maine during this period was 37. The Sanford Bank, which failed in 1861, up to January 1, 1863, had only paid a small amount of its circulation; the Nororubega Bank of Bangor had redeemed its circulation, but no information is given as to other liabilities; the Atlantic Bank, which failed in February, 1860, had redeemed its circulation, but no other information is given; the Mariners' Bank of Wiscasset had redeemed its circulation, an#d had remaining some real estate, the proceeds of which could be applied to the payment of other creditors. The first State bank was organized in New Hampshire in 1792. By 1809 the Cheshire, the Hillsboro, and the Coos banks had failed, with heavy losses on circulation. Between 1839 and 1845 the Concord Bank failed, with a circulation of $88,000 and deposits of $70,000; the Wolfboro Bank, with a circulation of $38,000, and the Lancaster Bank, with a circulation of $48,000, also failed. But a small amount of the circulating notes and no other, claims were paid by these banks. During this period 8 other banks failed, some of which redeemed their circulation in full. The total of failures in New Hampshire during the period was 14. In 1862 the bank officials of New Hampshire reported that the Weare Bank, which had suspended at Hampton Falls, with a capital of $50,000, and with assets amounting to $104,341, from which it had collected about $44,000, had nearly redeemed its circulation. The Exeter Bank, which failed in 1860, was reported to have been nearly liquidated. In 1806 the first bank was organized in the State of Vermont. It was an institution the capital of which was supplied by the State. In 1812 it failed, causing a loss of over $200,000 to the State, but the note holders and other creditors were paid in full when its affairs were finally closed in 1845. In 1839 the Essex Bank failed, with a circulation of $66,262 and deposits of $3,798. But a small portion of the circulation was paid from the assets of this bank. In 1862 the Black River Savings Bank had paid final dividends amounting to 65.82 per cent on its liabilities, while the affairs of the Middleburry Savings Bank were nearly closed, but with almost a total loss to creditors. In the State of New York the first bank chartered was in 1791. In the years before 1831 the following banks had failed: In 1819, Bank of Niagara, capital $400,000; 1820, Bank of Hudson, capital $300,000; 1825, Bank of Washington and Warren, capital $400,000; Bank of Plattsburg, capital $300,000; 1827, Aqueduct Association, capital $90,000; 1829, Bank of Columbia, capital $160,000; Middle District Bank, capital $500,000; 1830, Franklin Bank, capital $500,000. While capital stock of these banks is given, no information is at hand as to the amounts which were finally paid to their creditors. 42 REPORT OF THE COMPTROLLER OF THE CURRENCY. The failed banks whose liabilities were secured by the safety fund system are as follows: Bank of Buffalo, capital $200,000, circulation $111,234; Commercial Bank of Buffalo, capital $400,000, circulation $174,782; City Bank of Buffalo, capital $400,000, circulation $127,845; the Wayne County Bank, capital $100,000; Commercial Bank of New York, capital $500,000; Commercial Bank of Oswego, capital $250,000; Watervliet Bank, capital $250,000; Clinton County Bank, capital $200,000; Lafayette Bank, capital $500,000; Bank of Lyons, capital $200,000; Bank of Oswego capital $150,000. All the liabilities, including circulation of the above banks, were paid in full from the safety-fund deposit. The liabilities of the bauks amounted to $3,000,000, but only $138,277 was realized from their assets. Subsequent failures were: The Canal Bank of Albany, with a capital of $300,000, circulation, $185,531. Lewis County Bank, capital, $100,000, circulation, $150,000, with no other liabilities. Yates CountyBank, capital, $100,000, circulation, $148,958. Bank of Orleans, capital, $200,000, circulation, $200,000. The Canal Bank paid no creditors except note holders. The Yates County Bank and the Bank of Orleans paid the largest part of the note holders. The failure of the Lewis County Bank *was complete. Under the free-banking system, inaugurated in 1838, there were 57 failures, which resulted as follows, viz: Name of bank. Tenth Ward Bank Bank of Tonawanda Millers' Bank of Clyde Farmers1 Bank of Seneca County.. City Trust and Banking Company. Chelsea Bank Allegany County Bank Bank of America, Buffalo Bank of Commerce, Buffalo Bank of Lodi Bank of Olean Bank of Western New York Binghamton Bank Cattaraugus County Bank Erie County Bank Mechanics' Bank, Buffalo Merchants' Exchange Bank Phoenix Bank, Buffalo Staten Island Bank St. Lawrence Bank Union Bank, Buffalo United States Bank, Buffalo Washington Bank, Buffalo New York Banking Company State Bank of New York, Buffalo . Farmers' Bank of Orleans Clinton Bank Bank of Brockport Hamilton Bank Farmers and Drovers' Bank Atlas Bank, Clymer Walter Joy's Bank Circulation outstanding. f I ( V f { f { / \ / $11,303 15/485 137,380 45,090 27,343 22.234 i;200 695 23,346 3,051 69,920 6,980 65, 025 31,766 8,846 50,124 3 224 74, 393 16, 325 8,960 53, 019 6,181 37, 413 19, 720 94, 396 66, 235 47,760 27, 490 19, 702 40, 475 19,499 46,150 41, 627 19, 235 11, 240 2,890 24, 825 2,582 25, 000 8,245 5,971 129,998 48, 202 50, 700 Rate paid. 94 68 94 Par. 74 Tar. Par. 25 50 36 76 78 76 97 83 74 87 75 74 79 77 85 60 72 63 65 81 73 56 50 32 81 77 Par. 42 30 Par. 60 80 Par. Par. 75 97 Par. REPORT OF THE COMPTROLLER OF THE CURRENCY. Name of bank. James Bank Bank of New Rochelle Farmers' Bank of Onondaga Merchants and Mechanics' Bank, Oswego. Eighth Avenue Bank Bank of Carthage Empire City Bank, New York Exchange Bank, Buffalo State Bank, Sacketts Harbor Island City Bank Hamilton Exchange Bank Ontario County Bank Pratt Bank of Buffalo Chemung County Bank Pine Plains Bank Dairymen's Bank Agricultural Bank, Herkimer Lake Mahopac Bank Cataract Bank '. Bank of Albany Bank of the Capitol J. W. Rumsey & Co.'s Bank National Bank of Albany Medina Bank Brojckport Exchange Bank Total . 43 Circulation Rate outstanding. paid. $76,743 80, 000 5,113 81, 000 88,000 100,000 53, 643 110, 464 17,235 48, 462 99, 528 43, 016 49, 063 31, 000 58,167 66, 956 91,470 80, 528 40, 400 51,556 65,673 73,449 31,150 64,150 100,168 41, 516 91 81 Par. 85 77 94 Par. Par. Par. Par. Par. 84 Par. 94 Par. Par. Par. Par. Par. 93 Par. Par. Par. Par. Par. Par. 3,119, 695 Of this total of 57 failed banks under the free banking law of 1838, 29 were within the first five years, and had an aggregate circulation of $12,233,374. Their securities, consisting of stocks, bonds, and mortgages, were sold for $953,371, entailing a loss of $601,966. The avails of these 29 banks were only 74 per cent of the circulation, with nothing for the other creditors. The losses to the note holders occurred only in the case of those banks which had deposited State stocks other than those of New York. Of the entire number failing, but 23 redeemed their circulating notes in full. At the end of 1862, the Reciprocity Bank of Buffalo was in the hands of a receiver. The circulation at date of failure amounted to $159,577 The affairs of the Bank of Orleans and the Yates County Bank were still unsettled. From 1852 to 1857, and prior to the panic, 51 of the 94 free banks and private institutions in Indiana are reported as having,failed, with almost entire absence of payment to note holders or other creditors. The amount of circulation and other liabilities have not been obtained for these banks. During 1863 the circulation of the Bank of North America at Clinton was redeemed at the Southern Bank of Terre Haute at 90 cents. The circulation of the State Stock Bank at Peru was redeemed at the Bank of Goshen at 85 cents, and the circulation of the New York and Virginia State Stock Bank wras redeemed at par. The circulation of the following banks was redeemed by the auditor of the State from securities which had been deposited with him: Bank of Albany, at 90 cents; Bank of Albion, at par; Bank of Gosport, at par; Bank of Perryville, at par; Bank of South Bend, at par; Boone County Bank (genuine), at par; Bank of T. Wadsworth, at 91 cents; Bank of Eockport, at par; Central Bank, at par; Farmers' Bank of Jasper, at 91 cents; Kalamazoo Bank, at par; State Bank of Marion, at90 cents; Savings Bank of Indiana (genuine), at 69 cents; Wayne Bank, at Logansport, at par; Wayne Bank, at Kichmond, at par; and Agri cultural Bank, at par. In the notice of the auditor of the State it is set forth in italics that persons sending notes "will take particular notice77 that no other suspended-bank notes are redeemed at his office. The bank reports from Minnesota show that on January 1, 1863, the Digitized for circulation FRASER of the Bank of Kochester was being redeemed at 16J cents 44 REPORT OF THE COMPTROLLER OF THE CURRENCY. on tlie dollar; Chisago County Bank at 19\ cents; Filmore County Bank, 20 cents; Bank of Owatonna, 20f cents; Exchange Bank, 2L^ cents; Central Bank, 30 cents; Mcollet County Bank, 35 cents; Bank of the State of Minnesota, 70 cents; Bank of St. Paul, 98 cents, while the circulation of the Bank of Eedwing was provided for at par. The banking system of the State of Michigan prior to 1863 was, as practiced, entirely based*upon frauds. It is current history that the bank commissioners were carefully watched with a view to transporting specie from banks already examined to those which it was supposed they were about to visit. Gold and silver never before circulated so freely or traveled so rapidly, and if the same well-filled boxes or bags were found in several banks in succession some official was ready to swear that the bona fide ownership was vested in the present possessor. Sometimes it i>assed the commissioner by rapid transit on the road; sometimes it was transported by night; sometimes, arriving too late, it was handed in at the back door of the banking house while an examination was in progress. But there were some banks that had no amount of even borrowed specie. The Bank of Sandstone, for instance, never had any specie, and although its liabilities exceeded $38,000, it had no assets of any kind at the time when it was reported upon. The Exchange Bank of Shiawassee had in the safe but 7 coppers and a very small amount of paper, while it had bills in circulation to the amount of $22,207. The Jackson County Bank was discovered by the commissioners to have many large and well-filled boxes, but on being opened and examined it was found that while the top was covered with silver dollars there was nothing below but nails and glass. The only box containing silver brought into the room and sworn to by a director present as the property of the bank was afterward the subject of an action by the director against the receiver of the bank for its recovery, claiming it as his own individual property. A settlement of the bank's affairs proved that, with an indebtedness of some $70,000, it had not more than $5,000 of available assets. It was reported by the bank commissioners in December, 1839, that only 3 chartered banks, with 1 branch bank, and 4 organized under the general law out of 60 recently established were then in existence. The report of the attorney-general of the State? made at the same time, enumerates 42 banks under injunction and exhibits the condition of their affairs so far as ascertained. His report is an exhibition of a large amount due creditors, with little or no available assets with which to liquidate. It is estimated that the circulation outstanding, which was a total loss to the note holders of the State, was not less than $1,000,000. Illinois, Indiana, and Wisconsin passed free-bank laws in 1851,1852, and 1853, respectively. Few of the banks organized under these laws escaped disastrous failure, either prior to 1857 or in the panics of that year and of 1861. Immense loss was entailed upon all of their creditors. At these two periods most of the banks of the Southern and Western States failed, either because their business was transacted without any actual supply of capital or from reckless management. It is stated in Elliott's Funding System, page 1176, that in 1841, out of banks having a capital amounting to $317,042,692 and circulation of $121,665,198, fifty five banks, with a total capital of $67,036,265 and a circulation of $23,577,752, failed. In nearly every instance the capital of these banks was entirely lost. In the financial report for 1838 the balance of public deposits due from banks which had suspended specie payments amounted to $2,345,535, including the Commercial Bank 7 of Buffalo, the Mobile Digitized forbranch FRASERof the Bank of Alabama, the Planters Bank of Mississippi at REPORT OF THE COMPTROLLER OF THE CURRENCY. 45 Natchez, the Agricultural Bank of Natchez, the Bank of Kentucky at Louisville, the Franklin Bank of Cincinnati, the State Bank of Indiana, the Bank of Michigan at Detroit, and the Farmers and Mechanics' Bank at Detroit. The following list of 129 banks, with capital amounting to $24,212,339, and 36 banks of which the capital was not known, are banks enumerated by Hon. Albert Gallatin, previously Secretary of the Treasury, in Considerations on the Currency and Banking System of the United States: LIST OF THE BANKS WHICH FAILED OR DISCONTINUED BUSINESS FROM JANUARY 1, 1811, TO JULY 1, 1830. Massachusetts: Essex New Bedford Northampton Farmers' (Belchertown) Brighton Sutton Capital. $300,000 150, 000 75, 000 100, 000 150, 000 70,000 Total (six banks) 845,000 Maine: Maine Penobscot Wiscasset Hallowell Kennebeck Passamaquoddy Castine Lincoln and Kennebec 300, 000 150,000 100, 000 150,000 100,000 50, 000 100,000 200,000 Total (eight banks) Rhode Island: Fa rmers and Mechanics', Paw tuxet Farmers' Exchange, Gloucester Total (one bank) New Hampshire: Coos.. Concord Total (two banks) Connecticut: Eagle Derby Total (two banks) New York: J. Barker's Exchange Utica Insurance Company Columbia Hudson Niagara Plattsburg Washington and Warren New York Manufacturing Compauy Franklin Middle District Catskill Aqueduct Association Total (ten banks) 1,150,000 200, 000 200,000 100,000 29,600 129,600 500,000 100,000 600,000 495, 250 100, 000 167,650 110,000 108,000 300, 000 400,000 700,000 510,000 487,776 3,378,676 46 REPORT OF THE COMPTROLLER OF THE CURRENCY. New Jersey: Jersey City Bank Paterson State Bank, Trenton Protection and Lombard Franklin Moninouth Manufacturing Salem and Philadelphia Hoboken , Total (seven banks) Pennsylvania: Washington Farmers and Mechanics' of Greencastle Farmers and Mechanics' of Pittsburg Juniata Marietta and Susquehanna Trading Company Pennsylvania Agricultural and Manufacturing Bank Delaware Bridge Allegheny Beaver Swatara Center Huntingdon Northumberland, Union and Columbia Northwestern Bank Union of Pennsylvania Silver Lake Fayette, New Salem Harmony Wilkesbarre Branch Total (sixteen banks) -~ Capital. $200,000 160,000 92,400 200,000 300,000 40,000 150, 000 1,142,400 92,070 74,485 65, 337 164,478 239,430 110,102 99, 715 144,807 78,985 75, 075 159,610 123,122 116,980 77,688 124,792 64,882 1,811,558 Delaware: Farmers and Mechanics7 of Delaware Total (one bank) Maryland: Elkton Conococheague Cumberland Somerset & W Somerset Caroline Havre de Grace City Planters', Prince George County. Total (nine banks) 45,000 45,000 110,000 157,500 107,862 90,000 195,850 103,045 132,075 838,540 86, 290 1, 821,162 District of Columbia: Columbia Union of Alexandria Central Franklin 901,200 340, 000 252, 995 163,265 Total (four banks) 1,657,460 Virginia: Ohio County Charleston M. and C. Co Winchester Monongalia Farmers and Mechanics', Harpers Ferry South Branch. Farmers, Merchanta, and Mechanics', Jefferson County 60,000 32,580 122,930 25, 000 19, 480 25,000 26,425 REPORT OF THE COMPTROLLER OF THE CURRENCY. Virginia—Continued. Warrentown Leesburg Union Londoun County 47 Capital. $60,000 20,000 30, 000 Total (ten banks) 421,415 North Carolina: Fayetteville Bertie South Carolina: Cheraw Hamburg 20,000 Total (one bank) 20,000 Georgia: Darien Total (one bank) 480,000 480,000 Louisiana: 7 Planters Bank Bank of Louisiana ; Total (two banks) Alabama: Planters and Merchants' Bank Tombeckbe Steamboat Total (three banks) Tennessee: Fayetteville Transfer Farmers and Mechanics' of Nashville Nashville and branches Tennessee Bank (old) Three branches of Tennessee Bank Nashville branch of Tennessee Bank Rogersville branch of Tennessee Bank Total (four banks and five branches) Kentucky: Farmers and Mechanics' of Lexington (stock and notes at par) Versailles Kentucky and branches Flemingsburg Limestone Shepherdsville Hinkston Exporting Company Newcastle Cynthiana Center Bank of Kentucky Union of Elizabethtown Farming and Commercial Bank Greenville Newport Southern Bank of Kentucky Farmers' of Harrodsburg .". Farmers' of Somerset Lancaster Exporting Company Insurance Barbersville Cumberland Bank of Burkville Burlington Bank of Columbia Frankfort / 200,000 724,000 924,000 164,175 156,937 16,000 337,112 110,000 180,200 994, 560 371,107 300,000 206,775 67,140 2,229,782 489, 700 Ill, 180 2, 756,220 61, 626 135,825 55,880 50,120 40,520 47,900 120, 000 '. 39, 400 37, 219 46, 640 54,700 117,222 81, 000 22, 379 39, 900 48 REPORT OF THE COMPTROLLER OF THE CURRENCY. Kentucky—Continued. Georgetown Greensburg Green River Christian Bank Bank of Henderson Bank of Washington Commercial Bank of Louisville Mount Sterling Morgantown Monticello Farmers' Bank of Jessamine Owingsville Petersburg-Steam Mill Farmers' Bank of Gallatin Farmers and Mechanics' of Logan Farmers and Mechanics' of Shelbyvillo Farmers and Mechanics' of Springfield Winchester Commercial Commonwealth Bank $ Capital. , (2, 000, 000 Nominal.) Total (eighteen banks) 4,307,431 Ohio : Miami Exporting Company, Cincinnati Columbia, New Lisbon Granville Alex'n Society Farmers7 Bank of New Salem German of Wooster Muskingum Farmers and Mechanics' of Cincinnati Cincinnati Dayton Manufacturing Lebanon-Miami Banking Company Urbana Banking Company Farmers and Mechanics' Manufacturing, Chillicothe Hamilton Zanesville Canal and Manufacturing Company West Union Lake Erie Steubenville Muskingum of Zanesville Jefferson County Bank of Xenia Total (eighteen banks) , 468, 966 50, 000 12, 002 57, 000 25, 000 97,800 184, 776 216, 430 61, 622 86, 491 49, 685 99, 575 22, 707 79,125 100,000 100, 000 100, 000 100, 000 1,911,179 Indiana: Farmers and Mechanics' Bank Bank of Vincennes 130, 000 127,624 Total (two banks) 257,624 Illinois: Illinois Edwardsville 105,720 57,190 Total (two banks) 162,910 Missouri: Bank of Missouri Bank of St. Louis 250,000 150,000 Total (two banks) 400,000 Michigan: Monroe 10,000 EECAPITULATION. One hundred and twenty-nine banks ' Digitized forThirty-six FRASER banks ,,,,•«,,,, 24, 212, 339 Not known REPORT OF THE COMPTROLLER OF THE CURRENCY. 49 In the Comptroller's report for 1878 an estimate is made that the losses upon all of the currency issued by State and private banks amounted annually to 5 per cent, but no estimate had been made as to the losses to other creditors and shareholders. As in most cases prior to 1863 the noteholders were preferred creditors, undoubtedly the loss to depositors and shareholders must have been enormous. STATEMENT EXHIBITING THE NUMBER OF BANKS, WITH CIRCULATION, DEPOSITS, AND AMOUNTS DUE TO OTHER BANKS, BY STATES, FOR THE NINE YEARS PRIOR TO JANUARY, 1863. State. iNcw Hampshire Connecticut........... ... N e w York............ . New Jersey OUR 96, PT 1 . . Date. No. 1854 1855 1856 1857 1858 1859 1860 1861 1862 1854 1855 1856 1857 1858 1859 I860 1861 1862 1854 1855 1856 1857 1858 1859 1860 1861 1862 1854 1855 1856 1857 1858 1859 1860 1861 1862 1854 1855 1856 1857 1858 1859 1860 1861 1862 X854 1855 1856 1857 1858 1859 1860 1861 1862 1854 1855 1856 1857 1858 1859 1860 1861 1862 1854 1855 1856 1857 1858 1859 1860 71 75 76 70 68 68 71 71 69 36 46 49 47 52 " 52 51 52 52 40 42 41 41 41 46 43 40 40 143 169 172 173 174 174 176 183 183 87 92 98 93 90 91 90 90 88 63 68 71 74 76 74 74 75 75 329 338 311 294 300 303 306 302 308 32 35 46 47 46 49 50 Circulation. $5, 691,815 5, 077, 248 4, 641, 646 2, 964,327 3, 886, 539 4,149, 718 4, 313, 005 4, 047, 780 6, 488, 478 3,079,548 3, 589, 482 3, 677, 689 2, 289, 939 3,115, 643 3, 271,183 3, 332, 010 2, 994,408 4,192, 034 3, 986, 709 3, 704, 341 3,970, 720 4, 275, 517 3, 024,141 3, 882, 983 3, 784, 673 2, 522, 687 5, 621, 851 24, 803, 758 23,116, 024 26, 544, 315 18,104, 827 20, 839, 438 22, 086, 920 22, 086, 920 19, 517, 306 28, 957, 630 5, 035, 073 5,404,104 5,521, 909 3,192, 661 3, 318, 681 3, 558, 295 3,772, 242 3, 306, 530 6, 413, 404 11,219 566 6, S71,102 9,197, 762 10, 590, 421 5, 380, 247 7, 561, 519 7, 702, 436 6, 918, 018 13, 842, 758 31,507, 780 31, 340, 003 34, 019, 633 23, 899,964 28,507, 960 29, 959, 506 28, 239, 950 30, 553, 020 39,182, 819 3,552, 585 4, 285, 079 4, 759, 855 3, 395, 939 4, 054, 770 4, 811, 832 4,164, 799 Deposits. $2, 914, 601 2,011,028 1,994, 782 1, 743, 939 2, 382, 910 2,411, 022 2, 869,871 3, 307, 628 5, 076,107 775, 410 958, 474 1, 058, 803 875, 789 1, 069, 920 1,187^991 1, 234, 628 1, 376, 853 1,725,866 745,170 801, 039 797, 535 746, 547 615, 874 787, 834 814, 623 715, 207 925, 627 18, 783, 281 21, 478, 717 23, 437, 256 17, 631,190 30,538,153 27,804, 699 27, 804, 699 33, 956, 711 44, 737, 490 2, 772, 357 2, 914, 596 3,141, 657 2, 510,108 3,130, 475 3, 553,104 3,737,234 3, 742,171 5, 376, 414 3, 910,160 3, 433, 081 4, 090, 835 4, 688, 843 4,140, 088 5, 574, 900 5, 506, 507 6,142, 754 8, 890, 237 84, 970, 840 88, 852, 395 96, 907, 970 83, 043, 353 110,465,798 104. 070, 273 114,845,^?: 146, 215, 488 200, 824, 756 3, 290, 462 3, 994, 541 4, 891, 970 3, 696, 605 4, 239, 235 5, 741, 465 5,117,817 , D u e to other banks. $172,628 118,975 145, 083 139, 304 189, 271 02, 392 151,437 83, 601 128, 578 15,715 4,788 7,348 1,639 5,441 19,132 15,042 6,930,098 5, 947,835 4, 807, 601 4,106, 694 7, 654, 234 6, 937, 042 6, 937, 042 8,000, 526 17, 413, 850 1, 046, 658 1,192,449 1, 475,221 1, 661, 204 936, 081 1, 022, 277 1, 396,184 965, 208 1, 605,121 1,008, 655 945, 844 875,287 1,020, 711 684, 997 926, 308 1,166, 778 964, 752 1, 387, 274 21,081, 456 26, 045,439 29, 014,125 21, 268,562 35,134, 049 28, 807, 429 r>. !°2,678 34, 431, 615 57, 389, 106 483,875 616, 321 1,438,658 507, 077 770, 935 1,141, 664 559,579 50 REPORT OF THE COMPTROLLER OF THE CURRENCY. STATEMENT EXHIBITING THE NUMBER OF BANKS, ETC.—Continued. State. New Jersey . . . Pennsylvania . Delaware. Maryland . Virginia. North Carolina. South Carolina. Georgia . Florida... Alabama. Louisiana. Mississippi . Tennessee. Date. 1861 1862 1854 1855 185« 1857 1858 1859 1860 1861 1862 1854 ]855 1856 1857 1858 1859 1860 1861 1862 1854 1855 1856 1857 1858 1859 1860 1861 1862 1854 1855 1856 1857 1858 1859 18G0 1854 1855 1856 1857 1858 1859 1800 1854 1855 1856 1857 1858 1859 18(50 1855 1856 1857 1858 1859 1860 1859 1800 1854 1855 1856 1857 18.18 1859 18(50 1854 18i5 1856 1857 1858 1859 1860 18(52 1854 1855 1856 1857 1854 1855 1856 1857 1858 1859 No. 51 52 64 71 71 76 87 90 89 m 94 10 11 11 11 12 12 12 6 5 29 31 31 31 32 31 31 28 32 58 57 57 62 63 65 66 26 28 28 28 28 30 31 19 20 20 20 20 20 20 24 23 30 28 29 28 2 2 4 4 4 Circulation. $3, 927. 535 8,172, 398 16, 739, 069 16.883,199 17, 368, 096 11,610.458 11, 980, 480 13,132,892 15, 830, 033 16, 384, 643 27, 689, 504 1, 380, 991 1,192,204 1,394,094 1, 240, 370 960, 846 1,135, 772 1, 080. 822 445,619 678,340 4,118, 197 5, 297, 983 5,155, 096 4, 041, 021 3, 977, 971 4,106, 869 3, 558. 247 3, 794, 295 6. 649, 030 10, 834, 963 13, 014, 926 12. 685, 627 10, 347, 874 10. 340, 342 9, 819,197 19,817,148 6, 667, 762 5, 750, 092 6, 301, 262 5, 699, 427 6, 202, 626 5, 594, 057 5, 218, 598 6, 739, 623 6, 504, 679 10, 654, 652 6.185, 825 9,170, 333 11, 475, 634 6, 089, 036 10,092.809 9, 147,011 5,518,425 11,687,582 8, 798,100 8,311,728 183. 640 11(5, 250 2, 382,176 3, 467, 242 3,177,234 2,581,791 1 6,651.117 7, 477, 976 5, 055, 222 19 I 6,586,601 19 j 7,222,614 19 ! 9. 194, 139 15 ; 4, 336, 624 12 ! 9. 09!-, 009 13 j 11.579,313 13 | 6,181,374 8, 87C;519 6 221.760 1 i 324. 080 1 ' 556, 345 1 169, 400 2 5, 850, 562 32 8, 518, 545 45 8, 401, 948 40 6, 036. 982 45 6, 472, 822 39 5, 538, 378 34 Deposits. $5, 687, 923 9, 599, 269 21, 076, 464 25, 340, 814 27 593,534 18,924, 113 26, 054, 568 26,167, 843 27, 032,104 28, 986, 370 43,038,218 D u e to other hanks. $450,572 853,193 3,930, 665 4, 955, 485 4, 215, 515 5, 847. 970 4, 569 625 3, 837, 554 4,118,925 3, 979, 824 8,447,311 127,510 125,303 147, 250 72, 297 86,180 102,166 105, &48 53, 009 7,652 1, 511, 970 1, 924, 756 1, 895, 284 4, 194, 677 1, 725, 807 1, 324, 740 2,108, 920 1,167, 555 1,799,287 815, 830 663, 995 729, 507 899, 796 982, 354 1, 138, 327 1, 310, 068 234, 832 307,168 859,010 852,163 868,414 609,179 832.657 976 226 818, 201 405,362 509,381 7, 268, 888 8, 370, 345 9, 611, 324 7, 541,186 9, 028, 664 8, 874,180 9, 086,162 7, 637, 602 13,779,279 5, 615, 666 6, 204, 340 7, 397, 474 6, 971, 325 7, 401, 701 7, 729, 652 7,157,270 1,130,329 1,101,113 1, 170, 020 1. 037, 457 1,502,312 184,356 1, 487,273 100, 139 2, 034. 391 105, 631 2, 871, 095 1,197, 949 1,100, 299 3, 068,188 3, 502, 733 3. 518, 962 3, 074, 740 2, 955, 854 3, 746, 604 3, 897, 840 4,165,615 1. 490, 218 3, 334, 037 1,312,659 2, 525, 256 1, 334, 098 3,126. 530 1, 663, 429 2,215,853 533, 819 5,317,923 1, 727, 995 4, 738, 289 1, 287. 268 3, 846,176 1, 389, 011 129, 518 5, 144 108,606 181, 558 1, 278, 022 2, 837, 55G 481,289 703. 443 2, 423, 269 571i 556 1, 408, 837 1, 006, 832 3, 830, 607 4,851.153 874, S00 3, 435, 085 2, 250. 855 11,688,2: ;(> 1,154.538 14, 7-17. 470 j .1, f'87. :'>31 1:5,478.729 " (no. 555 11,638,120 l, ;wo, oi9 21, 822, 538 2,198. 082 19, 777, SI 2 17. 05:>, 800 1, U55.-'175 5, 810, 251 75:], ,159 42, 738 o52,463 35, 606 83, 435 49, 781 31, 792 2, 413, 418 211,681 3,740,101 467, 070 4, 875, 346 944,917 4,545 104 1,617,610 4, 650, 809 1, 073, 269 4, 324, 799 264, 627 REPORT OP THE COMPTROLLER OP THE CURRENCY. 51 STATEMENT EXHIBITING THE NUMBER OF BANKS, ETC.—Continued. State. Tennessee. Kentucky Missouri Illinois Ohio Michigan , Wisconsin Minnesota Towa Kansas Nebraska Date. 1860 1862 1854 1855 1856 1857 1858 1859 1860 1861 1862 1854 1855 1856 1857 1858 1859 1860 1861 1862 1854 1855 1856 1857 1858 1859 I860 1861 1862 1854 1855 1856 1857 1858 1859 1860 1861 1862 1854 1855 1856 1857 1858 1859 1860 1861 1862 1854 1855 1856 1857 1858 1859 1860 1861 1862 1854 1855 1856 1857 1858 1859 1860 1861 1862 1858 1860 1861 1862 1859 1860 1861 1862 1858 1860 1861 1856 1857 1858 1860 No. 35 14 34 33 35 37 37 45 43 44 44 6 6 6 10 22 38 42 42 42 29 36 42 45 48 74 94 19 25 59 46 46 40 37 • 37 39 37 37 66 65 61 49 53 52 55 55 55 6 4 4 4 3 4 2 4 4 23 32 49 66 98 108 110 60 04 2 3 4 7 12 13 14 14 1 2 1 4 6 2 1 Circulation. $4,285,174 4, 540,906 8, 628, 946 12, 634, 533 13. 682 215 8,884.225 14, 345, 696 13,520, 207 10, 873, 630 7,405, 015 9,035,724 1, 460, 650 2, 805, 660 2, 780, 380 1,718,750 6, 069,120 7, 884, 888 8, 204,845 6,511,851 4, 037, 277 2, 283, 526 3 429, 985 5' 534, 945 5, 238, 930 5, 707, 045 8,981,723 11,010,837 1,415,076 619,286 8.165, 856 4,516,422 4, 731, 705 3,363, 976 5, 379, 936 5, 390, 246 5, 755, 201 6, 844, 700 6, 782, 800 8, 074,132 9,080,589 9,153, 629 6.201,286 8, 040, 304 7 983, 889 8, 143,611 9, 217, 520 9, 057, 837 500,942 573, 840 670, 549 364, 676 331. 978 222,197 47, 510 120. 124 131,087 740, 764 1, 060,' 165 1, 702, 570 2, 913^ 071 4^ 695' 170 4, 429, 855 4, 310,175 1, 419, 423 1, 643, 200 48^ 643 8, 702 81,236 198. 494 563 806 689", 600 1,281,453 1,249.000 8, 895 5,443 2. 770 353! 796 41, 641 23, 346 16, 007 Deposits. $2, 998, 063 1,125,633 3,011,719 3, 608, 757 4 473, 378 3, 232,132 5,144, 879 5, 662, 892 3, 725, 828 4,369,218 7, 676, 305 1, 247, 651 1,331,126 1,188,982 1, 482, 442 3, 123, 622 3, 357,176 3, 360, 384 2, 068, 473 3, 434. 262 1, 286. 102 1,267^234 1, 002, 399 658, 521 640, 058 697 037 807, 763 D u e to other banks. $335, 923 91, 136 2, C77, 824 2, 555, 953 2, 083, 373 3,195, 352 4, 338, 364 3, 259, 717 3,073,919 1, 352, 737 2, 829, 898 284, 776 172, 425 111,984 242,117 579, 830 1, 200, 010 1, 247, 335 1, 450, 723 546, 896 210, 483 19, 662 15,621 26, 533 64, 200 110, 739 400, 213 803, 849 2, 289, 605 379, 804 1,957,097 272, 815 1,852.742 380, 569 1, 417, 966 176, 366 1, 723, 840 80, 530 1, 700, 479 1.841.051 117, 868 2, 076, 548 162, 890 110.126 3,017,597 5,450, 556 949, 727 1,712,040 7,101, 325 1, 202, 961 6, 543, 420 3, 915, 781 280,786 4, 389, 831 488, 878 4,039,614 790, 568 3, 206, 589 4,046,811 450, 035 5, 762, 355 1, 014, 752 11.G97, 818 1,170, 974 95, 597 53, 425 1,366^958 1, 347, 956 118, 962 310,479 78, 975 35, 165 555, C93 13, 969 375, o97 436, 837 4, 777 749, 828 125, 623 19, 218 1. 420, 852 1, 482, 053 2' 806' 'Ml 3, 365. 562 2, 077, 862 3,' 022! £84 3,085. 813 4 083 131 2,34M12 """" " 3, 318 007 13 i;u 54, 065 92, 876 527 378 1,154! 925 809,387 1,287.273 2 695 14'783 6, 330 125! 291 3,673 23, 748 30,717 10 3, 100 16 689 50, 504 47, 876 48, 003 24 1,749 4,418 52 REPORT OF THE COMPTROLLER OF THE CURRENCY. STATEMENT EXHIBITING BY YEARS THE NUMBER OF BANKS, AMOUNT OF CIRCULATION, AND DEPOSITS FOR THE ENTIRE UNITED STATES FROM JANUARY, 1834, TO JANUARY, 1863. Date. 1834 1835 1836 1837 1838 1839 1840 1841 1842...., 1843 1844 1845 1846 1847 1848 1849 1850 i No. of banks. Circulation. 1j Deposits. 506 704 713 758 829 840 907 784 692 691 696 707 707 715 751 782 824 $94, 840, 000 $75, 667, 000 103,092,000 83,081,000 140,301,000 i 115,104,000 149,186,000 ' 127,397,000 116,139,000 1 84,691,000 135,171,000 j 90,240,000 107,000,000 ! 75,696,000 107, 290, 000 I 64, 890, 000 83,734,000 \ 62,408,000 58,564,000 56,168,000 75.168,000 I 84,550,000 89, 608,000 i 88, 021, 000 105,552,000 96,913,000 105,500,000 ! 91,812,000 128,506.000 103,237,000 114,740,000 1 91. 182,000 131.367.000 ; 109 586, 000 i Date. 1851 1852 1853 1854 1855 1856 1857 1858 1859 1860 1861 1862 1863 Average f o r 29 years No. of banks. Circulation. Deposits. 879 $155,165, 000 $128*957, 000 146, 072, 000 1, 208 204, 689, 000 1,307 187, 000, 000 1,398 195, 747, 000 1,416 214, 779, 000 1,422 155, 208, 000 1,570 193, 307, 000 1, 562 207,102,000 1,601 202, 005, 000 1,496 183.938.000 1,466 238, 677, 000 145,553, 000 188,188, 000 190,400,000 212, 706,T)00 230,351,000 185,932, 000 259, 568, 000 253, 802, 000 257, 229, 000 297,127,000 393, 686, 000 142,416, 000 142, 901, 000 RESULTS OF INVESTIGATION RELATIVE TO INSOLVENT STATE BANKS FROM 1863 TO 1896. In my annual report for the year 1895 certain information then obtained respecting insolvent State banks was given. It was, however, so meager and fragmentary as to be highly unsatisfactory. In order to supply the defects, and to gather reliable data, on August 6 of the present year an inquiry was instituted regarding the condition of insolvent banks other than national subsequent to February 25,1863, the date when the original national-bank act went into effect. The following information was requested: jSTame and location of the bank; date of failure; liabilities not including capital stock, surplus, and undivided profit; dividends paid; estimate of further dividends. In view of the difficulty experienced last year in prosecuting this inquiry, it was decided to have the investigation made through nationalbank examiners exclusively, and a letter, of which the following is a copy, was sent to each one of the 58 national-bank examiners in the United States: TREASURY DEPARTMENT, OFFICE OF THE COMPTROLLER OF THE CURRENCY, Washington, D. C, August 6, 1896. SIR: In October, 1895, this office made an attempt to secure certain information, for incorporation into the annual report of the Comptroller of the Currency, relative to failed banks other than national in the different States, and the banking officials of such States, together with a number of the examiners, were requested to aid me in this respect. The information received, however, was not of sufficient completeness to warrant its insertion in the report, and I have now undertaken to secure the desired information through the national-bank examiners exclusively, using that obtained last year as a basis upon which to begin work. To this end I send you inclosed herewith a tabulated list of the information received concerning the State of , covered in part by your territory, and the request that you endeavor, either by personal call upon those possessed of the facts while visiting a place for the purpose of examining a national bank or by correspondence whenever necessary, to verify this information, and add anything more you may be able, going back, if possible, to the year 1863. I will send you by mail a supply of blanks to be used for the purpose mentioned, and you will please observe the headings and give the information as indicated therein. It is understood that the receivers of these State banks are appointed by the various State courts, their reports being filed with the clerks of the courts appointing them. It would appear that the desired information could be obtained either REPORT OF THE COMPTROLLER OP THE CURRENCY. 53 from the receiver of each of the hanks or from the clerk of the court, from whom it ought to be obtainable without necessitating the payment of fees. I shall look to you for this information, in as complete form as it is possible for you to obtain it, not later than October 1,1896. Please acknowledge receipt of this letter, and advise me from time to time of the progress you are making. Very respectfully, JAMES H. ECKELS, Comptroller. As a result of the effort to collect information on this subject, reports were received as to 1,164 banks, having an aggregate capital of $53,187,259. The nominal assets reported amounted to $212,725,771.58, the liabilities to $218^833,563.86, and thedividends paid to $99,711,330.75. In addition to this, 70 failures are reported in the various States, with, no information as to dates of closing. The capital of these 70 banks amounted to $445,000, nominal assets$l,586,419, liabilities $1,796,424.41, and dividends paid, $377,396.20. The total failures, therefore, reported from 1864 to October 31, 1896, aggregate 1,234; capital $53,632,259, nominal assets $214,312,190.58, liabilities $220,629,988.27, dividends paid $100,088,726,95. This information is shown, by years, in the following table: NUMBER OF FAILURES, CAPITAL, ASSETS, LIABILITIES, AND DIVIDENDS PAID BY BANKS OTHER THAN NATIONAL WHICH FAILED IN EACH YEAR FROM 1864 TO 1896. Number of failures. Year. 186-1 1865 1866 1867 1868 1869 .... 1870 1871 1872 1873 1874 1875 1376 1877 1878. ... 1879 1880 18S1 . .. 1882 1883 1884 1885 1886 1887 1888 1889 1890 . 1891 1892 1893 1894 1895 1896 . ... ... . . . Total Not dated Grand total 2 5 5 3 7 6 1 7 10 33 40 14 37 63 70 20 10 9 19 27 54 32 Capital. Nominal assets. $125, 000. 00 275, 000. 00 260, 000. 00 276, 381. 00 100, 000. 00 $245, 401. 97 1, 206, 035. 00 222, 075. 00 182, 002. 30 77,861.00 220, 000. 00 470, 000. 00 907, 000. 00 770, 000. 00 2.413,900.00 96], 000.00 2,491,250.00 3. 250,193. 00 1, 370, 465. 00 452. 200. 00 436, 750. 00 545, 000. 00 870, 000. 00 1, 718, 596. 00 1, 099, 400. 00 254, 000. 00 931,590.00 745, 500. 00 363, 250. 00 2,169, 568. 00 2, 071, 300. 00 578, 840. 00 16,641,637.00 3,112, 447. 00 3, 906, 350. 00 3, 4Q0, 642. 00 2,314,871.90 2,126,124. 18 4, 644, 889. 91 4,125,731.00 9,190, 283. 98 7,312,218.73 13,137, 835. 47 26,001,949.67 5,102, 691. 94 1, 629,146. 61 585, 653. 06 2, 765, 951.10 2,813,915.19 12,900,819.05 2, 982, 879. 51 1,300, 536,30 2, 865. 300. 30 2, 805, 326. 52 1, 279, 900. 68 10, 692, 385. 98 7.190, 824. 69 2, 719, 410. 75 54, 828, 690. 65 7, 958, 284.18 11,276,529.99 10, 240, 244. 97 Liabilities. Dividends paid. $225, 662.14 890,112. 00 138, 821. 00 148, 886. 00 361,961.73 50, 000, 00 2, 654,187.15 3, 059, 318. 06 6, 938, 653. 01 4, 562,879. 00 12, 365, 475. 25 9, 206, 429. 34 15, 223, 785. 49 27, 269, 520.51 5, 253, 307. 22 1,311,799.49 1, 785, 890. 45 2, 608, 489. 57 3,193, 747. 39 15, 508, 389. 70 4, 883, 454. 27 1,140, 824. 48 3, 074, 022. 29 3, 342, 336. 52 2,147, 059.18 11, 385, 584. 64 6, 365,198. 77 3, 227, 608. 56 46, 766, 818. 80 7,218,319.51 9, 010, 584. 93 7,513,837.41 974, 256. 96 1, 906, 573. 00 3, 420, 016.33 2, 022, 498. 51 4,143, 941. 97 5,178, 020. 98 7, 004, 558. 27 19,485, 717. 87 4, 235, 808. 85 288, 494, 74 851, 755. 00 1, 221,737. 29 1, 408, 047. 99 9, 671. 860.25 2,361 320.01 673, 579.10 1, 610. 527. 45 1, 924, 773. 68 1, 026, 682. 73 3, 884, 577. 99 3, 090, 597. 48 803, 860. 76 17, 912, 270. 45 1, 456, 522.87 2, 251, 708. 93 534, 363. 30 1,164 70 53,187, 259. 00 212, 725, 771. 58 218, 833, 563. 86 1, 586, 419. 00 1, 796,424. 41 445,000.00 99,711,330.75 377, 396. 20 1,234 53, 632, 259. 00 214, 312,190. 58 220, 629, 988. 27 100, 088, 726.95 13 19 17 15 30 44 27 261 71 115 78 $145, 592.25 138, 821. 00 82, 844. 74 The following table shows the number of failures, capital, assets, liabilities, and dividends paid by banks in each State and Territory. It will be observed that some States have suffered from failures to an extent greater than others, but this is partially explained by the fact 54 REPOET OF THE COMPTROLLER OF THE CURRENCY. that some of the examiners had better opportunities and showed greater diligence than others, and, in addition to this, the information in certain sections was more readily obtainable, and in others the difficulties encountered were almost insurmountable. In some cases it was impossible, for various reasons, to get all of the desired information, or even to get the exact number of failures during the period covered by this investigation, and those States, necessarily, show fewer failures than have actually taken place: NUMBER OF FAILURES, CAPITAL STOCK, ASSETS, LIABILITIES, AND DIVIDENDS PAID BY BANKS OTHER THAN NATIONAL WHICH FAILED IN EACH STATE AND TERRITORY FROM 1863 TO 1896. States and Territories. Alabama Arizona,. Arkansas California Colorado Connecticut Delaware Florida Georgia Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts . . Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire. New Jersey New Mexico New York North Carolina.. North D a k o t a . . . Ohio Oklahoma Oregon Pennsylvania Rhode Island •South Carolina.. South Dakota Tennessee Texas Utah Vermont "Virginia Washington W e s t Virginia . . Wisconsin Wyoming Total No. of failures 3 3 1 16 38 15 1 7 9 7 121 77 43 30 12 7 8 2 15 7 31 5 74 5 105 1 22 10 12 92 2 13 112 7 10 162 10 4 27 5 11 5 2 13 32 1 31 1,234 Capital. Nominal assets $150,000.00 12, 500. 00 2,193,341.00 958, 500. 00 211,600.00 291, 500. 00 786. 750 00 100. 000. 00 8, 012, 500.00 1,185, 000. 00 917, 500. 00 1, 067, 876. 00 2,177, 600. 00 830. 000.00 75. 000.00 491, 000.00 2, 408, 000. 00 575, 000.00 2, 925, 940. 00 42, 500. 00 2,406, 740. 00 30. 000. 00 150,000.00 1,555,340.00 485, 000. 00 6, 563, 000. 00 300, 000. 00 444, 633. 00 1, 296, 070. 00 10,000.00 582,100. 00 7,148, 895. 00 77, 225. 00 155, 000.00 539, 982. 00 224,900. 00 908, 000. 00 407,105. 00 100,000. 00 659,000. 00 2, 251, 300. 00 70, 000. 00 1,541,813.00 314, 049.00 53, 632, 259.00 Liabilities. Dividends paid. $634, 265.17 47, 889. 00 19, 764, 350. 00 3,212,218.12 6,549,391.00 119,969.25 725,413.08 1, 357, 074. 00 255,161. 90 23, 346, 830. 73 2, 346, 928.49 2, 640, 214.16 1 919,681.14 4, 575. 681.69 585, 351. 66 1, 460, 939. 00 59, 928. 00 10,681,994.99 1,954,338.73 7, 555, 474. 62 966, 000. 00 8 100,911.67 170, 924. 23 6, 259,172.15 259, 861. 00 4, 843, 072. 20 2,371.208.83 1, 171,714.96 46,167,165.40 1, 307, 786. 00 1,139,058.00 4,703 949.29 27, 732. 83 3, 671, 920. 69 15,992,361.47 2, 832, 742. 66 $223,197. 70 35, 389. 00 15,998,267.00 2,311,136.74 6,456, 528. 00 229,112.81 610,164.18 2,568, 714. 52 483, 576. 22 25,821, 825. 77 2, 930, 450. 05 7,418,540.75 1,449, 064. 49 3,143,708.63 353,482. 76 1,376,014.00 59, 928.00 10, 459, 630. 09 1, 339, 714. 68 5, 792, 294. 32 801 000. 00 7, 040, 659. 90 125, 562.54 4, 002,308. 74 234. 861. 00 4, 807, 508. 62 2,109,274.46 1, 097, 438.00 40, 526, 572,11 1,276,415.00 570, 944.00 13, 746, 531. 23 68,129 54 3, 062, 730. 30 28,671,527.64 3, 733, 448.47 1, 466,263.65 1, 555,723.27 3,347 454.39 900, 202. 91 763, 173. 36 2, 008,821. 93 4, 484,206.47 125, 000.00 8, 699,179.16 1,183. 489.33 1,140,814.57 . 1,419, 871. 53 2, 597, 574.17 606, 702. 97 657, 608. 62 1, 733, 330. 23 2, 761,440. 32 120, 000.00 7, 963, 527.08 793,467. 52 251,844.49 412, 917. 66 1, 345, 636. 75 114,445.07 383, 321.49 360, 744. 60 221,573. 81 19,400.00 1, 920,821. 80 242, 839.80 214, 312,190. 58 220, 629,988. 27 100, 088, 726.95 $60, 841. 65 9, 382,517.56 598, 940.79 3, 926,751.83 119, 138. 65 169, 791.00 907, 295. 36 75, 180. 00 10, 099,813.25 1, 305,061.54" 1,527 737. 72 4J8, 318.63 1,629, 808.30 72. 803 53 1, 038,306. 33 29, 964. 00 7,781, 886. 40 558, 946. 30 1.257 831. 36 161 980. 00 2, 666.280. 95 58! 002. 59 599, 021. 85 2, 676, 639.43 1, 700, 573.16 453, 420. 87 24, 460, 470. 34 357, 396. 20 62, 635. 35 5, 001, 060.15 22, 006. 04 1, 502, 168. 08 11, 800, 028.67 2, 293, 563.60 PERCENTAGE OF DIVIDENDS PAID BY STATE BANKS. The reports of insolvent State banks show that 158 banks x>aid dividends to creditors of 100 per cent; 128 paid 75 per cent and over, but less than 100 per cent; 184 paid 50 per cent and over, but less than 75 per cent; 203 paid 25 per cent and over, but less than 50 per cent, and 192 made payment of less than 25 per cent. REPORT OF THE COMPTROLLER OF THE CURRENCY. 55 Herewith is given a tabulated statement of all of such banks, and their location by States: NUMBER OF FAILED BANKS IN EACH STATE AND TERRITORY WHICH PAID DIVIDENDS AT THE RATES INDICATED. States and Territories Alabama Arizona Arkansas . . . California . -. Colorado Connecticut. Delaware Florida. Georgia Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts .. Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire. New Jersey New Mexico New York North Carolina.. North Dakota . . . Ohio Oklahoma Oregon Pennsylvania — Rhode'lsland South Carolina .. South Dakota . . . Tennessee Texas Utah , Vermont Virginia Washington "West Virginia... "Wisconsin Wyoming . . . . I 75 and 50 and ! 25 and 100 per j less than less than less than j;Less than cent, ! 100 per 75 per j 50 per cent. cent. 2 x ) 27 : 15 6 ' 5 2 jl! 10 •)•> 10 9 5 6 1 i g 1 10 1 3 1 1 27 5 6 8 2 1 1 2 4 2 17 13 3 3 i 14 l ! 14 2 22 1 1 32 1 1 7 1 30 1 i 4 3 1 3 2 Total. 158 j 128 203 192 STATE BANKS PAYING NO DIVIDENDS. In the States and Territories regarding which information concerning failed banks was received, 282 associations, with an aggregate capital stock of $12,067,869, assets amounting to $30,698,307, and liabilities aggregating $26,351,087, are reported as having paid no dividends to creditors. Of these associations one is reported in Alabama, amount of capital, assets, and liabilities not being given; Arizona, one, capital $50,000, assets $81,033, liabilities $32,405; Arkansas, one, capital $12,500, assets $47,889, liabilities $35,389; California, three, capital $159,600, assets $513,548, liabilities $266,969; Colorado, nine, capital $240,000, assets $812,888, liabilities $608,264; Connecticut, two, captial $51,600, assets $81,799, liabilities $29,599; Florida, four, 56 REPORT OF THE COMPTROLLER OF THE CURRENCY. capital $41,500, assets $17,571, liabilities $40/194,- Georgia, three, capital $400,000, assets $1,041,161, liabilities $725,895; Idaho, three, capital $50,000, assets $126,678, liabilities $280,527; Illinois, twentyfive, capital $991,000, assets $2,138,106, liabilities $2,480,779; Indiana, nine, capital $310,000, assets $290,992, liabilities $403,759; Iowa, nine, capital $170,000, assets $641,112, liabilities $961,322; Kansas, seven, capital $105,000, assets $276,090, liabilities $273,686; Kentucky, five, capital $545,000, assets $1,180,466, liabilities $863,461; Louisiana, two, capital $283,000, assets $72,346, liabilities $65,000; Michigan, two, capital $251,000, assets $641,067, liabilities $247,184; Minnesota, ten, capital $1,188,000, assets $2,693,551, liabilities $1,920,281; Mississippi, one, no information regarding capital, assets, and liabilities; Missouri, twelve, capital $102,500, assets $1,259,224, liabilities, $1,183,027; Nebraska, fifty-seven, capital $1,427,740, assets $3,965,655, liabilities $2,541,458; Nevada, two, capital $30,000, assets $259,435, liabilities $234,861; New Mexico, three, capital $15,000, assets $5,000, liabilities $117,000; New York, twelve, capital $1,305,000, assets $4,586,431, liabilities $3,220,963; North Dakota, ten, capital $432,133, assets $1,030,334, liabilities $503,259; Ohio, twenty-one, capital $275,565, assets $552,656; liabilities $1,688,752; Oklahoma, two, capital not given, assets $2,000, liabilities $18,500; Oregon, lour, capital $50,000, assets $34,500, liabilities $146,200; Pennsylvania, nineteen, capital $600,000, assets $170,950, liabilities $1,472,092; South Carolina, two, capital $35,000, assets and liabilities not given; South Dakota, ten, capital $142,000, assets $248,060, liabilities $272,921; Tennessee, one, capital $30,000, assets $50,000, liabilities $20,000; Texas, one, capital $5,000, assets $43,848, liabilities $27,782; Utah, three, capital $210,000, assets $485,710, liabilities $375,257; Virginia, three, capital $504,000, assets $1,355,000,liabilities $949,000; Washington,twentytwo, capital $1,491,300, assets $3,479,287, liabilities $2,215,641, and Wisconsin, eleven, with capital stock of $564,431, assets $2,513,920, and liabilities $2,129,660. INSOLVENT STATE BANKS HAVING NO CAPITAL STOCK. In the States of California, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa,- Kansas, Maine, Maryland, Minnesota, Montana, New Jersey, New York, Oregon, Pennsylvania, Ehode Island, South Dakota, Tennessee, Texas, Vermont, Virginia, Washington, Wisconsin, and Oklahoma Territory there are 233 insolvent banks reported as having no capital stock. Their total nominal assets are given as $33,458,225 and their aggregate liabilities, $53,742,095. The reports from Massachusetts, New Hampshire, and Ohio did not give the capital stock of the various insolvent associations in those States. TIME REQUIRED TO CLOSE INSOLVENT STATE BANKS. An effort has been made to ascertain from the information at hand the average time required to close the affairs of these insolvent associations, with the following results: The longest time the affairs of any insolvent association was open is reported as twenty-four years. There is one association reported as continuing twenty-two years; two for twenty-one years; two for eighteen years; three for seventeen years; one for sixteen years; one for fifteen years; two for fourteen years; four REPORT OF THE COMPTROLLER OF THE CURRENCY. 57 for thirteen years; ten for twelve years; thirteen for eleven years; four for ten years; fifteen for nine years; eleven for eight years; seventeen for seven years; fourteen for six years; twenty-six for five years; twenty-eight for four years; and forty-six for three years. The average time required to close the affairs of 353 of the 1,234 failed banks was four and three-fourths years. The affairs of the remaining 881 banks are either still unsettled, or, if settled, the reports do not so state. RESULT OF INVESTIGATION ON EXTENT OF THE USE OF CREDIT INSTRUMENTS IN DAILY PAYMENTS. From time to time there have been carried on through the office of the Comptroller of the Currency investigations tending to make more complete the information afforded Congress and the public on the extent to which the use of instruments of credit enter into the settlement of wholesale and retail transactions in daily life. The importance of these investigations has been augmented by the growing demand for such legislation upon the subject of banking as will give to the country a bank-note issue adequate to meet the needs of the business world, absolutely sound, and so regulated as to make it continually and automatically responsive at any and all seasons of the year and under all conditions of trade and commerce. It can not be expected that such bank or other currency system can be evolved without the legislative branch of the government and others who have to deal with it having complete knowledge of the matters which most affect and enter into the making of transfers of property from seller to buyer. It was with this end in view that the investigation, the result of which is herewith given, was undertaken. The hope at the outset was that it would be more exhaustive in its scope than any previous one, and it is believed in many respects the results gathered justify the expectation had when the investigation was entered upon. In the tabulation and analysis of these returns the services of David Kinley, Ph. D., professor of political economy at the University of Illinois, have been largely availed of. He has had as an assistant Mr. N. A. Weston, a member of the faculty of the same university. The facts obtained being so thorough in character, it was desired to present them, together with the deductions to be drawn therefrom, in a manner equally complete and accurate. Professor Kinley, having aided in elaborating the results of the investigation of 1894 and being fully conversant with the whole subject and the manner of dealing with the statistics gathered, was therefore again called upon. IMPORTANCE OF THE INQUIRY. The important bearing of bank notes upon the transactions of the commercial world is emphasized by the constant attempt made to regulate their issue by legislation. In the first instance, to the largest degree, such desired legislative control arose from a pronounced hostility toward the bank note on the part of the lawmaking powers and the public. The greater the misinformation upon the subject the greater the hostility evidenced against bank-note currency. Fifty years ago among every class of people were found large numbers who looked upon the notes of a bank as a tool which the banks could and generally did use contrary to the public welfare. It was also believed that their issue was the most important business of the bank. 58 REPORT OF THE COMPTROLLER OF THE CURRENCY. These ideas are by no means extinct to-day. It was in consequence of holding to this belief concerning bank notes that legislation at that time was so largely directed in this and other countries toward efforts to control the banks in their powers to issue them. The course of banking, however, notwithstanding the attempt to thus control it by legislation, has developed upon entirely different lines, and the feature of modern-day banking in the United States and England is the deposit and not the note issue feature. The note issuing function is but the incident and not the principle in its operations. The check, and not the note, is the symbol of banking progress, and its extensive use is the best proof of a high plane of industrial and commercial life. The check system is therefore a subject of interest and importance in our business world—of so much interest and so much importance that knowledge of the extent and influence of it is necessary to a proper understanding of the machinery of exchange. The fact that it has been a matter of inquiry on many different occasions is evidence of the value attached to any data that can be secured concerning it. It is a matter of scientific interest as giving a clearer idea of exchange in modern communities, and of practical importance because of its bearing upon the question of the determination of the volume of money needed under given social and economic conditions. The quantity of money necessary to a country to transact its business and the possibility of determining this quantity have long been subjects of discussion and investigation, though not a few writers have taken the position that both are questions of little importance. If it be true that the quantity of money has an important part in determining the level of prices, obviously the monetary policy of the country would be clearer if it were possible to determine the quantity of money needed under existing conditions. It is believed, however, that the importance of this level of prices through long periods has been greatly overestimated. So, too, in some quarters? it is evident that the influence of the quantity of money on prices has been equally exaggerated, while in others that influence has been belittled. Correspondingly, too much or too little importance has been attached to the use of credit instruments* in payments, by one authority or another, according as he was influenced by his previous theory. In the Report of the Comptroller of the Currency for 1892, Volume I, page 32, the following statement appears: Over 90 per cent of all business transactions are done by means of credit. When the public loses confidence and credit is impaired and refused over 90 per cent of the business transacted is directly affected. It is easy to realize how unprofitable it is for the remaining 10 per cent of money to carry on the business of the country without business stringency and financial distress. Similar or different views have been expressed by students of monetary problems in this country and abroad, all tending to show from the conflicting opinions entertained that any facts which can be obtained upon the subject must be regarded of great value. PRICES AND QUANTITY OF MONEY. The relation between the quantity of money and prices can not be here discussed, but certainly the factors which determine the price level are numerous, and the amount of money which 'the country requires depends not on one but on many circumstances. A careful study, *In this connection the term " credit instrument" is used as a convenient term for all classes of bank paper that are used in making payments and are not commonly Digitized forcalled FRASER money. REPORT OF THE COMPTROLLER OF THE CURRENCY. 59 however, of the amount of the country's trade, the number and frequency of payments to be made, the commercial and domestic habits of the people, and other factors enumerated by economic writers, show that they may be reduced to three or four groups, or that there are two or three so important as to exert a determining influence upon the leveling of prices. Of these the extent of credit operations and the use of credit instruments in exchanges occupy no unimportant position. Without undertaking to formulate a relation between the quantity of money and prices, and therefore between the extent of credit instruments and prices, it is proper to assume tbat a relation does exist. On that assumption it is designed that the present investigation shall furnish some information concerning the character and influence of one of these factors. The problem is so exceedingly complex as to render it difficult to arrive at conclusions of absolute accuracy, but the difficulty of the inquiry only makes it more necessary that it should be investigated. It is undoubtedly true that there is no known way of directly determining the quantity of money necessary in a country at any given time, nor is it certain that there is any indirect method available. It is, however, not unreasonable to assume that so far as actual payments are concerned the quantity of money and the quantity of credit instruments are complementary, allowing for velocity of circulation, and that if the latter can be determined approximately and approximate data of the total trade of the country can also be secured, some information will be obtained, although, possibly, it may be slight, upon the subject PREVIOUS INVESTIGATIONS MADE OF SUBSTITUTES FOR MONEY. It will be interesting and proper in this connection to review briefly the history of previous attempts to determine the amount of credit instruments used in business. The first information of importance published on this subject was that furnished in a report of the committee of the House of Commons on the crisis of 1857. That report contains an analysis of the operations of the banking house of Mr. Slater for 1856, in which he gives the following table,* showing the proportion in which each million of receipts and expenditures were made in money and the various forms of credit: RECEIPTS. In bankers' drafts and mercantile bills payable after date Checks payable on demand Country bankers7 notes Bank of England notes Gold Silver and copper Post-office orders £533, 596 357, 715 9, 627 68, 554 28,089 1,486 933 £900,938 99,062 Total 1,000,000 PAYMENTS. By bills of exchange Checks on London bankers Bank of England notes Gold Silver and copper Total 302,674 663, 672 „ 966,346 22, 743 9,427 1, 484 33,654 1,000,000 * The table is taken from McLeod's Theory and Practice of Banking. 60 REPORT OF THE COMPTROLLER OF THE CURRENCY. This table shows that in the operations of this banking house gold and silver entered to an extent of less than 3 per cent, Bank of England notes to 7 per cent, credit instruments 90 per cent. Of the payments, gold and silver formed 1 per cent, bank notes 2 per cent, credit instruments 97 per cent. The next data of importance on the subject given to the public were furnished by Sir John Lubbock in his article u Country clearing," published in the Journal of the London Statistical Society, September, 1865. The account, as follows, is taken from the report of the Comptroller of the Currency for 1881: Pounds sterling. Clearing .. . . Checks and bills which did not pass through the clearing house Bank notes Coin Country notes Total .... Per cent. 16, 346, 000 5, 394, 000 1,137, 000 139,000 79, 000 23, 095, 000 70.8 23.4 4.9 .6 .3 100 It would appear from this that out of £1,000,000 rather more than £700,000 passes through the clearing house. The second account given above, £5,394,000, includes, of course, the transfers made in our own books from the account of one customer to that of another. These amount to £3,603,000, the remainder, £1,791,000, representing the checks and bills on bankers which did not clear. In order to ascertain the proportion of payments made in bank notes and coin in town, I have taken the amount, £17,000,000, paid in by our London customers. This was made up as follows: Pounds sterPer cent. ling. Checks and bills on clear in bankers Checks and bills on ourselves Checks and bills on other bankers .. Bank of England notes Country bank notes Coin 13, 000,000 1, 600, 000 1,400, 000 674,470 9,570 117,960 Total 16, 802, 000 77.4 9.5 8.3 4. .1 .7 100 The above amount of bank notes, small as it is, must, I think, be still further reduced. All the clearing bankers have accounts at the Bank of England, and as we require notes to supply our till, we draw them from the Bank of England, crediting the bank in our books. Out of the above amount of £674,470, £266,000 were notes drawn by us from the bank to replenish our till, and did not represent the amount paid in by our customers to their credit. On the other hand, we must add the amount of notes paid in for collection, and deduct the loans on security which pass through the different set of books, and which represent the sum of £2,460,686. Making these alterations, we find that out of £19,000,000 credit to our town customers, £408,000 consisted of bank notes, £79,000 of country bank notes, and £118,000 of coin. Pounds sterling. Checks and bills Bank notes Country notes Coin Total 18, 395, 000 408, 000 79, 000 118, 000 . . . . 19, 000,000 Per cent. 96.8 2.2 .4 .6 100 REPORT OF THE COMPTROLLER OF THE CURRENCY. 61 It lias been objected that Sir John Lubbock's statistics do not fairly represent the proportion of payments made in England with ready money, on the ground that his bank did not afford accurate indications of the character of the commercial transactions of all England. The objection, it would seem, is well founded. Certainly the returns did not furnish a sufficient basis for safe conclusions. Among the returns obtained in the present investigation was a statement from a Chicago banking house of its total transactions for the first six months of 1896, which showed that only twenty-two one-hundredths of 1 per cent of the whole six months' business was in "currency." It would hardly be fair to conclude that the business of all similar houses was performed on an equally small basis of money. Indeed, in -no case among the returns of the present investigation is there a similar instance. The next data on this subject were gathered in this country by the Treasury Department at the request of President Garfield, then in the House of Representatives. In his speech on resumption, November 1(>, 1877, he stated that when he was chairman of the Committee on Banking and Currency in 1871 he requested the Comptroller of the Currency to secure for him data on the subject from 52 selected banks. He goes on to say: I selected three groups; the first was the city banks, the second consisted of banks in cities of the size of Toledo and Dayton in the State of Ohio. In the third group, if I may coin a word, I selected the "countriest" banks, the smallest that could be found, at points away from railroads and telegraphs. The order was that those banks should analyze all their receipts for six consecutive days, putting into one list all that can be called cash—either coin, greenbacks, bank notes, or coupons—and into the other list all drafts, checks, or commercial bills. What was the result1? During those six days $157,000,000 were received over the counters of the 52 banks, and of that amount $19,370,000—12 per cent only—was in cash, and 88 per cent, that vast amount representing every grade of business, was in checks, drafts, and commercial bills. Following this effort to secure data on the subject was the one made by the Comptroller of the Currency in 1881. On two dates, June 30 and September 17 of that year, he asked the national banks for classified returns of their receipts and payments. As shown by the tables incorporated in this report, returns were received in June from 1,966 of the 2,106 national banks in operation, and for September 17 returns were received from 2,132, being all the national banks in operation at that date. It will be seen by the tables that the gold coin in the returns on the first date amounted to sixty-live hundredths of 1 per cent of the total receipts, and the silver coin to sixteen one hundredths of 1 per cent; the paper money was 4.6 per cent and checks and drafts were 91.77 per cent. The Comptroller gives 95.13 per cent as the total percentage of credit instruments used for payments, according to these returns. In this, however, he includes clearing-house certificates. The same thing was done in subsequent reports in 1890 and 1892. Inasmuch, however, as these clearing-house certificates are really certificates of deposit of currency, they can not be properly classed with checks and drafts. They should therefore be left out in figuring the total percentage of credit instruments. On September 17 of the same year gold coin formed 1.38 per cent of the receipts of the national banks; silver coin, seventeen hundredths of 1 per cent; paper, 4.36 per cent; checks and drafts, 91.85 per cent. The Comptroller includes clearing-house certificates again, and so makes the total per cent of credit instruments 94.09. Other totals may be gathered from the tables, which are inserted in the reportfor the purpose of comparison. 62 REPORT OF THE COMPTROLLER OF THE CURRENCY. TABLE I.—ANALYSIS OF NATIONAL-BANK RECEIPTS, JUNE 30 AND SEPTEMBER 17,1881. June 30—1,966 banks. Items. Checks, drafts, and bills .. Clearing-house certificates Paper money Gold coin Silver coin Total Amount. $261, 271, 666 9, 582,500 11, 554, 747 1, 864,105 440,998 284, 714, 016 Percent 91.77 3.36 4.06 .65 .16 100 Sept. 17—2,132 banks. Amount. $271,036,525 6, 592, 337 13, 026, 570 4, 078, 044 500,301 295, 233, 779 Per cent, 91.85 2.24 4.36 1.38 .17 100 In his report for 1881 the Comptroller also discusses the use of checks in France, England, Scotland, and Ireland. In France, as is well known, "the use of deposits, bank accounts, and checks is still in its infancy.'7 In the past ten years, however, their use has doubtless increased. The Bank of France for several years made an effort to persuade the public to use them to a larger extent, and offered advantages to those who kept current accounts, in the shape of better facilities for " transfer from one place to another free of cost for all sums proceeding from discount operations or the encashment of documents on demand. We have desired to proceed further with this plan, and we have just completed the first arrangement by giving to all those who had current accounts with us, without exception, a means of disposing by oj3en checks of the whole of the sums which stand to their credit. These checks * * * will be delivered gratuitously when they are drawn against the proceeds or discounts of drafts on demand encashed by the bank, and they will be made payable in all our establishments indifferently."* In England banking has reached a high stage of development, and the percentage of credit instruments used in transactions in that country probably runs as high as it does in our own. The London Banker's Magazine for November, 1881, gives data from which the Comptroller of the Currency in that year reported that the percentage of checks in the receipts of London banks averaged 97.23, in the banks of Edinburg 86.78, in the banks of Dublin 89.90, and in the country banks, in 261 places, 72.86. In the same report of the Comptroller is given a table showing the percentage of bank notes, coin, and checks used in the transactions ot several English banking houses. In one case 90 per cent of the total receipts consisted of bills and checks, and 97 per cent of the payments were of the same character. Two banks of Manchester showed 47 per cent, 58 per cent, and 68 per cent of total payments in credit instruments in the years 1859,1864, and 1872, respectively. In still another case, the transactions of an English banking house for six working days in each month for a period of seven months in 1878 and 1879 showed 96.5 per cent of the total receipts in credit instruments and 96.9 per cent of the total payments in paper of the same character. The foreign data, however, are small and insignificant when compared with those which have been obtained from investigations in this country. The subject was investigated again in 1890 and 1892. In the former year, on July 1, checks, drafts, etc., constituted 91.46 per cent of the total receipts of 3,364 banks. In September the percentage for 3,474 * Report of the Bank of France for 1880, as quoted in report of the Comptroller for 1881. 63 REPORT OF THE COMPTROLLER OF THE CURRENCY. banks was 90.3. Tables II and III show the details. If clearinghouse certificates are included, the per cents are 92,5 and 91.04 for 1890 and 90.61 for 1892. TABLE II.—ANALYSIS OP NATIONAL-BANK RECEIPTS, JULY 1 AND SEPTEMBER 17, 1890. July 1—3,364 banks. Items. Amount. Checks, drafts, etc Exchanges for clearing house Miscellaneous , Per cent. $189,408,708 194, 290, 203 2,138, 022 Gold coin Silver coin Gold Treasury certificates... Silver Treasury certificates.. Legal-tender notes National-bank notes Legal tender certificates Clearing-houso certificates... 421, 824, 726 Amount. Per cent. 51.58 $168, 803, 756 126, 596. 873 135, 562 726, 605 352, 647 427, 973 442, 638 881,786 244, 967 520, 000 391,177 Total Sept. 17.-3,474 banks. 3, 702, 1, 399, 6,159, 5,908, 7,665, 4, 371, 105, 2, 428, 100 .04 90.30 1.13 .43 1.88 1.81 2.34 1.34 .03 .74 772 991 305 714 666 778 000 834 100 327, 278, 251 TABLE III.—ANALYSIS OF NATIONAL-BANK RECEIPTS, SEPTEMBER 15, 1892. [3,473 banks.] Items. Checks, drafts, etc Exchange for clearing houses. Miscellaneous Gold coin Silver coin Gold Treasury certificates... Silver Treasury certificates. Legal-tender notes Treasury notes National-bank notes Legal tender certificates Clearing-house certificates.. Total . Amount, j Per cent. $154, 959, 059 141, 873, 266 586, 367 46.79 42.83 .18 2,907,017 1, 372, 054 3, 407, 340 6, 537, 015 8, 531, 514 2, 675, 269 3,451,483 2,210,000 2. 691, 829 89.80 .88 .41 1.03 1.97 2.58 .81 1.04 .67 .81 331,205,213 100 The Comptroller notes as a conspicuous change the increase in the percentage of credit instruments returned by country banks from 14.11 per cent in June, 1881, to 25.28 per cent in September, 1892. He summarizes the results as follows: The variations in the percentage of the different kinds of money, checks, drafts received, as shown in the statistics for September 15, 1892, do not essentially vary from those of 1890 and 1891. The percentage 'hows a decrease for each of the three years reported and a corresponding increase in the amount of cash received by the banks over their counters. A study of the results of the investigations thus far discussed shows that although they are very valuable as throwing light on the extent to which the credit instruments enter into payments for all classes of transactions, they are not satisfactory as a means of determining the percentage of such paper used in the actual trade of the country. In the first place, the figures obtained show the total receipts of the banks. The receipts of a bank during a given day may be very different 64 REPORT OF THE COMPTROLLER OF THE CURRENCY. from its deposits, inasmuch as the receipts will usually include bills for collection, checks presented for cashing, notes discounted, and various other items which go to swell the total per cent of credit paper. In the second place, the results received furnish no satisfactory means of distinguishing between the credit paper that passed in consequence of speculative transactions and that which represents real trade. Still further, no measures were taken to have the returns classified on the basis of the different classes of business. And, finally, no investigation was made into incidental influences affecting the use of checks. In consequence of these and other defects, the inquiry of 1894 was instituted. This investigation was confined entirely to retail trade. It called for the deposits received by the national banks from certain classes of retail traders instead of for the total receipts of the banks. The banks were requested to specify the amount of each of the different kinds of money and the amount of checks and other instruments of credit in the deposits of retail grocers, butchers, clothiers, furniture dealers, and fuel dealers. The day selected for securing the data was the settling day nearest the 30th of June. These five classes of retail dealers were selected for the reason that the purchase of their products represents the principal part of the expenses of living of the people at large. Hence, any data received concerning the mode of payment in transactions of this kind it was thought would be valuable as showing the extent to which credit paper actually was used in trade payments. a Settling day" was selected on the supposition that the returns on such a day would be more likely than any other to show the normal volume of trade and the normal volume of checks deposited. Information was also sought concerning the length of period of credit in retail trade; the length of the wages period; the method of payment of wages, whether by checks or in money, and the extent to which wage checks are cashed by merchants. The purpose of this last was to secure some information whereby correction could be made for the deposit by merchants of pay checks which they had simply cashed instead of receiving in payment for goods. The results of the investigation are given in the general comparative table presented in the present report (table No. XVI).* It appeared from the returns that about 58 per cent of the deposits of the traders concerned was in checks and other instruments of credit, and that from the investigation 50 per cent is a fair average for the amount of credit paper entering into the transactions of the dealers reporting on the date mentioned. The investigation of 1894, too, was unsatisfactory, for several reasons. In the first place, returns were asked for only a part of retail trade, expenditures in which constitute about 67 per cent of the total expenses of an average family. In the second, the returns came from the national banks only, and in this respect were defective, like all previous reports. Still further, there were no figures in existence to permit a comparison to be made with those obtained. And, finally, the reports were for but one day. For this last reason it was thought they were liable to serious error, because the deposits made by the traders on the day in question probably represented sales made throughout the period of credit common to their community, while the money deposits probably did not include payments for all the cash sales made during that period * The data received in 1894 have been gone over again since the publication of the Comptroller's report and certain corrections made. These appear in this table. The general average is only slightly changed. KEPOKT OF THE COMPTROLLER OF THE CURRENCY. 65 Some effort lias been made in the present investigation to meet this difficulty. As a result of these obvious difficulties it seemed best to make another investigation on a much larger scale and with more careful attention to the form of the returns. It was desirable to secure comparative data to test the figures previously obtained, and to take advantage of previous experience in order to eliminate sources of error. These sources of error, as has been noted, came principally from the paucity of the returns, the small industrial field covered by them, and the nonclassification of depositors. THE PRESENT INQUIRY. In pursuance of these ideas a circular was sent out asking for the necessary information, in the following form: TREASURY DEPARTMENT, OFFICE OF THE COMPTROLLER OF THE CURRENCY, Washington, D. C, June 15, 1896. The CASHIER Bank, SIR: In 1894, in response to the special request issued by the Comptroller of the Currency, the national banks made reports to this office showing the extent of the use of credit instruments in retail transactions by their customers, the results being shown in the annual report issued from this Bureau in that year. It is now desired for purposes of comparison, and also to increase the fund of information relative to the use of credit instruments, to extend the scope of inquiry to cover not only retail but wholesale transactions, and as well transactions of other depositors in all bank3. With this end in view, I inclose herewith a blank form on which you are requested to state, as of the "settling day" in your community nearest to July 1, the amount and character of deposits made in your bank on the day selected by (1) retail dealers, (2) wholesale dealers, and (3) all other depositors. Your attention is also called to the three inquiries following the statement of deposits with respect to "proportion of checks/7 etc., "payment of wages by checks/' and "time of payment of wages." Information is also desired respecting the number of your depositors, total deposits in bank, and all actual cash on hand, classified as indicated, at the close of business on the day selected for this and the statement above called for. In order to make the investigation as complete as possible, this request has been sent to every banking institution in the United States—national, State, savings, and private banks, and trust companies. These statistics will be of sufficient value, itis believed, to warrant urging upon you to aid in making them thoroughly complete. In making a request for returns from those who are not conducting banks under the national-bank act, it is hoped the responses will be as general and complete as from those who are connected officially with this office. Such courtesy will be greatly appreciated, and the assurance is given that the publication of the information submitted will be confined entirely to a general summary of the returns. The subject is of wide and general interest and will give an amount of statistical information that will be of benefit to the public. As the compilation of these returns will involve considerable time and labor, I trust that you will transmit your report to me as promptly as possible after July 1. Very respectfully, JAMES H. ECKELS, Comptroller. BANK, , July —, 1896. The COMPTROLLER OF THE CURRENCY, Washington, D. C. SIR : In compliance with your special request, dated June 15,1896,1 append hereto statements showing (A) the amount and character of deposits made in this bank on July —, (1) by retail dealers, (2) by wholesale dealers, and (3) by all other depositors; and (B) number of depositors, total amount of deposits, and cash on hand, classified as indicated. CUR 96, PT 1 5 66 REPORT OF THE COMPTROLLER OP THE CURRENCY. (A) Deposits made in this bank on July —, 1896, j Depositors. Deposits. Checks, Paper Gold coin. Silver coin. currency. drafts, orders, etc. Total. [Retail dealers Wholesale dealers All other depositors Total Q. 1. Does the above statement show about the usual proportion of checks, drafts, etc., to total deposits? If not, please indicate how much it differs therefrom. A. 1. . Q. 2. Is it customary in your community to pay wages by checks? A. 2. . Q. 3. Are wages, as a rule, paid weekly or monthly in your community? A. 3. . (B) Total number of depositors, amount of individual deposits, and cash on hand in this bank on July —, classified as indicated. Number of depositors Total deposits Cash on hand, viz: Gold coin Gold certificates Silver, dollars Silver, fractional Silver certificates Treasury notes, 1890 United States notes Currency certificates National-bank notes $ , Total cash Respectfully yours, , Cashier. Bank, It is to be noted that the circular called for deposits, not receipts. Obviously the deposits would be less in volume, as has already been stated, than the receipts, but they would represent more accurately the real business transactions of the country. The circular, it will further be noticed, called also for a classification of depositors into " retail dealers,'3 "wholesale dealers," and "all others," together with the usual classification of the deposits. The date selected was the settlement day nearest the 1st of July. A settlement day was selected for reasons already given. Midsummer was chosen merely as a matter of convenience. Further, the circular asked for certain incidental information. It asked whether the percentage returned was an average one, whether wages were usually paid by checks in the community, and what was the length of the wage period. Information on the two latter points is of considerable value in determining whether or not the percentage of checks returned in any given community is due, to a large extent, to these special causes. REPORT OF THE COMPTROLLER OF THE CURRENCY. 67 Those who are familiar with statistical investigations need not be told that it is quite impossible to prepare a form so phrased as to preclude the likelihood of misinterpretation, or to secure information so accurate as to cover all possible variations in the conditions that it seeks to investigate. It almost seems as if common words were turned into stumbling blocks by the mere fact of being used in a formal way. It is exceedingly difficult to get uniform interpretation of even very simple questions and terms. The present investigation is no exception to this experience. In interpreting the results obtained we must allow for errors due to various causes of this kind. In the first place, it is difficult in some cases to draw the line between retail merchants and wholesale merchants. Where, for example, some asked, Shall we class the jobber, or the lumber merchant % The answer depends upon the community, the extent of the business, and the point of view. Ordinarily the retail merchant is regarded as one who sells directly to consumers; yet there are many dealers who sell both to consumers and to jobbers. One or two Boston banks were unable to classify the returns of some merchants in Faneuil Hall market for this very reason. Again, in a bank with a very large number of depositors, many of them are personally unknown to the officers of the bank. In such a case a proper classification can not be made. The best that could be done under these circumstances was for the bank to return the statistics of deposits of all who were known to be retail dealers. This was done in some cases. The omissions, however, such as they were, can have no effect of any importance on the average results, for the dealers included were, in all likelihood, representative. Moreover, there can not have been many omissions, for the difficulty arose only in a few of the larger cities. In the next place, the returns, although more complete than any ever before obtained, are, after all, partial. Of the nearly 13,000 banking institutions of all kinds in the country, 5,700 sent replies, of which 5,530 were available. Of these 3,474 were from national banks and the remainder State and private banks, savings banks, and loan and trust companies. However, allowance can probably be made for any error due to the partial character of the returns. The results as obtained are tabulated hereinafter. There are three sets of tables of totals. The first set consists (1) of the deposits of retail dealers returned by the national banks in each State and Territory; (2) those of wholesale traders returned by the same banks; (3) the deposits of all the other depositors returned by the same banks; (4) the total deposits of all three classes of customers as returned by the same banks. The second set of tables contains the data, similarly arranged,returned by banks other than national. The third set of tables, also consisting of four, presents the total deposits of each class of dealers as returned by all the banks that made replies. The returns are presented in this detail for several reasons. First, inasmuch as the returns of the previous investigations came from national banks alone, it is desirable to present by themselves the data now received from them for purposes of comparison. Such a comparison will enable it to be determined how far the allowances made at previous times for omissions now supplied were good. In the next place, the presentation of the tables in so great detail will enable it to be distinguished more clearly the real business transactions from those that are purely speculative; and, finally, it will give some information as to 68 REPORT OF THE COMPTROLLER OF THE CURRENCY, the use of the different classes of banks by the people, and the comparative influence of national and other banks in the business transactions of the country. The tables are as follows: TABLE IV.—RETAIL DEPOSITS OF 3,474 NATIONAL BANKS, JULY 1, 1896. State or Territory. Num ber of replies. Specie. Currency. Checks. Total. Per Per Per cent cent curren cent specie. checks. Alabama Arizona Arkansas California Colorado Connecticut Delaware District of Columbia. Florida Georgia Idaho Illinois Indiana Indian Territory Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana... Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island. South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming 22 5 9 30 40 77 17 12 17 24 10 212 105 8 165 105 67 20 79 67 254 86 72 10 64 34 105 $8,151 2,872 3,601 64, 664 51,398 10, 324 4,610 2,156 10,225 18, 008 4,654 57, 602 26,646 655 32, 811 20,358 9,743 14,131 5,994 12, 749 45.322 17. 868 27,989 2,474 32, 496 16, 787 28, 703 $20, 234 2,891 11, 462 8,315 120, 322 175, 444 23, 512 60, 355 21, 995 27, 409 3,512 412, 084 119, 463 2,637 139, 040 51,929 45, 995 30, 305 88, 070 172,405 668, 468 112, 375 82,958 12, 838 146,026 24, 533 62, 815 $38, 366 17, 306 24, 937 239, 086 538, 628 293,431 46, 784 93,185 51,414 71, 081 12, 061 1, 062, 378 266,037 3,681 285, 663 141, 911 99, 974 100,492 142, 222 256, 573 1,451, 895 245, 598 276, 067 16, 644 818, 836 111, 126 140, 698 $66, 751 23, 069 40, 000 312, 065 710,348 479,199 74, 906 155, 696 83, 634 116, 498 20, 227 1, 532, 064 412,146 6,973 457, 514 214,198 155,712 144, 928 236, 286 441,727 2,165, 685 375,841 387, 014 31, 956 997, 358 152, 446 232, 216 12.2 12.4 9 20.7 7.2 2.2 6.1 1.4 12.2 15.4 23 3.8 6.5 9.4 7 9.5 6.3 9.8 2 5 2.9 2.1 4.7 7 2 7.8 3.3 11 12.4 30.3 12.5 28.7 2.6 16.8 36.6 31.4 38.7 26 3 23.5 17.4 26.9 29 37.8 30.4 24.2 29.5 20.9 37.3 39 30.8 30 21.4 40.1 14.6 16.1 27.1 57.4 75 62.3 76.6 75.8 61.2 62.4 59.8 61 4 61 59.6 69.3 64.5 52.7 62.6 66.2 64.2 69.3 6i.2 58 67 65.3 71.3 52.1 82.1 72.9 60.5 49 320 22 26 236 5 32 398 57 12 29 47 182 9 47 31 39 30 75 10 3,952 19,995 1,950 47,861 8,974 3,633 88, 757 905 30,967 97, 874 3,647 2,920 8,833 14,117 43, 069 7,839 4,160 5,908 37,827 4,670 19, 936 3,542 63, 956 308, 724 3,976 783, 301 22,166 19, 370 445,163 3,628 4,405 833, 983 115,869 6,098 18, 206 45,057 132, 634 2,659 49,945 30,107 22,562 25, 643 94,330 4,350 77, 919 * 567, 212 24, 699 2, 352, 834 49, 757 36, 376 964,419 2,664 53,205 1, 965, 663 130,216 25, 469 59, 589 111, 170 265, 419 22,484 115,913 57,427 77, 877 69, 216 239,464 20, 742 145, 827 895, 931 30, 625 3,183, 996 80, 897 59, 379 1,498, 339 7,197 88, 577 2, 897, 520 249, 732 34, 487 170,344 441,122 32,982 170, 018 93,442 138, 266 99,529 353,730 28, 634 2.7 2.2 6.4 1.5 11.1 6.1 5.9 12.6 34.9 3.4 1.5 8.5 10.2 8.3 9.8 23.8 2.5 6.3 27.3 4.7 5.6 12.4 43.9 34.5 13 24.6 27.4 32.6 29.7 50.4 5 28.8 46.4 17.7 21 26.4 30.1 8 29.4 32.2 16.3 25.8 26.7 15.2 53.4 63.3 80.6 73.8 61.5 61.2 64.3 37 60 67.8 52.1 73.8 68.7 65.2 60.1 68.1 68.1 61.5 56.3 69.5 67.7 72.4 Whole country. 3,474 994,327 5,683, 524 14,135, 808 20, 813, 659 4.8 27.3 67.9 69 REPORT OF THE COMPTROLLER OF THE CURRENCY. TABLE V.—WHOLESALE DEPOSITS OF 3,474 NATIONAL BANKS, JULY 1, 1896. State or Territory. Number of replies Specie. Currency. Checks. Total. Per cent specie. 6,795 3,584 2,217 2, 578 1,896 3,410 9,588 11, 065 6,900 576 13, 304 1,200 3,004 $6, 879 360 4,574 3,167 22,177 35, 681 5,352 20, 649 9,283 19,004 362 193, 496 43,330 110 17,907 8,187 9,766 32,144 19, 780 66, 541 193, 743 35,318 16,942 1,393 54, 490 2,614 5,989 6,265, 381 544, 396 161 293, 924 89, 952 267, 012 480,891 311,853 1, 077, 451 4,241,786 481,518 1, 365,185 28, 526 2, 096, 868 30, 032 160,729 6 320 22 26 236 5 32 398 57 12 29 47 182 9 47 81 39 30 75 10 940 8,001 330 15, 357 3,288 50 21,823 263 2, 418 27, 492 2,045 187 408 4,390 8,695 3,807 288 760 12 416 1, 351 4,263 58 11,889 116, 548 537 480, 011 9,540 2, 380 275,053 1,640 325 332,034 32,740 1,152 1,430 24, 274 19,519 2,040 5,360 4,967 4,464 11,617 30, 743 606 114, 800 821, 809 20, 545 24, 398, 702 63,547 21,398 2,495,142 6,791 58, 676 4, 092, 483 266, 318 28,138 11,441 324,227 324, 646 31, 670 162, 958 73, 407 124, 248 70, 846 675, 588 1,620 127, 629 946, 358 21,412 24, 894, 070 76, 375 23,828 2,792, 018 8,694 61, 419 4,452, 009 301,103 29,477 13. 279 352, 891 352, 860 37,517 168, 606 79,134 141,128 83, 814 710, 594 2, 284 3 3.9 .6 .7 .7 3.1 1.3 2.5 10.2 .2 1 8.8 1.6 .6 2.5 3,474 276, 304 2,198,007 53,976,104 56,450,415 .5 Alabama Arizona Arkansas California Colorado Connecticut Delaware District'of Columbia. Florida Georgia Idaho Illinois Indiana Indian Territory Iowa Kansas Kentucky Louisiana , Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York IS orth Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode I s l a n d South Carolina South D a k o t a Tennessee Texas Utah Vermont Virginia Washington W e s t Virginia Wisconsin Wyoming 22 5 9 30 40 77 17 12 17 24 10 212 105 8 165 105 67 20 79 67 254 86 72 - 10 64 34 105 Whole country $2,720 175 1,535 39, 875 8,719 2,481 241 1,346 2,529 7,327 444 14, 804 9,361 $122, 866 1,205 36, 647 439,167 670, 316 405, 380 87, 249 53, 814 83, 900 142, 015 $132,465 1,740 42,256 482,209 701, 212 443,542 92, 842 75, 809 95,712 168,346 9,686 6,473,681 I 597, 087 271 318, 626 101, 723 278, 995 515,613 333,529 1,147,402 4, 445,117 527,901 1, 389, 027 30, 495 2,164, 662 33, 846 169,722 2.1 10 3.6 8.3 1.2 .6 .3 1.8 2.7 4.3 4.6 .2 1.5 2.2 3.5 .8 .5 .6 .3 .2 2.1 .5 1.9 .6 3.6 1.8 1.5 .6 4.3 Per cent currency. Per cent checks. 5.2 21 10.7 .7 3.2 8 5.8 27.2 9.8 11.3 3.7 3 7.2 | 40.6 5.6 8.1 3.5 6.2 5.9 5.9 4.4 6.7 1.2 4.6 2.6 7.8 3.5 92.7 69 85.6 91 95.5 91.3 93.9 70.9 87.4 84.4 91.6 96.8 91.2 59.4 92.1 88.4 95.6 93.3 93.5 93.8 95.4 91.2 98.3 93.5 96.8 88.6 94.7 9.3 12.3 2.5 1.9 12.5 10 9.8 18.9 .5 7.5 10.9 3.9 10.7 6.9 5.5 5.4 3.2 6.2 3.2 13.8 4.4 26.3 86.8 95.9 97.5 83.2 89.8 89.3 78.1 95.5 91.9 88.4 95.4 86.1 91.7 92 84.4 96. C 92.7 88 84.6 94.9 71.2 95.6 70 REPORT OF THE COMPTROLLER OF THE CURRENCY. TABLE VI.—ALL OTHER DEPOSITS OF 3,474 NATIONAL BANKS, JULY 1,189G. State or Territory. Alabama. Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia. Idaho.. Illinois Indiana Indian Territory . . . Iowa Kansas Kentucky Louisiana Maine — Maryland Massachusetts Michigan Minnesota Mississippi Missouri... Montana Nebraska Nevada New Hampshire New J ersey. New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon . . . Pennsylvania Rhode Island. South Carolina South Dakota Tennessee . . . Texas Utah Vermont Virginia Washington W e s t Virginia, Wisconsin Wyoming Whole country Currency. $7, 598 2, 662 3,227 80, 509 21,408 5.717 1,096 2,445 2,698 9,911 4,116 40, 600 17,510 681 20,317 14, 470 ,405 9,692 2, 088 5,373 20, 760 9,804 18, 763 934 28, 821 15,697 37, 713 $31,367 2,752 5, 750 12, 327 49,809 114,742 9, 732 107, 485 9,520 21.368 2 296 457, 236 121,351 2,383 94. 444 52, 777 50, 655 74,507 67, 638 181. 258 621,939 03,127 105, 866 4,975 136, 010 23,820 95, 600 Per Per cent cent curchecks. rency. Checks. Total. Per cent 9pecie. $196, 601 35,495 76, 744 593, 542 944, 206 1, 493, 346 159,366 361, 155 163. 632 137, 253 34. 325 7, 359, 910 713, 077 18, 838 626, 094 660, 638 442, 320 726,718 656,139 4, 537, 039 17, 703, 447 1, 046, 952 1, 941, 042 75, 047 1, 833,106 293,261 1, 340, 629 $235,566 20, 909 85, 721 686, 378 1, 015, 423 1, 613, 805 170,194 471, 085 175,850 168, 532 40, 737 7, 857, 746 851, 938 21, 902 740, 855 727, 885 501, 380 810, 917 725, 865 4,723, 670 18, 346,146 1,149, 883 2,065,671 80,956 1, 997, 937 332,778 1,473, 942 3.2 12.7 3.7 11.7 2.1 .4 .6 .5 1.5 5.8 10.1 .5 2.1 3.1 2.7 1.9 1.7 1.2 .3 .1 .1 .9 .9 1.2 1.4 4.7 13.3 13.2 6.7 1.8 4.9 7.1 5.7^ 22.8 i 5.4 ! 12.7 5.6 ! 5.8 14,2 10.9 I 12.7 | 10.1 9.2 9.3 3.8 j 3.4 8.1 I 5.1 6.1 6.8 7.2 6.5 83.4 74.1 89.5 86.4 92.9 92.5 93.6 76.6 93 81.4 84.2 93.6 83.7 86 84.5 90.8 88.2 89.6 90.4 96 96.4 91 93.9 92.7 91.7 88.1 90.9 739, 623 3, 562, 510 86, 566 87, 039, 796 147, 007 96, 517 3,868, 577 23, 592 150,181 18, 007, 915 874, 624 72, 770 89, 666 539, 564 596, 674 153, 052 303, 285 510,659 221, 666 176, 399 989, 676 16, 687 794, 938 3, 836, 890 93,235 88, 863, 777 170,667 110, 423 4,348, 224 26, 908 185,060 18, 874, 439 950, 949 81,938 101,790 603, 691 709, 271 165, 811 335, 257 542, 910 262, 395 201,102 1,136, 537 21, 482 .2 .6 2.1 .05 1.5 1.8 1.1 1.5 16.1 .3 .3 2.1 3.8 1.6 4.2 4.2 .4 .8 11.1 1.3 1.2 6.7 6.5 5.1 2 12.4 10.7 9.9 10.8 2.7 4.2 7.6 9 8.1 9 11.6 3.4 9.1 5.1 4.4 10.9 11.7 13.5 93 92.8 92.8 97.9 86.1 87.5 88.9 87.6 81.1 95.4 91.9 88.8 88.1 89.4 84.1 92.3 90.4 94.1 84.4 87.7 87 77.6 3.7 95. J i, 373,103 162,416,928 169,511,365 7.2 ; REPORT OP THE COMPTROLLER OF THE CURRENCY. 71 TABLE VII.—ALL DEPOSITS OF 3,474 NATIONAL BANKS, JULY 1, 1896. State or Territory. Alabama Arizona Arkansas California Colorado * Connecticut Delaware District of Columbia. Florida Georgia Idaho * Illinois Indiana Indian Territory Iowa Kansas * Kentucky Louisiana Maine Maryland* Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska* Nevada New Hampshire New Jersey New Mexico * New York* North Carolina North Dakota * Ohio* Oklahoma Oregon Pennsylvania* Rhode Island South Carolina South Dakota , Tennessee Texas Utah Vermont Virginia* Washington "West Virginia Wisconsin Wyoming Whole country. Num- I her of i Specie, replies. Currency. Checks. Total. Per cent specie. Per cent checks. 5 9 30 40 77 17 12 17 24 10 212 105 8 165 105 67 20 79 67 254 86 72 10 64 34 105 $18, 469 5,709 8,363 185, 048 81. 525 18, 522 5,947 5,947 15,452 35,246 11, 864 113,196 53, 606 1,336 59,923 39, 986 20, 365 32, 001 9,978 22,262 75, 670 38,737 53, 652 3,984 74, 621 33, 684 69, 575 $58,480 6, 003 21, 786 23,809 192, 308 325, 867 38, 596 188, 489 40,798 67,781 6,920 1, 063, 783 285, 713 5,130 251,391 125, 004 106, 416 144, 256 175, 488 439, 429 1, 484,150 240, 820 205, 766 19, 206 336,526 50, 967 164, 989 $434, 782 45, 718 168,477 1, 480, 652 2, 426, 983 2, 536, 546 337, 942 702,590 355,196 453, 376 75, 924 15,880,440 1, 865, 277 29,146 1,516,995 1,102,480 936, 087 1, 484, 358 1, 295, 680 7,135,530 24, 956, 948 2, 053, 625 3,841,712 143, 407 5,159, 957 519, 070 1, 876, 742 4.2 12.5 5 12.5 3.3 .7 18 .9 4.3 7.8 15.6 .7 3 4.6 3.9 3.6 2.2 2.1 .8 .3 .3 1.9 1.4 2.8 1.5 6.5 3.6 13.5 13.1 12.9 1.6 7.9 12.9 11.4 26.8 11.5 14.9 9.1 6.7 15.2 17.6 16.6 11.3 11.4 9.8 13.5 6.2 5.9 11.8 5.4 13.4 6.5 82.3 74.4 82.1 85.9 88,8 86.4 86.8 72.3 84.2 77.3 75.3 92.6 81.8 77.8 79.5 85 86 3 88.1 85.6 93.5 93 8 86 3 93 2 83.8 92 83.7 87.6 49 96 6 320 22 26 236 5 32 398 57 12 29 47 182 9 47 31 39 30 75 10 6,551 52, 677 4,441 107, 542 14,749 6, 207 165,130 1,574 63,129 187, 377 9,110 4,861 13, 080 28, 550 81,722 18, 678 5,723 11, 716 79, 326 8,675 38, 086 5,486 932,342 1,068,394 129, 501 5,679,179 674, 971 4, 951, 531 152, 751 166,972 9,780 3, 065, 325 115, 865, 984 119, 038, 851 327,939 260,311 52, 879 201, 262 35,742 159,313 1,180,379 7, 836, 743 9,182, 252 33, 047 42, 799 8,178 262, 063 335, 047 9,855 1,977, 019 24, 088, 375 26, 252, 771 223, 516 1, 503, 784 1,271,158 145, 902 14, 664 126, 377 27,921 160, 696 201, 697 974,S61 1,126, 926 123,415 1, 503, 253 234, 792 1,186,739 236. 310 10,426 207,206 673, 881 86, 002 582,156 725, 611 64, 418 649, 477 541, 789 423, 791 38, 672 384, 445 316,461 59, 309 2, 200, 861 1, 904, 728 258,047 39, 049 52, 400 7,865 .6 1 2.7 .1 4.5 3.1 1.8 3.7 18.8 .7 .6 3.3 6.4 2.5 5.5 7.9 .9 1.6 14.6 2.3 1.8 10.5 12.2 11.9 5.9 2.6 16.1 17.7 12.9 29.1 3 7.5 14 10.1 13.9 11 15.6 4.4 12.8 8.8 7.2 15.4 11.7 15 87.2 87.1 91.4 97.3 79.3 79.2 85.2 77.2 78.2 91.8 84.5 86.6 79.7 86.5 78.9 87,7 86.3 89.6 78.2 82.3 86.5 74.5 3,474 2,009,058 14, 362, 547 234, 036 360 250, 407, 965 5.7 93.4 * The sum of these totals is larger than the sum of the corresponding columns in Tables 4, 5, and 6, because in some cases only grand totals were returned by the banks. 72 REPORT OF THE COMPTROLLER OF THE CURRENCY. TABLE VIII.—RETAIL DEPOSITS OF 2,056 STATE AND OTHER BANKS, JULY 1, 1896. State or Territory. Alabama Arizona Arkansas California Colorado Connecticut Delaware District of Columbia. Florida Georgia Idaho Illinois Indiana Indian Territory Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri , Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Whole country. Number of Specie. replies. Currency. | Checks. Total. Per Per Per cent cent cent curspecie. rency. checks. $1,450 $1,267 $5, 938 $8, 655 16.8 14.6 68.6 1,117 204,125 1.655 1 002 2,488 7.189 2.481 15, 857 6,975 158, 498 16,289 15,016 30,580 369, 812 20, 425 31, 875 10.5 55.2 8.1 3.1 23.5 1.9 12.2 49.7 65.9 42.8 79.7 47.1 674 1 287 35 9,218 7,580 1,582 3,701 52 64, 965 26, 657 7,850 10, 262 821 186, 344 51, 039 10,106 15, 250 908 260, 527 85, 276 6.7 8.5 3.8 3.5 15.7 24.2 5.7 24.9 31.2 77.6 67.2 90.4 71.5 59.9 169 60 46 9 32 7 106 84 84 7 213 4 159 13, 701 4,385 9,454 2,519 169 2,323 3,873 9.886 16.322 2,166 21 003 2.344 10, 828 49, 999 14, 465 28, 753 3, 824 6,425 11,637 63,712 67, 088 44, 630 1,765 100 313 5", 384 26,753 105, 657 44 849 221, 290 34,951 15, 333 32, 890 54,967 135,865 166,584 6, 235 258, 826 9,039 57, 529 169, 357 63, 699 259,497 41, 294 21,927 46, 850 122, 552 212, 839 227,536 10,166 380,142 16,767 95,110 3.7 6.1 2.9 4.3 3.2 4.8 11.5 18.7 5.6 16.7 11.2 29.5 22.7 11.1 9.3 27.2 25.5 52 31.4 15.3 20 26.3 29.4 28.4 62,5 70.4 85.2 84 6 69.9 70.2 44.8 63.8 73 2 61.3 68.1 53,9 60.4 25 30 3 190 4 18 70 4 11 105 17 2 31 21 11 6 15 17 17 7 97 3 410 868 25 24, 343 889 1,046 11,539 267 2,596 16, 608 30 547 1,824 2,554 2, 336 1,180 282 2,238 8,527 765 13, 312 915 9,419 25, 386 183 494,459 2,825 7,036 70,161 667 321 157, 540 1,141 520 7,262 12,313 5,752 581 6,306 9,770 3,274 3,848 62, 667 40 10,086 55, 668 309 1, 354,166 6,676 11,597 154,727 4, 223 2,153 402,641 915 4,408 9,977 21, 075 23,106 10, 791 20,136 16,635 15,806 7,662 130, 680 419 19. 915 81,922 517 1, 872,968 10,390 19,679 236, 427 5,157 5,070 576,789 2,086 5,475 19,063 35, 942 31,194 12,552 26, 724 28, 643 27,607 12, 275 206, 659 1,374 4.4 1.6 5 1.4 5.8 6.1 5 5.3 51.3 2.8 1.7 10 10.4 7.8 6.6 9.7 2.5 7.3 31 5.7 G.4 67.5 45 30.4 35.3 26.3 30 35 29.6 12.9 6.3 27.4 54.6 95 36.8 33.3 19.3 4.6 22.2 34.5 11.7 32 30.4 2.1 50,6 68 59.7 72.3 64.2 58.9 65.4 81.8 42.4 69.8 43.7 80.5 52.8 58.9 74.1 85.7 75.3 58.2 57.3 62.3 63.2 30.4 2,056 420, 217 1,432,458 3,866,903 5, 719, 578 | 25 67.6 116 12 45 7.4 REPORT OF THE COMPTROLLER OF THE CURRENCY. 73 TABLE IX.—WHOLESALE DEPOSITS OF 2,056 STATE AND OTHER BANKS, JULY 1, 1896. State or Territory. Alabama Arizona Arkansas California Colorado Connecticut Delaware District of Columbia. Florida G eorgia Idaho Illinois . Indiana Indian Territory Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Whole country. Number of replies. Total. Per Per Per cent cent cent curspecie. rency. checks. Specie. Currency. $96 62,142 $415 9, 697 $9,625 360,130 $10,136 431,969 0.9 14.3 242 3,392 79, 232 82,866 130 2,292 281 40, 650 3, 077 753 28,106 9, 231 169 60 46 9 32 7 106 84 84 7 213 4 159 1,466 107 432 1,646 13 10 905 1,453 2,853 49 2,086 5 501 | 726 1,784 5,481 205 1,370 6,929 6,674 10,141 125 18,211 89 230 25 30 3 190 4 18 70 4 11 105 17 2 31 21 11 6 15 17 17 7 97 3 4 207 80 7,671 220 80 2,728 10 115 3,342 343 5,349 10 179, 097 726 95 17,158 80 40, 777 100 309 375 Checks. o 9 116 12 45 4 13 15 3 96 53 2,056 4 2.2 94.9 83.3 .2 4 95.6 281 43, 072 .3 5.3 94.3 716,120 113,902 747, 303 123, 886 .4 .6 95.8 w 9R0 13, 041 64,061 90, 724 187 16, 207 67, 520 138, 960 349, 521 8,123 563,412 65,197 13, 874 66, 277 97,851 1-05 17,587 75,354 147, 087 362, 515 8,297 583,709 2.2 .8 .7 1.7 3.2 3.7 7 4 8.4 5.3 2.7 5.6 50 6 7. 8 9.1 i 4. 5 2.8 1.5 : 3.1 7,228 7,547 1.2 2,155 55, 700 764 2,560,999 10,169 5.028 148,042 189 .2 .3 9.3 386, 757 2,502 61, 256 854 2, 747, 767 11,115 5,203 167, 928 279 115 430, 876 .8 9.5 89.7 428 244 8,152 518 2,169 106, 759 1,046 2,722 115,286 9.6 11.5 .5 40.9 8.9 6.9 49.5 79.6 92.6 1,139 2,952 65 1,399 4,017 1,264 536 6,703 4,815 23, 346 27, 574 21, 561 106, 574 4,815 28, 502 31, 790 22,162 114, 676 4.3 10.2 .4 1.1 13.8 3.1 2.4 6 81.9 86. 7 97.2 92.9 98,345 375,489 6,160,273 6, 634,107 1.7 5.5 92.8 1.2 1 .8 .6 .4 d 1.6 1.8 3.7 3 91 9 89.3 93.9 96.6 92.7 dfi 1 92.1 89.6 94.4 96.4 97.9 96.4 95.7 86.1 13.7 90.9 8.7 89.4 1.2 93.2 6.5 91.4 6.7 96.6 1.8 88 1 10.1 28.6 1 67.7 74 REPORT OF THE COMPTROLLER OF THE CURRENCY. TABLE X,—ALL OTHER DEPOSITS OF 2,056 STATE AND OTHER BANKS, JULY 1, State or Territory. Alabama Arizona Arkansas California Colorado Connecticut Delaware District of Columbia. Florida Georgia Idaho Illinois Indiana Indian Territory Iowa Kansas Kentucky Louisiana Maine Maryland Massach usetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Whole country Number of Specie. replies. Currency. $449 Checks. Total. Percent specie. 1896. Per cent checks. $5,039 6, 776 401 550, 328 758 912 1,324 13, 780 1,940 34,930 37, 937 609, 754 21,039 207,609 39, 662 1,173, 862 23,737 243, 451 1 46.9 3.2 .3 3.3 1.2 8.2 14.3 85.2 316 208 632 721 12, 957 3,804 16, 507 692 5,636 405 136, 391 28,515 70,400 9,115 86, 584 2,734 1, 617,488 196,957 87,223 10,015 92, 852 3,860 ,766,836 229, 276 .3 .2 .6 18.7 .7 1.3 18.9 6.9 6 10.5 7.6 12.6 91 93.2 70.8 91.5 85.9 43, 251 9,340 9,683 4,146 21, 614 4,646 206,855 60,951 29, 735 1,217 135,512 851 16, 227 187, 781 107, 342 119, 606 38,186 25, 094 2,725 985, 074 272, 851 519,800 7,884 1,410, 941 1,708 84, 651 242, 801 118, 568 130, 608 42, 586 47, 067 7,453 1,196, 820 338, 123 558, 089 9,640 1, 572, 728 2,565 105, 873 4.9 1.7 1 17.6 8.4 7.6 9.6 4.7 106 84 84 7 213 4 159 11,779 1,886 1,319 254 359 82 4,891 4,321 8,554 539 26, 275 6 4,995 25 30 3 190 4 18 70 4 11 105 17 2 31 21 11 6 15 17 17 7 97 3 203 2,072 27 36, 204 413 509 10,189 144 2,111 12, 328 202 462 733 912 525 995 420 2,849 6,867 1,355 7,182 180 116 12 45 169 60 46 32 7 2,056 723, 628 10.2 83 95.6 51.9 1.4 .4 1.2 1.6 5.6 1.6 .5 5.1 17.2 18.1 5.3 12.6 8.6 33 15 77.3 90.5 91.5 89.4 53.3 36.5 B2.3 80.6 93.1 81.7 89.7 66.5 79.9 20, 370 97, 388 76, 815 444,438 71, 578 370, 788 85 873 985 912, 021 23,734,665 24, 682, 890 14, 661 935 13, 313 16, 392 4,755 11,128 332, 638 64, 574 257, 875 271 556 971 4,291 192 6,594 844,428 150,086 1,006, 842 26, 793 9,415 36, 410 5,792 457 6,711 22, 627 2,044 25, 404 168, 685 16,165 185, 762 26, 495 14,651 41, 671 266 7,475 8,736 10,202 9,590 20, 212 14,031 81,051 64,171 3,102 37,195 47,164 6,033 22, 609 29, 997 41, 250 268, 508 316,940 115 1,902 2,197 .4 2.8 .2 2.8 3.2 3 15.8 32.7 1.4 1.4 7 3 1.2 .8 12 2.6 3.7 14.7 4.7 2.4 8.3 20.6 16.2 8.6 3.8 6.4 29 19.5 27.9 2.9 14.8 25 6.8 8 8.6 35.7 3 50 17.2 6.5 20 12.9 52 78.8 83.4 88.6 96 90.8 67.8 77.5 57.2 64.4 B3.8 73.6 86.3 89 90.2 63.5 B5.7 47.4 79.1 78.8 75.3 84.7 86.5 35, 456, 635 2.1 2,127, 434 32, 605, 573 60.9 91.9 REPORT OF THE COMPTROLLER OF THE CURRENCY. 75 TABLE XI.—TOTAL DEPOSITS OF 2,056 STATE AND OTHER BANKS, JULY 1, 1896. Number of replies State or Territory. Alabama Arizona Arkansas California* Colorado Connecticut Delaware District of Columbia. Florida Georgia Idaho Illinois * Indiana Indian Territory Iowa Kansas* Kentucky * Louisiana , Maine Maryland Massachusetts * Michigan * Minnesota Mississippi Missouri * Montana Nebraska* Nevada New Hampshire New J e r s e y * New Mexico * New Y o r k k N o r t h Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania *• Rhode I s l a n d South Carolina South D a k o t a Tennessee Texas k Utah Vermont * Virginia Washington W e s t Virginia Wisconsin Wyoming , , Whole c o u n t r y . Specie. Currency. Checks. Total. Per cent specie. Per cent currencj'. Per cent checks. $1, 899 $1,955 $11,577 $15, 431 12.3 12.7 75 1,662 821,893 2.558 2,156 4, 686 30, 831 4,886 54,179 55,191 1,143, 384 44, 381 301, 857 61,539 1, 996,108 51,825 358,192 2.7 41.2 5 .7 7.7 1.5 9.4 15.1 89.6 57.3 85.6 84.2 316 882 2,049 756 24,905 12,462 16, 507 2,274 11, 629 457 234, 589 67, 231 70, 400 17, 246 137, 496 3, 555 2, 556, 068 368, 409 87,223 20,402 151,174 4.768 2,815, 562 448,102 .3 4.3 1.4 16 .9 2.8 1.9 11.2 7.7 9.5 8.3 15 80.7 84.5 90.9 74.5 90.8 82.2 26, 946 14, 516 11,292 4,419 541 2,415 9,950 15, 910 27,818 2,754 50, 021 2,350 15, 917 101,738 28,164 40, 410 13, 451 28,394 17, 653 309, 473 138, 801 85,116 3,107 255, 795 6,235 43, 384 363, 424 174, 050 406, 619 163, 861 40, 654 51, 822 2,176, 588 576, 044 1,038,914 22, 242 2, 250, 374 10,747 152,963 492,108 216, 730 458, 321 181, 731 69, 589 71, 890 2, 496, 011 730, 755 1,151, 848 28,103 2,556,190 19,332 212, 264 5.4 6.7 2.4 2.5 .8 3.4 .4 2.2 2.4 20.7 13 8.9 7.4 40.8 24.6 12.4 19 7.4 11.1 10 32.3 20.5 73.9 80.3 88.7 90.1 58.4 72 87.2 78.8 90.2 79.1 88 55.5 72 617 3,174 653 77, 212 1,522 1,635 24, 456 414 4,822 259,453 567 1,109 2,866 3,947 2,957 2,175 702 6,972 18,346 2,185 21, 893 1,095 30,132 107, 285 910 2, 079, 612 4,486 11, 886 151,893 963 513 567, 882 19, 262 1, 405 9,550 37, 019 20, 718 847 16, 508 31,318 7,640 10, 417 110, 620 155 89, 056 482, 645 4,572 29, d95, 662 30, 158 27, 753 560,644 2,158 6,444 2, 235, 507 61, 909 10,718 34, 773 298, 751 49,817 18, 266 34,541 79, 826 80. 575 51, 832 505, 762 2,321 119, 805 593.104 6,135 31,552,486 36,166 41, 274 7?6, 993 3, 535 11,779 3, 062, 842 81, 738 13, 232 47,189 339, 717 73. 492 21,288 51,751 118,116 106, 561 64. 434 638,275 3,571 .5 .5 10.7 . 2 4.2 4 3.3 11.7 40.9 8.5 .7 8.3 6.1 .9 4.1 10.2 25.2 18.1 14.8 6.8 12.5 28.8 20.5 27.3 4.4 18.6 23.6 10.7 20.3 11.2 28.2 4 31.9 26.6 7.2 16.2 17.4 4.3 74.3 81.4 2,056 |1,495, .159 4, 721, 966 46, 201, 556 52, 418, 681 2.9 9 116 12 45 169 60 46 9 32 7 106 84 84 7 213 4 159 3 25 30 3 190 4 18 70 4 11 105 17 2 31 21 11 6 15 17 17 7 97 3 12.2 7.5 i 1.4 5.9 17.2 3,4 3.4 30.7 74.5 93 83.3 67.2 76.2 61 54.7 72.9 75.7 81 73,9 87.6 67-8 85.7 66.7 67.5 75.6 80.4 79.2 64.9 88.1 * The sum of these totals is larger than the sum of the corresponding columns in Tables VIII, IX, and X, because in some cases only grand totals were returned by the banks. 76 REPORT OF THE COMPTROLLER OF THE CURRENCY. TABLE XII.—TOTAL RETAIL DEPOSITS OF 5,530 BANKS ON JULY 1,1896. State or Territory. Alabama Arizona Arkansas California Colorado Connecticut Delaware Districtof Columbia. Florida Georgia Idaho Illinois Indiana Indian Territory Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklanoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming $9, 234| 496 4,003 32, 776 19, 808 10,787 4,463 2, 011 10, 441 18,941 867 54, 973 31, 931 596 29,068 18,715 18, 508 16, 526 5,897 14,676 47, 487 23, 600 19, 875 40| 4,600 277| 13,620 39, 879 12,037J 7,094 264! 16,257; 23, 274 270' 159 90 4,272 1,297 19, 566 580 1, 395 ,158 64, 046 458 9,405 2, 735; 1,944 4,679 20, 774 79, 522 100,296 325 847 1, 172 28,102 5,461 33 563 15. 563 98, 919 114,482 205 3,472 3,677 35! 3,432 3,467 7, 360! 3,297 10, 657 i 414! 16, 257 16, 671 35,133 45, 405 2,001 9,019 4,127 4,442 7,912 8,146 8,919 46,354 4,913 5,435 18,755 33, 248 1,197 4,457 740 748 135 18. 2 591 422 973 2.7 2.2 209 222 213 577 237 080 550 122 500 .9 87.3 44. 2| 53 2 34.2 63.7 Whole country. 5, 530 562, 311 852, 662 1, 414,973 7,116, 017 18, 005, 940 26, 536, 930 2. 4 * One national and two others. It was not thought worth while to give their returns separately. REPORT OF THE COMPTROLLER 77 OF THE CURRENCY. TABLE XIII.—TOTAL WHOLESALE DEPOSITS OF 5,530 BANKS, JULY 1, 1896. State or T e r r i t o r y . | | | l Gold Silver' coin. ! Specie Currency. Checks. _ Alabama Arizona Arkansas California Colorado Connecticut Delaware Dist. Columbia.. Florida Georgia Idaho Illinois Indiana I n d i a n Territory Iowa Kansas Kentucky I Louisiana Maine Maryland { Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New H a m p s h i r e . . . New J e r s e y New Mexico N e w York N o r t h Carolina North Dakota..'.... Ohio Oklahoma Oregon | Pennsylvania Rhode I s l a n d j South Carolina | South D a k o t a | Tennessee Texas ! Utah j Vermont j Virginia Washington W e s t Virginia Wisconsin Wyoming 25; $2, 535; 5| 145 301 18! 720 911 146 92,461 9,556 52| 6,638 2,081 122 183 2,540 17 236 5 16 1, 346 30 55 2.474 39 115 7,342 13 350 94 308 4,848 13, 033 158 2,452 7, 662 334 165 113 29 111 74 360| 1701 156 17 277 38j 264j 3 74 126 9 510 26 44 306 9 43 503 74 14 60 68 193 15 62 48 56 37 172 13 3,011 1,165| 280, 20l 73i 90; 232< 6,170! 6,158 5 4,845: 730| 1, 670 500 1,030 95 3, 874; 75 80; 6,015 10 1,905 4,291 90 115 2,165 3,390 125 48 12, 555 175 2,500 40 5,220 2, 526 2,369 4,204 1,836 3,330 10,261 6,348 3, 5951 620! 10, 545 470 1. 4231 ' 60 944! 7,178; 315, 19,154 3, 433 50 18, 536 263 628 26 543 1 955 287 229 4, 650 6, 530| 417 163 1,851 2,813 3,241 3.162 18 W h o l e c o u n t r y 5, 530 172, 202 203- 007 $2, 720 175 1,631 102, 017 8, 719 2, 723 241 1,346 2,529 7,457 444 17, 881 10,114 $6, 879 360 4, 989| 12,864! 22,177! 39, 073! 5, 3521 20, 649, 9, 283! 21.296| 362: 221,602 52, 561 110 23,408 8,913! 11,550 37, 625! 19, 985 $122, 866 1,205 46, 272 799, 297! 670, 316| 484, 612| 87, 249! 53,814 84,181 182, 665 5,981,501! 7, 658, 298; 161 352,154 102, 9931 331,073 571,615 312. 040 1,093, 4, 309, 306 620,478 1,714,706 36, 649 ,660, 280 30, 032 167, 957 3,346 116,955 877, 509 21, 309 8.261 3,6911 2, 649i 4, 2241 1, 909' 3,420 67,911! 10, 493i 200, 672 12,518! 41,992 9, 753! 27,083 625| 1,518 15, 390; 72,701 2,614! l,200! 6, 219; 3, 093; 560| lol 944J 12, 232 8, 208; 121, 8971 410 547j 23, 028 659,108 26,959,70127, 3, 508! 10, 266 73, 716 130i 2, 475 26, 426 24,551 292,211 2,643,184! 2, 273 1,720 6,980! 2, 533i 325 58,6761 30, 834 372,811 4,479,240 4, 2,045 32, 740 266, 318 287 1,580 28.656 7171 1,674 13, 610 4, 765 32,426 430, 986: 8,695 19,519 324, 64 61 3, 807: 2.040 31, 670! 288 5,360 167, 773] 1, 899 8,984 96, 753! 15, 368 5,728 151,822! 1, 416 92, 407 12,153 782,162| 5, 662 37, 446 1,620 606! 58 375, 209 2, 573, 506,60,139, 723 63, 088,438j 5.17 93. 9 10.46:85.05 6.92 92.05 5.53192 5. 44J84. 4 3.09|96. 7 . 34 89. 9 3. 31 87. 8 95.3 78 REPORT OF THE COMPTROLLER OF THE CURRENCY. TABLE XIV.—TOTAL OP ALL OTHER DEPOSITS OP 5,530 BANKS, JULY 1, 1896. State or Territory. 1= Gold Is Alabama Arizona Arkansas California Colorado Connecticut Delaware District of Columbia. Florida Georgia Idaho Illinois Indiana Indian Territory Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota rl.. Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming 25 51 1,765 18 1,115 146 613,811 52j 15,938 604 122! 50 17! 40 16! 10 30' 165 39 13 4,199 308: 9,931 158 3,438 520 334! 16,962 165| 6,797 113 1,558 164 29 163 111 625 74 360' 2,353 170 2,285 16,476 193 6,098 27 38 11, 804 264 30, 248 945 3 20 74 126 1,571 9 1,150 510 14, 623 26 245 44 1,740 306 17,791 105 27,819 503 14,259 74 390 14 60 ' "2," 935 68 120 193 4, 15 5,365 280 62 122 48 56 28,079 37 298 172 9,066 13 1,795 2 Silver Total specie. Currency. Checks. Total. $7, 807 $8, 047 $32, 055 $202, 240 $242, 342 0.1 897 2,662 2,752 15,495 20, 909 2,513 7,074 114, 681 125, 383 3, 628 17,026 630,837 26,107 1, 203, 296 1, 860, 240 33 6,228 51, 749 965, 245 1,039,160 22,166 6, 025 6.629 149. 672 1, 700, 955 1, 857, 256 1,046 159,366 9.732 1,096 170,194 431,555 2,721 2,761 123, 992 558, 308 172, 747 2, 896 10, 212 2, 906 185, "" 223, 837 10, 378 27,004 10,543 261, 384 638 2,701 4, 837 37, 059 44, 597 43,626 53, 557 593,627 8,977, 398 9, 624, 582 17, 876; 21,314 149, 866 910, 034 1, 081, 214 161 2,383 18,838 21, 902 681 15.134 813, 875 983,""" 32, 096 137, 695 9,559 767, 980 846, 453 16, 356 62,117 8,166 60,338 561, 926 631,988 9,724 9,782 78, 653 764, 904 853, 503 .021.1 9,946 2,284 89, 252 681,233 772,932 2,447 4,830 5,455 185, 904 4, 539, 764 4,731,123 23, 298 25,651 828,794 18,688,521 19,542,966 11,840 14,125 154,078 1,319,803 1,488,006 10,841 27 317 135, 601 2, 460, 842 2, 623, 760 1, 280 6,192 82, 931 90, 596 1,473 48, 998 55, 096 271,522 3, 244, 04^ 3, 570, 665 294, 3! 335, 343 15. 703 24,671 12', 460 42, 708 111,827 1, 425, 280 1,579, 815 225 58, 206 40 59,416 1,170 816, 438 1,842 74,026 892, 326 1,862 3, 933, 298 25,182 321,277 4, 281, 328 26, 753 87,439 814 4,817 94,220 1,964 1,774, • 79,150 2, 693, 056 110, 774, 461113 64,527 !, 546, 667 160, 320 2, 655 2,900 22.108 185, 32,r 107,645 833 2,573 16,597 126,815 43, 610 61,401 493, 009 4,126, 452 4, 680, 862 24,148 3,181 445 550 27, 870 154,472 5,327 4,036 31, 855 191, 654 14. 59, 816 74,075 954,863 18, 852, 343 19, 881,281 901,417 82, 322 3,230 3,620 987,359 78,562 2,216 2,216 7,871 112, 293 1,637 4,572 10, 329 127,194 2.3 708,249 10,835 10,955 70,249 789,453 623,169 97, 290 750, 942 25,584 30,483 160,527 5,993 174, 547 2,662 8,027 312, 875 355,469 1,415 1,695 40, 899 574, 830 623, 961 7,334 7,456 41. 675 258,861 309,559 7,871 35, 950 14, 748 199, 008 231,099 3,711 4,009 28, 082 12, 003 21, 069 174, 224 1, 258,184 1, 453, 477 18, 589 23,679 7.6 3,024 271 2, 066 5.7 22.2 5.5 10.3 6.1 6.2 13.9 10.9 14 7.3 9.5 9.2 11.5 4 4.2 95.6 10.3 88.6 5.9 93 6.7 91.6 7.6 90.8 7.4 87.9 7.1 90.2 . 07 97. 8.3 91.5 7.5 91.8 5.1 92.8 2.4 97.5 11.9 86.5 13.1 84.8 83.1 86.5 80.5 94.8 91.2 .6 8.1 88.2 •.7 8.9 82.9 13 3.5 91.7 11. 5 6.7 4.8 83.6 12.2 86.1 12 86.5 1.2.8 '8.4 . 4 .2 4.1 95.1 W h o l e country.. |5, 530 881,189 564,943 1,446,132 8,500,577 195, 080, 607 205, 027, 316 13.2 13.1 5.8 1.4 83.4 74.1 91.3 64.6 92.8 91.6 93.6 77.2 92.9 85.6 83 93.2 84.2 86 82.7 91.8 8.9 9.6 EEPORT OF THE COMPTROLLER OF THE CURRENCY. TABLE XV.—GRAND TOTAL OF DEPOSITS OF 5,530 BANKS, JULY 1, Gold coin. State or Territory. Alabama Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Idaho Illinois Indiana Indian Territory... Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire . . . New Jersey New Mexico . . . » . . New York North. Carolina North. Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South. Dakota Tennessee Texas Utah. Vermont Virginia "Washington West Virginia Wisconsin Wyoming Silver coin. Total specie. $19,576 $20, 368 5 4,286 1,423 5,709 18 7,475 2,550 10,025 146 958, 9851 47, 956 1, 006, 941 52 55,921 84, 083 28,162 122 20, 678 1.32G! 19,352 17 5,745 5,947 202: 16 6,263 6,078 1851 30 16, 334 523| 15,811 39 634| 36, 661 37, 295 IB 10, 77l| 1,849 12, 620 308 26, 636 121,465 138.102 15 8, 308! 57, 760 66, 068 1,336 757 579 8| 86, 869 37, 447 49, 422 334! 21, 727 32, 775 54, 502 1651 29,132 31, 657 2,525 113 34, 512 36, 420 1,908 111 502! 10, 017 10, 519 74 23,566 24, 677 1,111 360 81,317 85, 620i 4,303 170 12, 609 42, 038 54, 6471 34,315 81, 470| 1561 47,155 171 6,500 6, 738! 238 277i 24, 763 99, 879 124, 642J; 38 24,571! 11, 463 36, 034 264 48,175 37, 317 85,492! 3 444 8,216 7,772! 74 7,058 7,168 110 126 3, 898! 51, 953 55,851 9 1,969 5, 094! 3,125; 510 29, 902 154, 852 184, 754 26 783 15,493 16, 271 44| 7,842 3,027 4,815 306! 46, 072 143, 514 189,586 1,548 9i 1,988 440 10,125 67, 951 43 57, 826 503j 258, 077 188, 753 446,830 74! 8, 657| 9,677 1,020 14 5,970 5, 935 35 60 5,163! 15, 946 10, 783 68 649 31,848! 32, 497 193 17, 366 67, 313; 84, 679 15 5,080 20, 853 15,773 62 5,705 6,425 720 48 472 18, 216 18,688 56 19,603 97, 672 37 9,865 10, 860 995 172 26, 059 33, 920 59, 979 13 1,486 6,581 5,095 Currency. Checks. 79 1896. Total. 2.8 13.5 82 $60, 435 $369, 410 $450, 213 3.213.2 74.3 45, 718 6,003 34, 006 3.3 11.5 84.1 26, 472 193, 519 230,016 ! 1.6 69.4 54, 640 2,415,179 3, 476, 760 27 5.6 197,194 2,197, 531 2,478, 808 2.2 ! .3 13.1 86.2 2,494, 014 2, 894, 738 .4 380, 046 38, 596 293, 399 337, 942 .5 1.3 11.4 86.8204, 996 578,554 789, 813 .2 . 6 26 73.2 43, 072 316,192 375, 598 1.4 2.9 11.5 84.2 5.213.2 80.6 79, 410 487, 845 604, 550 60, 695 7, 377 80, 692 13. 3 2.3 9. 2 75.2 1, 298, 372 17, 259, 529 18, 696, 002 5.6 7. 0 92.3 352, 944 1,894,367 2, 313, 379 2.615.3 81.8 29,146 5,130 22, 680 2.7 17.7 77.7 353,129 1, 569,105 2, 009,103 2.4117. 5!78 153,168 1, 111, 540 1, 319, 210 2. 6 11. 68L 2 146,826 1, 215, 925 1, 394,408 2.2 10.6,87.1 2 . 1 9.5 88.3 157, 707 1,471,962 1, 666,089 203, 882 1,150, £ 1, 365, 269 .5 15 J84.2 457, 082 6,725,661| 7,207,420 .3 6.3 93.3 1, 793, 623 25, 573, 716|27, 452, 959 .2 6.5 93.2 379, 621 2,350,112! 2,784,380 1. 6 13. 6 84.4 290,882 4, 621, 208 4, 993, 560 .9 5.7i92.5 22, 313 142, 459 2.6!13 83.1 171,510 592, 321 6, 999,184 7, 716,147 1.3 7. 7|90. 7 2.110. 6 82. 7 57, 202 445,166 538, 402 1.810 185.9 208, 373 1, 795,141 2, 089, 006 .4 .1J92.5 85 101, 285 109,586 159,633 1, 021, 398 3,188,199 . 1 . 5 13. 5:85. 9 782,256 5, 434,176 6, 272. 283 . 1 .8 12.5;86. 6 10, 690 157, 323 1.73,107 1.8, 1.21 6.2 90.8 5,144, 937 145,261,646 150,491,337 . 1 .21 3. 4 96.4 57, 365 290, 469 364,105 .4 4.1115.8 79.7 47, 628 187, 066 242, 536 2 1.2J19.7 77.1 l,332,272i 8,397,387 9, 919, 245 .5 1.4 13.5 84.6 9,14lj 46, 334 .1 4.2 19.7 76 35,205 346, 826 16. 7 3 77.3 10," 268,507 8.7 89-8 2, 544,901 26, 323,882 29, 315, 613 .7 242, 778 1, 333, 067 1, 585, 522 . 1 .5 15.4 84 . 1 10.1 86.1 16, 069 137, 095 159,134 15.1 78. 5 37,471 195, 469 248,886 4.4 86.8 160,434! 1,273,712 1, 466, 643 78.4 255,510! 1,236,556 1, 576, 745 4.4 87.5 257, 598 11,2731 225, ~ 472 """ . 8 14.2 84. 9 725,632 102, 510| 616, 697 2.111.4 86. 4 95, 736 729. 303 843, 727 7. 2 77. 7 46, 312 504, 366 648, 350 12 448, 879 2.215.5 82 69, 726 368,667! 2,410,490 2,839,136 1.212.9 85 14. 3 73.9 8,020| 41,370 55, 971 8.8 W h o l e country 5, 530 1, 868, 589 1,643,844; 3, 512, 433 19, 084,598,280,339,201 302936,232 .5 6.3 92.5 From the face of the returns the conclusion to be drawn is that 67.4 per cent of the retail trade of the country is transacted by means of credit paper; that 95.3 per cent of the wholesale trade is so carried on; 95.1 per cent of business other than mercantile, and 92.5 per cent of all business. In retail trade the national banks have 80 per cent of the deposits. The percentage of credit instruments in these deposits varies from 52 in Ehode Island to 87.3 in Nevada.* According to the returns of two years ago South Dakota stood lowest, with 37.6 per cent. It appears from the tables covering retail trade that the per cent of checks shown by the two investigations, in 1894 and 1896, is very nearly the same in Arkansas, Kansas, Maine, Maryland, Montana, and New Mexico, * The returns from Nevada are so small in the aggregate that they are not a safe basis for inference. 80 REPORT OF THE COMPTROLLER OF THE CURRENCY. although the percentages for the last two are probably too high; that the present returns give higher percentages for Arizona, California, Colorado, Connecticut, Delaware, Illinois, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Michigan, Missouri, Minnesota, New Jersey, New York, North Carolina, North Dakota, Ohio, Pennsylvania, South Dakota, Tennessee, Utah, Vermont, West Virginia, Wisconsin, and Wyoming, and that in every case but three—Arizona, Delaware, and Wyoming—the number of banks reporting is much larger than in 1894. There seems to be no sufficient explanation of the higher per cent except that being deduced from a much larger volume of trade it is more truly representative. Indiana and Ohio, whose percentages were clearly abnormal in the returns of 1894, take their obviously proper place now with Illinois, Pennsylvania, and other adjoining States. The per cents in the present tables tor Wyoming and Arizona are doubtless abnormally high. The deposits reported from Wyoming are $26,000 less than two years ago, although four more banks sent in replies. The deposits reported from Arizona are in all only $23,000 from live banks, as against $77,000 from four banks two years ago. The percentage this time is less than in 1894 for Alabama, Florida, Georgia, Mississippi, Nebraska, New Hampshire, New Mexico, Rhode Island, Texas, Virginia, and Washington ; the returns from New Mexico, with two more banks reporting than there were two years ago, show $7,000 less of deposits, and the percentages in both cases, 83.6 and 80.3, are evidently too high. The other changes all seem to place the States concerned in a more probably correct position. The changes one way and the other have affected the average'for the whole country by only 8.9 per cent. The average per cent of credit instruments in the retail deposits is almost identical for the returns of both sets of banks, despite the great disproportion of the total deposits. The national banks yield an average of 67.9; the other banks, an average of 67.3. The most remarkable difference in the averages of the two sets of tables are in the cases of California and Idaho. The national-bank average for the former is 76.6 per cent, while the average of other banks is only 42.8 per cent. The difference is in the large amount of gold coin evidently in deposits of other State and private banks. A difference of 30.8 per cent exists in the averages for Idaho, but the larger of the averages is clearly too high on account of being based on too few returns. The averages work out practically the same from the two sets of returns for the States of Illinois, Idaho, Michigan, Nebraska, New York, North Carolina, North Dakota, Ohio, Pennsylvania, and Washington. It seems pretty certain that errors due to too few replies in either class of banks are offset by the fullness of the other set in most cases. The high per cent in States like Missouri and New Mexico does not necessarily mean that checks are so much more largely used there than, for example, in Massachusetts. It probably shows rather that banks are used by a smaller per cent of the population, but by that part of the people which in any community uses checks most. The trade by this part of the population is doubtless much larger in proportion to their number than is that transacted by the rest. Hence the per cent, while too large, is probably not so much too large as at first thought might appear. There are certain points that need to be cleared up, and certain omissions that must be allowed for, before it is certain that the result obtained is accurate. In the first place, are the checks deposited by the 1retail dealers Digitized forreceived FRASER wholly in payment of purchases made by them ? Doubtless REPORT OP THE COMPTROLLER OF THE CURRENCY. 81 not. In communities where wages are paid by check, merchants are often called on to cash these checks. In so far as their deposits include checks thus cashed, credit instruments would appear to represent too large a proportion of the business receipts of the depositors. But in most cases probably the checks thus cashed by the merchants are presented by customers who carry accounts with them. The amount owed by the owner of the check to the merchant would be deducted from the amount of the check and the balance turned over to him. It is proper enough, therefore, to regard even such checks as representing to a certain extent payments by credit paper. In so far as the checks cashed by merchants are cashed in full, they would make the proportion of checks in their deposits too large if their deposits are assumed to represent the extent of their trade. All things considered, the error due to this cause is probably too insignificant to deserve notice. The second point to be considered, and one of more importance on its face, is the question whether the proportion of cash and credit paper in bank deposits may be properly regarded as that which exists in actual payments by customers. This has been denied, on the ground that a business man is likely to use part of the cash he receives in the interval between its receipt and the time of its deposit. The answer to this objection, however, is not difficult. The business man who is accustomed to using checks is as likely to give his check for such a payment as to make the payment in cash; moreover, it seems pretty well established that the cash in a tradesman's till is relatively constant, even allowing for such payments. The next question to consider is, What allowance should be made for deposits in banks from which no replies were received"? The correction due to this failure ought not to be difficult. There is no reason to think that the deposits of banks which did not answer would be any different in character from those of the banks which did answer. It has been asserted that the banks from which no answers come in such investigations are those outside of the large cities, and that the average obtained is therefore too high. The returns do not show this to be wholly true. Many banks in large places, such as Nashville, Tenn., failed to report. The returns of small State and private banks average about the same as others. Even if the assertion were true, however, allowance could be made for the partial nature of the returns by adding for the banks not replying amounts in the proportion of their number to the total number of banks in country districts. As has been said, the total number of banking institutions to which blanks were sent is about 13,000; of the replies received, 5,530 were used. If the banks of the reserve cities are thrown out there will be left 5,005. This is 60 per cent of the whole number of banks outside of those cities; therefore 40 per cent of the country banks did not reply. If to the total deposits reported from the country outside of these cities is added 40 per cent for the nonreplying banks, the aggregate would be $22,600,000. The amount of checks, similarly increased, is $14,000,000. The resulting percentage of checks is 62. This is a variation of only 5.4 per cent from that obtained from the banks actually reporting. Still further must be considered carefully the question whether the bank deposits are representative of the medium of payment used by all industrial classes. It is certainly true that there are very many peopie who do not use banks at all. The total number of depositors in the banks from which replies have been received is 5,929,963.* How many of these are individuals not in business at all, how many are men of * Omitting, in the case of most of the commercial banks, certificate deposits. http://fraser.stlouisfed.org/ OUR 96, PT 1 6 Federal Reserve Bank of St. Louis 82 REPORT OF THE COMPTROLLER OF THE CURRENCY. trade, retail or wholesale, and how many are corporations, it is of course impossible to say; and of the individuals who are in trade there is no means of ascertaining to a certainty how many carry on their business without receiving checks at all. It is probably true that all industrial classes whose annual income is below $500 or $600 do not use checks to any extent, though this number is being daily lessened by the increased use by them of savings banks. There are four classes of the population who, it has been urged, should be included among the noncheck users, whose trade would materially lower the percentage deduced from the bank returns. They are the negro population in the South, portions of the foreign population in our large cities, all other wage earners of small income, and farmers. To consider these classes in detail: The nonuse of checks by the negroes is undoubtedly offset to a large extent by the use of store orders and by direct barter. These store orders are used to a considerable extent in the payment of wages in the mining and country districts, especially throughout the South. Moreover, a considerable amount of the commodities consumed by these people is raised on their own plats of ground directly for their own consumption. That portion of their living which is thus supplied creates no additional demand for a medium of exchange. It would not be fair, therefore, to count the total value of the expenditure of the noncheck-using negroes on the side of cash in determining the percentage of credit instruments used in payments in retail trade; for the ultimate question under investigation in this and similar discussions is: What per cent of the demand for a medium of exchange is supplied by credit instruments'? Obviously, products which are exchanged by direct barter, or are consumed by their producers, do not enter into the amount of this demand. As to the second class, the foreign population, it is doubtless true that the suggestion made may apply to such portions of them as have not been used in their home countries to the deposit feature in banking, and therefore unacquainted with payments made by checks. In so far as they are located in the city, their trade would tend to lower the per cent of credit paper. How much it is impossible to say, but certainly not in proportion to their number, because until the commencement of the use of checks by this class the amount of their individual income is usually small, and their number, moreover, is comparatively small. Some data illustrating their habits in the matter of the use of checks are given below in another direction. These remarks apply also to the third class, the native white wage earners of small income, somewhat modified, however, by the extent to which checks are used in paying wages. Owing to the probably greater intelligence of this class, to the educational influence of the system of paying wages by check, and to the general character of the individuals in the class, the percentage of checks used is undoubtedly higher than is the case in the second class considered. There is some evidence to show this in some of the detailed accounts of specific places given below, especially as shown in the report from New Brunswick, N. J. As to the farmers, it is not at all an uncommon supposition that they do not use checks to any considerable extent. This, however, can not by any means be taken for granted. It is learned from bankers, in the East and middle West especially, that checks are used by farmers in making payments to a larger extent than cash. In one town of importance in central Illinois it has happened that in a business of fully $20,000 in one day, carried on with farmers mostly, it was not necessary to open the safe of the bank to take out money at all. In another case REPORT OF THE COMPTROLLER OF THE CURRENCY. 83 it was found that a business of $20,000 by a bank is done on the average with not more than $500 in the till. In running through the balances shown by the books of this particular bank for a considerable period it was shown that the extreme variation of the money in the till was $2,500 for a total business aggregating several hundred thousands. Information received from other sections of the country point to the existence of a similar state of affairs. There are still other considerations which render it by no means a foregone conclusion that the trade of farmers is carried on to only a small extent by means of checks. With them also, as with other classes mentioned, if the need for checks is small, so, too, especially in the case of the multitude of "smallfarmers?? is the need for money. "Small farmers" produce largely for their own consumption. The influence of the trade of the farmers in swelling the money side of the account is offset by this fact. Still again, a great deal of the farmers' trade in certain sections is done by direct barter. This of course tends to decrease as the country becomes more thickly settled. In the East it probably has practically died out, but it has not done so in very many places in the West and South. The report from New Brunswick, N. J., states: "Time was? and only recently, when farmers had long-standing accounts with the merchants. Now the merchant makes his purchases and pays for them, in most cases, at once. Fanners were formerly accustomed to trade out their produce. Now they receive payment for it and deal with whom they choose." Upon this same subject reports from many sources show that the habit of paying with checks on the part of farmers is growing, though in all parts of the country not an inconsiderable part of trading on account is still carried on. Farmers are credited on the books of the dealers with the produce which they bring in, and secure their supplies on the basis of this credit. In a single grocery store in the city of Urbana,Il].,it is developed by the report that there are 73 such running accounts, and there are four or five similar stores in the city. All these would reduce the proportion of cash trade and make the percentage of payments in cash smaller. The fair conclusion from a consideration of all these facts is that not the whole of the trade which is not shown in bank returns can be properly credited to the money side of the account in determining the proportion of checks used in trade; in other words, that the percentage of credit instruments used in retail trade, as shown by the accounts of those tradesmen who use banks, is not larger than the actual percentage by the entire proportion of the trade of those who are not bank users. When the investigation of two years ago was made it was attempted to secure some data on the subject directly from retail traders throughout the country. However, only a few replies were received, and they came too late to be incorporated in the report then made. They are of interest and value still, and as they bear upon this point, some of them are here given : NEW BRUNSWICK, N. J.—Eeturns were received from four grocery stores showing the per cent of their total trade which was paid for in checks during the month of September, 1894. Three of these stores were so situated as to attract patrons of all classes in the community. The fourth was evidently a small suburban grocery, for the whole trade for the month was less than $1,000. The percentage of checks received in payments by the first three in a total trade of over $10,000 was 51.6. The small store mentioned received only 1.6 per cent of its payments in (Checks. The average per cent for the four was 47,5. The percentage 84 REPORT OF THE COMPTROLLER OF THE CURRENCY. as shown by the bank returns for the city of New Brunswick in the present investigation is 47.2. The grocers' trade is of such a character that doubtless it receives from people of medium incomes a smaller proportion of checks than other branches of trade from people of the same class. New Brunswick is a manufacturing city of some 20,000 inhabitants. It contains manufactories of wall paper, rubber and leather goods, three machine and tool factories, sash and blind works, pottery works, cigar and cigarette factories, medicine manufactory, saw mills, carriage manufactories, and numerous other small industries, and its trade transactions are fairly representative of this class of cities. Further information received bears out the belief that the percentage, 47.5, is too low to be representative of all retail trade in the city. In the deposits of one bank of the place for thirteen days in September, 1894, only 3 per cent was in money. The extent to which the wealthier classes use checks is illustrated by the statement to the effect that of $60,000 received in payment of lodging and board at a certain hotel during the summer of 1894 only $600 was in money. LEWISTON, ME.—The data from Lewiston, Me., were from two grocers and two fuel dealers., Checks entered into the receipts of the two grocers for the month of September, 1894, to the extent of 10 per cent, and of the fuel dealers to an extent of 25.4 per cent. The average for the four dealers was 17 per cent. The percentage as shown by the reports of the present investigation is 55.8. Lewiston is a city containing extensive manufactories of cotton and woolen goods, lumber and machinery, and boots and shoes. As the stores from which figures were received in Lewiston are considered "among the best of the grocery stores of the city—that is, they carry the best quality of goods and are patronized by well-to do and wealthy people"—the small percentage of checks is therefore remarkable, and is probably not representative. IOWA CITY, IOWA.—Keturns were first received from ten classes of retail dealers, and they show that the percentage of checks received in payment of the day's trade, Saturday, November 24, varied from two in the case of grocers to thirty in the case of furniture dealers, butchers, and dealers in flour and feed. The average percentage for all the dealers was 14. Afterward the report was extended to several other places, and covered the trade of grocers, dry-goods dealers, clothiers, hardware, furniture, and boot and shoe dealers, druggists, and " others." The results were: Cash sale 3. Currency. Checks. Winterset Iowa City Averages Produce. Running accounts. Cash and running accounts. Cur- Checks. Prodrency. uce. CurProdrency. Checks. uce. HI 44 33 7 3 62 56 65 4 65 33 89 93 89 7 7 8 4 89 7 16 15 14 5 2 79 85 83 2 83 14 3 3 The average per cent in the present returns for Iowa City, three banks reporting, is 74; for Davenport, from six banks, 64; for both, 67; for all Iowa, 60.7. LAWRENCE, KANS.—Eeplies received showed per cent of checks in receipts of one furniture dealer to be 10; in those of two butchers, 21. The bank average in the returns of last July is 57, three banks reporting. ANN ARBOR, MICH.—One grocer, 44 per cent. REPORT OF THE COMPTROLLER OF THE CURRENCY. BEDWOOD, CAL.—One general store, 34 per cent. SAN JOSE, GAL.—One dry-goods dealer, 20 per cent; 85 one butcher, 55 per cent. The present bank average is 45. PALO ALTO, GAL.—One grocer, 24 per cent. MAYFIELD, GAL.—Mayfield is a farming town a short distance from Palo Alto. One grocer, 63 per cent. This grocer's trade was of nearly the same volume as that of the Palo Alto tradesman. Another source of error, which it was thought would tend to make the per cent of credit instruments too large, was due to the supposed fact that the deposits made in the bank by traders on a settling day would represent sales made throughout the period of credit common to their community, while the money deposits would not include all the cash sales made during that period. The figures of two years ago from Iowa seemed to show that this supposition was well founded. If this were true, it is obvious that the percentage of checks would be too high, although the excess would be offset to the extent that immediate payments were made by check throughout the credit period. From investigations made in 1894 it was concluded u that the error due to this source can not be great. If it were, the returns from places which have long periods of credit should show a larger proportion of checks than the returns from other places; but the figures do not show this to be uniformly so. Moreover, if the people of a community were in the habit of using checks they would be more likely to make even immediate payments with them than with money." In order to test the point several banks in Ghicago and in Champaign and Urbana, 111., were requested to give the per cent of checks in total deposits of representative retail traders for the month of October of the present year. Eight replies were received representing the accounts of some forty retail traders. In some cases only percentages were given so that it is impossible to figure out a general average that we can regard as exactly correct. The individual replies made the following showing: Case 1.—Eeturns from a bank in the business portion of Ghicago. One grocer, 40 per cent; one butcher, 22 per cent; one clothier, 40.5 per cent; one dry-goods dealer, 78.5 per cent; one coal dealer, 33 per cent; one furniture and house furnishing dealer, 57.4 per cent. Case 2.—A similar Ghicago bank. One grocer, 95 per cent; one shoe dealer, 22 per cent; one dry-goods dealer, 36 per cent; one butcher, 3 per cent; one coal dealer, 58 per cent. Case 3.—A third Chicago bank similarly situated. This bank did not return the per cent for individual dealers, but gives theu percentage of checks in total receipts for the month of October in seven 7strictly retail accounts, representing totally different lines of business/ as 68| per cent. Case 4.—This is the case of a bank in Ghicago situated in a retail district of the city. The population is dense and composed mainly of foreigners. The returns are again for the month of October, and are as follows: One retail grocer, 15.5 per cent; one butcher, 21 per cent; one coal dealer, 12 per cent; one clothier, 9 per cent; one dry-goods dealer, 19 per cent; one furniture dealer, 18 per cent. As already pointed out, the percentage of checks in a population unacquainted with deposit banking, as expected, would be found to be below the average. These figures bear out the truth of the remark. Case 5.—This gives a statement of the accounts of retail dealers in Champaign, 111., for the month of October. Two dry-goods dealers, 11 per cent; two grocers, 44 per cent; two butchers, 54 per cent; two hardware dealers, 76 per cent; two clothiers, 40 per cent; one furniture 86 REPORT OF THE COMPTROLLER OF THE CURRENCY. dealer, 49 per cent; one lumber dealer, 91 per cent. The total receipts and the total checks are given, so that the average per cent is found to be 33^ if the lumber dealer is left out, and 40.7 per cent if he is included. Case 6.—This also is an account of Champaign tradesmen. The returns were not made in detail, but they represent the trade for the month of October of one grocer, one butcher, one coal dealer, one clothier, one dry-goods dealer, and one furniture dealer. The percentage of checks in the aggregate receipts was 55.2. Case 7.—This case represents the trade of similar dealers in the city of Urbana, 111., for the same time. One grocer, 18.6 per cent; one butcher, 21.8 per cent; one dry-goods dealer, 47 per cent; one boot and shoe dealer, 39 per cent; one furniture dealer, 43.7 per cent, and one coal dealer, 53 per cent. A general average for all these cases can be ascertained by proceeding as follows: Several banks gave the actual deposits for the month for each class of dealers. From these is to be gotten the relative weight of each class in the total. Calling groceries 1, the weights are 1.25, 1.133, .04, .51, .73, .36, .72, for the business of the butcher, hardware dealer, dry-goods dealer, clothier, furniture seller, coal dealer, and shoe dealer, respectively. Assume that these relative weights hold in the cases where only per cents were returned; assume, further, that in these cases the deposits of the dealers reported in these banks were to the deposits in the banks reporting actual figures in the same ratio as the relative total deposits of the banks concerned; then the average per cent of credit instruments for all dealers reported in all these cases, except No. 4, was 58 per cent, and including No. 4, was 54. If it should be assumed that the per cent shown by the Chicago bank in case No. 4 is fairly representative of the use of checks in payments among the foreign population; if, also, is assigned the low average of 5 per cent to the negro population; if, further, is assigned 60 as the fair average for native whites, and if, finally, is assumed the amount of the payments made by each class to be in proportion to their numbers, 20,000,000, 10,000,000, and 40,000,000, respectively, 40 is found as the general average per cent of checks used in retail payments for the whole country. This is the lowest that can reasonably be assigned in view of all the facts. The average per cent of checks used in retail trade may be estimated in still another way. From the report of the Commissioner of Labor for the year 1890 the average expenditure per day per individual in this country may be estimated as about 50 cents. This is certainly true for the vast majority of the population. Indeed, it is perhaps somewhat too high. Assuming, however, that it is correct, and taking the population at present as 70,000,000, $35,000,000 is had as the total average daily expenditure for udaily living" in this country. This is only $8,500,000 more than the total retail deposits, according to the returns of the banks in the present investigation. It is here estimated that 16 is the proper per cent of checks used in retail payments by the foreign population, and that 5 is not too high a per cent for the negro population. The average of these two, weighted in the proportion of the respective numbers of the two classes of people, is 7 per cent. If, now, it is assumed that 7 per cent of the above $8,500,000 was paid by checks, there is $595,000 to be added to the check returns in the banks. This gives a total of $18,600,000 of checks, and $35,000,000 for a grand total expenditure. The percentage of checks is 53. In view of all the facts, the true average per cent of checks used in making payments in retail trade can be fixed at about 55. REPORT OF THE COMPTROLLER OF THE CURRENCY. g7 THE SECOND CLASS OF DEPOSITORS. A consideration of the facts brought out by the second class of depositors is not less interesting. Already there has been pointed out the difficulty of exactly classifying wholesale as distinct from retail traders, and the difficulty, less here than in the case of retailers, of including in the list of wholesale merchants all who may properly be said to belong there. There is no reason to think, however, that errors due to these two circumstances are either more numerous or more important than in the case of retail dealers. Indeed, it is hardly to be supposed that the percentage of checks used by wholesale merchants, as shown by the bank returns, will vary so much from the actual conditions as would be the case with retail dealers. The percentage for the whole country, as shown by the returns, is 95.3. The wide difference between the per cents for wholesale and that shown for retail traders establishes at once the fact, insisted on by economic critics, that it is untrue to say that 90 per cent or more of the whole business of the country is done by means of credit instruments. The statement obviously holds true, as has been claimed, for wholesale trade. It has not been found possible, however, to secure direct evidence of the habits of retail dealers and jobbers in the matter of their payments to wholesale merchants. In a few cases only, six in all, has any information been obtained relative thereto. In each one of these the percentage of checks in the payments made to jobbers and wholesale merchants by the retail dealers was over 96. These cases, however, were so purely local that no dependence can be placed upon them as representative. The percentage shown by the national banks for wholesale trade is 95.6; that of the other banks is 92.8. Several States have no returns in the figures of the State and private banks. The figures in both classes of banks are virtually the same in the States of Connecticut, Illinois, Indiana, Kentucky, Louisiana, Maryland, Missouri, Nebraska, Ohio, Pennsylvania, and Tennessee. It is interesting to observe the difference in the extent of the use of checks by this class of dealers in the various States. The percentages vary from 69.2 in Arizona to 97.9 in Minnesota. Twenty-nine States show averages of 90 per cent or over, 10 of them being over 95. Fifteen of the others have each an average greater than 85. The returns for this class of trade are so meager for Arizona, Indian Territory, Oklahoma, and Wyoming that the per cents are probably not normal. The total deposits shown are $63,088,438, as against $26,536,930 for retail trade. There is no reason to think that the general average of 95 for this class of trade is too high. THE THIRD CLASS OF DEPOSITORS. The third class of depositors concerning whom the bankers returned information must be very miscellaneous in its make-up. Here undoubtedly are found the corporations, individuals not in business, and all other individuals and bodies not of a mercantile character. Here, too, are those accounts which represent the great mass of speculative transactions in the country, as distinguished from legitimate business. Of course there is no way of distinguishing the deposits of these various classes. The average percentage for the country is virtually the same for this class of deposits as for the second class. It is higher, of course, in New York than in any other State, for the figures for Nevada are again not to be relied on because of the paucity of returns. The States with 90 per cent or over range as follows, after New York: Maryland Digitized forand FRASER Massachusetts; Pennsylvania5 Illinois and Delaware; Minnesota. 88 REPORT OF THE COMPTROLLER OF THE CURRENCY. Colorado, Florida, and New Mexico; Virginia, Utah, New Jersey, New Hampshire, Mississippi, Kansas, Rhode Island, Connecticut, and Arkansas; Missouri, Nebraska, Tennessee, and Louisiana. Arizona is lowest, with 74 per cent. It has been asserted that certain branches of business represented in this third class of deposits are of such a character that their receipts preclude the use of checks almost entirely, and that the kinds of business are so important that they must lower the averages very materially. Railroads, street railways, and newspapers have been instanced. But the freight business of railroads is larger than the passenger traffic, and is paid for largely by checks. So are newspaper advertisements to a considerable extent. The receipts of street railways are only a fraction in the great total of the business of a city like New York or Chicago. The special consideration of these lines of business does not modify the conclusions arrived at. Moreover, their receipts are doubtless very largely in the returns. Table No. XV shows the grand total results. According to this the per cent of business done by checks, all classes being included, is 92.5. New York State leads the list, with 06.4 per cent. Closely following come Massachusetts and Maryland, with 93.2 and 93.3, respectively, and Nevada and Minnesota, with 92.3 and 92.5. Missouri has 90.7; New Mexico, 90.8. The lowest perceutage shown is that of California, 69.4. If the present percentages are compared with those gotten from the total receipts accounted for in the investigation of 1892, we find that, leaving out the reserve cities, they are nearly the same at both times for New Hampshire, Delaware, New York, New Jersey, Pennsylvania, Florida, Indiana, Iowa, Kansas, Michigan, Minnesota, Wisconsin, North Carolina, and Virginia. They are higher for the District of Columbia, Maryland, Louisiana, Mississippi, Missouri, Illinois, Nebraska, Utah, and Idaho. ULTIMATE CONCLUSION. What conclusion is finally to be reached as to the true proportion of the demand for an exchange medium which is met by the use of credit instruments ? First, the returns for mercantile business must be considered. The average per cent of retail trade transacted by means of credit instruments, it is seen, is 67, according to the face of the returns; that 40 per cent is as low as could in reason be claimed to be correct, and that 55 per cent is, all things considered, probably about accurate. There seems no reason to think that the per cent of checks shown by the returns for wholesale payments needs to be diminished by any allowances. That per cent is 95. If the returns for retail and wholesale business are combined, 87 is had as the average per cent of the deposits of the merchants of both classes in the form of credit instruments. If the retail business is taken at 40, and weights the per cents of the two classes of trade according to their total returns, we get 79 as the average per cent. If the retail average is taken at 55, the similarly weighted average for both kinds of business is 83. If each kind of business is regarded as of equal importance, the averages are: With retail trade at 40 per cent, 68; with retail trade at 55 per cent, 75. It is therefore not unreasonable to assume that 75 is a net figure at which to rest as the per cent of both retail and wholesale business which is done by credit-paper exchange. What influence should the third class of check users have in determining the final proportion of credit instruments in the exchange medium? Some writers argue that the checks due to speculative transactions Digitized forshould FRASERbe ruled out of the count. "If all these receipts represented REPORT OF THE COMPTROLLER OF THE CURRENCY. 89 legitimate business," wrote the Comptroller in 1881, "the means for merchandising and manufacturing would be most abundant." Speculative transactions occur in the business of wholesale dealers; but the speculation which it is claimed should be thrown out of the calculation is, perhaps, transactions in stocks. The payments, however, for stock transactions can not be regarded otherwise than as constituting a real part of the demand for an exchange medium, and so influence the amount needed; speculative transactions of other kinds exert an influence on prices, and also influence that demand. The real question of importance is as to the per cent of the total currency demand which is satisfied by means of credit instruments. It would seem, therefore, that in seeking to determine what amount or per cent of money of account is dispensed with because of the use of credit instruments, the- means of payment in speculative transactions may not be ignored, even when they are purely stock speculations. If, however, they are thrown out, what is left1? The Comptroller, in 1881, estimated that of the $165,000,000 checks and drafts received by the banks of Kew York City on September 17 of that year, three-sevenths represented stock transactions. If even one-half of the total transactions of "all other" depositors, as representing speculations in stocks, is deducted and assume that they are all paid for by checks, $200,000,000 is left for the total business deposits, of which $180,000,000 was in checks. This is 90 per cent. Heretofore in this report it has been assumed that the figures obtained from retail trade are within $9,000,000 of the total retail business for the day, and that the checks used in performing this business formed about 53 per cent of the whole medium of payment. It has been estimated that the total amount of checks passing through the IsTew York clearing house is about 70 per cent of the whole number drawn. Of course, the percentage will be much lower for the country as a whole. If it is assumed that it is 30 per cent for the country as a whole, and there are added to the figures returned by the banks for the various kinds of deposits amounts representing 30 per cent of the returns in checks, after rejecting $100,000,000 for stock transactions, 85 per cent is left as a result. This is probably not far out of the way as'representing the per cent of the business of the country which is paid for by means of checks, drafts, and other credit instruments. This method, of course, is arbitrary, but is probably as reliable as any other that could be assumed. It may safely be concluded, therefore, that at least 80 per cent is a reasonable estimate from all the data presented. The subject may be looked at in still another way. If it is assumed that the volume of business is constant for a brief period, and if it is supposed that this volume may be taken to represent the total money demand, then the amount of the medium of exchange necessary for the country would be approximately the sum of these quantities: The amount of money actually used to make exchanges in a given period, as a week, divided by the velocity of circulation; the amount of credit instruments used in payments in the same period, divided by their velocity of circulation; the amount of money needed as a reserve for the credit operations. Each one of these is very difficult to determine. The question of the velocity of circulation, especially, is a problem on which there is very little definite information. If, however, satisfactory information were available, it would now be less difficult to deal with the "quantity of money" question than ever before. The general result of this discussion is very strongly to emphasize 90 REPORT OF THE COMPTROLLER OF THE CURRENCY. the importance of the part played by credit instruments of exchange in the economy of the country. It bears out the statement made as a result of the investigation of 1894, as follows: The advocates of a large volume of mone3T, uot inherently sound money, have used their belief to offset the statement that credit is a more determining cause of prices in modern business than money. The results of the present inquiry, however, are on the whole in the line of the former conclusions as to the importance of credit instruments in payments and exchanges generally, and against the necessity of any additional provisions for simply an increase in the volume of money without taking into consideration the other and more important elements which should characterize our monetary circulation. The two diagrams which follow present readily to the eye the relative standing of the States in the use of checks in retail and in all business transactions as shown by the bank deposits. There is also appended a comparative table (XVI) of the results of all the investigations made in this country in which the data are full enough for comparison. It must be remembered that the figures for 1894 are for part of retail trade only, and show deposits. A similar caution is necessary with regard to the first column for 1896. The last column, again, contains only deposits. Deposits, retail trade, per cent checks, by States, lowest to highest. c 10 20 30 40 R.I. I.TER. N.H. MISS. OKLA. WASH. CAL. ALA. ORE. MD. CONN. NEB. N.DAK. IDAHO. VA. TEX. ME! GA. N.CAR. IOWA. DEL. ARKFLA. IND. N.J. TENN. OHIO. MICH. MASS. S.DAK. WIS. KAN. PA. W.VA. VT. ILL WYO. MONT. MINN. LA. UTAH. NY. S.CAR. ARIZ. COLO. KY. MO. N.MEX. NEV. U.S. Face page 90—CUR 96, PT 1 50 60 70 80 90 "100 All deposits, per cent checks, by States, lowest to highest. 0 10 20 30 40 CAL. WYO. ARIZ. IDAHO. OKLA. N.DAK. ORE. I.TER. WASH. IOWA. TEX. S.DAK. N.CAR. GA, 1ND. ALA. W.VA. MONT. MISS. R.K ARK. FLA. KAN. ME. MICH. OHIO, VT. WIS. NEB. N.H. S.CAR. COMN. VA. N.J. DEL TENN. KY. UTAH. LA. COLO, PA. MO. N.MEX. ILL MINN. MASS. MD. ^EV. N.Y. U.S. Face page 90—CUB 96, PT 1 50 60 70 80 90 100 92 REPORT OF THE COMPTROLLER OF THE CURRENCY. TABLE XVI.—COMPARATIVE TABLE OF RETURNS OP ALihnvna Arizona . Arkansas California Colorado Connecticut.. Delaware Diat.Col Florida.. Georgia . Idaho... Illinois.. Indiana Indian Ter Iowa Kansas Kentucky Louisiana Maine.... M aryland MassachusettsMichigan Mississippi . . Missouri Minnesota . . . Montana Nebraska . Nevada N. Hampshire New J e r s e y . . New Mexico.. New Y o r k . . . . N. Carolina N o r t h Dakota Ohio Oklahoma Oregon ... Pennsylvania Rhode Island. S. Carolina . . . South Dakota Tennessee Texas.. Utah... Vermont Virginia Washington West Virginia Wisconsin . . Wyoming Receipts. 120 80 68 10j 37 $100,177 72.0 53, 220 235, 384 1,185, 38f 2, 533,108 313, 628 27. 983 23, 026 281, 995 W.2\ 48.2| 81. lj 87.4j 86.3 64 23. 7 69.5 1,411,907 1,321,819 70.6 74.6 Sept. 17,1881. July 1,1890. Sept. 17,1890. Receipts. Receipts. Receipts. f ban States and Territories. rafts, J u n e 30,1881. $293,220 85.7 51,183 260, 637 1, 533, 504 3, 536,106 381,077 44,699 40, 739 738, 926 17, 921 3, 332, 447 2, 092, 5311 975,956 68.2 421,744 78.1 446,275 76.7 76.7 52.5 85.1 88.1 89 76.4 77.8; 77.3 51.21 80 72.7 1,552, 481 71.4 395, 885 65.6 688,199 87 69 67 j 1,167, 284 82.3 22 20 278,008 83.7 182; 4, 246, 968 83.51 190 76 70 988,890 73.5 1,016,018 252,470 4, 047, 088 1,423,241 79.8 77.8 81.3 77.1 142J 163. 481 1, 227, 770 19, G62 511, 723 6, 543 509, 594 3, 907, 471 117, 306 5, 059, 2#i 344, 720 48, 474 2,825,066 67.3 80.8 88.6 76 52.8 75.3 92 82.5 83.1 85 768.6 80 17 27 3 12 1 4r 6' 4 243 15 8 161 566,861 82.3 1, 784,146 78.1 75,716 58.1 815, 481 80.1 7, 559 8.2 500,318 75.7 4, 412, 620 91 119, J)72 79.3 5, 634, 586 83.3 391, 965 78.3 257, 442 gU. 3 3,150, 787 76.1 1 179 58' 9 162,420 3, 934, 436 1, 235, 886 395,441 71.8 84.8 87.9 85.9 1 191 62 13 174, 526 5, 718,088 1, 486,144 728, 573 72.6 84.9 90.5 80.4 702, 408 292, 786 92,969 405,256 1,518,480 15,526 112, 4151 543,935 6,782 63.9 67.8 49.8 79.2 89.5 37.4 65 80.8 33.6 25 15 1 47 18| 2| 17 31 3 893,058 832, 923 112,764 407, 423 1,439, 571 38, 242! 180, 627j 545, 019| 144, 796 73.3 76.8 80.5 74.3 87.2 30 72.4 64.3 87.8 13| 25! 2 11 1 45 62i 226J 12; 28 2 8! 35! 42^ 84| $711, 342 77. 6 15, 41670.1 270, 720|75.4 1,411, 33577. 0 4,193, 612 92.5 5, 766, 955 92.1 570, 605 78. 4 1 33, 637:58.1 401, 254184.1 15 651181.3 859, 29! 100, 960*55.5 6| 922 81. 7 3, 753, 160 99 2, 5y2, 371 77. 3 131 151 64 8 79 38 200 103 12 49 47 22 117 2 51 91 9 259 19 25 208 2,755, 468 81 l,894,31l|74.6 1,415, 529179. 2 69, 222 55. 6 2. 403, 252 88. 4 622, 265187. 6 8, 095, 558 85. 7 2, 248, 709 78. 6 205, 378 72. 6 489, 955 70.1 1,215,787 86.3 816, 921 84.5 652, 699 ;70.1 17, 937J61.1 1, 992, 071187. 5 5, 490, 722 86. 8 388, 683 91. 5 9, 067, 232 88. 3 536, 983 8$. 1 168,015 75.9 5,330, 538;79. 4 35 266 59 14 38 40 153 10 49 31 39 17 62 9 1,155, 425J77 7, 942, 20884. 6 3,120, 722 89.9 454,425 83 364,559 71.6 1,759.214 82. 3 3,466, 929 76. 5 555,254 74 1,161,487 83.8 2, 248, 088 92.1 1, 346, 571 74. 5 247, 111 86 1, 396, 264 79.1 259, 506 76.14 Whole conn 1,731! 40,175,542! 81.71,895 52,118,185 81.7 3,034 92, 045, 578 84.1 t r y without reserve cities. 48 165,193, 347 98.8 481167,437,759! 98.7 47 165, 923, 38296 N . Y. C i t y . . . 187 77,100,715 94.4 189 77, 922, 247 92.3 283163.855,766 93.'; Other reserve cities. 28 2 8 35 46 84 18 1 15 29 7 170 101 2 138 154 66 $642, 454 74.3 10, 289 59.9 289,909j73.2 1,139,894 73.6 3, 273,295 89. 5! 4,141,017 92.6 426, 082:85. 8 37, 720|78. 4 264, 488 77.2 1,151,180 73.3 153, 5X9 50 5, 298,441 79. 7 2, 895, 063 79.1 26, 963J76. 4 3, 293, 990179. 6 2,123, 562!82. 3 1,166,18&74.9 89,196143.1 78 1,937. 429J88.4 40 417, 264181. 203 6,185, 310 87.1 102 2,213,253 80.6 12 219. 477 78. 5 53 478,964 72. 7 47 986,614J83. 3 24 1,097,125 81.8 123 1, 726. 031 77.3 2 20,332 55. 6 51 964. 080i88. 2 94 4, 848,74886. 8 9 274,834;85. 9 256 6, 781, 255;«8.1 20 791,741185.7 27 254, 769J78. 4 207 4, 752, 768-80.1 33, 849128.9 3 910, 868 76. 6 35 276 6,820,918183.4 59 2,307,387 90.4 16 1,007,242 90 37 442,665 75.4 49 1,864, 388 82.1 172 5,136,238 73.7 9 587, 065 75.4 51 902,474 84.4 31 2,100, 592 89. 5 48 1,759, 739;79.7 201 470, 847|85.8 63| 1,233, 396 78. 8 11 187, 206,62. 2 3,141 86,167, 915 82. 9 47 120, 451,472 95.6 286120,658,864 92.3 United States 1, 966 284, 714,016 95.1 2,132 295, 233,779 94.1:3,364 421,824, 726:92. 5 3, 474 327, 278, 251 91 a The settling day nearest the 30th of June. b The settling day nearest the 1st of July. c These amounts are deposits of selected classes of retail depositors. d This the corrected table. The percentages are for the States without the reserve cities. REPORT OF THE COMPTROLLER OF THE CURRENCY. 93 RECEIPTS AND DEPOSITS OF BANKS AT DIFFERENT TIMES. 28 4 9 32 53 81 18 1 18 28 11 165 101 5 136 142 58 11 80 38 213 82 13 48 55 31 113 2 50 94 8 250 21 29 191 3 37 288 58 13 34 47 188 14 43 22 63 22 70 12 $500, 305 78.0 136, 639 95.6 203, 251 80.0 1,327, 247 79.8 3, 377, 856 92.1 3, 063, 485 92 495, 464 87.4 54,666 54.8 471, 809 84 758,226 84.3 141, 476 50. 5 4, 780,175 85.1 3,199,958 80.1 32,942 46.9 2, 721, 280 79 2,143, 404 85.5 1, 025, 622 83.5 63, 678 60.9 1, 708, 985 88.8 576, 752 86 7,068, 468 89 1, 758, 624 83.7 138, 550 74.1 404, 928 78.8 1, 679, 606 90. 9 1,346,841184.5 1, 770, 246 80. 5 17,247^1.6 1,162, 227 87. 4 5, 214, 420 85.0 116, 098 67. 3 6,757,119 88 436,52179.9 329, 830 85. 3 4, 986,18879. 5 50, 771:42. 4 1, 122, 545 62. 4 6, 685. 288 85. 9 3, 063, 485 92 660. 649 92. 2 700.984 83.1 1,076,51183.1 3, 562, 658 80. 4 472,014 76.2 821,225 89.1 456, 027 85. 9 1, 214, 474J72. 5 456, 027 85. 9 1, 712, 360 82. 9 167, 212)79 18 4 4 20 33 43 13 1 9 16 7 111 68 5 102 94 33 4 65 19 137 58 8 24 39 13 64 1 38 70 7 278 12 18 118 6 22 158 48 21 30 117 5 32 21 49 14 57 9 Retail deposits, c $ $51, 895 7, 776 27,159 52, 060 127, 967 83, 565 30,123 (f\ 65.0 59.2 60.3 43.1 70.5 55.2 53.7 ft 25 5 18 135 52 122 17 42, 281 66 36, 047 70.2 28,038 54.3 235,3981 55.7 112, 739; 45. 3 2, 429 61. 9 188, 339; 56.1 213,239 65.7 37, 815 53.9 18, 506 71.4 145,880 62.3 55,760 65.1 267, 981 48.6 117, 523 53.4 70,150 86.5 48,874 63.4 69, 046 51.4 55, 003 72.7 101, 890 65.4 30 39 13 272 158 8 327 165 104 19 111 49 294 157 17 245 134 38 256 181 3 74 60,081 *57."i 126 232, 287 51 9 38, 323 83.6 470,361 60.7 396 26 46,112 49.5 27, 499 56.3 44 233,695' 55.8 269 9 16,309 60.8 71, 375! 55. 8 43 751,266 52.4 392 74 70,835i 59 14 39,428! 37.6 60 43,104 57.1 68 312,298 67.5 193 12,303 56.3 15 63, 280 62.1 62 57,641 74 8 48 114, 964j 66.8 50 37 34, 869 64 92,117 52.5 164 56, 399: 43. 6 13 3,144 83,713,926 84.92,142 5,072, 058, 57 Retail deposits, e r P XH Total deposits. p'd ft $75,406 58.7 23, 069 74. 9 50, 580 63. 0 572, 546 56.0 730,773 75.9 511,074 60.3 74, 906 62.4 (/) (/) 1 (/) 93,740 63.2' 131,748 61.7 21,135 60.8 831,944 67.11 497.422 64.8 0, 973 52. 6 598, 643 60. 7 277, h'97 67. 2 200,77169.3 30, 907 58.11 258, 213 61 111,97161.8 1,201,505 57.31 470, 243 66 42,122 54. 2 1 268,836 64.7 324.307.68.1 169,213 71 267,44162.2 3, 693 87. 31 165, 742 53. 6 977.853 63.7i 31,142 80. 3 2,120,904 66.6 91.287-61.8' 79, 058 60. 7 914, 665 56. 7 12, 354 55. 7 93, 647 59. 2 1,684,074 61 ..... 251,818 52 39,96274.7 105,69165.8 206, 286 64.1 472, 316 61 45, 53473 196, 742 69. 2^ 122,085 60.7; 165,873 56.4 111,804 68.7 388, 633|61. 3 30, 008 70. 5 5, 005 16,144, 616 63.1 SQ 1. °£ Per cent of an d dra s. p July 1,1896.6 inks. M OQ M a | so Per ce an & j. £ II 1 la P r ce anc er of Receipts. snt of ch id drafts 8^ nks. M a July 1,1896. & June 30,1894. a er of nks. Sept. 15,1892. $450,213 82.0 45, 718 74. 3 230, 016184.1 2, 000, 860!61.2 2, 478, 808 88. 6 2, 894, 738 86.2 337, 942 86.8 if) \ (f) 375, 598 84. 2 604, 550 80. 6 80,69275.2 2,774, 309 81. 8 2, 313, 379 81. 8 29,14677. 7 1,871,80677.7 1,319,210 84.2 736, 985 84. 2 113, 383.67. 5 1, 365. 269 84. 2 367, 026.80.1 6,120, 392 98. 4 1, 527, 810 82. 2 171,510 83.1 854, 66479. 9 1,310,941:86.1 538, 402 82. 7 949,762 91.9 109, 586 92. 5 1,188,199 85.9 6, 272, 283 86. 6 173,107 90.8 8, 435, 698 84. 6 364,105 79.7 242, 53677.1 3, 654, 442 75. 7 46,334 76 347, 203177. 3 6, 512,13272. 9 1, 585, 522:84 159,134 86.1 248, 886 78. 5 1, 466, 643! 86. 8 1, 576. 745 78.4 257, 598 87. 4 725, 632 84. 9 843, 727 86. 4 648, 35077. 7 448, 879 82 1,380,871,79.2 55, 971 73.9 States and Territories. Alabama. Arizona. Arkansas. California. Colorado. Connecticut. Delaware. Dist.Columbia Florida. Georgia. Idaho. Illinois. Indiana. Indian Ter. Iowa. Kansas. Kentucky. Louisiana. Maine. Maryland. Massachusett Michigan. Mississippi. Missouri. Minnesota. Montana. Nebraska. Nevada. N. Hampshire. New Jersey. New Mexico. New York. N. Carolina. North Dakota. Ohio. Oklahoma. Oregon. Pennsylvania. Rhode Island. South Carolina, South Dakota. Tennessee. Texas. Utah. Vermont. Virginia. Washington. West Virginia. Wisconsin. Wyoming. 69, 006, 045 82.7 Whole country wi thou t reserve cities. 48 130, 976, 963 92.3 281 116, 514, 324 92.7 47, 692 64.5 48 226 1, 244, 596 64 81 444 2,136, 816 79.4 8, 255, 498 74.1 3,473 331,205,213 90.6 2,416 6, 364, 346 58.5 5,530 26, 536, 930 67.4 139, 221, 377197.8 N. Y. City. Other reserve 94,708,810 92 cities. 302, 936, 232 92.5 United States. e These amounts are deposits by all classes of retail dealers. / W i t h reserve cities. g For Dakota before the organization of the present States. 94 REPORT OF THE COMPTROLLER OF THE CURRENCY. INCREASE IN THE USE OF CREDIT INSTRUMENTS. Is the percentage of payments made by means of checks, drafts, and other credit instruments increasing? This has been both affirmed and denied. It has too often been tacitly assumed that the amount of checks drawn increases with the population. This, however, is not quite accurate. The returns show that places of comparative sparseness of population use a higher percentage of checks than do more thickly settled portions of the country. The percentage of checks used depends on a variety of circumstances. Besides those given heretofore there may be mentioned as among these causes the proximity to a large commercial center; the industrial character, whether manufacturing or agricultural; the length of the wage period; the habit of paying .wages by checks; the rate of wages, or rather the range of incomes, and the scale of prices itself. If prices are very low and purchases small, a larger number of small pieces of money are likely to be used in retail trade. The percentage of checks returned depends partly on the state of trade. In a period of business depression the demand for a medium of exchange is lessened, and the proportion of this diminution of demand which falls on the credit part is proportionately larger than that which falls on the money part. JStill again, allowance must ber made for any increase in the quantity of Government or bank notes. In so far as these are not certificates ot deposit, they are virtually credit instruments, and should be counted on the credit side of the account. The extent of the use of credit instruments is affected also by certain minor causes, such as the season. Several banks, in returning the blanks sent to them, remarked that the percentage of credit instruments was an u average for this season of the year," or below or above the average for this season of the year, as the case might be. Finally, the use of checks varies like the use of any other highly developed tool of industry. If trade is on a large scale, the check has a more important function. If trade is active, business confidence great, men hopeful, there will be in business transactions a larger proportion of credit paper. It will be observed, however, that beginning with places of the smallest population the percentage rises to a certain point, then falls, then rises again. To make more clear this subject a table (XVII) by States in the order of their population, showing the percentage of checks for each State according to the present investigation, and another (XVIII) showing the percentages for the usual geographical groups of States are herewith given, as is also a table (XIX) showing the percentages obtained from all the investigations on this subject for sixteen of the largest cities of the country. It will be observed that the average varies from 92.27 in September, 1890, to 93.68 in June of the same year, It is 92.3 for 1896. 95 REPORT OF THE COMPTROLLER OF THE CURRENCY. TABLE XVII.—PERCENTAGES BY STATES IN ORDER OF POPULATION. Per cent checks. Population, a State or Territory. New York Pennsylvania Illinois Ohio Missouri Massachusetts Texas Michigan Indi ana Iowa Georgia Kentucky "Wisconsin Tennessee Virginia North Carolina Minnesota New Jersey Alabama Kansas Nebraska California Mississippi Arkansas South Carolina . . Retail. 6, 557, 000 5,861, 000 4, 200, 000 3, 880,000 2, 970, 000 2, 675, 000 2, 445, 000 2, 350, 000 2, 290, 000 2, 025, 000 1,960, 000 1,955,000 1, 939, 000 1, 890, 000 1,722, 000 1,690,000 1, 660,000 1,632, 000 1, 625, 000 1,590,000 1, 490, 000 1, 392, 000 1, 350, 000 1, 290, 000 1,195,000 73.3 68.2 69.7 64.5 78.2 65.8 61 64.7 63.5 62.2 61.7 77.4 66 64.1 60.7 61.8 72 63.7 •58.7 67.2 60.5 58.2 54.3 63 74.6 All. 96.4 89.8 92.3 84.6 90.7 93.2 78.4 84.4 81.8 78 80.6 87.1 85 1 86.8 86.4 79.7 92.5 86.6 82 84.2 85.9 69.4 83.1 84.1 86.1 Per cent checks. Population. * State or Territory. Louisiana Maryland West Virginia Connecticut Maine Washington Colorado South Dakota Florida New Hampshire Oregon --..•Rhode Island Vermont North Dakota District of Columbia Utah Montana Indian Territory Delaware New Mexico Oklahoma Idaho Wyoming Arizona Nevada Retail. 1,190, 000 1, 095, 000 835,000 821, 000 666, 000 575,000 546, 000 522, 000 475,000 391, 000 388, 000 382, 000 333,000 316,000 284, 000 255, 000 217, 000 201, 000 180, 000 173, 000 145, 000 126, 000 91, 000 67, 000 45, 000 All. 88.3 93.3 82 86.2 84.2 77.7 88.6 78.5 84.2 85.9 77.3 84 84.9 77.1 73.2 87.5 82.7 77.7 86. 8 90.8 76 75.2 73.9 74.3 92.5 72.7 59.3 68.9 60.3 61 56.4 75.9 65.8 63.2 53.2 59.2 52 69.2 60.7 59.8 73 71 52.7 62.4 80*3 55.7 60.8 70.5 74.9 87.3 * Estimate by the Government actuary. TABLE XVIII.—PERCENTAGE CHECKS BY GEOGRAPHICAL DIVISIONS. 1896. 1894, retail. Divisions. 56.1 62.3 54.3 65.6 59.7 North Atlantic States South Atlantic States North Central States. South Central States.. Western States Retail. All returns. 69.2 61.5 67.4 67.4 66.8 94.4 89 88.4 84.8 78.5 Population, 1890. 17,400, 000 8,900, 000 22, 400,000 11,000, 000 3, 000,000 Here again we see evidence that the fuller the returns—that is? the larger the amount of trade reached—the larger the proportion of credit instruments shown. TABLE XIX.—PERCENTAGE OF CHECKS IN DEPOSITS OF CITIES ON VARIOUS DATES. Cities. New York •. Chicago Boston .. Philadelphia Cincinnati Baltimore Pittsburg. . . . . . Albany ^V^ashington New Orleans . Cleveland Detroit Milwaukee ... St. Louis San Francisco Reserve cities, except New Y o r k . . Banks elsewhere... Whole country . . . . J u n e 30, 1881. Sept. 17, 1881. 98.70 92 96.50 96 88 92.90 90.40 93 80 60 89.80 92.80 94 87 50 88 30 82 30 91.80 98.80 90.30 93.70 96.40 90 93.90 86.20 96.50 45 80 80.20 83.40 95.10 93.50 94.90 81.50 77.40 94.38 81.72 95.13 92.35 81.74 94.09 * All deposits. J u n e 30, 1894.t J u l y 1, 1896.t Sept. 17, 1890. Sept. 15, 1892. 96.04 95.11 94.14 96.19 92. 34 89.89 92.37 92.97 65 27 90.09 93.55 93 08 87.31 83.25 89.77 85.61 95.64 95.06 90.70 93. 48 93. 50 89.16 90 96.60 32 65 82. 83 92.68 94.74 95.61 87. 50 89.59 91.20 92.36 94.52 93.11 93.92 94.64 82.46 90.02 95.33 66 65 87.16 91. 86 92. 79 91.82 90. 93 87.83 83.39 97.8 94.1 96.3 95.5 89.2 94 87.8 80.8 73 2 89.9 90. 5 87.2 87.1 90.3 91.8 80.6 30.3 72.1 68.9 38. 3 88.5 79.4 71.8 75.2 78.6 64.7 58.5 59.2 69.6 59.8 75.6 84.8 79.1 60.1 76.8 82.3 70 93.68 84.09 92.50 92.27 82.91 91.04 92.74 84. 91 90.61 92.3 82.7 92.5 61.5 57 58.5 74 63.1 67.4 J u l y 1, 1890. J u l y 1, 1896.* t Retail deposits only. 64.5 53.2 51.4 55 78.2 45.3 58 72.8 62.6 96 REPORT OF THE COMPTROLLER OF THE CURRENCY. OTHER POINTS OF INTEREST SHOWN BY THE RETURNS. There are certain incidental points of considerable interest, concerning which information was secured from the banks in the present investigation. Perhaps the most interesting is the showing of the bank deposits for the different classes of depositors, with reference to the amount of various kinds of money actually in use in the hands of the people, as shown in Tables XII-X V, inclusive. The percentage of gold coin shown for all retail trade was 2.4; of silver coin, 3.2; of paper money, 26.7. The percentage of gold coin was highest in California where it was 36.4. Oregon had 30 per cent; Washington State, 22.6; Idaho, 18.2; Utah, 15; Wyoming, 10.9; Arizona, 10.3. A study of the tables shows, as did the returns in 1894, that gold coin has a more extensive circulation in the extreme Western States than in any other part of the country. Silver coin predominated in Georgia, Alabama, Mississippi, North Carolina, Florida, Louisiana, Tennessee; in other words, silver is more largely in the hands of the people in the Southern States than elsewhere. Paper currency shows the largest percentages in the Eastern States. New Hampshire leads, with 44.2; the District of Columbia has 38.8; Connecticut has 37.4; Maryland has 37.6; Maine, 36.6; Michigan shows 30 per cent; Massachusetts, 32; Mississippi, 35. In wholesale trade the average per cent of gold used was for the whole country 0.3 per cent; of silver, 0.4 per cent; of paper, 4 per cent. Nevada, Utah, Washington, California, and Arizona show the largest percentage of gold. The percentage of silver used is in no case remarkable. Such as it is, however, it is largest in the Southern States. In wholesale trade, as in retail, the largest percentage of paper money used is in the Eastern and Northern States. New Jersey has 12 per cent, North Dakota 8£, South Dakota 10. A study of the table showing the grand total returns reveals similar variations. PAYMENT OF WAGES. Table XX shows the ratio of replies obtained affirmatively and negatively to the second question on the blank sent out, viz: "Is it customary in your community to pay wages by check?" It shows also the ratio of the number of replies giving the wage period as monthly, semimonthly, and weekly. The information obtained, of course, is only of a very general character, yet it serves to prove something of the influence which both have on the use of checks by the people at large. It is likely that in many cases an answer " yes" was given to the question concerning the payment of wages by check when the writer meant salaries rather than wages. It is likely, too, that a similar mistake was made by some in giving the wage period. From notes appended to many of the blanks it would seem that where wages are paid monthly or semimonthly they are more largely paid with checks. REPORT OF THE COMPTROLLER OP THE CURRENCY. 97 TABLE XX.—RATIOS OF REPLIES AS TO WHETHER WAGES ARE PAID BY CHECK, AND AS TO THE WAGE PERIOD. Wages byState or Territory. check. (Katio Wage period. of yes to no.) Alabama.......... Arizona Arkansas California Colorado Connecticut Delaware District of Columbia. Florida Georgia Idaho Illinois Indiana Indian Territory Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota, Mississippi Missouri Montana , M. S.-M. W.* 0.3 t o l 1:0.2 0.50 2.0 t o l 1: 0 0 1.0 t o l 1: 0 1.70 1.5 t o l 1:0.07 0.75 13.0 t o l 1: 0 0.20 7.0 0.16 to 1 1:1.0 2.50 0.5 t o l 1:1.0 2.0 0.15 to 1 1:1.5 2.0 1.0 t o l 0.5 0.25 to 1 1:0.25 0.7 2. 0 to 1 0 0.5 1.3 1.5 t o l 0.6 1.0 t o l 0.8 2.0 0.37.0 t o l 0 2.0 t o l 0.25 0.5 4.0 to 1 0 0.4 1.3 t o l 0 3.0 0.16 to 1 0 2.0 1.8 0.25 to 1 1:1.5 0. 25 to 1 0 4.0 0. 05 to 1 0.15 15.0 1.75 1.5 t o l 0.6 2.0 t o l 1:0.14 0.5 0.2 t o l : 0 2.0 3.0 t o l :0.03 0.40 2.0 t o l : 0 Wages by State or Territory. check. (Ratio Wage period. of yes to no.) Nebraska New Hampshire . . . New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Whole country. M. S.-M. W* : 0.03 0.2 : 0.5 2.0 : 1.0 4.0 : 0 0.2 : 0.5 5.0 1: 3.0 8.0 1: 0 0.08 2.0 t o l 0.3 t o l 1: 3.0 5.0 9.0 t o l 1: 0 0.5 2.0 t o l 1: 0 0.5 0.3 t o l 1: 1.8 2.0 0.5 t o l 1: 0 7.0 0.3 t o l 1: 1.0 2.0 1.0 t o l 0 0.14 0.5 t o l 0.3 1.5 0 0.3 1.5 t o l 3.0 t o l 0.3 0.3 0.12 1.0 0. 25 to 1 0.2 t o l 0 1.0 0 0.2 4.0 t o l 1.0 0.5 0. 75 to 1 2.0 t o l 0.1 0.5 0 0.08 13.0 t o l 3.0 t o l 0.16 to 1 0.12 to 1 4.0 t o l 0.3 t o l 0.2 t o l 1.96 to 1 1: 0.40: 1.9 * Monthly, semimonthly, weekly. ANALYSIS OF RETURNS FROM CLEARING HOUSES FOR JULY 1, 1896. In order to make as complete as possible the statistics relative to the monetary transactions of July 1, a circular was also addressed to the clearing-house associations of the country requesting information of the business of that day. The replies received were from 66 of the 78 of such associations then in active operation in the United States. Their total clearings upon the day stated amounted to $227,935,464. The balances of these total clearings settled in cash or cash exchanges were but $19,152,834. The items making up such balances were as follows: Gold Gold clearing-house certificates Silver and silver certificates United States notes Currency Currency certificates National-bank notes Exchanges Managers' certificates Collections by creditor from debtor bank Not stated Total $1,325,015 265,000 175, 950 3,451,761 1,017,101 5, 785, 000 31, 746 3,088,299 3, 904, 904 85, 930 22,128 19,152,834 On examination of the individual items of settlement, it is found that but $1,350,000 of the aggregate balances consisted of coin, the various forms of paper currency being, as a matter of fact, u substitutes for money." Upon this basis the proportion of actual money used in settlement is extremely small. An analysis of the accompanying table setting forth in detail the transactions of these clearings by States, together with the information sent with the returns, shows the methods for settling balances to vary in different States, and also to differ between clearing houses located in the same State. In some cases balances due by debtor banks are Digitized forpaid FRASER in gold coin, silver coin, or paper currency to the manager of the http://fraser.stlouisfed.org/ OUR 96, PT 1 7 Federal Reserve Bank of St. Louis 98 REPORT OF THE COMPTROLLER OF THE CURRENCY. clearing house, who disburses this money to the creditor bank. The extent to which this practice prevails is shown in columns headed "Gold," "Silver," and "Paper currency," respectively. Again, the debtor banks settle their balances by paying part in money and part in drafts on their correspondent banks to the clearing-house manager, who remits the currency and drafts to a correspondent bank and gives his drafts on such bank to the creditor banks for amounts due to them. In other cases, no money or drafts are handled by the clearing houses, but it is the custom for the clearing house manager to certify the amount due to or due from each bank and the manner in which this certificate or order of the manager is settled by the debtor bank is not uniform. In a few instances the manager's certificate or order is not presented to the debtor bank for payment, but is held by the creditor bank until needed to settle an adverse balance. As a general thing, however, the order is presented to the debtor bank for payment either in currency or by drafts drawn by the debtor bank upon a correspondent bank in New York, Chicago, St. Louis, or some other city, as may be agreed between the creditor and debtor banks. The extent to which settlements are made by manager's certificates or orders is shown in columns headed "Collections from debtor banks," "Exchanges," "Manager's checks or orders." To a large extent and in some of the largest cities balances are habitually settled by exchange on correspondent banks in neighboring or distant cities, and no money passes between the debtor and creditor banks in such cases. CLEARINGS AND BALANCES AND METHOD OF SETTLING BALANCES OF THE CLEARINGHOUSE ASSOCIATIONS OF THE COUNTRY ON JULY 1, 1896. Balances. Location of associations. Clearings. Gold.* $305, 892 19,400,160 853, 042 888, 052 M'line Massachusetts "RTinrlA Tulaiirl $16 21,447,146 Total New York District of Columbia Total Silver.! 16 139, 849, 413 15, 832, 025 3, 802,490 425, 561 $145,000 120, 000 748,467 159,909,489 1,013,467 Paper currency. $789,125 789,125 Texas Tennessee 154,667 1,500 154, 667 8,935,403 10,713 2,688 42,471 13, 401 42,471 5,000 44 780 398, 220 19, 806 11,380 131, 000 4,324 8,951 13, 375 79, 255 Wisconsin Minnesota Iowa 5 341 796 23,329, 662 80, 061 984, 440 2, 295,181 136, 523 67, 418 5, 259, 577 Total 37, 494, 658 147, 380 7,797 21, 241 543,427 * Includes TJnited States and clearing-house gold certificates. t Includes silver certificates. 23, 653 5, 524 2,442 5,154,547 Total Ohio Illinois $23, 653 6, 965, 843 1,968, 060 132, 915 578, 698 35,136 48 242 1,479, 529 1 210 585 1, 343, 714 325,728 "Flnrirlfl Collections from debtor banks. 19,806 EEPOET OF THE COMPTROLLER OF THE CURRENCY. 99 CLEARINGS AND BALANCES AND METHOD OF SETTLING BALANCES OF THE CLEARINGHOUSE ASSOCIATIONS OF THE COUNTRY ON JULY 1, 1896—Continued. Balances. Location of association. Clearings. Gold.* $193,423 319, 734 192, 437 71, 449 297.125 2, 855, 456 Colorado Utah -M^ontana "W ashin "'ton California Total The United States Silver.! $69, 345 40, 000 35, 127 284, 696 $4, 252 $i0 16 3, 929, 624 429, 168 26 4, 252 227,935, 464 1, 590, 015 175, 950 10, 285,608 Balances. Location of associations. Exchanges. Maine Massachusetts Rhode Island ... ............ Total !N"ew York Pennsylvania Maryland District of Columb a Managers' checks or orders. $234,408 209 424 251, 331 $1,965,994 695,163 1, 965, 994 179,109 24, 000 55, 460 Total 203,109 55,460 Virginia Georgia Florida .Alabama . -. Louisiana Texas Kentucky Tennessee 17,584 Ohio Illinois . . . . Michigan "Wisconsin Minnesota Iowa $23 653 2, 989, 543 209 424 251, 331 7.7 15.4 24 5 28.3 100.0 73.6 100 0 100.0 3, 473, 951 16.2 77.3 22.7 7, 289, 952 2,167, 520 748, 467 156,167 5.2 13.6 19.6 36. 9 2.4 3.6 97.6 96.4 100.0 100.0 6.5 2.5 97.5 83,241 8,712 5,570 135,171 +43 875 218,356 173, 685 37. 9 35.2 16.2 53.3 62.1 64.8 100.0 100.0 100.0 100 0 100.0 100.0 17, 584 668, 610 742,066 14.4 98.1 1.9 7,683 1, 815, 543 13, 375 113 016 222, 826 385, 987 8.3 9.6 16.7 14.4 19.2 32.3 11 5 13.6 88.6 81.0 100.0 79.3 50.4 100.0 11.4 19. 0 716,664 443, 974 2, 241, 011 13,375 142 095 442, 032 44,120 7 797 716, 064 1,146, 771 4,051,068 10.8 82.4 69 345 21, 358 33 467 44, 252 70, 509 284, 712 35.6 6.6 17.3 61.7 23.6 10.0 90,197 523, 643 3,927,032 19,152, 834 2,172, 443 Oregon Colorado Utah Montana Washington California 21, 358 33,467 35, 372 Total 3,088, 299 20.7 49.6 100 0 100.0 17.6 100.0 100.0 100.0 50.1 100.0 49.9 100.0 13.3 17.2 82.8 8.4 36.5 63.5 * Includes "United States and clearing-house gold certificates. t Includes silver certificates. I Includes $22,128, character not reported. 2G.4 12.2 22.1 24.7 11.5 9.1 Nebraska The United States . Percentage of PercentPercentbalances age of age of settled balances balance to clear- by credit settled in instruing. money. ments. 28,297 128,400 8,712 5 570 135,171 43,875 218,356 173,685 44,120 Total Total balances. $85, 930 10,362,106 ... Total Collections from debtor banks. Paper currency. 100 REPORT OF THE COMPTROLLER OF THE CURRENCY. SUGGESTED AMENDMENTS TO THE BANK ACT. It is one of the duties imposed by law upon the Comptroller of the Currency that he shall in his annual report to Congress indicate such amendments to the bank act as would in his judgment improve the national banking system. In discharge of that duty, I submit for consideration the following suggestions which it is believed, if embodied into law, would be of material public benefit: First. That the loans and discounts of any bank to its executive officers and employees be restricted in amount, secured by proper collateral or by additional signature or signatures of financially responsible persons to the notes taken, and made only upon the approval of the board of directors, a written record thereof being kept. Second. That no loan shall be made to a director who is not an executive officer of the bank except either upon a deposit of collateral security or upon a note given therefor bearing in addition to such director's own signature the signature or signatures of one or more financially responsible person or persons. Third. That upon a day in each year, to be designated by the Comptroller, the directors of national banks shall be required to make an examination of the affairs of the bank with which connected and submit to the Comptroller of the Currency a report thereon upon blanks to be furnished for such purpose. Fourth. That the assistant cashier, in the absence or because of the disability of the cashier, be authorized to sign the circulating notes and to sign and make oath or affirmation to reports of condition of a national bank. Fifth. That some class of public officers be empowered to administer the general oaths required to be taken by the National Bank Act. Sixth. That in places having a population of less than 2,000 inhabitants national banks shall be permitted, under regulations to be made by the Comptroller of the Currency and approved by the Secretary of the Treasury, to be organized with a capital stock of not less than $25,000, and with a corresponding reduction in the amount of bonds required to be deposited with the Treasurer of the United States. Seventh. That national banks be permitted under such regulations and restrictions as shall be made by the Comptroller of the Currency and approved by the Secretary of the Treasury to establish branch banks in towns and villages where no national bank is established and where the population does not exceed 1,000 inhabitants; such branch banks to have the right to receive deposits, make loans and discounts, and buy and sell exchange, but in no case to be permitted to issue circulating notes other than of the parent bank. It shall in all respects be considered as a part of the parent bank, and in each case where such branches are maintained the Comptroller shall receive in the reports of the central bank a statement properly sworn to and attested of the condition of its branches. He shall also have the right of separate and independent examinations, and he may, whenever he deems it necessary, require, before granting the right to any bank to maintain branches, that the paid-up capital stock of such bank be increased to an amount to be fixed by him with the approval of the Secretary of the Treasury. Eighth. That the semiannual tax levied on account of the circulating notes of national banks be reduced so as to equal but one-fourth of 1 per cent per annum. Ninth. That the Comptroller of the Currency be authorized to issue national banking associations circulating notes to the par value of Digitized forto FRASER REPORT OF THE COMPTROLLER OF THE CURRENCY. 101 the bonds, when the market value thereof is equal to tne par value, deposited by them with the Treasurer of the United States to secure such notes. ARGUMENTS IN SUPPORT OF. SUGGESTIONS. The amendments denominated, respectively, first, third, fourth, and fifth, and those denominated eighth and ninth, have been repeatedly urged upon the law-making branch of the Government and as repeatedly failed of definite and decisive consideration. The second, sixth, and seventh are now for the first time presented. The first proposed are designed wholly to reach the necessary and safe administration of the affairs of national banks, and are essential thereto. No possible objection can be raised to either one or all of them, and if the time could be had for their consideration, it is not unlikely they would find a place upon the statute book. It is respectfully urged that as they in no wise bear upon the subject of giving an enlarged power to the national banks no objection against their enactment could be raised by even those who see fit to oppose the system. AMENDMENTS TO RESTRICT BORROWING BY OFFICERS AND DIRECTORS AND TO ENFORCE KNOWLEDGE OF BANK'S CONDITION. It is known by those familiar with the conduct of banks that danger, loss, and at times scandal and dishonesty arise in the conduct of a bank from the too large use of its funds by its executive officers, employees, and directors. And not less often does it occur that directors, charged with the duty under the law of administering its affairs, at such times plead ignorance of the condition developed by its failure or the serious impairment of its capital. The first and second amendments recommended design to remedy the one and take away all excuse for the other of these sources of weakness to banks and of delinquencies of those who are concerned in the management. Their enactment would tend, at the close of a period of many bank failures and defalcations, characterized in the majority of instances by overloans to executive officers and directors and gross negligence of duty, to reintrench in the confidence of the public the banking system. The deposit feature of banking in this country has been developed to its present great proportions by the national bank, the source of whose strength has arisen from its national character. If there is no legal responsibility because of its national origin and supervision resting upon the general government to protect depositors and shareholders against needless loss, there is a moral one, which can only be discharged by the enactment and enforcement of the best protective measures. The powers now vested in the Comptroller of the Currency, despite the exercise of them to the utmost, are but limited. He can suggest, but not enforce—as he might in the light of the amendments asked for— rules and regulations which would guarantee a better condition of affairs in the banking world and relieve the public of anxiety in times of financial uncertainty. AMENDMENT RELATING TO CASHIER. The giving of authority to the assistant cashier in the absence or because of the disability of the cashier to sign the circulating notes of a bank and its reports of condition under calls from the Comptroller is asked in order to relieve the banks of an embarrassment so frequently met. The bank act restricts the power in these respects entirely to the 102 REPORT OF THE COMPTROLLER OF THE CURRENCY. cashier, and in his absence or disability loss and embarrassment are entailed by the want of someone to sign such notes, and this delay is occasioned through want of the x^roper person to sign and make oath or affirmation to reports of condition. AMENDMENT RELATING TO THE ADMINISTRATION OF,OATHS. In 1882 the Supreme Court of the United States delivered an opinion through Mr. Justice Harlan, in the case of the United States v. Curtis, to the effect that there was no act of Congress which gave notaries public in the different States the authority to administer the oaths verifying reports of condition of national banks prior to the passage of the act of February 26, 1881, chapter 82. The reasoning in that opinion appears to apply equally well to the oaths required of directors of national banks under section 5147 of the Eevised Statutes. Inasmuch as the act of February 26,1881, simply provides for the verification of bank reports, it would seem proper that an amendment should be made to the section referred to authorizing some class of officers to administer the oaths therein provided for. ORGANIZATION OF NATIONAL BANKS WITH A LESS CAPITAL STOCK THAN FIFTY THOUSAND DOLLARS. The national-banking system was for many years protested against, by those who looked upon its creation by national statute, as an innovation of the rights reserved to the States under the provision of the Federal Constitution. Whether or not the prejudice against the system upon that ground has yielded through the decision of the Supreme Court upholding the constitutionality of the law, or for other reasons, the fact is that throughout the whole country whatever complaint is now urged against it is placed upon a different basis. It has drawn to itself support and inspired general confidence because of its central and uniform governmental supervision and examination, the frequent publication of sworn reports of condition, the double liability of shareholders, the percentage of reserve to be held against deposits required, and the necessity of having the bank's funds invested in quick assets rather than tied up in real-estate investments. These features have been the means of giving it a strength beyond any State system, and guarantee its future continuance. Its usefulness, however, can still be enlarged and its benefits to the people made more widespread. The complaint to-day is main]y directed against it because the minimum capital stock required is so large that small towns and villages can not have the banking advantages which they might if less capital were required. The allegation is not without force, argument, and reason. In many sections of the country under existing requirements national banks, though needed, can not be supported from a want of surplus investable capital necessary to establish them. These places suffer more for want of banks of deposit and discount than from any need of banks of issue, but under amendments six and seven, to which attention is called, either banks of issue, deposit, and discount or banks of deposit and discount alone could be had. The minimum capital stock required at present for the organization of a national bank is $50,000, with a deposit with the Treasurer of the United States of United States bonds of $12,500. The proposed reduction of capital stock to $25,000, with a proportionate reduction in the amount of bonds to be deposited with the Treasurer, in places of less REPORT OF THE COMPTROLLER OF THE CURRENCY. 103 than 2,000 inhabitants would give independent banks of issue to communities in the South and West which, owing to the conditions surrounding them, can not take from their daily business needs a greater sum and invest in banking. The result is that they are deprived both of the use of foreign and local capital and the utilization of their own credits. The safety of banking upon a reduced capital stock in such localities would be not less than that which attaches at present in larger cities and towns upon a greater capital stock. State banks are, under proper regulations and safeguards, conducted upon the basis of a small capital and, with the methods of examinations employed and the requirements exacted, there is no reason to believe that banks in the national system would be less safe. It would be far better for depositors in all towns and villages of limited population if officers and directors of national banks had dividends to pay upon but half of fifty thousand of capital instead of upon the whole amount. It would lessen the hazarding of loans upon uncertainties in order to make a profit which can not be legitimately earned and therefore diminish the number of resultant failures. The enabling of these communities to have national banks would bring them in touch with those portions of the country where there is a surplus of investable capital. For many years this capital has been invested in other States largely in national-bank stocks and it has thus come about that facilities for commercial exchange have been afforded many places where local capital could not be furnished for the purpose, and the loanable capital needed increased, with the effect of loweringrates of interest beyond those previously prevailing. In evidence of the extent of this investment it was shown by an investigation made in 1889 that nearly one-third of the capital stock of 520 national banks in Iowa, Minnesota, Missouri, Kansas, and Nebraska had been contributed by Northern and Eastern shareholders, while in Dakota, Idaho, Montana, New Mexico, Utah, Washington, Wyoming, and Arizona more than one-half of that of 144 national banks was held by nonresident shareholders. In the States of Virginia, West Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Mississippi, Louisiana, Texas, Arkansas, Kentucky, and Tennessee, of the shares of 410 national banks a little more than one-sixth of the total was held by nonresidents. The investments of this character made by nonresidents since the date given, and especially so during the years from 1890 to 1892, have been at least as large, if not larger, than in the years prior, but the figures are not at hand to state with accuracy the proportion. The facts alluded to, however, form of themselves such data upon the point made as to make them worthy of consideration. THE ESTABLISHING OF BRANCH BANKS. The construction placed upon the National Bank Act, as now in force, by the Supreme Court precludes the establishment of branch banks. In the agitation for the increased volume of circulating medium, either in the form of silver or irredeemable greenbacks, it has been many times suggested by those who have argued against both, that with the majority of the communities where the honest demand for more money was made it was a lack with them of credit and not a lack of volume in the country's circulating medium from which they suffered. The statement is undoubtedly true; but it arises in the largest measure only because they have not the means of availing themselves of that which elsewhere entitles and obtains credits which is 104 REPORT OF THE COMPTROLLER OF THE CURRENCY. equivalent to and does answer the purposes of money. This state of affairs is due in the most appreciable degree from not having at hand such facilities for banking as will enable them to show to those in control of loanable capital why credit should be extended and to whom. The very smallest of agricultural communities, even though deprived of transportation facilities, under a branch-bank system could still be given the advantages of available capital, lower interest, and lessened cost of exchange, privileges they can not enjoy when dependent upon the banking methods employed by the village or entirely isolated storekeeper. The branches grafted upon a parent institution of strength would introduce a capital into places unable to support independent banks, which could successfully compete with that of the local loaner of money at exorbitant rates of interest, and make it possible to obtain credit without endangering all property interests in so doing. They would as well afford a place of local deposit, and within a very brief period the local capital, theretofore idle and useless, would become available loanable capital. The use of a bank as a place of deposit of funds means the use of the check, the draft, the bill of exchange, and other credit devices which reduce to a minimum the passing from hand to hand of actual money or the currency representatives of money in the payment of obligations. Under such an order of things every dollar would become an efficient dollar, and instead of supporting but a single transaction it would support many. It is not an extravagant assertion to state that with these enlarged opportunities of gaining credit at hand, all entitled thereto could readily obtain it. It would soon follow that all of such would come to appreciate the fact that money is always to be had by those seeking it if they can offer sufficient inducements in the way of current profit and hope of return to its owner to cause him to part with it. That which is termed "the money question" is, in its proper analysis, more one of facilities of exchange, methods of transportation, and means of obtaining credit than of the volume thereof in existence in a particular country or locality. The whole surplus loanable capital of the world is always available to the people of every country where credit is maintained and who offer investments which promise a margin of profit. Modern methods of banking and modern methods of transportation make it immaterial whether the volume of money in the world is greater in London or New York, in Chicago or New Orleans, in Boston or San Francisco. It is as equally available for one place as the other if proper knowledge is had by the owner of it of the financial character and ability of those desiring its use. Upon the same lines it is available between these centers of commerce and smaller and more remote places. The important thing is the possession of this knowledge, by those who control the mtoey or credit to be loaned. It is knowledge of a character only to be obtained through the corporations and men whose business is dealing in debts and credits, viz, banks and bankers. If a community is deprived of banks and bankers, it is deprived of the channel through which it can make known that it has to offer to investable capital that which entitles to credit. It is false reasoning which overlooks this, the true source of the difficulty, and alleges that there is a scarcity of money and that the volume should be increased. The scarcity-of-money argument, however, always stops short of an explanation of how it is to be obtained after the increase is had, unless the defects in distribution existing before the increase was made are remedied. REPORT OF THE COMPTROLLER OF THE CURRENCY. 105 The permitting of branch banks would be the forming of agencies through which a better trade distribution of currency could and would be made. The money of a country congests at the great financial centers, to remain idle and profitless or to be used at a very small profit, only because there seem to be no new arteries through which it can flow. It is not a matter controlled by any feeling of sentimentalism or wish to create a scarcity in one section of the country and a plethora in another, for such rule of conduct could have but one result, loss to all concerned. It may be objected to the establishing of branch banks that they would tend to create a monopoly. The objection is hardly tenable; for there could not, under the proposed amendment, be established a branch in any city, town, or village where a national bank was in existence, and moreover the privilege of establishing a branch at a designated place would be open to the competition of all banks already established outside of such place. Upon the other hand, they would stand as an aid introduced from the outside, which, while of profit to the nonresident shareholder, would in the end be of equal if not of greater benefit to resident citizens. They could not weaken the parent bank; for with, the taking on of new responsibilities additional capital could be required. They would place the national banking system in this respect in lien with the systems maintained in other great commercial nations and in accord with the provisions of some of the banking systems of the States. Under the restrictions adverted to, it is immaterial that the number of central banks in the United States would be so largely in excess of those in England, Scotland, Ireland, Germany, France, and Canada. If the principle is a correct one, the administrative detail involved will not be difficult of solution.. The monetary problems which confront Congress, embarrass the administrative officers of the Government, harass the business world, and bring a plague upon American politics must ultimately find solution in required banking improvements. The time must come when the banks shall be such agencies of distribution of loanable capital as will make credit everywhere equally available to the extent to which those seeking it are justly entitled. So, too, must a point be finally reached when banks shall issue all of the credit currency of the country and stand wholly responsible, instead of the Government, for its redemption in gold coin whenever and in whatever quantities presented. THE ISSUING OP NOTES BY THE GOVERNMENT AND BY THE BANKS. Upon the specific subject of granting an increase issuance of circulating notes upon bonds deposited, and a reduction in the rate of tax now collected beyond any possible need of the Government, discussion has not been wanting in recent years in any reports made to Congress by Comptrollers of the Currency. It has been given a place in messages of the President and the reports of the Secretary of the Treasury. The urgency evidenced by these repeated efforts has arisen from a belief that no valid reason can be urged against the propriety of such amendments, nor can any be assigned for further continuing the present provisions of the bank act in this regard. No one can urge that the payment of notes issued to the amount of 100 cents on the dollar of each bond deposited to secure the notes is not completely assured, nor can it be gainsaid that the rate of tax upon circulation of one-fourth of 1 per cent per annum is not amply sufficient 106 REPORT OF THE COMPTROLLER OF THE CURRENCY. to reimburse the Government for all expenditures made by it on behalf of the banks. The reasons for the provisions of the law when first enacted do not now, nor is it at all probable that they will ever again, exist. It is a frequent complaint that though the national banks alone are enabled to issue bank notes without incurring heavy penalties, they fail to use the privilege to the extent that the public has a right to expect and demand. This complaint fails to take account of the fact that banks, whether national, State, or private, do not deliberately undertake an investment of capital in any enterprise unless the promised profit from it is greater than that of some other in which this capital might be engaged. Banks other than national do not issue bank notes, simply because by so doing they must incur loss through the enforcing of the 10 per cent tax against the notes so issued. Upon the same grounds national banks do not issue notes when there is either a direct loss to them in so doing or a profit too small to warrant the investment in bonds and the payment of the rate of tax levied. While it is true that national banks are in a sense public institutions, in that they are under direct governmental supervision, they are none the less associations of private individuals formed wholly for purposes of private gain. There is invested in them the individual property interests of individual citizens and it is as unreasonable to find fault with them for not conducting a losing business as it is to so treat the individual in the other dealings which he carries on. The public has a right to expect from that part of it engaged in national banking just as much, and no more, business generosity than from those engaged in agriculture, manufacture, or mining. On the other hand, this class is entitled to as much consideration from the general public as the classes referred to, and no more. There is no monopoly under the present banking laws given to any class of citizens beyond that which comes to any person having investable capital. It is on the same footing exactly with the business of the merchant with no more favoring laws in the matter of taxation. It is to be doubted whether the returns upon the capital invested in banking, proportionate to the amount, indicate as large a percentage of profit as that invested in merchandise. The net earnings on the capital stock and surplus fund of national banks for the past year was 5.4 per cent, including all profit made on the issue of circulation. As compared with the profits accruing to those interested in many mining and manufacturing enterprises the rate is exceedingly small. The Actuary of the Treasury has for recent years estimated the profit upon bank circulation, secured by all classes of accepted Government bonds, to be as follows: Date. October 31 1894 October 31 1895 October 31 1896 Profit. 0.967 1.107 1.659 Upon this basis the amount of national bank circulation outstanding secured by a deposit of bonds was— November 1,1894 November 1,1895 November 1,189G $179,401,364 190,180,961 216,510,014 REPORT OF THE COMPTROLLER OF THE CURRENCY. 107 It thus appears that the law controlling bond-secured circulation is that which governs all other business undertakings. Increase follows conditions of promised profit and decrease those where no apparent profit is discernible. Unnecessary restrictions and unnecessary taxation only serve to hamper at needed times an enlarged circulation of an instrument of credit which has the merit of always being safe and redeemable. It is not to be claimed that these amendments would make the bank-note circulation of the country perfect, but they would at least improve it and again attract to its attention banks which have now become indifferent. If the right of note issue should properly vest in national banks they ought to have every privilege which can be consistently and properly granted, and thus enabled to make the exercise of this function a means of facilitating the interests of trade and commerce. It is unnecessary to discuss the right. That has been passed upon by the courts and the national-bank note is the willingly accepted bank currency of the people. It is therefore certain to continue, and for this reason, if for no other, legislation which will make of greater scope and wider utility the note-issuing powers of the national banks is legislation which should find enactment. The monetary difficulties of the Treasury which affect every class of people and embarrass the administration of the affairs of the Treasury Department can not longer continue without entailing still greater loss and more widespread financial disaster. They do not find their origin in any mere surface and temporary weakness, nor are they due to recent and passing conditions. They are inherent in the financial policy which has been built up in the United States and constitute an integral part of it. Instead of lessening in ill effects with time, they will accumulate more strength for harm at each recurring season offinancialand business disturbance. The policy of having the Treasury a bank of issue, as it is in the issuing of the Treasury notes, without attaching to it needed bank-ofissue powers, and of making it a bank of deposit in the maintenance of the subtreasury system without corresponding bank-of-deposit essentials, violates the laws of all successful government financiering. If the Treasury is to be a bank of issue, it should be clothed with complete powers in this regard. If it is to be a bank of deposit, it should be governed by principles invoked by such an institution and make of benefit to trade and commerce the moneys which come into its vaults. It ought not to embarrass the business world by locking up vast sums, resulting at times in artificially creating a money stringency, and at others, by suddenly expending equally large amounts, creating a plethora. If the harm worked by this latter feature of our financial policy is less than that flowing from the former, it is nevertheless a source of very great weakness. Though it may be a debatable question as to the wisdom of taking the moneys gathered for public revenues out of the channels of daily business and locking them up in the subtreasuries of the country, the experience of this and other countries certainly demonstrates that there is little, if any, room to doubt the folly of the direct issue and redemption of Treasury bank notes by the Government. It is a practice abandoned as a controlling policy by every great government save the United States, on the ground of unsoundness. Other countries which tolerate it at all, issue these notes only in very limited quantities and not on lines followed here. It had no advocates in this country until the advent of the civil war, and was then accepted only because of an urged necessity, under the promise of being but a temporary expedient 108 REPORT OP THE COMPTROLLER OF THE CURRENCY. and was admittedly wrong as a matter of principle by those who fathered it. The staunchest friends it had in either House of Congress protested against the contiuuance of Treasury issues beyond the war period, and with equal emphasis promised at an early date their payment and cancellation. A policy in finance wrong in principle never becomes right in practice. The truth of the statement is fully illustrated by the course of the legal-tender Treasury issues of the United States. They have been always a disturbing element in business, and their current redemption a continuing weakness and anxiety to the Treasury. They compel the Treasury of the United States to carry a reserve of gold which their use makes the basis of supply for all places and all people. They have not even the merit of being without expense to the Government. At one time it was argued in behalf of continuing their issue and compulsory reissue that to cancel them meant to dangerously contract the currency. That argument has given way to one which assumes that they are what is termed u a noninterest bearing debt," and are consequently carried without additional tax upon the public. Those who advance this as argument either disregard or are ignorant of the facts. In order to present the full effect of the Treasury issues of the Government in creating and continuing an interest-bearing debt since the war, and to draw a comparison between that and the effect of note issuing by the national banks upon the Government's income, the following statement has been prepared at the request of this office by the chief of the loans and currency division of the Treasury Department: COST OF THE GOLD RESERVE, INCLUDING LIABILITY FOR PRINCIPAL OF BONDS SOLD AND INTEREST THEREON TO THEIR MATURITY. Principal of bonds sold for resumption purposes: 1877 and 1878 1894 1895. 1896 Total principal Interest at 4 per cent on the average amount of the free gold in the Treasury from January 1,1879, to January 1,1895 Interest from January 1,1895, to July 1,1907, on $95,500,000 4 per cent bonds of 1907 Interest from January 1,1895, to February 1,1904, on $100,000,000 5 per cent bonds Interest from February 1,1895, to February 1,1925, on $62,315,400 4 per cent bonds Interest from February 1, 1896, to February 1, 1925, on $100,000,000 4 per cent bonds '. Total cost, including liability, except United States notes outstanding. Add amount of United States notes still outstanding $95,500,000 100,000,000 62,315,400 100,000,000 357,815,400 93,440, 000 451,255, 400 47,750,000 45,416,666 74,778,480 116,000,000 735,200,546 346,681,016 Total cost and liability 1,081,881,562 If the United States notes had been funded on the 1st day of January, 1879, into the 30-year 4 per cent bonds of 1907, then being sold, the total cost to the Government therefor, including interest from January 1, 1879, to July 1, 1907, would be as follows: Principal of bonds $346,681,000 Interest from January 1, 1879, to July 1, 1907 Digitized forDifference FRASER in favor of converting the United States notes into bonds.. 395,216,340 741,897, 340 339,984,222 REPORT OF THE COMPTROLLER OF THE CURRENCY. 109 It may be objected that the item of $93,440,000, interest at 4 per cent on the average amount of the free gold in the Treasury from January 1,1879, to January 1,1805, should be eliminated from the items of cost as not proper to be included therein. But even when this is deducted, there is yet an enormous direct money cost to the Government growing out of these issues which could have been lessened by the sum of $214,044,222 if the notes had been funded on January 1, 1879, into 30-year 4 per cent bonds of 1907. It may be still further objected that a part of the notes redeemed with the gold thus procured has been used to defray the expense of the Government, bat this objection does not reach to the merit of the question, because none of this interest-bearing indebtedness would or could have been lawfully created if the United States notes and Treasury notes had not been in circulation. The seat of difficulty has been the necessity of the maintenance of the gold reserve ior current redemption, a difficulty which can not be obviated as long as the causes of it are in existence. EFFECT OF MAINTAINING TREASURY AND NATIONAL-BANK NOTES COMPARED. The argument as stated in favor of the continuance of Treasury notes is their assumed lack of cost to the public. That advanced against issues of national banks is that they burden the people and take from the people for private benefit. If the first argument is opposed by the facts, not less so is the second. The comparison could not be more striking or the results upon the income of the Treasury more diametrically opposite. The course of the former has increased the rate of taxation necessary to meet the expenses of the General Government, while that of the latter has lessened it. This rate has been further lessened by other items of revenue gained to the Government directly from the national banks. REVENUE RECEIVED BY THE GOVERNMENT FROM NATIONAL BANKS FROM 1863 TO OCTOBER 31. 1896. Tax on capital stock prior to March 3, 1883 Tax on deposits prior to March 3,1883 Tax on circulation to June 30, 1896 Tax on circulation, July 1 to October 31, 1896, estimated $7, 855, 887.74 60,940,067.16 79,390,680.89 617,225.34 Total 148,803,861.13 From unredeemed circulation, two-fifths of 1 per cent of actual circulation outstanding on October 31, 1896 ($706,616,861) 2,826,466.00 From taxation 148,803,861.13 From unredeemed circulation 2, 826, 466.00 Saving by national banks handling Government deposits to the amount of $5,855,099,160.91 at rate of three-eighths of 1 per cent.. 21, 956,621.85 173,586,948.98 Deduct expenses of Comptroller's Office, appropriated for by Congress to October 31, 1896 16,147,700.00 Total profit to Government 157,439,248.98 It thus appears that instead of loss resulting to the Government from the creation of the national banks, the direct money benefit to it therefrom has been $157,439,248.98, which could be further augmented byadding the saving made to the Treasury by having had annually the use of the five per cent redemption and lawful money fund kept by the 110 REPORT OP THE COMPTROLLER OF THE CURRENCY. banks for the current and ultimate redemption of their notes with it, amounting, on October 31 of the present year, to $26,951,641. The efforts in other countries have been directed toward divorcing the treasury department of governments from the bank-note function. That function has been given to corporations created for the purpose. It has followed that the duties of their treasury departments have been limited to the collection and expenditure of revenues and their regulation, while the banks have issued promissory bank notes and both currently and ultimately redeemed them. The problem of maintaining a gold reserve to a certain amount has not vexed and harassed them, nor interfered with the conduct of the citizens' private business. The volume of the currency so issued has depended upon the needs of business as seen in many portions of such countries by institutions invested with the right to meet the local demand. It is not affected by change of political parties nor discussed as a matter to be decided by political affiliations. There is no state of affairs peculiar to the United States which makes it wise to employ different methods or to invoke different rules in the same line of conduct. It is equally certain that there is no exemption vouchsafed to this country from loss in violating the proven rules requisite to sound and prudent monetary and fiscal operations. The current credit instruments entering into the movements of finance, trade, and commerce ought all to be issued by the banks as needed, under government supervision, in order to insure uniformity and guard against loss. The responsibility for their redemption in gold coin should be wholly borne by the banks, and upon the banks should rest the duty of furnishing whatever gold is needed for domestic or foreign business purposes. In order to attain this end the credit currency of the government now outstanding should be redeemed in gold and retired, through funding or otherwise, as speedily as safety will permit, and the banks made to assume the rights and burdens which properly belong to them. The sound State and private banks prior to 1863 redeemed their own notes in gold and furnished all gold needed for domestic trade and to settle international balances. The national and other banks from the resumption of specie payments until 1890, when the government's credit currency was again enlarged and legislated upon, followed the same practice. The question is not one of ability on their part to meet such demand, but one of opportunity, freed from government competition and unrestricted by unrequired government control. It is respectfully submitted that legislation by Congress, based upon safe and prudent lines, having in view the gradual payment and cancellation of the credit currency now maintained by the Government and the issuance hereafter of all of such currency through the banks, with full responsibility therefor placed upon them, should be had at the very earliest practicable moment. The results which would follow such enactments would be beneficial, and neither would monopoly be created nor favor shown thereby. FOREIGN AND STATE BANKING SYSTEMS. In the report for 1895 appeared papers concerning the banking systems of the following countries: Belgium, Canada, Chile, China, Denmark, Ecuador, France, Germany, Greece, Guatemala, Haiti, Hawaii, Italy, Korea, Liberia, the Netherlands, Paraguay, Peru, Portugal, Russia, Salvador, Siam, Switzerland, Turkey, Uruguay, and Venezuela. They were prepared by representatives of this Government to countries which accredited. It has been thought best to reprint these papers Digitized forto FRASER REPORT OF THE COMPTROLLER OF THE CURRENCY, 111 in the Appendix, and to add others received since from the following countries, viz: Argentina, Austria, Bolivia, Brazil, British Columbia, Bulgaria, Colombia, Costa Rica, Dutch Guiana, Egypt, Great Britain, Japan, Java, Mexico, Newfoundland, Nicaragua, Persia, Eoumania, Servia, and Sweden. In addition, through permission of the author, Mr. Charles A. Conant, extracts have been taken from his Modern Banks of Issue upon the banking systems maintained in the French colonies in America, British colonies in Latin America, Dutch Guiana, Java, Bulgaria, Servia, and Cuba. In view also of the fact that the edition of the report of 1895 has been exhausted, there is also reprinted the reports then published of the bank systems maintained in the various States and Territories and the local regulations pertaining thereto. NATIONAL-BANK ACT AND DIGEST OF BANK CASES. The report herewith submitted has also been enlarged by the embodying in it of a revised edition of the National Bank Act and a carefully prepared digest of the decisions of the courts, both Federal and State, upon questions affecting the administration of the bank law. To this has been added a table of cases, arranged in alphabetical order. APPENDIX AND SECOND VOLUME. In the appendix is also to be found the usual tables, together with added ones bearing upon the subjects of special investigation. In the second volume of the report will be found a detailed statement of the condition of all the national banks as shown by the report of condition on October 6,1896, alphabetically arranged by States and properly indexed. CONCLUSION. The added work entailed by the investigations made and tabulated, together with an increase in correspondence, has largely fallen upon the force of employees in the Comptroller's office. It has been done without increasing the number thereof, and in a manner which warrants the renewing of the testimony heretofore given to each one's character and efficiency. The work done by the national-bank examiners and the receivers of failed national banks has been equally satisfactory, conscientious, and intelligent. Comptroller of the Currency. The SPEAKER OF THE HOUSE OF EEPRESENTATIVES. APPENDIX. CUR 96, P T 1 8 113 FOREIGN BANKING SYSTEMS. The reports relative to foreign banking systems are based on the following questions : 1. Give the different classes or kinds of banks. 2. What requirements must be met in order to enable each class of banks to transact business? 3. Who determines when these conditions have been satisfied? 4. Give regulations, if any, governing each class of banks as to (A) capital stock, (B) management of the bank, (C) liability of shareholders for claims against the bank, (D) reports of condition of thebank,(E) examination by Government official, (F) restrictions on the amount of loans, (G) restrictions of any other character on loans by the bank, (H) security for loans, (I) cash reserve required, (J) accumulation of surplus. 5. Give the regulations, if any, governing the receipt of deposits, and state if it is the custom of the banks to allow interest on deposits. 6. To what extent is the Government interested as a shareholder in the banks? 7. Are any of the banks permitted to conduct branch banks or offices? 8. To what extent and by what medium is information as to the condition of the banks given to the public ? 9. What taxes or burdens are imposed upon the banks in return for the privileges granted them? 10. Give as full information as possible as to the closing up of the business of insolvent banks. 11. To what extent and under what conditions are the banks allowed to issue bank notes ? 12. What provision is made for the redemption of such notes? 13. Please give any additional information which you think will be of interest concerning the banks. [William I. Buchanan, United States minister.] 1. The different classes of banks existing or provided for by the laws of this Republic are: (a) The Banco de la Nacion. (b) Provincial, i. e., ''State/' banks provided for by the guaranteed banking act of November 3, 1887. (All the banks that were organized under this law are in liquidation.) (c) Joint stock banks. These are subject to the general commercial law of October 5,1889. This law applies to all forms of joint stock companies, (d) Private banks. (None, however, are in existence.) (e) Branches of European banking houses. (These comprise almost all the banking interest centered here.) 2. (a) Banking companies having limited liability are organized under and subject to the requirements of the general law applying to all joint stock companies. (See c, above.) This law requires that before any joint stock company commences business it must have 20 per cent of its capital stock subscribed and 10 per cent of its subscribed capital paid in. (b) Private banks are only required to conform with the general law applying to all mercantile firms. This provides that their articles of partnership or incorporation must be submitted to and approved by the commercial court. There is no limitation as to liability of such a bank, (c) The special legislation affecting the Banco de la Nacion and the provincial banks that were organized under the guaranteed banking act of November 3,1887, is most interesting. In the years 1886 and 1887 the development of this country had reached such proportions that great need was felt by the people of more satisfactory banking facilities than then existed in the different provinces. An increase in the volume of currency in circulation was also deemed necessary. With a view of providing a remedy for both of these wants, the Argentine Congress enacted, on November 3,1887, the guaranteed banking act. This law authorized, among other things, the issuance of money by any provincial bank that had complied with the provision of said law 115 116 REPORT OF THE COMPTROLLER OF THE CURRENCY. requiring such an issue to be secured by an equivalent amount of Government bonds. For the purpose of furnishing the banks with the class of securities these required, the Argentine Congress authorized, in a section of the same law, the special emission of a large issue of national 4 | per cent £old bonds. In order to secure the gold required to buy these national bonds, each of the provinces that desired to have a provincial bank authorized sold abroad a special issue of its own gold bonds. The gold realized by the province from such bond sale was paid int* the treasury of the National Government. Upon the receipt of this money the National Government authorized the bank of said province to issue an amount of paper money equal to the sum of gold received by the National Government from the sale of the bonds of said province. In addition to this, the National Government, in lieu of the gold it had thus received, placed to the credit of the province an amount of the 4£ per cent national gold bonds authorized as above described to secure the paper money to be issued by the provincial banks equal to the sum of gold so received. Thus it happened that the capital of the provincial banks was entirely borrowed. In addition to this bonded debt, which was a gold obligation, and by many believed to be socondarily^ an obligation of the National Government, as quasi indorser of the plan, the province' became responsible for the issue of paper money made by its bank. This paper issue, as will be readily seen, had nothing in reality behind it as security other than the good faith of the province and of the nation, because the borrowed gold dollar, which was, theoretically, to be the security for the paper dollar, was never in the bank's possession, it having been received and held by the National Government. This law is believed to have been the direct cause of the crisis of 1891. During that year, as a result of the excessive inflation of the currency thus caused and the fictitious value given by this inflation of property on which loans were afterwards made by the bank, all of the provincial banks organized under this act, together with the Banco de la Nacion, failed, and the premium on gold reached 370. This law is at present inoperative, except as it applies to the liquidation of the broken banks that sprung up under its provisions. (D) The Banco de la Nacion was originally created as a State bank by act of Congress, November 5,1872; by the provision of this law the nation became a shareholder with private parties; the Government subscribed $2,000,000 to the capital stock of the bank and private parties $3,000,000. This bank enjoyed one special privilege and one not given to any other, except the old bank of the Province of Buenos Ayres; this was the grant of fiscal privileges to its credits; that is, the obligations given to it by its customers became by this law mortgages, in fact, or prior liens on the property. On the passage of the national guaranteed banking act in 1887, this bank, together witli the old bank of the Province of Buenos Ayres, was reorganized under the provisions of said law, and thus lost the special privilege I have just mentioned. Both failed in the crisis of 1891, as before mentioned. Following the failures of the provincial and Government banks in 1891, the present Banco de la Nacion was built up on the ruins of the suspended provincial banks, in order to maintain banking connections, in some degree, with and for the different provinces of the Republic. It is well to remember, in this connection, that at that time there was not a solvent bank in this Republic outside this city (Buenos Ayres) and Rosario. Thus rehabilitated the Banco dela Nacion was empowered by Congress to reorganize and establish branches throughout the Republic. Its capital was fixed at $50,000,000. It was to have its main office in this city; it was to be a joint stock concern, with the nation as a stockholder, or not, as the subscribers to its stock might elect. Stock subscription books were opened, and pending their being filled up the bank started on a loan of $50,000,000 of treasur}7 money advanced by the National Government. This was to be repaid by the money received on subscription to its capital stock; the stock, however, was not subscribed for, although the books were twice reopened for subscriptions. Afterwards efforts were made by the Government, without success, to negotiate the sale of the bank's charter, with its concession, to foreign capitalists. The bank continues in existence as a bank of issue owned by and wholly under Government control. The loan of currency that became its capital is to be repaid to the national treasury by a yearly payment equal to the bank's net profits during such year. 3. In the first instance a special bureau in the ministry of justice, known as the " Cuerpo de inspectores de sociedades anonimas," and finally the minister of justice, who approves the statutes of the company. 4. The law applying to guaranteed banks and the Banco de la Nacion having been suspended by the failure of the banks organized thereunder in 1891, new banks would not foe permitted to begin business under its provisions, consequently no answer can be given with reference to banks included in answers A and Bto interrogatory 1. (A) For banks organized under the general law governing joint stock companies 20 per cent of the authorized capital stock must be subscribed and lOper cent of the subscribed capital paid in (see A, interrogatory 2). For private banks no legal provision is made regarding capital. As heretofore mentioned, such a bank would have unlimited liability (see B, interrogatory 2). (B) No regulation exists REPORT OF THE COMPTROLLER OF THE CURRENCY. 117 applying specifically to banks. (C) In all joint stock companies the liability of shareholders is limited to the face value of their shares. Shares can not be transferred that are not fully paid up. (D) The bureau of inspection, alluded to in the answer to interrogatory 3, is authorized to examine all joint stock companies, but can not make its report public except through the minister of justice. Joint stock banks having their sole office and legal domicile in this country are required to publish reports of their condition every three months. This is not done, however, in every instance, the requirement, seemingly, not being deemed of much importance by the public; the form usually adopted is similar to that attached hereto marked Exhibit A. Foreign banks whose legal domiciles are outside this Republic publish no report beyond the yearly report of their home office. Four-fifths of the banks in this country are branches of foreign banking companies, and being foreign corporations do not come within the jurisdiction of the bureau of inspection, except when they request the bureau to make an inspection of their business. Their reports being made up only to their home office, their depositors never see a statement of their condition. (E) Answered under D above. (F) No limitation provided by law, with the exception that no joint stock company can loan money on its own stock. The bank's articles of incorporation may fix such a limitation, otherwise it is a matter of discretion left with the bank's officials. (G and H) Answered in F above. (I and J) The only bank of emission, for which the nation is responsible, being the Banco de la Nacion, there are no laws or regulations applying to these questions; they are discretionary subjects left with the management of the bank. 5. No governmental regulations exist. The following are the current rates of interest usually allowed by a large proportion of the banks in this city: National money (paper). On current accounts On deposits at seven days' notice up to $20,000 On deposits at thirty days' notice up to $20,000 On deposits at three months fixed On deposits at ODC hundred and twenty days' notice. On deposits at six months fixed Gold. Per cent. Per cent. 1 3 2 4 3 4 6. Only to the extent of being the entire owner of the Banco de la Nacion. 7. Any bank organized under the law regulating joint stock companies, or as a private bank, can have as many branches as it desires. 8. See answer to D, interrogatory 4, above. The reports made by the banks therein described are published in one or more of the daily papers of this city. 9. (A) Banks are classified, for the purposes of taxation, according to their capital, business, etc. There are eight classifications; beginning with the lowest, the tax, or "patente" as it is called, is $1,500 gold per annum; the tax ascends in amount, through the different classifications, reaching $8,000 gold per annum for banks coming within the provisions of the regulations providing for one of the highest class. (B) In lieu of some taxes heretofore existing, all banks pay, this year, an additional special tax of 50 per cent of their "patente," (This can be changed at will by Congress for the next, and for other years.) (C) Two per mil (2.0/00) per annum, payable half-yearly on all deposits, except current accounts. (D) Onequarter per mil (£.0 00) on all drafts and letters of credit. This tax is payable quarterly on sworn statements. (E) An internal-revenue stamp of 5 cents paper, say 1 | cents gold, must be attached to each check paid by a bank. (F) Discounted bills are subject to an internal stamp tax of 10 cents paper, say 3 cents gold, on each $100. This stamp must be renewed every ninety days. The last two items are, of course, paid by the depositor, or borrower, but are inserted here to complete the list of taxes. 10. No special banking law being in existence in this Republic, except the national guaranteed banking act heretofore mentioned, the procedure in cases of insolvency would be the same for a joint stock bank as for any other joint stock company—that is, a commercial judge would appoint a receiver, a meeting of creditors would be called, and the usual proceedings held. Depositors would have no special claim against such an insolvent bank. 11. With the exception of the Banco de la Nacion, no bank of emission exists here. All the banks opened under the guaranteed banking act are in liquidation and are things of the past. Under the country's present inconvertible currency system no bank, other than the Banco de la Nacion, would be allowed to issue money, and, even were specie payment to be resumed, it would require a new banking law to permit the founding of a bank of issue. 118 REPORT OF THE COMPTROLLER OF THE CURRENCY. 12. Answered in No. 11. 13. The banking system of this country has a peculiar history. Up to the year 1863 there was hut one bank in the Republic, the bank of the Province of Buenos Ayres. Founded originally as a private bank in 1822, the institution was changed to a State bank on the proceeds of an English loan in 1826, the province becoming a shareholder. As a State bank it was authorized to issue paper money, which at the time of issue had a value equivalent to the silver currency then in circulation in the country. In 1868 this paper issue had depreciated to 4 cents gold per dollar, at which rate it was converted, by national law, into a new issue. Notwithstanding this, the bank enjoyed a high credit in England between the years 1870 and 1889, and was recognized abroad as one of the great banks of the world. It was of the highest benefit to the country during that period, loaning, as it did, to breeders and agriculturists at a fair rate of interest, with an amortization of the loan at a rate as low as 15 per cent per annum. This historic bank took advantage of the guaranteed banking act (mentioned herein), and is now in liquidation. Few banking institutions here loan money on real estate, the usual course being to loan on short-time bills at 7 and 8 per cent. The current rate of interest, outside this capital, is higher than the above, while on real estate the rate in the country and in this city varies from 15 to 18 per cent. The constant fluctuations in the daily price of gold is a large source of revenue to the banks of this city. It is customary for the banks to lend gold against paper money, with a wide margin, and then by loaning at regular interest the paper money held as such security they make interest on both loans, which, of course, yields a large profit. Each bank is a constant buyer and seller of gold on the Bolsa, and, if all were to act in harmony, they could at any time depress or raise the current quotations at their will. Incident to this brief sketch, I desire to call your attention to the following table, which I have prepared with the purpose of showing the relative position occupied here by different countries in regard to commerce and banking. The illogical and unsatisfactory position in which the commerce of the United States is placed by the absence of proper banking facilities can thus be more clearly seen. Country. England France Spain Germany Italy.... United States (and Canada)* NumImports Exports ber of from country to country banks. named. named. * $35,835,492 $19,720,513 10,425, 865 26,438,097 2,179,259 2,412, 485 10, 676, 513 16,635,103 8,412,941 4,343,056 7,376, 583 4, 831,454 * The trade of Canada is charged to us by the Argentine statistician. It will be seen that the United States is the only country doing, or attempting to do, any business with this country that is not represented here by some banking interest. The consequent result is that the whole business done between the United States and this country is obliged to pay tribute to English or German banks. The injury done to our trade by reason of this condition is marked. An American coming here with drafts on the most solvent bank in the United States can not obtain cash for them nor use them in any way other than to have them forwarded for collection via England. The total absence in this city of direct American banking facilities makes the transaction of business with the United States unsatisfactory, slow, and unpleasant, and is, I believe, partly responsible for our commercial backsliding here. This condition makes it practically an impossibility for our merchants to keep in touch with this market or to investigate credits and conduct their business operations as they are accustomed to do at home. Such a condition of affairs is a standing menace and drawback to any considerable extension of our trade with this country, and equally a reflection on our ability as a people to successfully carry on a foreign trade worthy of any mention in competition with other countries. This city offers a splendid field for American banking capital, and I am satisfied that an American bank, conducted as our banks are, would command great favor here and find many advantages and facilities extended to it. I am equally certain that it would be the means of extending and enlarging our commerce with this country. REPORT OF THE COMPTROLLER OF THE CURRENCY. 119 EXHIBIT A. The following is the balance sheet of the Banco de Italia y Rio de la Plata up to September 30, 1895: Balence at SO de Setiembre de 1895.—Caja Central y Sucursales.—Publicado miento de articulo 360 del Codigo de Comercio. Activo. Acciones series a emitir Caja existencia en efectivo Corresponsales de ultramar Pagares y obligaciones a cobrar . Cuentas corrientes Cuentas varias Conversion Total. Pasivo. Curso legal. Total. Oro sellado. 7, 932, 608. 81 3, 964.64 18, 553, 693. 36 2, 391, 878. 99 1,396,235.28 3, 000, 000. 00 1,467, 806. 77 653,132.62 1, 800, 626. 97 409,921.78 2, 769, 672. 60 191,629.45 30,278, 381.08 10,292,790.19 Curso legal. Oro sellado. Capital autorizado Fondo de reserva Cuentas corrientes a la vista Obligaciones y depts. a plaza fijo. Corresponsales de ultramar Cuentas varias Conversion en cumpli- 17, 516, 918.12 9, 827, 2B9. 40 2, 255, 218. 35 679, 005.21 30,278,381.08 8,000,000. 00 314, 302.12 944, 508. 24 329, 344.78 11,714. 51 692, 920. 54 10, 292, 790.19 [Bartlett Tripp, United States minister.] 1. There are three classes of banks in Austria-Hungary: First, the Austro-Hungarian Bank, the only bank of issue, was created by an act of Parliament June 27, 1878; second, the bank companies, which are all limited joint-stock companies or associations; third, the private banking firms. In addition to the above there are Government postal deposit and savings banks. 2. The Austro-Hungarian Bank transacts the general banking business of the Government, floats all Government loans, discounts drafts of the department of finance, undertakes commissions for the Government, and has the exclusive right of issuing notes of the value of 10 florins and upward. Two-fifths of the amount of such issue must be covered by a gold or silver reserve, and three-fifths by other first-class securities. The banking companies and associations must present their articles of incorporation, by-laws, and general system by which they propose to operate to the Government, and must obtain a concession from the latter before being permitted to transact business. Private banking firms are only required to register their name with the ministry of interior. Their business is treated as contracts between private persons, over which there is no Government supervision and no special laws governing them other than the general commercial code governing all commercial transactions. 3. Two Government comptrollers are appointed, one by Austria and one by Hungary. They are required to examine into the condition of the Austro-Hungarian Bank from time to time and report to the Government. They have the right to attend all meetings, to exercise a supervision over all acts and resolutions, and can veto the latter, provided they be contrary to the articles of incorporation and its agreement with the Government. In the case of other bank companies, a board, one member of which is appointed from each of the ministries of the Government, have full power to grant or refuse concessions to the companies applying for same. 120 REPORT OF THE COMPTROLLER OF THE CURRENCY. 4. (A) The capital stock of the Austro-Hungarian Bank is 90,000,000 florins, and is divided into 150,000 shares. In the case of other banks the capital stock varies. The amount is, however, stated in the articles of incorporation and is solely an arrangement between the bank directors and the stockholders, subject to the terms of concession. The concession from the Government also usually permits a company to increase its stock, if deemed advisable, by the directors and stockholders.- (B) The Austro-Hungarian Bank is managed by a governor, two vice governors, and twelve general councilmen, acting as a board of directors. The governor is appointed by the Emperor on the joint recommendations of the ministers of finance of both divisions of the monarchy. The two vice-governors are appointed by the ministers of finance of Austria and Hungary, respectively. Eight of the board of directors are elected by the shareholders at the annual meeting, and four are appointed by the management of the bank, two from Austria and two from Hungary. The board elects six of its members to act as an executive committee, and one member to act as general secretary. Other banks are generally managed by one governor or president, two vice-governors, one general secretary, and board of directors, all elected by the shareholders. (C) All stock companies in Austria-Hungary are limited-liability companies; stockholders are liable only to the amount of their shares. They are not liable to assessments for claims against the bank. (D) The Austro-Hungarian Bank is required to publish a report of its condition on the 7th, 15th, 23d, and last of each month, and in addition a yearly statement. The other bank companies are required to publish yearly balance sheets. Private bankers are not required to publish any reports or statements of their condition. (E) The weekly reports of the Austro-Hungarian Bank are submitted to the ministry of finance, and the two Government comptrollers are required to examine the condition of the bank and report from time to time to the ministry of finance. In the case of other bank companies the Government has the right to send a commissioner to every meeting of the board to exercise a supervision over the business of the company and report to the Government any irregularities or deviation from the system or by-laws as laid down in the concession under which the bank company is permitted to transact business. (F) In the case of the Austro-Hungarian Bank the amount of individual loans on real estate must not exceed 50 per cent of the valuation of the property hypothecated. The amount to be loaned on other securities is not limited by statute. There are no laws placing restrictions on the character or amount of loans of other bank companies; this is left to the managers of the companies and the stockholders, and is a matter of agreement between the bank and the party procuring the loan. (G) The Austro-Hungarian Bank is required to pay to the Government 5 per cent of the amount of all notes which it may issue above 200,000,000 florins. (H) Any coin, stock, or bonds listed on the exchange are accepted as security for loans, also first mortgages on real estate, as may be agreed between the bank and those dealing with it. (I, J) In the case of the Austro-Hungarian Bank two-fiths of the amount of notes issued by the bank must be covered by a cash reserve in coin, the remaining three-fifths by first-class securities upon which cash can be immediately realized. In addition to this reserve covering notes issued, there is another or additional fund, which is in reality part of the surplus, as the term is understood in the United States. When this reserve fund reaches the amount of 20 per cent of the capital, it shall not be further augmented, but the pension fund for retired employes shall then be increased by the addition of 5 per cent of the accumulated profits of the year. The balance, if any, is added to what is called accumulated surplus. Other bank companies and associations are not required by law to carry a cash reserve or retain a surplus. The amount of the surplus or reserve accordingly varies in different institutions, and is entirely a matter to be decided by the management under the terms of the concession. 5. The Austro-Hnngarian Bank does not receive cash deposits subject to check, only special deposits of stocks, bonds, and other valuables. The other bank companies receive cash deposits ^nd allow 2 to 2-£ per cent on open accounts subject to check, and 3 to 3^ per cent on closed accounts, but their deposits are not large, for the reason that the Government postal banks have almost a monopoly of the open deposit account business subject to check. 6. The Government is not interested in either the Austro-Hungarian Bank or any bank company. 7. The Austro-Hungarian Bank has branch offices in all the principal cities of Austria-Hungary. The bank companies have branches when necessary, if their concession contains a clause to this effect; not otherwise. 8. Official financial newspapers in Vienna, Prague, and Budapest publish full information of the condition of the banks from time to time, in addition to which an official book of reference is published annually, containing balance sheets and general condition of all banks and stock companies. 9. The Austro-Hungarian Bank pays only a tax of 5 per cent on the amount of its notes which it issues above 200,000,000 florins. The bank companies pay the same annual taxes as all the commercial or financial companies and stock associations. REPORT OF THE COMPTROLLER OF THE CURRENCY. 121 10. There are no special laws governing the closing up of the business of insolvent banks. The procedure is the same as in case of other bankrupt and insolvent corporations. 11. The Austro-Hungarian Bank has the exclusive privilege of issuing notes of the amounts of 10 florins and upward, which issue must be covered by a reserve, two-fifths of which must be in gold or silver and three-fifths in first-class securities which can be immediately converted into cash. Smaller notes of 5 florins are issued by the Government payable in the currency of the Government, This constitutes all the paper currency in circulation. 12. If called upon," the Austro-Hungarian Bank is required to redeem its notes within twenty-four hours under penalty of forfeiture of its franchise. In case of the winding up of the business of the bank, all outstanding notes must be paid, but they are forfeited if not presented for payment within six years after the date of liquidation. 13. The banking business in Austria-Hungary is yet in its infancy and is, in general, governed by the same laws and regulations that govern other financial and commercial corporations. The country being in the past an agricnltural rather than a commercial one, its banking capital was comparatively small, and the same attention has not been given the legislative and administrative regulation of the business in its different departments as was found necessary in the great banking and commercial centers of western Europe, so that, outside of the special charter granted to the Austro-Hungarian Bank and the administrative discretion exercised over banking corporations and associations by the ministry in granting concessions, but little control is exercised over this business in Austria-Hungary, and no control is exercised over private banking other than is exercised over other private business transactions. In addition to the banks of Austria-Hungary above described, there is another different and distinct class of banks known as the postal and savings bank, which must be separately described. The postal deposit and savings bank is a Government institution under the control of the postal department, with a general office in Vienna and branch offices at every post-office throughout the monarchy. On opening an account the depositor is assigned a certain number, which, together with his name and address, appears upon all checks, deposit receipts, statements of account, and all papers relating to the transactions of such depositor with the bank. The depositor purchases from the bank a check book costing about $1 per hundred checks, a book of deposit blanks, costing about 40 cents per hundred blanks, the name, address, and number of the depositor being printed on each check and deposit blank; in addition to these the depositor is furnished with special envelopes addressed to the general office of the bank in Vienna, at the cost of about 10 cents per hundred. The depositor uses the postal bank not only as an ordinary bank of deposit, which allows the depositor 2 per cent on open accounts, but also as a means of paying all bills and collecting all indebtedness in every part of the city or country, free of all postage or charges to the depositor. The system in vogue, which is both simple and practical, is briefly, as follows: If a depositor wishes to pay a debt to a creditor in any part of Austria-Hungary, he simply fills out a postal check to the order of his creditor, with address of same together with the date and amount, incloses it in one of the special envelopes addressed to the general office in Vienna, and the post-office authorities find the payee, pay the amount, and take his receipt for same. Within twenty-four hours the depositor receives through the post-office, from the central office of the bank in Vienna, a statement showing the transaction. It contains date, name of depositor, number of the check, amount and name of post-office where it has been paid; also cash balance of the depositor. These statements reach the depositor after every transaction. If there have been several transactions in one day, they all appear on the statement of the day. The depositor is thus kept informed as to the condition of his account every twenty-four hours, provided he has drawn or made a deposit during the previous day. The check of the depositor, forwarded as above, thus becomes a post-office order without incurring the trouble, time, and expense which the latter system involves. The depositors pay all their bills in this manner, whether in the same city or in different parts of Austria-Hungary. The receiver of the money sends his usual receipt by mail to the payer, and in addition the latter has the daily statement from the postal bank that such a numbered check for such an amount was paid on such a day. Furthermore, if the creditor, to whose order the check is paid, is also a depositor in the postal bank, as it is the custom for all business houses who are depositors in the postal bank to have their deposit number printed on all their bills, statements, receipts, and business cards, the debtor fills in the check with the name and deposit number of his creditor, forwards it in the same manner free of postage to the general office in Vienna, and the creditor receives his daily statement that his account has been credited by so much from depositor No. (giving number of debtor) and likewise the debtor or issuer of check receives his daily statement that his account has been debited by a like amount paid to account depositor No. (giving the number of creditor). Thus an enormous amount^. Digitized forof FRASER 122 REPORT OF THE COMPTROLLER OF THE CURRENCY. of transactions take place without the cash being withdrawn from the bank. The deposit blanks consist of two parts, each containing the name, address, and number of depositor printed on their face, in addition to which each blank contains its special number in its order in the book, which number appears on both divisions of the blank. The blanks are used in two ways: If a depositor wishes to make a cash deposit, he fills in a blank with the amount and date, presents it with the cash in person or otherwise, at the nearest post-office (there are 125 post-offices in Vienna alone). The postmaster or his deputy receives the deposit, places the date stamp of the post-office on both portions of the blank, separates the latter, affixes his signature to one portion, which he gives to the depositor as a receipt. The other portion is turned into the general office with the cash at the end of the day. Within twenty-four hours the depositor receives his daily statement, showing his account credited with the above transaction and inclosing the other half of the deposit blank. If a depositor sends a bill to one of his debtors he usually incloses one of his deposit blanks; the person receiving the bill fills in the amount of the bill on both portions of the deposit blank, adds his name and address, and presents it or sends it with the money to the nearest post-office, receiving half of the deposit blank, signed and stamped as above, which he attaches to the original bill as a receipt. When the depositor receives his next daily statement from the bank, he sees at once that his account has been credited by the amount of the bill he has sent to his debtor, and with the statement he receives the other half of the deposit blank which was presented by his debtor at the post-office when the latter made the deposit in his favor. In order that the depositors may enjoy all of the above privileges and conveniences, together with free postage and 2 per cent interest on deposit, each depositor is required to keep a constant balance of 100 florins on deposit unless he express a desire to close up his account; therefore the daily statements are most useful and necessary. Any check he may draw, the payment of which would reduce his balance to 1 kreutzer below 100 florins, would be refused payment; therefore all payments are made direct from the one central office in Vienna, though they may be made through any post-office in the monarchy. As there are upward of 1,000,000 depositors, the Government has the use of 100,000,000 florins permanently, and it is not an exaggerated estimate to calculate the average balance of each depositor at 1,000 florins, so that the Government has an average sum of 1,000,000,000 florins constantly at its disposal. [James S. Ewing, United States minister.] 1. There is in Belgium only one bank of issue, that is La Banque Nationale, organized under the law of the 5th of May, 1850, and under the law of the 20th of May, 1872. The texts of these laws and the text of the by-laws of the Banque Nationale will be found in Appendix A. It is difficult to classify the other banks. There exist banks of discount, of deposit, of credit fonder (banks that make loans on real estate), and unions du credit (banks that do the banking business of their members only). With the exception of the banks known as credit foncier, all the banks in Belgium discount bills, receive deposits, and interest themselves in industrial affairs. 2. Banks in Belgium are established under the forms of socie"t6 en nom collectif— partnership socie'te' en commandite simple—partnership in which the active partners are responsible without limitation and the dormant ones to the extent of their share of capital only. Society anonyme, joint stock company. Socie'te' en commandite par actions, partnership in which the active members are responsible without limitation and in which the dormant members are stockholders and are responsible for the amount of their stock only. Soci^t6 cooperative, cooperative societies in accordance with the provisions of the law of the 18th of May, 1873, modified by the law of the 22d of May, 1886. This law, which will be found in Appendix B, determines the conditions to be complied with by the banks in order that they may commence their banking operations. If the provisions of the law be complied with, the banks above described may be organized indefinitely. There is no public officer empowered to determine whether the conditions imposed by law in the organization of a bank have been complied with or not. 3. The shareholders and interested third parties have the right to protest against any infraction of law. 4. The provisions of the law of the 18th of May, 1873, found in Appendix B, answer these questions fully. 5. The Banque Nationale may receive deposits on current account, but without interest. All private banks may receive voluntary deposits and pay interest on them or not, as they may agree. 6. The Government is not interested as a shareholder in any of the banks of the country. REPORT OF THE COMPTROLLER OF THE CURRENCY. 123 7. Banks may organize subbanks or branch, offices as they please in conformity to their by-laws. 8. Only banks organized as joint stock companies or as socie'te's en commandite par actions are required to publish every year a general statement regarding their condition. This statement must contain an inventory indicating the value of the personal and real property and a balance sheet showing all the assets and liabilities of the society, with an annex containing a list of its contracts, and must be published in the Moniteur Belgo (the official paper) fifteen days after its approval by the members composing the annual general assembly, and at the expense of the society. The Banque Nationale, governed, as has been stated, by a special law, has to furnish every month to the Government a statement as to its condition as well as to the condition of its branch offices. This statement is also published in the official paper of the country. The cooperative societies must deposit the annual statement as to their condition, fifteen days after its approval, at the registry office of the tribunal du commerce of the district to which the society belongs. 9. Except the Banque Nationale, the banks are not taxed on account of any privileges they enjoy, but all pay a license fee according to the amount of their earnings. The Banque Nationale, which alone is authorized to issue bank notes, is subject on that account to various charges, determined by law. 10. The law of 1873 provides for the closing up of the business of insolvent banks. (See Section VIII, Appendix B.) 11. With exception of the Banque Nationale, no bank is authorized by law to issue bank notes. The amount of bank notes in circulation and of obligations payable at sight must not be in excess of three times the amount of the reserve in coin of the Banque Nationale. The amount of the bank notes in circulation may be increased by the authority of the minister of finance to more than three times the amount of the reserve in coin. On the 31st of December, 1894, the bank notes in circulation amounted to 469,662,000 francs, and the balances of current accounts to 78,558,169.29 francs; total, 548,220,169.29 francs. The available assets comprised the public funds of the bank and of the reserve, 74,382,512.05 francs; cash in bank, 130,756,515.01 francs; bills due and in account current, 41,847,875 francs; bills not due, 346,590,227.84 francs; loans on public funds, 13,469,529.90 francs; total, 607,046,529.90 francs. 12. See answer to question 11 for the redemption of bank notes. The payment of the latter is guaranteed by. the available assets of the bank. 13. See Appendixes A and B. [Thomas Moonlight, United States minister.] 1. There are only two classes or kinds of banks—banks of issue, deposit, and discount and banks of mortgage. At present there are two of the former and three of the latter, with branches of the former in all the leading cities in Bolivia and at points in South America and in Europe, as will more clearly appear in the semiannual report accompanying, and of only one of the latter in the leading cities of Bolivia. 2. These banks of issue are chartered by the Government and authorized to do business by having a specified capital or capital stock, with so much paid up, and upon this paid-up capital the banks are authorized to issue 150 per cent in notes, and they issue all the paper money in Bolivia. The banks of mortgage issue no money, but only mortgage cedules, and are also chartered by the Government. 3. The General Government determines everything, and it is very difficult to tell what officer decides, although the whole matter belongs to the minister of finance, but I am informed that favors have much to do with it. 4. (A) Capital stock may be in shares or in a community of partners. (B) Banks are managed by president, etc., as will more fully appear in semiannual reports. (C) The shareholders are liable for their full amount of stock and nothing more, and should a bank fail and the stockholders have previously paid in the full face of stock, they have no more liability. (D) The banks make semiannual reports to the minister of finance. (E) The banks are examined by a Government official. (F) No restrictions on amount of loans. (G) The banks have a wide latitude. (H) They make their own regulations about loan securities. (I) They are supposed to keep silver for the redemption of the outstanding notes. (J) The surplus is usually divided semiannually. 5. Can not give regulations governing receipts of deposits. It is the custom to allow interest on deposits. 6. The Government is not interested as a shareholder. 7. All the banks are permitted to conduct branches. 8. The banks publish semiannual reports which are also furnished to the minister of finance. 9. The Government receives from the banks semiannually a tax at the rate of 9 per cent per annum on all the profits, and in the case of the mortgage banks some additional tax on forfeitures, etc. 124 REPORT OF THE COMPTROLLER OF THE CURRENCY. 10. It is not possible to give information about the closing up of business of insolvent banks, as regulations are one thing and execution another. 11. The banks issue all the notes up to 150 per cent of the paid-up capital. The semiannual reports will show exactly the condition of the banks. 12. The banks are required to keep silver coin for the redemption of the notes. 13. The banks being required to redeem all notes in silver coin, find it very difficult to keep silver coin on hand, as the Indians and half-breeds or cholos hoard up all the silver they can lay their hands on and can spare as savings. The Government coins all the silver and the banks must procure the coinage from the mint at Potosi and all claim the Government makes great gains in this way. BRAZIL. [Thomas L. Thompson, United States minister.] Before responding to each one of these questions and for a complete understanding of the responses, I deem it advisable to enter into some historical remarks in relation to the establishment of banks in Brazil. In 1808 the first bank was established in Brazil by D. Joao, the then Prince Regent, by charter granted under the law of October 12, and was simply for the purpose of deposit and discount, the issue of bills being limited. It was founded in Rio de Janeiro in accordance with the political regimen then in force. The capital of this bank was 3,000,000 crusados divided into 1,200 shares of the value of 1 conto of reis. On October 12,1812, the Government became a shareholder in this enterprise to the extent of 100 contos annually, the proceeds from a new impost, and agreed to continue aiding the bank in this way for the period of ten years, as its strength was thought to be insufficient, and promised to demand no interest on the amounts so invested for the first five years, such interest passing to the private shareholders. By the law of the 23d of September, 1829, the bank entered into liquidation which ended on the 7th of December, 1830, the Government becoming responsible for its issue and giving forced circulation to its notes. October 8, 1833, the creation of a bank of deposit, discount, and issue was authorized with a capital of 20,000 contos divided into shares of 100 milreis each, with permission to operate for twenty years. This bank was not incorporated. The Government, however, agreed to become a shareholder to the amount of 40,000 shares, which should be paid for with the capital existing in the extinct bank and with the product from the impost arising from the law of October 20,1812, substituting those notes of the Government and of the former bank, which circulated in Rio de Janeiro, Sao Paulo, and Bahia by virtue of law. The Bank of Brazil having been created by the decree of July 2, 1852, and the statutes having been approved, the incorporation of a bank of deposit, discount, and issue was authorized by the law of July 5, 1853, with a capital of 30,000 contos divided into 150,000 shares of the value of 200 milreis each, permission given to increase the capital stock, establish branches, and to operate for thirty years, the presidency of the directory being reserved for the Emperor. The notes at sight and to the bearer were received in the public departments of Rio and wherever the bank established branches. In this bank was incorporated the Banco Commercio of Rio de Janeiro, created by decree of July 23, 1842. On September 13, 1864, in consequence of the crisis in the markets of Rio de Janeiro, an increase in its issue to three times the amount of its reserve fund was permitted, without limitation of time, and on the 14th of the same month and year forced circulation was given to its notes, they being received as legal tender not only in the public departments but as well by private individuals. The Government was authorized by the law of September 12, 1866, to change its agreement with the bank, in accordance with the law of July 5, 1853, and in consequence the issue of notes at sight and to the bearer ceased almost immediately, although it was permitted to make loans and borrow money upon the hypothecation of securities from which resulted the division of the bank into two distinct departments under the same management, and later the operation of the department of hypothecation was regulated by the law of September 24,1867. On August 10,1870, the capital was increased to 33,000 contos divided into 165,000 shares of the value of 200 milreis each. A new accord with the Government was realized on August 30, 1888, by virtue of which it entered the bank, under the pretense of a loan, 6,000 contos destined to create in the hypothecation department a section of credito agricola (to assist agriculture). On October 9,1889, the capital of the bank was increased to 100,000 contos, continuing to operate in this exposed condition until 1893, when, in consequence of the political happenings and of the economical necessities of the praca of Rio de Janeiro, the Bank of the Republic of the United States of Brazil was created by decree of December 17, 1892. In this bank was incorporated the Bank of Brazil, the fusion becoming known as the Banco da Republica do Brazil. Until 1860 the foundation of banks depended upon a decree by the power executive or on a law of the legislature, according to the conditions and end for which it was destined, REPORT OF THE COMPTROLLER OF THE CURRENCY. 125 submitting each separate case to the consideration of one or the other of those powers. General provisions were enacted for the establishment and operation of banks by the law No. 1083 of August 22, 1860, and the decree No. 2711 of December 19 of the same year, and their respective regulations. Under these provisions many banks were established. On account of the bank crisis which occurred in 1864*decrees were promulgated with the aim of protecting the banks and facilitating liquidation. In 1882 by the law No. 3150 of November 4, known under the title of "Law of Societies Anonymous/' rules were provided for the creation and operation of all companies or societies whether their object was banking, or commercial, or civil, the creation of the company not depending upon the authorization of the Government, the only exception being banks of issue, of real credit, and of certain companies. The law which is regulated by decree No. 8821 of December 30, 1882, was altered in some of its provisions in consequence of the speculation in this market during the years 1890 and 1891 by decree No. 10165 of January 12, 1889; No. 164 of January 17, 1890; No. 850 of October 13, 1890; No. 997 of November 11,1890; No. 1362 of February 14, 1891; No. 1386 of February 20, 1891, all consolidated in the regulating decree No. 434 of July 4, 1891. This is the state of the legislation concerning the question. I. To the first question I respond: At present there exists three classes of banks— banks of deposit and discount, banks of credit, banks of hypothecation, and one bank of issue, which at present is the Banco da Republica do Brazil, having all the privileges of issue conceded to other banks up to 1893. It may be noted that with the necessary authorization, banks of deposit and discount may have a special department for loans upon real credit, issuing letters of hypothecation thereon. This does not exclude the existence of banks of credit exclusively real, which, as a matter of fact, operate in the various States of Brazil. There exists also one bank of hypothecation, which, after the fusion of the Bank of Brazil in the Bank of the Republic of Brazil, called in the hypothecated securities which it held of other banks, which the decree by which it was established permitted, and one called the Credito Popular, which changed its name to Banco Hypothecario do Brazil (decree No. 1361 of April 20, 1893). 2 and 3. The conditions necessary in order that a bank may operate are given in the law which is cited, and a copy of which is annexed (chapter 3 of decree No. 434 of 1891), which in general are the presentation and deposit in the Junta Commercial of the documents and statutes corroborative of its legal existence. The Junta is only authorized to make the registration without power to weigh the judicial value of these documents, which is exclusively the province of the judiciary, at the instance of an interested shareholder (article 16 of the above-cited decree). To the fiscals of the Government in certain specified instances, set forth in the law, belongs the right to overlook and give an opinion upon the regularity of their operations when these banks are dependent upon the previous authorization of the Government, such as banks of issue or of circulation, credit real, relief societies, savings banks, mutual insurance, and the branches of foreign banks (decree No. 483 of August 25, 1891). The general principle, however, is that of inspection by fiscal councils composed of stockholders elected at a general meeting (chapter 5 of the decree No. 434). 4 and 5. In general the banks have a reserve fund created spontaneously as a measure of internal economy; and they pay or do not pay interest on the deposits confided to them according to the circumstances of the case. 6. At present the Government is not a stockholder in any bank and the only interest which it has arises from the tax collected on the professions and industries to which the banks are subject. This tax is 2\ per cent on all dividends paid to shareholders. 7. Banks are permitted to establish branches. 8. The condition of the banks is communicated to the public by the publication of the monthly balance sheets. j 9. From the loans made by the Government as an aid to labor, caused by the aboli- j tion of slavery, no interest is received. This sum amounts now to 47,250 contos and ! will be paid back in 1906. j 10. The liquidation of insolvent banks may be made amicably or judicially in con- j formity with chapters 7 and 8 of the decree No. 434. In the first instance the agreement should be confirmed by the judiciary, the second at the request of interested parties. II. To-day banks of issue can only be authorized by the legislature and the only bank which at present is such is the Banco da Republica do Brazil. \ 12. The amount of the issue permitted is double the sum deposited in the treasury \ as a guaranty, and if the deposit be in gold then three times the sum may be issued. ^ 13. Foreign banks are permitted to establish branches in Brazil by first obtaining | the permission of the Government, subject, however, to our laws as regards the 1 responsibility of the directors and the competency of the Brazilian tribunals within, the limitation in which it is exercised. Their statutes are respected and approved, in so far as they do not contravene the laws of Brazil and allows them to accord? 126 REPORT OF THE COMPTROLLER OF THE CURRENCY. with the laws of the country whence they originate. These establishments subject to the inspection of the Government are obliged to publish, as other banks, their monthly balance sheets and to pay a tax of 2\ per cent on the dividends calculated on the declared capital of the branch. [John B. Riley, consul-general.] 1. (a) The chartered banks, which alone can issue notes for circulation in denominations of $5 and upward, the smaller currency being issued by the Dominion Government. These banks are governed by the provisions of the act 53 Viet., cap. 31, "the bank act," a copy of which is sent herewith, marked A. (&) Two savings banks in the Province of Quebec, the City and District Savings Bank of Montreal, and La Caisse d'Economie de Notre Dame of Quebec, which are doing business under special act 53 Viet., cap 32, a copy of which is annexed, marked B. These banks do not issue notes for circulation and are not banks within the meaning of the bank act (vide sec. 29). They furnish monthly returns to the Government of the state of their affairs and annual returns of their shareholders and of dividends, etc., unclaimed for five years (vide sees. 31, 32, and 33). Their stockholders are only liable for the unpaid amount of their stock (vide sec. 8). These banks have been in existence since before confederation, (c) The Government savings banks: These are under control of two departments of the Dominion, viz, the Post-Office Savings Banks, authorized by sections 65 to 77 of the post-office act R. S. C , cap. 35 (act herewith, marked C, and regulations, marked D), and the Government Savings Bank, under control of the finance department, under R. S. C , cap. 121 (act herewith, marked E, and regulations thereunder, marked F). These banks are simply savings banks to encourage the deposit of small savings. The limit of deposit is $1,000 in any financial year and a maximum deposit of $3,000, exclusive of interest. The rate of interest paid is 3£ per cent, compounded yearly, (d) The loan and savings companies, a copy of the latest report as to which is sent herewith, marked G. (e) The private bankers, with reference to whom there is no Dominion legislation, except that they can not issue notes nor use the title of "bank," "banking company," etc. (See sections 60and 100 of the bank act.) NOTE.—The answers to the following questions refer only to the chartered banks, and the references are to sections of " the bank act," 53 Viet., cap. 31. 2. They must procure an act of incorporation from the Dominion Parliament, and then comply with sections 9 to 17. 3. The treasury board, which is a subcommittee of the Queen's privy council for Canada, consisting of the minister of finance, ex officio chairman, and five other ministers appointed by the governor-general in council. 4. (A) Capital stock: At least $500,000, all of which must be subscribed and at least $250,000 paid up before the bank can commence business (sec. 13). The stock may be reduced, but not below $250,000 paid up (sec. 28). (B) Management of the bank: See sections 18 to 25. (C) Liability of shareholders for claims against the bank: " Double liability," that is, to an amount equal to the par value of the shares held in addition to any amount not paid up on the shares (sec. 89). (D) Reports of condition of the bank: (a) Monthly (sec. 85); (b) special when called for by the minister of finance (sec. 86); (c) yearly as to shareholders (sec. 87); (d) yearly statement of dividends, etc., unpaid for five years (sec. 88). The above are to the Government, and in addition an annual statement has to be made to the shareholders on the occasion of the election of directors (sec. 45). (E) Examination by Government official: None. (F) The amount of discounts and loans to directors, either jointly or severally, or to any one firm or person, or to any shareholder, or to corporations, may be regulated by the shareholders by by-law (sec. 18). The amount of discounted notes and of the loans are exhibited in the annual statement to the shareholders (sec. 45) and in the monthly returns to the Government (Schedule D), and in the monthly returns special mention is made of the aggregate amount of loans to directors and firms of which they are partners. (G) The bank can not lend money (a) on note3 of a bank (sec. 52); (b) on a share of its own capital stock, or of the capital stock of another bank (sec. 64); (c) on the security of land, ships, or of any goods, wares, and merchandise (sec. 64). (See, however, section 72 as to advances in aid of the building of a ship.) (H) Security for loans: (a) Bills of exchange, promissory, etc. (sec. 64); (6) has lien on its own shares, and may decline to allow transfer (sees. 65 and 66); (c) Mortgages upon real or personal property by way of additional security for debts contracted (sec. 68); (d) may purchase and acquire title to lands offered for sale under execution, etc., belonging to debtor to the bank, but such lands must be sold within seven years (sees. 69 to 71); (e) warehouse receipts or bills of lading as security (sec. 73); (/) goods, etc., to secure advances to wholesale merchants, etc., in certain cases (sees. 74 to 78). (I) Cash reserve required: None; the only provisions being (a) that no division exceeding 8 per cent per annum is to be made, REPORT OF THE COMPTROLLER OF THE CURRENCY. 127 unless after making it the bank has a rest or reserve fund equal to at least 30 per cent of its paid up capital after deducting all bad and doubtful debts (sec. 49), and (J)) that of whatever reserves are held at least 40 per cent must be held in Dominion notes (sec. 50). (J) Accumulation of surplus: None. No dividend is allowed to be made to impair the paid-up capital, and if the paid-up capital is impaired, all net profits must be applied to make good the loss. 5. See section 84 as to receipt of deposits. Most of the banks have savings-bank departments attached. 6. The Government holds no bank shares. 7. All are. See section 64. 8. Monthly returns to Government published in Canada Gazette (latest return transmitted); list of shareholders and unclaimed balances returned to Parliament and printed in Blue Book from latest issues (herewith, marked I and J ) ; annual statements to shareholders generally printed and published in the financial papers (latest semiannual return of Bank of Montreal herewith, marked K. 9. The banks do not pay any taxes to the Government in any way. They are, however, debarred from charging any discount or commission on official checks of the Government of Canada (sec. 103). They have to make arrangements to insure the circulation of their notes in every part of Canada at par (sec. 55), and they contribute to the circulation redemption fund (sec. 54). 10. See sections 8S to 96 of the bank and the winding-up acts, R. S. C, cap. 129 (herewith, marked L), and 52 Vic, c. 32, in amendment thereof, annexed thereto. 11. To the extent of unimpaired paid-up capital, except in the Banque du Peuple and the Bank of British North America, which can only issue to extent of 75 per cent of unimpaired paid-up capital. See, in this connection, section 51, subsections 1 and 2. See subsection 3 of section 51 for penalties for noncirculation. They can only issue notes of the denomination of $5 or multiples of $5 (see subsection 4). 12. They are a first charge upon the assets of the bank, and in case of insolvency they bear interest at 6 per cent from date of insolvency until date named for redemption. There is the further security of the " double liability" of the shareholders and of the "bank-circulation redemption fund" (see sees. 53, 54, and 89). 13. The only points to which attention may be called, in addition to the foregoing, are that all sales and transfers of shares must be of bona fide shares actually in the possession of the transferrer, this being with the view of preventing speculative sales of shares (sec. 37); that counterfeit notes must be stamped as such when presented at the bank (sec. 62), and that heavy penalties are imposed for violation of the provisions of the act. Special attention is directed to the system of note circulation, which is a very elastic one, the circulation expanding and contracting as the business of the country requires, while at the same time the issue is fully protected. In the last act (1890) three new provisions were made: (1) The establishment of the bank-circulation redemption fund, to give additional security for the redemption of the circulation in case of insolvency; (2) the notes bear interest at the rate of 6 per cent in case of insolvency, the intention being to prevent the notes going under par, and (3) compelling the bank to establish agencies throughout the Dominion, so as to prevent a discount being charged on their notes. The charters of the banks will expire on the 1st of July, 1901, and further legislation will be required before that time. The Dominion Government, under certain restrictions, may issue Dominion notes to any amount. (See act respecting Dominion notes, and amendments thereto, marked M.) As to the currency, see act respecting the currency, marked N. CHILE. [Edward H. Strobel, United States minister.] 1. There are two classes of banks, namely, the hypothecary or mortgage banks (bancos hipotecarios) and the banks of issue (bancos de emision). The former were authorized by the act of Congress of August 29,1855, which provided for the establishment of a bank called the Caja de Cre'dito Hipotecario (Bank of Mortgage Credit) in Santiago, and permitted the founding of like institutions throughout the country, provided there should not be more than one in each province. These banks are in imitation of the French banques hypothe'eaires. They give loans upon real estate in return for certain annual payments (anualidades), first, not exceeding 8 per cent for interest; second, not less than 1 nor more than 2 per cent for the sinking fund; third, not more than one-half per cent for the reserve fund and expenses. The loan is given by the bank in notes of credit (letras de credito), the payment of which is guaranteed by the bank, and for which payment they are drawn by lot every six months (or sooner, if the bank so decides), to the amount of the sinking fund which the bank has for the purpose. These notes belong to different series, according to the amount of interest they bear, which is fixed at 8, 7, 6, and 5 per cent per annum. They are, of course, negotiable, and are quoted daily in the open market, being 128 REPORT OF THE COMPTROLLER OF THE CURRENCY. made out payable to order or to bearer, according to the wishes of the borrower. As stated above, this sinking fund for the paying off of these notes was derived from part of the annual payment iixed by law of not less than 1 nor more than 2 per cent, made by the borrower on the amount of the loan; and at the time of the passage of the act it was calculated that by this arrangement the paying off of the notes would be effected as follows: Those of 8 per cent in 21 years; those of 7 per cent in 22 years; those of 6 per cent in 23| years; those of 5 per cent in 25| years. (See Appendix, note 1.) The hypothecary bank, therefore, plays the part of middleman between the lender and the borrower, and begins with little or no capital. Banks of issue (bancos de emision) are banks in the ordinary sense of the word. They are authorized by act of Congress of July 23, 1860, and are called banks of issue because, besides doiug ordinary banking business, they are allowed to issue notes payable at sight and to bearer. Banks of issue are also permitted to engage in the business of hypothecary banks (bancos hipotecarios), but through a special department (seccion), which is entirely independent of their other business. In like manner several of the hypothecary banks have availed themselves of the act allowing banks to issue notes at sight and payable to bearer. In both cases the two classes of business, although managed by the same banking institution, are kept entirely distinct, and in many cases even to the extent of having separate capital stock for each class of business. This latter is done in order to enable the shares of each section to be quoted according to business done by the bank. As the two classes of business are authorized by two entirely separate and distinct acts of Congress, mentioned above, and as the credit notes of the hypothecary banks are amply secured by the real estate mortgaged to the bank, while, as will be seen, the notes of the banks of issue payable at sight and to bearer were issued without proper security, the shares of both sections are quoted in the market independently of each other, and generally at widely differing rates. 2. The act of Congress of August 29, 1855, makes no special requirements for the establishment of hypothecary banks; but the latter are subject to the provisions of the Commercial Code (Codigo de Comercio) applying to the organization of joint stock companies, given below. The act of July 23,1860, provides that the following requirements must be met in order to establish a bank of issue: Those who intend to found a bank of is^ue are obliged to deposit beforehand in the ministry of finance a declaration stating the name, domicile, number of branch offices, and capital of the same, as well as the date on which it is intended to begin operations. They must also deposit a copy of the by-laws and regulations. This is all that is contained on this point in the above special banking act. Both classes of banks, in order to transact business, must satisfy the provisions of the Civil Code (Codigo Civil) and of the Commercial Code (Codigo de Comercio) applying to joint stock companies (sociedades anonimas). According to articles 350 and 355 of the Commercial Code, the proof of the formation of a joint stock company must be a document to that effect prepared before a notary, inscribed in the commercial register, posted for three months in the office of the secretary of the judge of the department, and published ten times in a newspaper of the department. If there is no newspaper in the department, the publication must be made by posters in three of the most conspicuous places in the domicile of the company. The document must declare, first, the name, surname, profession, and domicile of the founders; second, the domicile of the company; third, the business the company intends undertaking, and the reason for its name, with clear and complete details; fourth, the capital of the company, the number of shares, and the periods in which the stockholders should pay in the amount of their subscription; fifth, the date for making inventory, balance, and declaring dividends; sixth, duration of the company; seventh, the manner of administration, powers of directors, and the rights reserved to the general assembly of stockholders; eighth, the amount of profit which should remain in the treasury of the company to form a reserve fund; ninth, the amount of deficit in the capital sufficient to cause dissolution of the company ; tenth, in case of dissolution, the form in which the company shall be wound up and the assets divided; eleventh, whether difficulties which arise during the duration of the company should or should not be submitted to the decision of arbitrators, and if they are so to be submitted, the manner in which the appointment of arbitrators should be made; twelfth, any other agreements made between the stockholders. No petition for the formation of a joint stock company shall be received if not signed by a number of subscribers to the stock equal to at least one-third of the whole, accompanied by a statement in which the above details, as well as the by-laws, are approved by the subscribers to the stock at a general meeting. 3. By article 427 of the Commercial Code, joint stock companies exist by virtue of a decree of the President of the Republic. As already stated, the petition for this decree must be signed by subscribers to at least one-third of the capital stock. On granting the petition and issuing the decree establishing the company, the President of the Republic decides whether a sufficient amount of the capital subscribed haa been paid in to warrant the company's beginning business; and if this has not been REPORT OF THE COMPTROLLER OF THE CURRENCY. 129 done, he fixes the amount that should be paid in. When proof has been furnished that the amount has been paid in, the President will issue the corresponding decree. These general provisions of the code apply to banks. The only special provision on this subject is article 5 of the act of July 23, 1860, establishing banks of issue, which i« as follows: "Before the date indicated for beginning its operations, the President of the Republic must ascertain the manner in which he considers best the existence of the capital of the future bank." As will be seen, therefore, the President of the Republic is the only one having authority to determine whether the legal conditions ior the establishment of a bank have been satisfied. 4. (A) Capital stock: Article 6 of the act of July 23, 1860 (banks of issue), provides that the capital stock of a bank must consist of legal money of the country, bars of gold or silver, or any obligations or documents signed by persons who are notoriously solvent, payable at six months or less. Real estate and ordinary obligations with mortgage security may be regarded as security for the capital stock, but in no case as constituting it; and the bank directors are prohibited from mentioning the said values or guaranties as constituting the capital of the bank, in the notices or prospectuses which they publish, under a penalty of $100 for each publication. It is also provided by article 7 of the same act, that the director or directors of a bank must declare under oath, to the agent appointed by the President for the purpose of ascertaining whether the capital stock exists, that the capital really belongs to the persons or company proposing to establish the said bank, and that it is to be truly and faithfully employed in its operations. As I have already stated, the capital stock to be paid in before beginning operations must be fixed by the President of the Republic before issuing the decree authorizing the establishment of the bank. These are the regulations in the act of July 23, 1860, regarding the capital stock of banks of issue. The act of August 29,1855, makes no reference to the amount which shall constitute the capital of hypothecary banks, which, as before mentioned, are mere middlemen, and begin with little or no capital. (B) Management of the bank: The management of a joint stock company is in the hands of a board of directors (consejo de administracion) elected, in accordance with the by-laws (estatutos), by the stockholders (Commercial Code, article 457). The Bank of Chile—the leading bank in this country—is managed by a board of eleven directors (consejo general), composed of eleven stockholders living in Santiago, and eleven residing in Valparaiso. The directors, with the exception of the president, are elected at the general meeting of stockholders. The president of the bank is annually elected by the hoard of directors, and may be reelected indefinitely. In addition, the board of directors may appoint as many managing directors as they regard necessa-y. By the act of August 29,1855, which established the bank of mortgage credit (caja hipotecaria), the management of this institution is placed in the hands of a manager appointed by the President of the Republic, and a board of four directors, two of which are appointed by the Senate and two by the Chamber of Deputies. The other banks of the same class authorized by this act have the right to elect their own board of directors, but the manager must be appointed by the President of the Republic, and from a list of candidates submitted by the board. It will therefore be seen that the Government only exercises supervision in the choice of officers of the hypothecary banks, but not in the case of banks of issue. (C) Liability of shareholders for claims against the bank: No ordinary shareholder is liable for claims against a bank beyond the amount of his unpaid subscription. According to article 452 of the Commercial Code, the shareholder was liable to a third party having claims against the bank to the extent of his unpaid subscription even after the transfer of his stock; but this section of the code has been repealed by the act of September 6,1878, which provides that the liability of the transferrer shall be only secondary, primary liability resting with the transferee. Article 9 of the act of July 23, 1860, makes a director of a bank responsible for all obligations contracted by the bank during his term of office. It also requires him to hold a number of shares equal to 10 per cent of the capital, or an interest in the profits of not less than 10 per cent; but whatever may be the capital of the bank, it is sufficient for the director to hold shares to the extent of $40,000, or to have an interest of not less than 10,000 pesos in the profits. The shares of the director shall be registered in his name, and shall be free of all obligations toward third parties not creditors of the bank during his term of office. They shall be deposited in the bank during that time and for six months afterwards as a guarantee. During this period the creditors of the bank shall be preferred creditors with reference to the attachment of this guarantee over the personal creditors of the director. (D) Reports of the condition of the bank: Article 8 of the act of July 23, 1860 (banks of issue), provides that the directors of a bank of issue must, in the first fifteen days of each month, send to the minister of finance a balance giving a summary of the condition of the bank at the end of the preceding mouth. By article 30 there must appear in this balance, on the credit side, the assets with the value given in legal currency, bars of gold or silver, documents, promissory notes, accounts current, advances or CUR 96, PT 1 9 130 REPORT OF THE COMPTROLLER OF THE CURRENCY. debts of agents or employees, and notes of other banks; and on the debit side there must appear the capital of the bank, the reserve fund, the notes in circulation, and deposits with and without interest. By article 4, there must also be deposited with the minister of finance a copy of the regulations and statutes of the bank, the annual inventories, the minutes of the meetings of the shareholders and resolutions adopted at the same, especially of those resolutions that have for an object the augmentation or diminution of the bank's capital stock. By article 25, delay in the transmission of documents and accounts to the minister of finance, as required by this act, will be punished by a fine of $20 for each day's delay. Article 5 of the act of August 29, 1855 (hypothecary banks), provides that every credit note issued must be entere'd in the register of the mint. There must be at the same time an authorized copy of every mortgage contracted in favor of the bank, and the notes of credit must be equal in value to that of the mortgage. By article 27 of the same act, the board of directors must send to the Government a full report of all the operations of the preceding year, and the results obtained, so that the bank's condition may be fully known. (E) Examination by Government official: Article 13 of the act of July 23, 1860 (banks of issue), provides that the President of the Republic may, through one or more agents appointed by him for the purpose, at any interval of time he thinks convenient, cause an examination to be made of the books, and the cash, and other assets of the banks of issue. By article 23, any director or agent of a bank who, after having been duly notified by the agent appointed for the purpose by the Government, refuses at once to exhibit to such Government agent the books, cash, and other assets of the bank, will be punished by a fine of $1,000, to be paid into the public treasury by the bank. By article 24. any bank director or manager who knowingly makes a false declaration regarding the property and the employment of the capital of the bank, or who has furnished a false balance, or has concealed by fraudulent documents the situation of the bank, especially the sums advanced by the bank to its directors or any other officers, whether directly or by discounting documents under their signature, shall be punished with a fine not exceeding 10,000 pesos. No provision is made in the act of August 29, 1855, for the examination of the affairs of a hypothecary bank by a Government official. It will be remembered that certain officials of these banks are appointed by the President of the Republic, which is not the case with banks of issue. (F) Restrictions on the amount of loans: There is no provision in the act of July 23, 1860, restricting the amount of loans of a bank of issue. The question does not arise in the case of hypothecary banks, which, as has been stated, give their own notes for the value of their loans or mortgages, these notes being sold in the open market by the borrower. (G) Restrictions of any other character on loans by the bank: By article 10, of the act of July 23, 1860 (banks of issue), all loans or discounts made by a bank in favor of its directors or any other officers, or any agent of any kind who may take part in the administration of a bank, must be entered in a special account in the books and in the statement of the bank's balance. By article 11, every bank of issue is prohibited from making loans on its own shares. These are the only restrictions of any kind upon loans by the banks contained in the act. (H) Security for loans: The act of July 23,1860 (banks of issue), makes no provisions for the security for loans. The act of August 29,1855 (hypothecary banks), provides that the loans given by a hypothecary bank in the form of its credit notes (letras de credito) must not be for more than 50 per cent of the value of the property mortgaged to the bank. The value of the property mortgaged may not be less than $2,000, nor the value of the loan less than $500. (I) Cash reserve required: There are no provisions regarding the amount of cash reserve. (J) Accumulation o£ surplus: There are no provisions regarding the accumulation of surplus. REPORT OF THE COMPTROLLER OF THE CURRENCY. 131 5. Receipt of deposits: There are no regulations established by law governing the receipt of deposits by the bank. It is the custom all over Chile for banks to allow interest on deposits. The following statement, showing the variations in the rates of interest allowed on deposits from 1865 to 1883, may be of interest: At three months. At sight. Date. 1865, Sept. 30 1866, Aug. 81 1867, July 8 1868, Nov. 28 1870, Aug. 1 1872, Dec. 16 1872, Dec. 18 1872, Dec. 31 1873, May 18 1876, July 4 1879, June 1 1879, July 15 1879, Dec. 1 1880, Sept. 1 1883, Jan. 8 Per cent. 6 5 4 3 4 5 4 ? 4 3 2 2 Date. 1865, Sept. 30 1867, May 15 1867, Oct. 18 1868, Nov. 28 1870, Aug. 1 1872, Dec. 16 1872, Dec. 31 1873, Mar. 18 1876, July 4 1879, July 1 1879, Dec. 1 1880, Sept. 1 1881, Jan. 1 1883, Jan. 8 At six months or thirty days' sight. Per cent. Date. 7 6 5 1865, Sept. 30 1867, May 15 1867, Oct. 18 1868, Nov. 28 5 1870, Aug. 1 6 1872, Dec. 16 1872, Dec. 31 K 6 1873, Mar. 18 7 1876, July 4 5 1879, July 15 1879, Aug. 2 1879, Dec. 1 | 1880, Sept. 1 1881, Jan. 1 1883, Jan. 4 Per cent. 8 7 6 5 6 7 6 7 8 7 6 5 6. The Government is not interested as a shareholder in any of the banks. The Bank of Mortgage Credit CCaja de Cr6dito Hipotecario), the first hypothecary bank established by the act of August 29, 1855, was established under the supervision of Government, but the Government is not a shareholder nor has it any interest in the bank's operations. 7. By article 355 of the Commercial Code any stock company can establish branch offices in any part of the Republic by fulfilling the conditions referred to under No. 2, regarding the publication and registration, the same as in the case of the company itself. These forms must be complied with in at least fifteen days before the opening of the new office. As already stated, article 3 of the act of July 23, 1860 (banks of issue), the declaration to be filed with the minister of finance fifteen days at least before the bank begins its operations must state the number of branch offices (if the bank intends to have branch offices) and the places in which it is intended to establish them. 8. The information, which, as already explained under No. 4 (D), must be given to the minister of finance within the first fifteen days of each month, is published in the Diario Oflcial, the official journal of the Republic. As an example that may be of interest, I give below a statement of the Bank of Chile, the leading bank of the country, on August 31,1895. The statements of all the banks of issue are published in this form. [JTrom the Diario Oficial of September 30, 1895.] Ministry of finance—Movement of private capital—Bank SI, 1895. of Chile—Balance on August [Offices in Valparaiso, Almendral, Santiago, Curico, Talca, Chilian, Concepcion, Talcahuano, Los Angeles, Angol, Traiguen, Quillota, San Felipe, Andes, Serena, Antofagasta, Iquique, Pisagua, Valdivia, Tacna, Osorno, Tomb, Temuco, Union, Ovalle, and Coronel.] DR. Notes in circulation , $10,639,595.00 Notes of the late Consolidated Bank of Chile (Banco Consolidado de Chile) .__ 12,320.00 Ditto ditto Alliance (Alianza) 14, 722. 00 Deposits : 50,705,626.62 Deposits of bonds and documents 78,004,786.33 Acceptances 154, 052.23 Agencies 2, 209,182. 88 Pending business 2, 265, 757. 66 Savings 30,739.87 Interest, commissions, etc , 55,214.62 Due to the public 144,091,997.21 132 REPORT OF THE COMPTROLLER OF THE CURRENCY. Paid-up capital Conversion fund Reserve fund F u n d for dividends Dividends payable $20,000,000.00 500? 000. 00 TOO, 000. 00 194, 455. 87 464,006.00 Due to shareholders 21,858,461.87 165, 950, 459. 08 CR. Cash: Treasury notes . . . Government notes $30, 700.00 2, 213, 228. 50 2,243, 928.50 853, 966. 00 4, 058, 239. 88 1,839,179.07 Notes of other banks Checks and values disposable of other banks Coin 8,995, 213.45 Bonds and t i t l e s : Guarantee for notes deposited in t h s mint. Bonds and documents given in guarantee Real estate Other securities Material Advances and amounts receivable Ditto ditto article 10 of the banking law $11, 750, 385. 59 - 89, 790. 96 11, 840, 176. 55 78, 004, 786.33 2, 094, 325.70 257, 740.36 193, 157.47 $63, G\(\. 2If). 49 758, 780. 01 64, 374, 979.50 190, 079. 72 Expenses of management 165, 950, 459. 08 I also give a general summary, published in the same number of the Diario Official, of the balance of all the banks of issue on August 31, 1895. By article 27 of the act of August 29,1855, the board of directors (consejo de administration) of thehypothecary banks must every six months present to the Government a statement of the operations of the bank, and must publish this statement in the Diario Official, and one annual balance must also be published. Balance of the banks on the 81st of August, 1895. Cash. Banks. Banco de Chile Santiago Comercial de Chile Internacional (Chile) Mobiliario A.EdwardsiC.a Talca D. Matte i C. a Union Concepcion Curico Melipilla Nuble Popular Hipotecario Jos6 Hunster Popular San Fernando Llanquihue Cochagua Aranco Serena Tacna Total Notes in circulation. Deposits. Gold. Coin. Government notes. a$10,639,595.00 $50, 705,626. 62 $1, 839, 179. 07 $2, 213, 228. 50 2, 076, 834. 50 15, 726,770. 55 2, 609, 335. 56 523, 501. 00 2, 217, 090.00 13, 535,901. 59 $1, 354,540. 85 518, 588. 96 343,448. 00 5, 431,637. 03 843, 997. 83 496, 426. 00 io5,23! 13, 168. 30 113, 452. 00 "i," 309," 030." 50* 6, 216,378.14 6, 286,416. 05 1, 002, 791. 27 25, 029.10 85, 960. 00 89, 249. 00 2, 641,623.57 47, 201. 66 74, 218. 81 416, 250. 00 121, 929. 00 4,418, 381.88 575, 990. 00 15, 810. 25 556, 600. 00 19, 963. 00 3, 314. 05 552, 226. 61 31, 500.00 405, 727.00 76, 716.19 208, 775.00 2, 718,830. 38 112,194.50 7, 210.33 165, 630. 00 389, 220. 50 19,470. 00 90, 274. 00 5, 226. 05 268, 473. 00 85, 643. 33 787, 486. 84 20, 621. 00 4, 206.15 116, 340. 00 15,150.00 159, 005. 51 5, 692. 00 1, 267. 01 219, 590. 00 19, 833. 34 95, 588. 89 1, 851. 45 108, 972.00 119, 102. 94 1, 325. 00 951. 29 5, 500. 02 8, 585. 00 3, 875. 39 166, 957. 50 669, 351.52 3, 696. 00 12, 810.10 21,600.00 218, 654.07 1, 025. 00 12,988. 00 (&) 65, 573. 34 10, 000. 00 204, 240. 00 30,195. 57 82, 733. 00 195, 000. 00 1, 552, 856.40 848, 698. 66 95, 080. 39 6,811.40 30, 000. 00 153, 673. 00 19,304,386.50 114,228,282.38 3, 557, 695. 84 6, 098, 311.59 4, 286, 016. 00 alias further $12,320 in notes of the ex-Consolidated Bank and $14,722 of the ex-Bant of the Alliance. Has not forwarded its balance. Digitized for bFRASER REPORT OF THE COMPTROLLER OF THE CURRENCY. Balance of the banks on the 31st of August, 133 1895—Continued. Cash. Banks. Treasury uotes. BdTico do Chile $30, 700 900 S a i i t ' !'•<> A i (1 ii.d-5 i U a 900 j) M tie i C A ('on' < IH iou "\r 1 '" I > t , ", > l\ ' MI' • /»> 400 r 200 Tueua Total 33,100 N o t e s of oilier banks. $853, 966. 196, 289. 384. 834. 96, 568. 00 90 00 00 Total. Checks disposable in other b a n k s . 51,681.00 69, 060. 00 a 153, 846. 90 114,5(58.00 36, 98(3. 00 44,301.00 9, 3-10. 00 8, 020. 00 7, 250. 00 8 tO 00 12, 000. 00 18, 421. 00 4, 830. 00 $4, 937, 073. 57 3, 330, 02(5. 46 2.601,411.81 1, 436, D91. 83 231,850.30 1,165, 461. 37 313,315.47 765, 610.15 149, 382. 05 225,896. 69 6171,922.33 c 123, 854. 38 33, 068.15 28. 350. 35 4, 416. 45 26, 085. 02 26 lf)'-> 3Q d 34, 373.10 $4,058,139. 88 152, 711. 98 118,218.09 278,988.63 45. 424. 20 46,185. 75 16, 482. 07 38, 767. 00 25, 206. 45 e5, 30(>. 40 355, 93r>. 57 / 1 6 7 , 222. <32 800. 38 6, 803. 22 964, 630. 94 2,126, 781. 25 16,133, 746. 46 5, 899,182.91 6 307 24 10 000 98 18, 395. 77 79, 018. 41 1, 904. 48 90,564.89 4, 000. 00 a Fig-tires under the heading of bills and checks of other banks. b In i his total figure $1.0,667 of its own notes. cln this total figure $3,024 of its own notes. din this total is included $2,720 of its own notes. e Not detailed in the cash. / I n this total figure $10,124.38 of its own notes. 9. There are no general taxes or burdens imposed on the banks for the privileges granted them. In certain crises in the history of the country, however, special privileges have been given to the banks in return for favors to the Government, and it is necessary, for the understanding of the banking system which has existed in this country, to give some of the most important cases in which these arrangements have been made between the Government and the banks. Although the act of .July 28, 1860, required at that time that bank notes should be redeemed on their presentation, by acts passed on December 20, 1865, and February 1,1866, in consequence of the war with Spain, in return for a loan of about 4,500,000 pesos to the Government of Chile, the Bank of Chile and four other banks were permitted to defer the redemption of their notes until six months after the close of the war, or at any rate until not later than July 30,1867. The inconvertible paper, however, did not extend later than August 31, 1866, and under these acts the bank notes were also to be received by the Government at their face value in payment of all Government debts. In 1878, the Government being again in need of funds, by the act of July 25 of that year—now known as the act establishing irredeemable paper currency—eleven banks, which subscribed for a certain amount of 9 per cent bonds issued by the Government, were authorized to defer the redemption of their paper until August 31, 1879. The issue of the paper was not to exceed 15,000,000 pesos. This amount was divided up proportionately among the eleven banks subscribing to the loan, and was about four times the total amount subscribed. These notes were received by the treasury at their face value in payment of all Government debts. The financial crisis at the time and the necessities of the war with Peru and Bolivia, which broke out during the same year, not only required continual postponements of the date of redemption by the banks, by further acts of Congress, but also necessitated the issue by the Government of its own irredeemable paper. This system of irredeemable paper lasted until June 1 last, when specie payment was resumed in accordance with the act of February 11 of the present year, providing for the redemption of the paper money on June 1 at the rate of 18 pence per peso, worth formerly 48 pence. Since that time and up to the present date specie payment has been sustained, but exchange in London, at ninety days' sight, hag not risen above 17|- pence, with much exportation of gold. 10. There are no special provisions for the closing up of the business of insolvent banks. The same rules of law apply as to the failure of a firm or an individual. The following summary regarding bankruptcy laws must therefore be made up from the somewhat complicated sections of book 4 of the Commercial Code (Libro 4 del 134 REPORT OF THE COMPTROLLER OF THE CURRENCY. Cocligo de Comercio): There are three kinds of bankruptcy—accidental (fortuita), culpable (culpable), and fraudulent (fraudulento). The last two are cases where there has been either fraud or concealment, and in the case of a bank the responsibility would rest upon the managers or directors. The rules here given apply to the case of accidental bankruptcy, as the other two kinds are subject to the jurisdiction of the criminal court (juzgado del crimen). The declaration of bankruptcy must be made before the commercial court (juzgado del comercio), and may be made on the petition of the bankrupt or his heirs, or on the petition of any creditor, or of a Government attorney (fiscal). As soon as the declaration of the inability of the individual or company to pay the debts is made, the individual or the company's agent must present himself within three days before the court, bringing with him a statement of the affairs and the explanation of the causes of the bankruptcy. The judge then makes a declaration of bankruptcy, and fixes the day on which all payments must cease, suspends the operations of the bankrupt, summons his creditors, and appoints two or three provisional administrators or receivers (sindicos) of his property. The decision of the judge is published in the newspapers, and effect is given to it in spite of a pending appeal. The declaration of bankruptcy acts as an attachment upon all the property of the bankrupt, and all suits against Mm are suspended, excepting suits regarding real property, such as mortgages, etc. An appeal can be taken against the declaration of bankruptcy either by the bankrupt or his creditors. The court of appeal in such case decides, within twenty days, whether there is a case for bankruptcy or not. As already stated, however, the proceedings begun do not cease during this appeal. The judge, at the time of the declaration of bankruptcy, causes an inventory to be made of the property of the bankrupt, puts his seal upon the latter's office and books, and delivers everything to the receiver or receivers. The creditors are summoned as soon as possible by the judge, and they agree u^on the number of permanent receivers to be appointed. The resolutions of the creditors are made by a simple majority of their number, representing three-fifths of the debts against the bankrupt. The correspondence of the bankrupt is opened in his presence, and within fifteen days the permanent receivers must present to the judge a record setting forth the causes of the bankruptcy and state of the bankrupt's affairs. On the day following the appointment of the permanent receivers the judge summons the creditors, in order that they should present their claims against the bankrupt. Creditors can raise objections to claims against the estate and the bankrupt can also raise objections to such claims, and whatever doubts may arise the judge must decide within eight days following the application presented to him by the parties interested. At this stage of the failure the bankrupt may propose a settlement (convenio) to his creditors, either for the purpose of obtaining from them a reduction of their claims or time for the payment of the same. This plan should be discussed at an open meeting of the creditors, and the agreement can only be accepted by a majority of the votes of the creditors. Each creditor has but a single vote, regardless of the number and amount of his claims. Whenever an agreement is made, the affairs of the individual bankrupt or the bankrupt company are wound up in accordance with this agreement. When no agreement is made, the receivers sell the property of the bankrupt at public auction, collect all the debts due to the bankrupt, and notify the judge of the amount that should be paid to each of the creditors, reserving the proportion belonging to any creditors domiciled abroad. Having realized all the property and settled with the creditors, they present their accounts to the judge. Any property of third parties in the possession of the bankrupt at the time of the failure is returned to its owners on proof of ownership. When the amount to be paid to the creditors is fixed, the judge orders the payment of certain preferred claims, such as those of the treasury, those of the municipality, employees, creditors secured by pledges, common carriers, insurance companies, etc. The foregoing is a short summary of the bankrux>tcy law of Chile, and of course the same proceedings must follow in the case of an insolvent bank. It is the usual custom here, however, in the case of an insolvent bank, to have one of the other banks, such as, for instance, the Bank of Chile (Banco de Chile), appointed receiver. It is necessary also to refer again to the articles of the Commercial Code quoted in answer to No. 12, which provide that in the case of the insolvency of a bank, after the passage of that act, the Government shall dispose of the guaranty deposited for the notes issued by the bank and shall pay off those notes. In the case of the insolvency of a bank of issue at the present time the Government therefore assumes the responsibility of redeeming the paper of the insolvent bank. 11. Article 29 of the act of July 23, 1860, establishing banks of issue, allowed any bank to issue notes payable at sight and to bearer to an amount not greater than 150 per cent of its capital stock, the stock being defined as above under No. 4 (A). Bank notes, by article 14, must be numbered and have a double stub, and must bear the signature and seal of the superintendent of the mint. One of the stubs must remain in the mint. Article 27 of the same act required that bank notes should be paid in REPORT OF THE COMPTROLLER OF THE CURRENCY. 135 gold or silver, but, as I have explained under No. 9, this article of the act was virtually repealed by various other acts, so that the system of irredeemable paper existed in this country from July 22, 1878, to June 1 of the present year. 12. The act of July 23, 1860, to which I have so often referred, made absolutely no provision for the redemption of the bank notes. With the exception of the period of the war with Spain, above mentioned under answer to No. 9, the bank notes, however, were promptly redeemed in this country down to the act of July 23? 1878. One of tbe conditions of the successful resumption of specie payment was, of course, provision for ihe redemption of bank notes. The resumption act of February 11 of the present year makes the following requirements of the banks/which are of sufficient importance to be mentioned here in full: "Article 6. The banks shall guarantee the total value of their issue by depositing, in the mint, gold, Government bills, Government bonds, municipal bonds payable by the Government, treasury notes, and bonds of banks which are exclusively hypothecary. These values shall be appraised monthly at an estimate tixed by the President of the Republic. The said guaranty shall be deposited in the following form: Seventy per cent within three months following the promulgation of this act, and the remaining 30 per cent at the rate of 5 per cent per month for the following six months. In case of the insolvency of the bank, the Government shall realize the guaranty, which shall be regarded as a pledge, and shall pay in full the notes of the bank through the Government offices. Bank notes shall, besides, enjoy preference over all other claims against the insolvent bank, except judicial costs and the fee of the receiver (sindico liquidador). Article 7. The bank notes guaranteed in the form prescribed in the preceding article shall be received by the Government in payment of taxes, credits, and for all other purposes until December 31, 1897. Article 8. Until the date mentioned in the preceding article, the total emission of bank notes is limited to 24,000,000 pesos, divided proportionately among the banks according to their paid-up capital." All the banks of issue have complied with the above requirements of the law. 13. The Chilean banking act of July 23, 1860, establishing banks of issue, on which the banking system of the country down to the resumption of specie payment on June 1, 1895, was based, was distinguished by a certain careless liberality toward the banks. No provision was made for the redemption of bank notes, no provision for a reserve fund, and no limit to the amount of loans which the managers of the institutions might make to themselves. The result has been that profits which, under the banking systems of other countries, would go into the reserve fund, have been expended in dividends paid to the stockholders; and the financial history of the country shows large dividends paid by the banks, while at the same time the stock of the banks has been below par. The Bank of Chile in twelve years and a half—that is, from the date of its foundation down to June 30, 1878, the month in which the law making paper irredeemable was passed—had paid 228 per cent in dividends, an average of more than 18 per cent a year. In 1872 it distributed a dividend of 24 per cent; in 1873 of 22 per cent; in 1875 of 20 per cent; and in December of 1875 it had only 2,452,000 pesos cash on hand to meet 2,555,000 pesos of notes and over 20,000,000 pesos of deposits; and at the same date the bank had the precaution to accumulate a special fund for dividends which amounted to 319,000 pesos. I give below the average rate of dividends paid by some of the principal banks between the periods I mention: Banks. Bank of Chile Banco Agricola (which coalesced in 1894 with the Bank of Chile) Bank of Talca Bank of the Union Bank of Concepcion Bank of Curico Bank of Santiago Tears. Semiannual. Annual. Per cent. Per cent. 17.08 11.82 9.31 9.62 14. 062 11.08 13 1865-1894 | 1869-1894 | 1885-1895 ! 1883-1895 !. 1872-1894 j. 1882-1804 !. 1884-1893 . 8.54 5.91 As a contrast to the large dividends paid I give at random the value of the shares of certain banks quoted in 1888: Bank of Chile, 50; Valparaiso; 50; Banco Agricola, 60; Bank of the Union, 50. The quotations to-day are as follows: Bank of Chile, 86; Bank of Santiago, 90; Bank of the Union, 63; Commercial Bank, 71. The values of the notes of the hypothecary banks have fluctuated as follows : Eight per cent between 73 and 105, 7 per cent between 70 and 104, 6 per cent between 89 and 102, 5 per cent between 65 and 93. If the Chilean law has been liberal toward the banks, it must also be said that the banks have shown great liberality toward their customers. Every person in this country of good credit who has a deposit in one of the banks is allowed to overdraw his account. This agreement is known as an account 136 REPORT OF THE COMPTROLLER OF THE CURRENCY. current contract (contrato de cuenta corriente). Of course the bank charges interest on the amount overdrawn, so that it is really equivalent to an unsecured loan by the bank to the depositor. The following shows the variation in interest collected on advances in account current from 1868 to 1893: Date. 1868,Oct.l 1868, Nov. 28 1869,Dec.31 1870, Oct. 15 1871, Sept. 1 1873,Mar.l8 Date. Per cent. 8 1874. Oct. 1 7 ! 1876, Sept.l 8 • 1877, Jan. 15 9 1879, July 15 8 1880, Sept.l 9 1881, Jan. 1 10 11 10 9 7 6 Per cent. Date. 1888, Jan. 1889, J a n . 1890, Jan. 1891, Jan. 1892, Jan. 1893, Jan. 1 1 1 1 1 1 Per cent. ." 6 6 6 6 6 7 In addition to the interest, the condition of the contract is that the depositor shall pay a commission of one-half of 1 per cent on the amount of the credit given him by the bank, payable every six months. Owing to the contraction caused by the resumption of specie payment the present rate is much higher, and has reached 10 per cent. To-day the rate quoted is 9 per cent. APPENDIX. Note No. 1.—By the act of January 10, 1884, the provision of the law of August 29, 1855, establishing hypothecary banks, and fixing the portion of the annual payment to be devoted to the sinking fund at not less than 1 nor more than 2 per cent, has been repealed. The amount to be devoted to the sinking fund may now be the subject of contract between the bank and the borrower. Note No. 2.—In the year 1888 this interest was quoted as follows: At sight, 2 per cent; at a fixed term of two to three months, 3 per cent; at a fixed term of four mouths or less, subject to thirty days' notice after two months, 4 per cent; at a fixed term of six months or less, with thirty days7 notice after four months, 4J- per cent; at a fixed term of one year, 5 per cent; at sixty days' notice after six months, 5 per cent; at thirty days' sight after two months, 4 per cent. The last two classes of deposits are received for indefinite terms, and the interest is payable on June 30 and December 31 of each year. To-day (October 18, 1895) the quotations are as follows: At sight and in account current, 2 per cent per annum; at two months, or subject to fifteen days' notice after the first month, 4 per cent; at three months, subject to thirty days' notice after one month, 5 per cent; at four months, subject to thirty days' notice after two months, 6 per cent; at six months, subject to thirty days' notice after four months, 7 per cent; at one year, subject to sixty days' notice after six months, 8 per cent. Deposits at fifteen, thirty, and sixty days' notice are received for indefinite terms, and the interest is payable, at the option of the interested party, either on the withdrawal of the funds or on the 30th of June and 31st of December of each year. CHINA. [Charles Denby, United States minister.] 1. Native chartered banking companies are unknown. Private bankers are found in all large towns. They are chiefly banks of discount and deposit. There are several foreign banks which are organized under the laws of their own countries, of which the chief is the Hongkong and Shanghai Banking Corporation. 2. A bank can be opened by any person or company on reporting its organization to the local officials. There are no special laws appertaining to banks. 3. See answer No. 2. 4. There are no regulations such as specified in this interrogatory. 5. The Chine e bank is a bank of discount and deposit. There is no limit to the receipt of deposits. It is the custom to allow interest thereon, except at Peking. 6. The Government is not interested as a shareholder in banks. 7. All banks are permitted to conduct branch banks or offices. 8. There is no system by which information as to the condition of banks is given to the public. 9. There are no taxes or burdens imposed on the banks in return for privileges. In times of emergency, however, they are expected to aid the Government by loans or subsidies. 10. Insolvent banks are taken possession of by a special officer appointed for that purpose, who winds them up and sees that their assets are properly administered and the proceeds paid to the bill holders. REPORT OF THE COMPTROLLER OF THE CURRENCY. 137 11. There are private banks of emission, but they are not numerous. They exist chiefly at Peking. The banks at Peking issue notes as low as 10 cents, but their circulation is local. There is no limit as to the right to issue notes. 12. There is no legal provision made for the redemption of these notes. Usually when disaster comes the banker disappears with the assets and the loss is total. If any assets are available the Government takes possession of them. 13. There is no State bank in China. The issue of paper money dates back to the earliest historic period. Five hundred years before Christ Government bills, which were utterly worthless, were in circulation. In 1445 the issue was suspended and, except during the Taiping rebellion in 1858, no bills have been issued since. As a State China has nothing to do with banking, but there is in each province a private bank which performs the functions of the treasury for the Government and receives the taxes. It requires payment in silver purer than the silver of the locality and thereby makes 2 per cent as a compensation for its services. The Chinese banks stand high in popular confidence. Banks for a consideration guarantee the paper of their customers. A clearing house exists at Peking. Immediate payment of bills is not demanded. Government moneys are deposited in the banks to prevent failures. There is little counterfeiting of bills. Bills are made out to the depositor as he requires them. Circular letters of credit are issued, which are good wherever the banks have agencies. Rates are higher than with us, as transportation is costly. In my opinion our banking system would work perfectly in China and would greatly benefit the country. What China ought to do, and what some day she will do, is to intrust the subject of banking and of finance to a competent American financier. If he succeeded in establishing a good system of collection and distribution of revenues he would be a great public benefactor. COLOMBIA. [United States minister.] 1. There are in Colombia to-day but two kinds of banks, viz, mortgage banks and discount loan banks. Banks are forbidden to issue bank notes, because this privilege belongs to the Republic, which can grant it to the banks when they fulfill certain conditions which will be mentioned later. 2. The formation to be observed by the banks in order to be able to do business are found in the statutes of each bank. 3. It belongs to the managing committee to decide if these formalities have been complied with, or in their absence the board of stockholders. 4. Everything relating to this point may be found in the statutes, except what is marked with the letter E, in regard to which the Government has the right to appoint an inspector, whose duty it is to watch the operations of the bank. 5. Banks are managed by statutes, and have, moreover, rules for their interior regime. Both the statutes and rules require the approval of the Government. Banks have two kinds of deposits—sight deposits and time deposits. For the first-mentioned the banks are not obliged to pay interest; for the second they are obliged to pay a rate established by each bank, and which has been previously duly published in the press. This rate can not be changed within ninety days after its publication, and the banks breaking this rule, which is legal, incur a fine not exceeding $5,000. The rate paid by the banks for the latter class of deposits is proportional to the time the deposits remain in the bank; for instance, a short time deposit earns a small interest. 6. The law authorizes the banks to establish branch offices, after having obtained the permission of the Government. 7. The public is made acquainted with the conditions of the bank through printed statutes. 8. The law compels banking establishments which have been allowed to issue bills to pay to the national treasury 2 per cent per annum on the amount of bills issued, aside from the register tax of the books, which must be registered annually. 9. Banks are suppressed when insolvent, and the lawsuits resulting therefrom must be tried before the ordinary courts, whose decision is final; when banks become insolvent the Government may order their liquidation. 10. The Government can authorize the banks to issue bills when the capital of the bank desiring this privilege is not less than $250,000 in legal silver or gold money. The banks to whom this privilege is granted are not allowed to issue bills for more than a sum double the quantity of specie contained in the vaults. The Government will only grant the foregoing privilege for a term of seven years, which may be renewed upon the bank offering sufficient guaranties. Banks must submit to official inspection in accordance with the laws. 11. The nation alone has the power to issue bills, and the Government can only transfer this power when the paper money is at a par with silver of 0.835. As this 138 REPORT OF THE COMPTROLLER OF THE CURRENCY. legal requisite has not been reached, inasmuch as silver of 0.835 has a premium over bills, no private party has requested this privilege, and therefore there are no rules for the amortization. 12. Further details regarding banks may be obtained from the rules and statutes accompanying the present report. COSTA [Harrison R. Williams, United States consul.} 1. There is one commercial bank without the privilege of issue, and another having the privilege of issuing notes up to double its capital, but is compelled to have a silver reserve of 25 per cent of its circulation. 2. Strictly speaking, there are none; but within a short time laws will be enacted treating upon the whole subject to meet the new conditions established by the contract entered into for the formation of a new bank of issue. 3. At the present no one is authorized; but under the new law a bank examiner is to be appointed for the purpose. 4.1 (A) Tinder the new contract it is stipulated that the minimum capital shall be 1,000,000 colones. (B) The management of the bank is to be in accordance with the regulations yet to be devised and approved by the Government and their proper exemption supervised by a Government representative. (C) Shareholders will only be responsible for the value of their shares. (D) The condition of the bank will be published monthly. (E) The examination of the bank will be made by a Government examiner whenever he deems it proper. (F) There are none. (G) Still undetermined. (H) It is the custom to have two responsible names or negotiable securities. (I) The law demands 40 per cent of the issue. (J) Nothing stipulated. 5. Banks only allow interest on deposits made for at least six months. 6. Not at all. 7. They are. 8. At the present time annual statements showing condition of banks are published by circular and through the local newspapers, and in the case of the Bank of Costa Rica these statements are published in newspapers in London, Spain, and the Republic of Colombia. 9. The banks pay $2 annually on each $1,000 capital, and the Bank of Costa Rica, on account of having the privilege of issue, pays $1.60 per thousand. 10. There are no laws and such a case has never occurred, but should one of the banks become insolvent its affairs would be administered in accordance with the commercial laws of the country. 11. The new law will permit the banks to issue 75 per cent of their paid-up capital in gold when the capital is not less than 1,000,000 colones (or $475,000 in gold) and will demand a reserve of 40 per cent of coined gold. 12. The reserve fund. 13. Until the terms of the new law are made public it is impossible to make a more detailed report. [John E. Eisley, United States minister.] 1. There are three classes of banks, namely, the national, the private, and savings banks. There is only one bank of the first class, viz, the National Bank of Copenhagen, and it alone is authorized to issue bills to circulate as money. Of the second class there are several, of which the largest are: (1) "Den Danske Landmandsbaiik," (2) "Ilandelsbanken," (3) "Privatbanken." The third class, savings banks, is the most numerous of the banks of Denmark. 2. The National Bank was established in 1818 to succeed the State Bank (Rigsbanken). The latter, which was established by the Government in 1813, did not succeed in promoting the objects for which it was created, namely, to give new life to the broken-down financial and commercial condition of the country, subsequent to the wars and unhappy circumstances of that period. While the State Bank was owned by the Government, the National Bank is a joint stock company, owned by individuals; but the original shareholders did not enter voluntarily upon this affair. By royal ordinance all real estate in the towns was taxed to 6 per cent of its value, and till this payment was effected this debt bore an interest of 6^ per cent; all farm lands were taxed to 1 per cent, bearing the above-mentioned interest. In return the proprietors became shareholders for the amount of the tax; but as the 1 The answers immediately above refer to the law that is to be enacted according to the contract that the Government and bank of Costa Rica have entered into for banks of issue. REPORT OF THE COMPTROLLER OF THE CURRENCY. 139 new bank should redeem all the notes as well as the bonds issued by the old bank before any profit could be gained, for many years no dividend could be paid to the shareholders. From 1845, however, the bank began to pay a dividend, which on an average has amounted to 7 per cent per annum. The shares are of course transferable. By octroi of July 4, 1818, the bank is granted the rights and privileges of the old State Bank (Rigsbank), whose assets and liabilities it assumed, so that transactions pending with the latter were transferred to the former for a term of ninety years, from 1818 to 1908. When the term shall have expired the octroi shall be renewed or revoked, as the case maybe. The private banks are also stock companies. Every joint stock company is by law required to notify the proper authority of its foundation and state (1) the date of the by-law, (2) the business, (3) the amount of capital subscribed for, (4) the number of shares issued and Avhether they are payable to the holder or issued upon name, (5) whether the full face value of the certificate is paid, or if not, when payment may be demanded, (6) in what newspapers notices to the shareholders will be published, (7) names and domiciles of the administrators, (8) the locality in which the office is situated, and (9) the name of the manager, whose signature binds the company. (Law of March 1, 1889.) Otherwise there are no laws in Denmark governing or controlling stock companies. Any three or more persons may unite by private agreement and form a joint stock company for the business of banking or any other business, and a company so formed, having complied with the law above mentioned, carries on its business in its own way, being liable only under the general penal statutes for any wrongdoing. But such companies may make for themselves by-laws, and may file a copy of the same in the ministry of the interior and obtain the sanction of the ministry thereto, and thereupon it becomes the duty of that ministry to see to it that such by-laws are faithfully observed. It is not obligatory to so file their by-laws, and in case it is not done the Government takes no cognizance of the doings of the company, except to punish its managers for any dishonest or unfair dealing, but companies formed for banking business usually do it for the purpose of strengthening their credit and gaining public confidence. The savings banks are subject to the law of May 28,1880, and their by-laws must be sanctioned by the King. Two copies of the law are sent herewith, and a translation of the principal sections is appended below. 3. The minister of the interior, so far as any authorization is required. 4. (A) For the National Bank the capital stock was determined as above mentioned. (B) They are managed by directors chosen from their shareholders. The number of such directors is fixed by by-laws. For the National Bank one of the directors is appointed by the King, and it is managed by fifteen so-called representatives and four directors. (C) There is no legal liability of shareholders. The savings banks are conducted in conformity to the law of May 28, 1880, as said before, section 12 of which provides for the responsibility of the proper parties. (D) Reports of condition of the bank are made monthly and annually—the National Bank and such private banking companies as have had their by-laws sanctioned by the ministry to the bank commissioner, and by the savings bank to the savings-bank inspector. (E) At the National Bank the minister of justice is commissioner; at each of the three other great banks the minister of interior appoints a commissioner, who exercises the control of the Government. For the savings bank is the inspector appointed by the King for such banks. (F) The National Bank can loan for periods of from one to six months, on such securities as its managers may deem safe, at not exceeding 6 per cent interest per annum. There are no restrictions on the other banks, except such as are imposed by their respective by-laws. The bank doing the largest loaning business is the "Landmandsbank." The loans are made partly on pledge of stocks or bonds, but mostly in mortgages on real estate, ;;but personal security and bond is also accepted. The by-laws of the " Handelsbank reads that " the bank gives loans on security, advances money on merchandise, procures capitalfor railroads and other enterprises." (G) Answered above. (H) Answered above. (I) The National Bank is required to keep 25 per cent in legal coins of the amount of bank notes in circulation, if the latter is less than 48,000,000; if 48,000,000 or more, the amount in coins must not be less than 12,000,000 kroner. The larger part of the banking business of the country is done by the private banking companies above named; as to them, there is no requirement by public law for a cash reserve. (J) The by-laws of the Landmandsbank provide that the surplus fund shall not exceed 4,000,000 kroner, but there is no public law or regulation to determine the amount of the surplus. All private banking companiesfixthe amount of surplus to be accumulated to suit themselves by their by-laws. The usual mode of accumulating the surplus is this: Ten per cent of the net earnings are placed to the credit of the surplus fund annually until the amount is reached, as fixed by the by-laws of the bank; 4 per cent dividend is paid to the shareholder, and when there is still a surplus the same is disposed of in an extra dividend. The dividends paid by the principal banks have of late years been 6 to 7 per cent, and sometimes more. 5. There are no regulations by public law. Deposits are received by all the banks, 140 REPORT OF THE COMPTROLLER OF THE CURRENCY. and an interest of 1 per cent as a rule is paid. But savings banks allow 3, and sometimes 3^ per cent. 6. The Government is not interested in any bank as shareholder. 7. Yes; all the banks may have branch offices. The National Bank alone requires the sanction of the Government to open other offices. 8. Monthly and annual reports are made and printed by the national and savings banks and by such private banks as hav^e had their by-laws sanctioned by the minister of interior. A copy of such report is sent to the royal ba.uk commissioner by the National Bank, to the ministry of interior by the private banks, and to the royal savings bank inspector by the savings banks. Any person may have a copy of these reports on application to the bank making them. In addition to this, the minister of the interior may at his discretion cause an examination to be made of any of the private banks whose by-laws have been sanctioned by the ministry. 9. There are no taxes nor burdens; neither are the banks (except the National Bank) granted any other privileges than to carry on business like any other stock company or business concern. 10. The proceedings are the same as in the case of any other business, i. e., by action in the courts by any person. The savings banks alone are subject to a special provision of the law of May 28, 1880, section 8 (see under No. 2). 11. The National Bank of Copenhagen alone is allowed to issue bank notes. The octroi of July 4, 1818, grants the privilege to the bank, and a royal proclamation of December 20, 1873, determines the conditions upon which the privilege shall remain in force. The proclamation of 1873 reads: u Section 1. The National Bank is authorized to issue as large an amount of bank notes as the business may make necessary, provided, however, (1) that the bank is in possession of a metal fund to the value of the amount which the bank notes exceed 27,000,000 kroner, and never to a less value than three-eighths of the face value of the bank notes; (2) that the bank owns, as security for that part of the bank notes, which are not covered by the metal fund, easily realizable, good and secure assets in the proportion of 150 kroner in assets to every 100 kroner in bank notes. Section 2. The metal fund, which the National Bank, according to the foregoing provision, must be in possession of at all times, shall alone consist of (1) coins of legal currency according to the face value; (2) gold in bars or foreign gold coins to the value of 2,480 kroner per kilogram fine gold; and (3) to a limited extent only, which at present is fixed at one-third of the amount of the fund, silver bars and foreign silver coins at a purchase price, not exceeding the relation of the value to gold of 1 to 15.675. That part of the metal fund which consists of legal currency must not sink below 12,000,000 kroner if the circulating bank notes amount to 48,000,000 kroner. If the circulating amount of the bank notes is less, then the aforesaid metal fund in legal currency must amount to at least one-fourth of the value of the bank notes. Gold bars, which the National Bank has delivered to the royal mint for coinage, may be included in the metal fund of coins of the bank. Section 3. The following assets serve to secure the amount of bank notes which is not covered by the metal fund: Notes for loans against security, bills of exchange upon Denmark and foreign countries, money payable on demand with foreign correspondents, public stocks according to the market value, and mortgages for direct loans on real estate; the last named, however, not to exceed the value of 6,000,000 kroner. Section 4. The bank notes must not be of a smaller denomination than 10 kroner. Section 5. The bank shall pay on demand the face value of the bank [notes ?] in gold of legal currency, and shall also purchase of anybody who may wish it fine gold bars at a price of 2,480 kroner for each kilogram fine gold, deducting, however, one-fourth of 1 per cent for coinage expenses. Section 6. It is the duty of the directors of the bank to make a monthly report to the royal bank commissioners, on the relations between the bank notes in circulation and the assets and metal funds, which serve as security for same. Section 7. Should it ever, against all expectations, be found that the report aforesaid shows a discrepancy in the relations between the assets and the bank notes, it shall be the duty of the directors to prove to the royal bank commissioner, before the end of the following month, that the proper relations have been absolutely restored. Section 8. These provisions go into effect from the time when gold coin, in conformity to the law of May 23, 1873, section 16, is made legal currency. The bank, however, is authorized to pay bank notes issued with the coins coined heretofore until the latter have ceased to be legal currency. Section 9. All previous rescripts and resolutions are canceled from the time when these provisions go into effect." (Signed by the King.) By a royal resolution of November 2, 1877, permission is granted to the National Bank to increase the amount, 27,000,000 kroner, which is not covered by a metal fund, to 30,000,000 kroner, by forming an extra reserve fund of 3,000,000 kroner from the surplus of the earnings, but this amount shall not be decreased, as long as the octroi remains in force, without the sanction of the King. This resolution is found on pages 60 and 61 of the octroi, sent herewith. The circulation of the National Bank under the provisions of the octroi and subsequent decrees has been increased, and on July 31,1895, was 83,000,000 kroner. REPORT OF THE COMPTROLLER OF THE CURRENCY. 141 12. They are redeemable on presentation and demand in gold coin of the realm. 13. I transmit herewith two copies of the octroi, regulations and decrees relating to the National Bank, the statutes or by-laws of the u Landmandsbank ;; and the "Handelsbank," also two copies of the law of May 28, 1880, regulating savings banks; also annual report for 1894 of the National Bank, Landinandsbank, and Handelsbank, under another cover. A translation of the principal sections of the law of May 28, 1880, and of section 262 of the penal code I subjoin below. [Translation of the law of May 28, 1880, sections 1, 2, 5, 7, 8, 12.] Section 1. Under the ministry of interior a savings bank inspector is appointed by the King. He is the immediate subordinate to the minister. Section 2. Savings banks which shall be established hereafter must, before starting, transmit a copy of their by-laws to the savings bank inspector, together with a list of the persons who constitute the board of managers of the bank. Ameudments to the by-laws and changes in the personnel of the board must be announced within one month of their taking effect. Section 5. The annual account shall be revised by the auditors of the savings bank, who must not be members of the board of management, nor elected by same. The auditors shall compare the accounts of the depositors with the amount put down in the chief account, subject the assets and liabilities to a careful examination, and see that the bank has been conducted in conformity to the statutes. The revision must be over within two months of the receipts of the account. Section 7. The account shall always be laid before the savings bank inspector as soon as they have been revised by the auditors. It is also the duty of the inspector to satisfy himself as to the standing and proper management of the bank by personal investigations on the spot, when the managers are required to answer all questions concerning the affairs of the bank. The inspector shall make an annual report to the minister of the interior concerning the affairs of all the savings b-mks. Section 8. When a savings bank has not only lost its reserve fund, but sustains a deficit amounting to 5 per cent of the amount due depositors, the savings bank inspector is authorized to suspend the transactions of the bank. When the management gives security for the deficit, and such security is approved by the minister of the interior, the suspension shall cease; otherwise the bank shall make an assignment. Section 12. The managing members of the savings banks, who are liable to punishment and to pay damages according to the usual rules of the law concerning losses which are sustained by the banks or depositors by reason of willful or undue neglect, may also be subject to section 262 of the penal code in case of the bankruptcy of the banks when proper charges of disorder in bookkeeping and accounting can be made against all or any of them. (Sanctioned by the King.) Section 262 of the penal code reads: "When a person who is required to keep proper books of account, and has been declared bankrupt, is found to have falsified, destroyed, or taken away such books, or has kept the books in a dishonest manner, or has, with fraudulent intent, not kept them, he shall be punished with imprisonment, on bread and water or with hard labor, for a term not exceeding two years. If such person is guilty of having kept his books in an improper manner, lie shall be imprisoned for a term not exceeding six months/7 ECUADOR. [James D. Tillman, United States minister.} 1. All the banks are organized under the laws of the Congress, and are denominated u Sociedades Anonimas/' or corporations, and all have a right*to issue notes to be circulated as money except the two hereafter named as i{ Bancos Hipotecarios,77 to discount commercial paper, and may lend money on mortgages. 2. The requirements before going into business are the payment of 40 per cent of the capital stock and satisfactory proof of it to a Government official. 3. A Government officer is appointed to determine when these conditions have been complied with by the bank. 4. (B) The bank is managed by a board of directors. (C) There is no personal liability of shareholders. (D) Reports on condition must be made and published as often as called for, and the Government may call for these reports at any time. (E) They are subject to examination at any time by Government officials. The whole question of loans, security, amount cash reserve and surplus is in the discretion of the directors. 5. Small interest on deposits is allowed, ranging from 2 per cent for short time to 5 per cent for twelve months. 6. The Government has no stock in the banks. 7. Some of the banks have agents at places different from the sites of the bank. 8. Statements of the condition of the banks are published occasionally in a newspaper. A statement of the Bank of the Union will be found in this report. 142 REPORT OF THE COMPTROLLER OF THE CURRENCY. 9. The Government tax on the hanks is 4 sucres per 1,000 on the amount of circulating notes issued. These notes are nearly all printed or lithographed hy the American Bank Note Company, New York. 10. Government officials may take charge of the banks for the purpose of closing them. 11. The hanks may issue 3 sucres of circulating notes for every sucre of silver held by the bank. 12. No provision is made for the redemption of the notes other than the proper management of the bank by the officials (banking and Government), whose duty it is to conduct its affairs. There are in the Republic five banks, with an aggregate capital of 8,140,000 sucres, as follows: First. The Bank of Ecuador, established in 1867, in Guayaquil; capital, 2,000,000 sucres. Second. The Bank of Commerce and Agriculture, recently established in Guayaquil; capital, 5,000,000 sucres. Third. The Bank of Hipotecario (mortgage bank), with a capital of 400,000 sucres, established in 1881 in Guayaquil. Fourth. The "Bank of Hipotecario Territorial," with a capital of 500,000 sucres, founded in Guayaquil in 1887. Fifth. The " Banco de la Unien," with a capital of 240,000 sucres, founded in Quito in 1881. This bank is now in a state of suspension and its notes are at a large discount. In a communication addressed to the public on the 30th of September, 1895, by the president and which concludes "Dios guarde a" V." (God protect you), there is given a statement of the condition of the bank. Among the assets there appears: Silver, 200,233.68 sucres; overchecks, 249,324.68; unpaid stock, 37,200; various accounts, 43,019.68. I understand this to be that uncertain account, " cash items/' In the list of liabilities there appears: Demand certificate deposits, 97,167.38; time certificate deposits, 48,150.52; deposits subject to check, 79,923.12; circulating notes outstanding, 575,259. It will thus be seen that the amount of overchecks exceeds the total amount of deposits. Many of the bills of this bank were printed for "pesos," 5 pesos, or 1 or 20 pesos, and afterwards, when the sucre was made the unit of value, these bills were raised to a sucre by stamping on the face with an india-rubber stamp the word "Fuerte," meaning " h a r d " or "strong;" "full measure;" and they afterwards circulated as sucres. This bank, it is said, has been largely used by the Government and its officials during the late political troubles here. It is now in the hands of the de facto authorities, General Alfaro and his executive ministers. The notes of the "Bank of Ecuador," and of the "International Bank" are preferred to silver, and these banks deservedly have high character at home and abroad. The "Banco Internacional" has been merged with the " Bank of Commerce and Agriculture," recently founded at Guayaquil. EGYPT. [Horace Lee "Washington, vice-consul general.] The principal banks in Egypt whose operations are strictly confined to legitimate banking business are the Credit Lyonnais, the Imperial Ottoman Bank, the Bank of Egypt, and the Anglo-Egyptian Bank, Limited. These banks receive deposits, advance money on commercial paper, on merchandise, and most particularly on crops, cereals, and cotton. There is one other institution, the Credit Foncier Egyptian, which is more in the character of a trust and loan company than of a regular bank, although it does, in a limited sense, carry on certain current accounts. Its principal business, however, is in making advances on real-estate mortgages, at a uniform rate of 7 per cent per annum. In addition to the foregoing there are many moneylenders who style themselves bankers, but who are in reality mere pawnbrokers, and who advance money on collaterals and paper, discounting signatures, etc., at usurious rates. These so-called bankers or money lenders are almost exclusively Jews. There are no special Government conditions or licenses required to establish a banking house in Egypt. All banking operations, as well as other commercial business, have to be conducted subject to the rulings of the Civil Code and the Commercial Code of the Mixed Tribunals, or, if the banker or banking company be Egyptian, of the codes for native courts, which codes, however, in these matters are identical with the Mixed Codes. If a banking company in shares were formed in Egypt and under Egyptian law, a firman or decree of authorization would be necessary for the validity of the limited liability company (art. 46 et seq. of Commercial Code). This decree would not be issued without the Government reserving to itself some kind of censorship, as was the case with the Credit Foncier Egyptian, where the Government has two censors, Messrs. Guy Lussac and Pietri. 3. In this case the ministry of the interior would be the competent authority to examine if the clauses of the firman or decree are carried out. 4. There are no Government regulations touching banking institutions beyond those laid down in the laws above referred to—that is, the Civil Code and the Commercial Code of the Mixed Tribunals. Banks are governed by their own regulations, REPORT OF THE COMPTROLLER OF THE CURRENCY. 143 and creditors of a bank or shareholders can only pursue claims by regular procedure before the mixed or native tribunals. There is no governmental supervision, nor is there any official restriction regulating loans. In a word, banking operations in Egypt are conducted subject to the good pleasure of the bankers themselves. Irregularities, whether alleged or founded, can only be adjusted by appeal to the tribunals. However, in case of limited liability bankers7 companies formed in Egypt, it is to be observed that no shares of less than 100 francs, if the capital is under 200,000 francs, or of less than 500 francs, if the capital exceeds that sum, are allowed to be issued. Also that the firman which authorizes limited liability companies shall fix the amount to be fully paid up before the shares can be transferred to bearer (art. 49-51, Commercial Code.) There are no other restrictions. 5. Banks receive deposits and give receipts therefor. Deposits made for less than a year bear no interest; exceeding one year, however, banks allow interest at the rate of 3 per cent per annum. 6. The Egyptian Government has no interest whatsoever and is not a shareholder in any bank. A few years ago the formation of a State bank was suggested by Sir Edgar Vincent, then financial adviser. The matter has never again been taken up. The public-debt commission advances money on Egyptian State bonds. 7. All banks in Egypt have the faculty of establishing branches in any part of Egyptian territory. 8. Banking institutions of standing and credit are of foreign nationality, and consequently enjoy the privileges held by their Governments under the capitulations. They are not obliged to publish any report of their standing or operations, nor have I been able to discover that they have published at any time any such reports to the public. 9. There being no privilege or concession requisite for establishing a bank in Egypt, there are consequently no taxes or burdens imposed upon bankers. In this connection reference is made to answers to questions Nos. 2 and 4, showing the conditions of establishing certain banking companies in Egypt and the part taken by the State therein. 10. Insolvent banks, or bank failures, are regulated by appeal from the creditors to the mixed tribunal, which hears and passes on their suit like that of any other bankrupt. In cases where no foreign interests are involved this appeal is preferred before the native courts. A receiver is appointed, and the affairs wound up in accordance with the procedure of the civil and commercial codes. 11. No banks in Egypt are authorized to issue bank notes. Currency is exclusively specie, on a specie basis; nor would i>he Egyptian population have anything to d.o with paper currency. I am informed that in remote districts, where specie is limited, barter in kind takes the place of cash payments. 12. See reply to No. 11. 13. The two principal banks in Egypt, and, indeed, the only ones of well-known power of capital, are the Credit Lyonnais and the Imperial Ottoman Bank. These are branches of the two principal houses, the one at Paris, the other at Constantinople. They are administered under their own statutes, and recourse against them by creditors or disputants must be effected before the mixed tribunal, which decides on all civil suits in which all the suitors are not purely Egyptian. [J. B. Eustis, United States ambassador.] 1. The Bank of France is the only bank of issue in France. There are also the Bank of Algeria and colonial banks, but they are regulated by special laws, and any privilege accorded is limited to the colony whose names they bear. 2. The Bank of France is a private institution, but a privileged one; its charter is voted by the Chambers. Since the foundation of the bank, nearly a century ago, it has been renewed many times. The present one expires in December, 1895. It can engage in no other transactions but those allowed by the laws authorizing its establishment and by its statutes, viz, (a) to issue bank notes payable on demand; (&) to discount bankers7 drafts and commercial bills drawn at a fixed usance, not exceeding three months, and bearing the names of business people and others well known to be solvent; (c) to collect bills remitted them by private parties or public establishments; (d) to receive in account current sums for deposit with the bank by private individuals or public institutions and to pay amount drawn to extent of funds deposited; ( / ) to keep a record of voluntary deposits of all securities, bullion, and all kinds of gold and silver money; (g) to make advances upon French bills and French securities, upon bullion and foreign coins in accordance with a certain proportion fixed by law and to terms fixed by the statutes of the bank; (h) to deliver to any person applying therefor orders from Paris on their branch offices and orders on Paris from the branch offices. 144 REPORT OF THE COMPTROLLER OF THE CURRENCY. 3. The bank, being a privileged institution, is, as such, under the control of the Government. This control is exercised by the representatives of the Government in the board of managers of the bank, who are the governor of the bank and two deputy governors, all three appointed by the State and removable at its will. Their functions and duties are determined by law. The minister of finance, through whom they are appointed, can report to the special jurisdiction of the council of state any action of the bank which he may deem contrary to the laws and regulations governing the institution. 4. (A) Originally fixed at 45,000,000 francs, it has been increased in successive amounts to 182,500,000 francs, made up of 182,500 shares of 1,000 francs each. (Nominal value; it is worth nearly four times as much on the market.) (B) It is confided to the governor, aided by the two deputy governors, and to a general council (conseil ge'ne'ral), made up of fifteen councilors (regents) and of three inspectors or auditors (censeurs). As stated above, the governor and the two deputy governors are appointed by the State. The councilors, or regents, and the inspectors, or censeurs, are elected at a general meeting of the stockholders. The three inspectors and five of the councilors are chosen from the business portion of the shareholders—industriels, fabricants, manufacturers, and merchants. Three of the councilors are selected from the treasury disbursing agents (tr^soriers-payeurs ge'ne'raux). The particular functions assigned to the councilors are much the same as those of the directors of limited stock companies. The inspectors, or auditors, exercise a control and surveillance over all transactions of the banks. The general council (conseil general) of the bank is divided into five committees, viz, the discount committee (comite* d'escompte), which examines the papers handed to the bank for discount; the note committee (comity des billets), having the making, signing, and registration of the notes; the books and portfolio committee (comite" des livres et du portfolio), having the bank books under its charge, and the treasury committee (contrite" des relations avec le tremor public), looking after whatever matters affect the treasury. (C) Stockholders are liable only to the extent of the amount of their shares. (D) Every six months the bank furnishes to the Government a statement of its operations and of the payment of its dividends. In January of each year there is a general meeting of the two hundred largest shareholders, when a statement is rendered of the general position of the bank's affairs. It is printed and at the disposal of the public. Every Friday the bank publishes in the Journal Officiel a return of its transactions. (E) See reply to No. 3. The minister of finance has the right to have the books of the bank examined by its inspectors of finances. (F, G) The bank can make loans to any amount. In so doing it is governed by certain rules. It can not lend more than 80 per cent on Government securities, and not more than 75 per cent on other securities. It makes no loans on foreign securities. The loans are made for a period of ninety days, but they can be renewed. Advances of money on current account are made for five days. (H) Securities deposited in guaranty for loans obtained from the bank must be registered in the name of the bank. (I) The bank reserve fund (fonds de reserve de la, Banque de France) is fixed by law at 10,000,000 francs, besides the amount paid for the buildings of the bank. (J) That fund amounts at present to eight millions and a fraction. It is derived from certain specified profits. 5. Anyone can bpen an account with the Bank of France by making a deposit of 500 francs. Deposits are payable at sight either'at the bank or at any of its branches. No interest is paid on them. 6. The Government has no interest as a shareholder. 7. The bank is obliged to conduct branch offices. It has now ninety-four branch offices and thirty-eight auxiliary offices in different parts of larger cities. The branch banks (sucem\sales) are created by decree of the State upon proposals of the bank's council, and a like decree is necessary before such branches can be abolished. Each branch is under control of a director appointed by decree by the chief of State on a proposition to that effect from the bank's goArernor and by managers appointed by the governor of the bank. These branches are examined into by a special body of inspectors from the Bank of France and by Government inspectors commissioned to that effect by the minister of finances. 8. By the balance sheet published every week and posted up in the bourse and by the annual statement which is furnished to the press. 9. The State has no share in the business of the bank, but the bank performs for the Government, without charge, important treasury operations, amounting every year to 6,000,000,000 or 7,000,000,000 francs. Another advantage obtained by the State in return for the charter accorded to the bank is an advance of 140,000,000 francs made to the treasury at a low rate of interest (3 per cent on the 60,000,000 formerly advanced by the bank and 1 per cent on the balance). The State gets, besides, the proceeds of the stamp duty on the notes issued by the bank and of a tax of 4 per cent on its dividends. Last year the proceeds derived from these two sources amounted to over 2,500,000. It is further necessary to take into consideration the REPOET OF THE COMPTROLLER OF THE CURRENCY. 145 important advantages assured to a large country in the matter of its credit, at home and abroad, by the excellent working of a first-class establishment, such as the Bank of France, and the consequent feeling of security that such a bank must everywhere inspire. 10. No information obtained. It seems that there is no special provision of law applicable to such case. 11. The issue of bank notes is regulated by law. The extent of the authorized note circulation of the Bank of France, limited by decree of March 15, 1848, to 350,000,000 francs, was increased by subsequent legislation as follows: lecember 10, 1849, to 526,000,000; August 12, 1870, to 1,800,000,000; December 29. 1871, to 2,800,000,000; July 15, 1872, to 3,200,000,000; July 30, 1884, to 3,500,000.000, and finally the law of January 25, 1893, raised the amount to 4,000,000,000 francs. The bank issues notes of 1,000, .r 00, 100, 25, 10, and 5 francs. But notes of the last three denominations are no longer in use. Bank notes, as soon as placed in circulation, constitute a legal tender in France and in all French possessions. They have to be guaranteed by deposit at the bank, by gold or silver coin, or by loans made upon securities or public funds, or, finally, by loans made to the State, or drafts discounted upon terms prescribed by the fundamental laws and regulations of the bank. The notes of the bank are payable in coin on demand. The bank may pay in silver if it chooses, but in fact it pays in gold. 12. It belongs to the council-general of the bank to proportion the circulation of its notes with its cash in hand and securities. In times of crisis the Government can give to the notes of the bank forced circulation (cours force"), in which case the bank is relieved from the obligation of redeeming its notes in coin. 13. To accompany the above report I transmit the following printed documents, in which additional information can be found: (1) Banque de France, Compte rendu. (2) Lois et Statuts de la Banque de France. FRENCH COLONIES IN AMERICA. [History of Modern Banks of Issue, by Charles A. Conant.j The banl<H of issue of the French colonies in America were authorized by laws of the Republic passed in 1849, which put them under the supervision of the home Government and under certain general regulations. These banks were authorized to issue notes no smaller than 25 francs ($5) until 1874, when the law of June 24 reduced the limit to 5 francs ($1). The circulation was limited to three times the metallic reserve, and the liabilities were not permitted to exceed three times the capital. The French colonial banks have a common agency at Paris under the supervision of the minister for the colonies. The Bank of Martinique and the Bank of Guadeloupe were each established in 1853, with a capital of 3,000,000 francs, while the Bank of French Guiana was founded in 1855, with a capital of 300,000 francs, which was increased in 1864 to 600,000 francs. The two older banks have loaned largely on the growing crops, which has brought them difficulties and losses in years when the crops have failed, but has contributed greatly to the convenience of the community. The Bank of Guadeloupe has a circulation of about 7,000,000 francs; the Bank of Martinique, 6,000,000 francs; the Bank of French Guiana, 1,600,000 francs. • GERMANY. [Theodore Runyan, United States ambassador.] 1. Banks issuing bills with the privilege of circulating them: The Imperial Bank, private banks issuing bills, mortgage banks, or banks granting credit on real estate, which grant loans on mortgages or other loans and issue mortgage bonds thereon; all other kinds of banks which are embraced under the customary name of " credit banks " (Kreditbanken). 2. This is regulated by the imperial law of March 14, 1875, inclosed herewith, as regards the Imperial Bank,and the private banks issuing notes (Privatnotenbanken). The conditions for establishing and carrying on mortgage banks and the mortgage and bond system (Pfandbriefwesen) not being regulated by Imperial law up to this time vary in the individual confederated States. In most of the confederated States it is necessary to have a grant from the State for the carrying on of a mortgage bank empowered to issue bonds payable to bearer. The conditions under which grants for mortgage banks in Prussia may be obtained are contained in the inclosed "Standard regulations for Prussian mortgage banks" of June 27, 1893. For the other banks (credit banks) regulations of the General German Business Law Book govern, which simply require the entry in the commercial register. (Compare articles 110, 163, 178, and 211 of the Business Law Book.) OUR 96, PT 1 -10 146 REPORT OF THE COMPTROLLER OF THE CURRENCY. 3. As to the banks issuing bills, the imperial chancellor or the Federal Council (sections 44-54 of the banking law of March 14, 1875). As to mortgage banks which receive their grant i'rom the State, the State government. As to mortgage banks which do not, according to State law, require a grant from the Government, and as to the credit banks which do not require a permit from the State for their establishment (Law of the Confederated States (Bundesgesetz) of June 11, 1870; Banking Law Sheet, p. 375); the appropriate commercial court (Handelsgericht) in whose commercial register the company is entered according to the German Business Law Book. 4. (A) The capital stock of the Imperial Bank amounts to 120,000,000 marks, divided into 40,000 shares of 3,000 marks each, bearing the names of the owners. This capital is raised out of private means without participation of the Empire or the confederated States. (Banking law of March 14, 1875, sec. 23.) The capital stock of the other banks is fixed in the statute of each bank. No regulations regarding the amount of the same exist. (B) The management of the Imperial Bank is with the imperial chancellor. The current management and its representation in business rests with the Imperial Bank directors (banking law of March 14, 1875, sees. 12, 25, 26, 27), who have at their head the bank president. (Banking law of March 14,1875, sees. 27, 31, 32a.) Th© standard for the management of all other banks is, so far as they are business companies, open business partnerships, joint stock companies, joint stock companies with shares or stock companies, contained in the second book of the Business Law Book and in the corporation statutes. (C) The stockholders of joint stock companies or stock companies are only held liable to the amount of the face value of their stocks. To what extent the original subscribers and subsequent owners of stocks that have not been paid up in full are held liable as to the unpaid amount is regulated by articles 184,184a-c, and 219 of the Business Law Book. (D) The Imperial Bank and the private banks issuing bills must publish an account on the 7th, 15th, 23d, and last day of each month of their profit and loss, and must draw up a balance sheet of profit and loss at the end of each business year, and must also publish in the Imperial Gazette the yearly account of profit and loss. (Banking law of March 14, 1875, sec. 8.) Furthermore, they are to furnish to the supervising authority (imperial chancellor), in order to enable it to collect the bill tax, a statement of the cash on hand (coin) and of the bills in circulation. (Banking law of March 14, 1875, sec. 10.) For the weekly reports and the annual statements of management the regulations of the banking law of the 14th of March, 1875, sections 15, 32, and 40-44, are also to be regarded. The report of management of the Imperial Bank for 1894 is inclosed herewith. For the balance sheets, as well as the profit and loss calculations of the stock banks and the publication thereof, the regulations, articles 185a-c and 239b, of the German Business Law Book govern. Besides this, for the Prussian mortgage banks there is also section 10 of the standard regulations of June 27,1893. (E) The supervision of the Imperial Bank is with the Empire, and is done by the bank curators, which body consists of the imperial chancellor, as chairman, and four members. (Banking law of March 3,1875, sec. 25.) The private banks issuing bills are also placed under the supervision of the Imperial Government through the imperial chancellor. (Banking law of March 14,1875, sees. 48,10.) Besides this, the confederated States have the right of supervision of the priTate banks issuing bills. (Compare banking law, sec. 48, chap. 2.) For the supervision of the mortgage banks various State regulations, issued by State government, exist. (Compare, for Prussia, the standard regulation of June 27, 1893, sec. 2, last chapter, and sec. 11.) (F) No restriction by law of the amounf of loans, as to the maximum limit, exists with regard to any of the banks. (G) The granting of credit by the Imperial Bank and by the private banks issuing bills is limited by the regulations of sections 13 and 44 of the banking law. (Compare, also, the general regulations regarding business transactions of the Imperial Bank herewith inclosed.) The mortgage banks grant loans on mortgage of real estate, which, according to its value as ascertained by appraisal, etc., must be in a fixed proportion, with the mortgaged property. They are generally also empowered to invest their available means in other profitable ways. (Compare section 1 of the standard regulations for the Prussian mortgage banks of June 27, 1893.) The granting of loans by other banks is not restricted by law. (H) Compare under question 4g as regards banks issuing bills. (Banking law of March 14, 1875, sees. 13, No. 3, and 44, No. 1.) (I) The having on hand of a cash reserve of at least one-third of the amount of the bills in circulation is only prescribed for the banks issuing bills (so-called metallic third security). (Banking law of March 14, 1875, sees. 17 and 44-3.) (J) In the case of the Imperial Bank the annual net profit is divided between the Empire and the stockholders, according to section 24 of the banking law of March 14,1875, and the supplement of December 18, 1889. Since December 31, 1891, the lawful limit of the reserve—onefourth of the original capital, 30,000,000 marks—has been reached. (See banking law of March 14, 1875, sec. 24.) The private banks issuing bills must place at least 20 per ^ent of the net profit beyond 4 | per cent of the original capital for the accu REPORT OF THE COMPTROLLER OF THE CURRENCY. 147 mulation of a reserve fund until the latter reaches one-fourth of the original capital. (Banking law of March 14, 1875, sec. 44-2.) For stock banks the regulations regarding the creation of a reserve fund are contained in article 185b-c and 239b of the Business Law Book. 5. Th© Imperial Bank is authorized to accept on deposit money on which interest is to be paid and money without interest. The amount of the deposits on which interest is to b© paid is not to exceed the amount of the capital stock and the reserve fund of the bank. (Banking law of March 14, 1875, sec. 13, sub. 7.) The Imperial Bank, however, has not, since 1879, accepted any deposits on interest. On deposits to be withdrawn at pleasure it pays no interest. Theu regulations for money to be withdrawn at pleasure are to be found in the inclosed General regulations regarding the business transactions of the Imperial Bank," pages 39 to 47. As regards the acceptance of money on deposit by the Prussian mortgage banks, compare the standard regulations of June 27, 1893, sections 1 and 2. For all other banks no legal regulations exist as regards their acceptance of money on deposit. On deposits which may be withdrawn daily without notice, the larger banks generally pay from 1 to 2 per cent, according to the condition of the money market, while on deposits with a longer time of notice a comparatively higher rate of interest is granted. 6. The Empire has no interest in any bank as stockholder (owner of shares). It, however, participates in the profits of the Imperial Bank according to article 24 of the banking law of March 14, 1875. The Bavarian State is a stockholder to the extent of 5,000 shares of 500 marks each of the Bavarian Bank, which is a bank issuing bills. 7. According to banking law of March 14, 1875, sections 12, 36, 37, the Imperial Bank may establish branch offices at any place throughout the Empire. The regulations of sections 42, 44, chapters 3 and 45, of the banking law of March 14, 1875, govern the private banks issuing bills. There are no restrictions as regards the establishment of branches by the other banks. 8. As regards banks issuing bills, compare interrogatory 4 D. The balance sheet and profit and loss account of stock banks are to be published in the papers specified by statute, and are to be forwarded to the commercial register. (Arts. 185c and 239b of the Business Law Book.) 9. The banks issuing bills whose bills in circulation exceed the amount of cash on hand and the amount allowed in accordance with section 9 of the inclosed banking law (sec. 32 of the printed inclosure) are required to pay 5 per cent annually of the surplus to the imperial treasury. (Banking law of March 14, 1875, sec. 9.) Besides this, the Imperial Government participates in the net profits of the Imperial Bank in accordance with section 24 of the banking law of March 14, 1875; in a like manner individual confederated States participate in the profits of the private banks issuing bills, doing business within their territory. 10. In the case of bankruptcy of an insolvent bank the general bankruptcy proceeding is applicable, as regulated by the German imperial bankruptcy regulation of February 10, 1877. Not only the debtors, but each of the directors is authorized to make the request for the declaration of bankruptcy. (As regards the stock banks, compare sections 193 and 194 of the bankruptcy regulations.) As to actual stock companies (not joint stock companies with shares) the special regulation exists that the board of directors must give notice of the bankruptcy before actual insolvency takes place, whenever the balance sheet shows that the capital is not sufficient to cover the debts. (Art. 240 of the Business Law Book.) 11. The amount of the bank bills in circulation of the individual banks issuing bills is not absolutely restricted by the Empire; it is, however, fixed by inclosure, section 9 of the banking law of March 14, 1875, up to what amount each bank may issue bills free from tax which are not covered by cash reserve. For individual banks the confederated States have issued regulations as to the limit of the bills which may be issued by the banks located in their territory, and the limit of the notes to be circulated amounts to: In the case of the Baden Bank, 27,000,000 marks; Bank of Southern Germany, 36,981,000 marks; Bavarian Bank issuing bills, 70,000,000 marks; Brunswick Bank, 10,500,000 marks; Frankfort Bank, 34,285,700 marks, and the Wurtemberg Bank issuing bills, 25,714,200 marks. 12. The banks issuing bills are required to have in their treasury as security for the amount of their bills in circulation, at all times, at least one-third in German current money, Imperial Bank bills, or in gold bullion or foreign coin (the pound fine of bullion to be calculated at 1,392 marks) and the remainder in discounted paper, payable within three months, and which as a rule is to have three or at least two solvent sureties. (Banking law of March 14, 1875, sees. 17 and 44-3.) Loans by the bank (Lombard Forderun<>en), notes, stocks, etc. (Werthpapiere), are not competent as security for bank bills. 13. Detailed information regarding the banking system of Germany will be found in the publications transmitted. 148 REPORT OF THE COMPTROLLER OF THE CURRENCY. GREAT BEITAIN". (Hon. T. F. Bayard, United States ambassador.] 1. The banking institutions of the United Kingdom can not be classified with absolute completeness, but those which have for their primary object to carry on the business of commercial banking within the country may be grouped and dealt with under the following three heads: (a) Chartered banks, (h) joint-stock banks, (c) private banks. 2. (a) Chartered banks: No company has been incorporated by royal charter for the purpose of carrying on the banking business in the United Kingdom since 1857. The system under which these charters were formerly granted may be regarded as obsolete. The statute law no w provides in the various companies acts means for the protection and regulation of banking companies for which recourse was formerly had to royal charters. The only domestic banks now carrying on business under roya] charter are: In England, the Bank of England; in Scotland, the Bank of Scotland,1 the royal Bank of Scotland, the British Linen Company Bank, in Ireland, the Bank of Ireland, (b) Joint-stock banks: The companies act, 1862, provides that " no company, association, or partnership consisting of more than ten persons shall be formed after the commencement of this act for the purpose of carrying on the business of banking, unless it is registered as a company under this act or is formed in pursuance of some other act of Parliament or of letters patent" (25 and 26 Viet. C, 89, S. 4). In the absence of any express legislation for the formation otherwise of banking companies this enactment in effect prohibits the establishment of a joint stock bank except as a company registered under the companies acts, for the grant of letters patent (i. e., of a royal charter), though it has been exercised since 1862 in the case of banks proposing to carry on business mainly in the colonies or in foreign countries, has not been and is not likely to be used in favor of any company intending to trade as bankers in the United Kingdom. The companies acts provide for the registration of companies with either limited or unlimited liability on the part of the shareholders, and the procedure differs slightly in the two cases. As, however, the banking companies, almost without exception, have declared their liability limited, it will be sufficient to describe the procedure in respect of a limited-liability company. Section 174 of the act of 1862 requires that there shall be in each of the three countries at least one office for the registration of joint stock companies. To enable a joint stock banking company to be formed with limited liability, seven or more persons must subscribe a document, called the memorandum of association of the company, which shall contain the following particulars: (1) The name of the proposed company, with the addition of the word "Limited" as the last word in such name. (2) The part of the United Kingdom, whether England, Scotland, or Ireland, in which the registered office of the company is proposed to be situated. (3) The objects for which the proposed company is to be established. (4) A declaration that the liability of the members is limited. (5) The amount of capital with which the company proposes to be registered. It is further provided that no subscriber to the memorandum shall take less than one share, and that each subscriber shall write opposite to his name the number of shares he takes. In addition to the memorandum of association the subscribers may also at their option sign articles of association prescribing such regulations for the company as they may deem expedient. The memorandum of association must be lodged with the registrar of joint stock companies, together with the articles of association, if any. In case no articles of association be lodged the act provides (Table A in first schedule) a code of regulations for the management of the company, which shall apply as if they had been entered in articles of association. These regulations deal with the shares of the company, the procedure in respect of any increase of capital, the holding of general meetings and the proceedings thereat, the qualifications and.powers of directors, the declaration of dividends, and the keeping and audit of accounts. The memorandum of association and the articles of association, if any, are to be retained and registered by the registrar, who issues a certificate of incorporation giving to the subscribers of the memorandum and such other persons as may become members of the company the power of exercising forthwith all the functions of an incorporated company, (c) There is no restriction upon the establishment of a private bank, provided the number of partners does not exceed ten; but these banks, in common with all other banks (except the live chartered banks) in the United Kingdom, are required to make an annual return to the inland revenue commissioners of the name, residence, and occupation of every member of the firm, the name of the firm under which the business is carried on, and of every place at which it is carried on. 1 The Bank of Scotland is included in this class, although it owes its original incorporation not to a royal charter, but to an act passed by the old Scottish Parliament in 1695. REPORT OF THE COMPTROLLER OF THE CURRENCY. 149 3. In the case of joint stock banks the certificate of incorporation given by the registrar is conclusive evidence that the conditions of registration have been satisfied. 4. Regulations governing each class of banks as to (A) capital stock—(a) chartered banks: The amount of capital stock is fixed for each of these banks individually by its charter or by special act of Parliament. In the case of the Bank of England, the Bank of Scotland, and the Bank of Ireland additions to the original capital have been authorized by later acts; in the case of the other two chartered banks in Scotland by supplemental charters, (b) Joint stock banks: The maximum amount and the division into shares of the capital of each bank is fixed in the first instance by its memorandum of association. If, however, a provision to that effect is included in the regulations of the company as originally framed or as subsequently altered by resolution of the shareholders, it is open to the bank, under the provisions of the companies act, 1862, (1) to increase its capital by the issue of new shares of such amount as it thinks expedient; (2) to consolidate and divide its capital in' o shares of larger amount; (3) to convert its paid-up shares into stock. By an act of 1877 joint stock banks are afforded facilities for reducing the amount of their nominal capital to the level of their wants by canceling any shares which may not have been subscribed for. Prior to 1879 many joint stock banks were deterred from availing themselves of the power of registering with limited liability under the companies acts by the belief that such a step might endanger their credit. The disastrous results of the failure in 1878 of the City of Glasgow Bank, the shareholders in which were liable without limit, gave an impetus toward the adoption of limited liability by other joint stock banks. To facilitate this movement with the least possible diminution of security for creditors was the object of the companies act, 1879. Under this act a limited company may declare with regard to any part of its capital which has not been called up that it shall not be capable of being called up except in the event of and for the purpose of the winding up of the company. In 1880 there was added to the series of acts regulating the capital of joint stock companies a further act (43 Viet., cap. 19), which empowers a company to return to its shareholders any accumulated profits in reduction of the amount of paid-up capital, but requires that at the same time the unpaid capital shall be increased by an equal amount. It is further provided that any shareholder may, instead of taking payment in cash, require the company to hold and invest his share of the returned capital to meet any future calls upon the shares, (c) Private banks are subject to no regulations as regards the capital employed in their business. (B) Management of the bank—(a) Chartered banks: The form of government of these banks, the number of directors, their qualifications and the manner of their appointment, the meetings of the proprietors to be summoned, and procedure to be observed at such meetings are among the regulations laid down in the respective charters. Thus the charter of the Bank of England incorporated the company under the style of the Governor and Company of the Bank of England and provided for its management by a governor, deputy governor, and 24 directors, to be chosen annually from among the members duly qualified. The charter prescribed the holdings of stock required to qualify the governor, the deputy governor, a director, and an elector, respectively. It directed that four quarterly courts should be held every year, besides which a general court might be requisitioned at any time by 9 qualified members. A supplemental charter has recently been granted to the Bank of England making sundry minor alterations in its administration, reducing the number of necessary general courts from four to two in each year, and prescribing that no dividend shall be declared except at one of the two regular general courts. The charter of the Bank of Ireland followed on similar lines. The corporation is styled the Governor and Company of the Bank of Ireland. Its affairs are to be managed by a governor, deputy governor,, and 15 directors, to be chosen annually, not more than two-thirds of the retiring directors to be reelected for the following year. The respective holdings of stock required to qualify the governor and deputy governor, a director, and a voter at a general court are prescribed. Four quarterly courts are to be summoned in each year and 9 qualified members may requisition an additional court at any time. No dividend may be declared without the consent of a general court. (6) Joint-stock banks: The regulations embodied in the first schedule (Table A) to the companies act, 1862, govern every company registered under the companies acts, except so far as they may be excluded or modified by the articles of association registered in respect of a particular company. The act itself requires that a general meeting of every company shall be held at least once in every year. The standard regulations provide, inter alia, that an extraordinary general meeting may be required at any time by not less than one-fifth of the members; that members may vote at meetings either personally or by proxy, each member being entitled to a number of votes determined by the number of his shares; that the business of the company shall be managed by directors, who shall exercise all the powers of the company subject to the provisions of the governing acts and of the regulations; that the directors shall retire in a prescribed rotation, and their places be filled by election 150 REPORT OF THE COMPTROLLER OF THE CURRENCY. at a general meeting, retiring directors being reeligible; that dividends, payable only out of the profits of the business, may be declared by the directors with the sanction of a general meeting; that eyery year a statement of income and expenditure and a balance sheet shall be laid before the company in general meeting; and that the accounts of the company shall be annually audited, and the correctness of the balance sheet ascertained by auditors appointed at a general meeting, (c) Private banks: No regulations. (C) Liability of shareholders for claims against the bank—(a) Chartered banks: The shareholders in these banks are by virtue of their charters protected from personal liability beyond the amount of their respective shares. Their position has been authoritatively denned as follows: "The corporation, being a separate person, has its own estate and its own liabilities, and the corporators are not liable for the. corporation, but only to the corporation, within the limit of the obligation which they have undertaken to subscribe to the corporation funds." An act of 1825 (6 Geo. IV, cap. 91) first made it possible for the shareholders in a chartered company to subject themselves to a liability beyond the amount of their shares. This act declared that in any charter subsequently granted it should be lawful to provide for the individual liability of members to such extent, and subject to such restrictions, as might be deemed proper. In virtue of this provision most of the charters since granted to colonial and foreign banking companies have attached to the members a liability for twice the nominal amount of their shares. But the law does not apply to the banks included in the present category, all of which were incorporated at earlier dates, (h) Joint-stock banks: These banks are, with very few exceptions, registered as limited companies under the companies acts. The effect of such registration is to limit the responsibility of the shareholders, as regards the general liabilities of the bank, to the amounts of their respective shares. This limitation does not, however, apply to the liability of a bank of issue in respect of its notes. Under the companies act, 1879, the shareholders in a limited banking company are liable to the holders of its notes to the full extent of their claims. The great majority of the banks are now registered, under the provisions of the companies act, 1879, on the principle of reserved liability, by which some portion of each share is left uncalled and incapable of being called up, except when required in connection with the winding up of the bank, (c) Private banks: A bank of this class is an ordinary partnership at common law, and all its members are liable, jointly and severally, to the full extent of its debts. (D) Reports of condition of the bank— (a) Chartered banks: The bank-charter act, 1844, requires the Bank of England to furnish a weekly return to the commissioners of inland revenue, setting forth the resources and liabilities of the issue and banking departments. (Z>) Joint-stock banks: Every limited banking company is required, twice a year, to make a statement, which must be put in a conspicuous place in the registered office of the company and in every branch office or place in which the business of the company is carried on, setting forth the capital, number and value of shares, number of shares issued, calls to the amount of per share made under which the sum of has been received; liabilities of the company on January 1 and July 1 to sundry persons ori judgment, on specialty, on notes or bill, on simple contracts, and on estimated liabilities; the assets, namely, Government securities, bills of exchange and promissory notes, cash at the bankers', and other securities. Any default in this respect is punishable by a fine not exceeding £5 for every day during which such default continues, (c) Private banks: No regulations except for note-issuing banks (see No. 11). (E) Examination by Government official—(a) Chartered banks: No regulations, (b) Joint-stock banks: There is no provision for examination into the affairs of these banks in the interest of the public, but in the interest of the shareholders the companies act, 1862 (sec. 56), provides for an examination by inspectors, to be appointed by the board of trade, upon the application of members holding not less than one-fifth of the issued shares. The inspectors may compel the production of books and documents, and examine upon oath the officers and agents of the bank. (c) Private banks: No regulations. (F, G, H) No restrictions are imposed by law upon any class of banks as regards their general lending business. The Bank of England is prohibited by the act 59 Geo. Ill, c. 76, from lending to the Crown without the express authority of Parliament; and a similar prohibition is imposed on the Bank of Ireland by its charter. (I) Th4re are no regulations respecting cash reserve except in the case of certain note-issuing banks (see No. 12). (J) Accumulation of surplus: No regulations. 5. There are no regulations governing the receipt of deposits by the banks, and the Bank of England allows no interest on any of the moneys deposited with it. All the leading London banks have ceased to allow interest on the current accounts of their customers, but they commonly allow interest on moneys left on deposit. In Scotland the practice of the banks is to allow interest, not only on deposit accounts, but on the balance of current accounts. The interest allowed by the banks on money deposited with them is generally regulated with regard to the minimum rate of discount advertised by the Bank of England, being about I per cent below that rate. REPORT OF THE COMPTROLLER OF THE CURRENCY. 151 6. The Government does not hold shares in any of the hanks, hut participates to a certain extent in the profit derived by the Bank of England from the issue of its notes. The hank charter act of 1844 allowed that hank to issue notes to the value of £14,000,000 against a deposit of securities of the same value. Any issue beyond that limit was to he covered by coin or bullion. But the act further provided that under certain conditions, dependent upon the cessation of the private issues of other banks, the uncovered issue of the Bank of England might be increased beyond £14,000,000, in which case all the profit derived from the increase of issue was to go to the public. By successive additions the uncovered issue of the bank has been raised from £14,000,000 to £16,800,000, so that the Government is entitled to the profit yielded by an issue of £2,800,000, i. e., to the interest derived from Government securities of that amount. 7. All banks are at liberty to open hranches. There is a partial restriction in the case of joint-stock banks which issue their own notes in England. By a remnant of the old legislation respecting the monopoly of issue formerly enjoyed by the Bank of England, these banks are precluded from having a house of lousiness or establishment as bankers in London or within a radius of 65 miles from London. 8. Information as to the condition of the banks given to the public is as follows: In the case of the Bank of England, the commissioners of inland revenue are required to publish in the London Gazette the weekly returns furnished to them by the bank (see No. 4 D). The statements made up twice a year by the registered joint-stock banks (4 D) are open to inspection at all the places of business of the hanks, and the statements laid hefore the shareholders of these banks at their general meetings are usually reported more or less fully by the public press. Private banks are not required to publish any information as to their affairs, so far as regards ordinary banking business, hut all banks of issue, whether private or joint-stock banks, are under obligation to make returns of their note circulation (see No. 11). 9. The only hanks which are subject to special taxes are the note-issuing banks, to which the following duties apply: £. s. d. For money not exceeding £1 0 0 5 Exceeding £ 1 and not exceeding £2 0 10 Exceeding £2 and not exceeding £5 1 3 Exceeding £5 and not exceeding £10 1 9 Exceeding £10 and not exceeding £20 2 0 Exceeding £20 and not exceeding £30 3 0 Exceeding £30 and not exceeding £50 5 0 Exceeding £50 and not exceeding £100 8 6 Composition for duty on hank notes—In lieu of the ahove duties, for every £100 or part of £100 of the average amount of notes in circulation during every half year: In England and Ireland, 3s. 6d.; in Scotland, 4s. 2d. Bankers issuing their own notes are required to take out an annual license, at a cost of £30, for each place at which such notes are issued, subject to the proviso that a hanker who issues notes at more than four places need not takeout a separate license for the additional places beyond the fourth. The notes of the Bank of England are exempt from note duty, and in lieu thereof the hank makes an annual payment of £60,000 to the inland revenue commissioners. The Bank of England is required to make a further payment of £120,000 a year to the exchequer in consideration of its privilege of exclusive hanking,1 as well as the profits derived from the additions which have been made to its fiduciary issue since 1844 (see No. 11). 10. There are no special regulations as to the procedure in winding up insolvent banks. Joint stock banks are subject in this respect to the provisions of the companies acts as regards the winding up of any companies registered under those acts. A petition for the winding up of such a company may 2be presented to a competent court of law by one or more creditors or contributories of the company. On proof to the satisfaction of the court that the company is unable to pay its debts the court will issue an order for its compulsory winding up. To assist the court in winding up the company's affairs a liquidator is appointed, who takes under control all the property, effects, and things in action of the company and carries on the business of the company so far as may be deemed necessary for its beneficial winding up. Pending the appointment of a special liquidator these functions are provisionally discharged by an officer of the court, the official receiver. It is his duty to call meetings of the creditors and the contributories separately, to take their decision whether application shall be made to the court for the appointment of a special liquidator (instead of the official receiver), and also as to the appointment of a committee of inspection x The exclusive privilege of the Bank of England now consists only in the restrictions as regards note issue imposed upon other banks (see No. 11). 2 A "contributory" is defined to mean every person liable to contribute to the assets of the company in the event of its being wound up. 152 REPORT OF THE COMPTROLLER OF THE CURRENCY. representing the creditors and contributories to act with the liquidator. The resolutions of these meetings are reported to the court, which thereupon decides as to the appointment to be made. The court decides what persons shall be held liable as contributories to the company and causes its assets to be collected and applied in discharge of its liabilities. When the affairs are completely wound up, the court makes an order that the company be dissolved. The members of a company may by resolution agree to a voluntary winding up of its affairs and may themselves appoint a liquidator or liquidators to carry out the proceedings on the same lines as in a winding up by order of the court. The object of this provision is to enable a company and its creditors, if possible, to settle their affairs by mutual arrangement without coming into court. In the course of a voluntary winding up reference may be made to the court on special questions. Further, it is open to the court, if applied to, to order that the proceedings in a winding up otherwise voluntary shall be subject to its supervision. (For special provisions in regard to the winding up of a note-issuing bank, see No. 12.) Private banks are dealt with as ordinary trading partnerships. 11. The bank act of 1844 (7 and 8 Viet., cap. 32) prohibited the future issue of bank notes in any part of the United Kingdom by any person other than a banker who was already, on the 6th of May, 1844, lawfully issuing his own bank notes, and enacted that any banker possessing that qualification should lose his privilege if at any time he became bankrupt or ceased to carry on the business of a banker or discontinued the issue of his notes. As regards England and Wales, the act provided that existing banks of issue should never have in circulation, on the average of a period of four weeks, a greater amount of notes than their average circulation during the twelve weeks ended the 27th of April, 1844, and that any issuing bank which at the date of the passing of the act consisted of six or less than six persons should lose its right of issue if at any time the number of partners was increased beyond six. The prohibition against the opening of any new bank of issue after the 6th of May, 1844, applies to Scotland and Ireland as well as to England, but the regulations governing the issues of existing banks were laid down separately for the two former countries by acts of 1845 (8 and 9 Viet., cap. 37 and cap. 38). Under these acts a bank in Scotland or Ireland is authorized to have in circulation an amount of notes which on the average of a period of four weeks must not exceed its average circulation during the year ended the 1st of May, 1845, together with an amount equal to the average amount of coin held by the bank during the same four weeks. If two or more banks unite in Scotland or Ireland, the united bank may issue notes equal to the aggregate of the issues authorized for the separate banks, a facility which does not exist in England. The effect of this legislation, combined with previous enactments, is to limit the power of note issue to the following institutions within the respective geographical areas: England and Wales—(1) Within the city of London and a radius of 3 miles therefrom, the Bank of England. (2) Beyond 3 and within 65 miles from London, the Bank of England and banks of six or less than six partners which were established as banks of issue before 1844 and have not since discontinued or forfeited their issues (limited to their average circulation at that date). (3) Beyond 65 miles from London, the Bank of England and all banks, whether private or joint stock, which were established as banks of issue before 1844 and have not since discontinued or forfeited their issues (limited to their average circulation at that date). Scotland and Ireland—All banks established as banks of issue before 1844 (limited as regards uncovered notes to their average circulation at that date, but with power to increase their issues to any extent, provided they hold coin of equal amount). The limits of the issue of the Bank of England were specially prescribed by the act of 1844. That act decreed the separation of the issue department of the bank from its banking department. The issuing department was empowered to issue notes to the extent of £14,000,000 against securities set apart for the purpose, of which securities the debt of £11,015,000 due from the Government to the bank was to form a part. No notes above the fixed amount (£14,000,000) were to be issued against a deposit of gold coin or gold or silver bullion, and the amount of silver bullion so held was never to exceed one-fourth part of the gold coin and bullion. The act further provided that if any bank privileged to issue its own notes in England or Wales should cease to do so the Crown might authorize the Bank of England to increase the amount of its issue against securities by not more than two-thirds of the authorized issue of the discontinuing bank, but on condition that the profits from this increased issue should go to the public. Under this provision the " fiduciary issue" of the Bank of England has been increased from time to time to the extent of £2,800,000, so that it now amounts to £16,800,000. The only other bank whose fiduciary issue may be increased beyond the average circulation of 1844 is the Bank of Ireland. That bank is subject to the general regulations prescribed by the act of 1845 for banks of issue in Ireland, but with the special proviso that any other of the issuing banks may make an agreement with the Bank REPORT OF THE COMPTROLLER OF THE CURRENCY. 153 of Ireland to relinquish its own privilege of issue, whereupon the authorized issue of the Bank of Ireland may be increased by an amount equal to the authorized issue of the discontinuing bank. In England the issue of bank notes of less than £5 is prohibited. In Scotland and Ireland notes may be issued of as low a denomination as £1, but not lower. The circulation in England of Scotch and Irish notes under £5 is prohibited. In England the notes of the Bank of England are legal tender at all places except the bank itself and its branches. No other bank notes are legal tender in England. In Scotland and Ireland the notes of the bank of England may circulate and be offered in payment, but they are not legal tender. No Irish or Scotch bank notes are legal tender except the notes of the Bank of Ireland, which are legal tender for the payment of revenue, and for that purpose only. All Bank of England notes are payable at the bank in London. If a note be issued from one of the provincial branches, it must be held payable at the issuing branch also. In Scotland the notes of each bank are made payable at the head office only. In Ireland the law prescribes that every note must be payable at the place of issue. The practice of the Irish banks is to make their notes payable at all their branches, thus considerably increasing the stock of gold to provide for the payment of their notes wherever presented. Only the coin held at the four principal places of issue of an Irish bank can be taken into account in determining the amount by which its circulation may exceed its fixed fiduciary issue. The form of the weekly return which the Bank of England is required to render respecting its business of note issue is given in the answer to question No. 4 (D). Every other note-issuing bank in England and Wales has to furnish to the inland revenue commissioners once in every week and once in every four weeks returns, according to a prescribed form, showing the notes of the said bank in circulation daily during the week, the average of the week, the amount of notes authorized by law, and the average amount in circulation during the four weeks. The account so far as relates to weekly averages is required to be published in the London Gazette. The inland revenue commissioners are empowered to cause the books of bankers containing accounts of their notes in circulation to be inspected, and a penalty is prescribed for any refusal to permit such inspection. In Scotland and Ireland the returns required from banks of issue include the same particulars as in England, with the addition that the amount of notes under £5 in circulation has to be distinguished from the amount of notes of £5 and upward, and that the amounts of gold coin and of silver coin held at the head offices of the banks (in Ireland at the principal places of issue of each bank, not exceeding four in number) at the close of business on each day have to be specified and the average of those amounts in every four weeks. Every note-issuing bank has to take out annually one or more licenses, according to the number of places at which its notes are issued (see No. 9). 12 (a) Chartered banks: The notes of the Bank of England are required to be secured to the extent of £16,800,000 by securities lodged in the issue department for that purpose, and as regards the remainder of the issue by the deposit in that department of gold coin or gold and silver bullion. The other chartered banks, under the Scotch and Irish acts of 1845, can exceed their authorized fiduciary issues only to the extent of the stocks of gold and silver which they hold. As regards their authorized issues, by virtue of their incorporation the remedy of note holders, as of other creditors, is against the banks, no liability attaching to the individual members, (b) Joint stock banks: The registration of these banks as limited companies does not limit their liability in respect of notes. The law provides that in case of the winding up of a limited banking company which is also a bank of issue, if the general assets are insufficient to satisfy the claims both of note holders and of general creditors, then the members of the company, after satisfying the remaining demands of the note holders, shall be liable to contribute toward payment of the debts of the general creditors a sum equal to the amount received by the note holders out of the general assets of the company, (c) No obligation rests upon private banks of issue in England (there are no such banks in Scotland or Ireland) to provide specially for the redemption of their notes, but the liability of the members of these banks is unlimited. 13. The Banking Supplement (transmitted), issued on the 16th of May last by the Economist newspaper, gives details of the accounts, up to the end of 1895, of the joint stock banks of the United Kingdom, including the 5 chartered banks, and also of a number of the leading firms of private banks and of the colonial and foreign banks with offices in London. The system of banking reserves in the United Kingdom is not controlled by law and, consequently, is not dealt with in the replies to the foregoing interrogatories. A description and criticism of that system will be found in two addresses (copies of which are inclosed) delivered in 1891 by Mr. Goschen, then chancellor of the exchequer. The following table shows (1) the amount of the fixed fiduciary issues of bank notes authorized for the various classes of banks by the acts of 1844 and 1845, (2) the number of banks of each class which are still issuing their own notes and the amount 154 REPORT OF THE COMPTROLLER OF THE CURRENCY. of the fixed issues of those banks, and (3) the average amount of notes of these banks in circulation during the month ended the 1st of August, 1896: Total of fixed issues under acts of 1844 and 1845. England and Wales: Bank of England. 207 private banks'72 joint-stock banks Scotland: 19 joint-stock banks Ireland: 6 joint-stock banks Surviving banks of issue. Present fixed Actual circulation. issues. £14, 000, 000 Bank of England 5,153,417 55 private banks 3, 478, 230 35 joint-stock banks 3, 087, 209 10 joint-stock banks 2, 676, 350 a 7,318, 7&4 6, 354,494 6, 354,494 a 5, 918,385 30, 020, 056 42, 254, 350 6 joint-stock banks 32,073,350 Total £16, 800, 000 a£27, 481, 497 2, 215, 010 529,945 1, 974, 202 I, 005, 769 a The doposits of coin and bullion held against these issues were: Bank of England Banks in Scotland Banks in Ireland Total £10,681,497 5,875,527 3,040,919 19,597,943 B R I T I S H COLONIES I N L A T I N AMERICA. [History of Modern Banks of Issue, by Charles A. Conant.] The bank-note circulation of the British West Indies and of British Guiana is largely furnished by the colonial bank, with headquarters in London and 15 branches and agencies. The bank was chartered by the British Government in 1836 and the charter was renewed in 1856. Tbe paid-up capital is £600,000. * * * Mr. Muhleman distributes the circulation among the various colonies as follows: Jamaica, $900,000; British Guiana, $300,000; Trinidad, $500,000; Barbados, $160,000; others, $240,000. The Nassau bank furnishes a part of the circulation in the Bahamas, based upon coin and British and United States bonds, and the British Guiana bank provides a part of the circulation for the colony for which it is named. [E. Alexander, United States minister.] 1. There are three privileged banks—the National Bank of Greece, the Ionian Bank, and the Epeiro-Thessalian Bank. They do a general banking business in discounts, loans, etc., and are the only banks in Greece which are permitted to issue bank notes. There are also other banks which transact every kind of banking business except the issue of bank notes. Loans on mortgage are made chiefly by the three privileged banks, whose regulations require them to make such loans. Most of the banks are limited. 2. All limited banks before beginning business must submit to the ministry of the interior their proposed regulations, specifying the amount of capital stock, the number of shares into which the same is to be divided, the object for which they are formed, and the provisions which may seem lit for the regulation of their business and the conduct of their affairs. A copy of the regulations is forwarded to the ministry of the interior, which, if it approves them, asks for a royal decree. The royal decree, together with the regulations of the bank, is published in the official gazette, thus sanctioning the formation of the bank. Other banks deposit their regulations at the court of first instance. 3. The ministry of the interior determines when the required conditions have been satisfied. 4. (A) The regulations of each bank determine the capital stock. (B) All banks have a manager, or managers, and a council elected at the annual meeting of the shareholders. At the same meeting the auditors are chosen, who examine the accounts of the past year and make a report on the condition of the bank. The councilors are usually elected for two or three years, but are eligible for reelection. Every councilor or manager is required to own in his own right a certain number of shares of the capital stock, as designated by the regulations of each bank. (C) The liability of shareholders is determined by the regulations of each bank, but shareholders are usually liable only for the amount invested in their shares. (D) Every year the manager reads at the meeting of the shareholders a report on the REPORT OF THE COMPTROLLER OF THE CURRENCY. 155 affairs of the bank for the preceding year. (See also No. 8.) (E) Each of the three privileged banks has a royal commissioner, appointed by the Government. All other banks are under the control of the ministry of the interior. (F) There are no fixed restrictions on the amount of loans. (G) As regards restrictions of any other character, the regulations of the National Bank require that three-fourths of the capital stock be invested in mortgages; of the Epeiro-Thessalian Bank that three-fourths of the capital stock and reserve fund be so invested. (H) Bank loans are made only on first mortgages or on approved securities. (I) The regulations of eaopi bank determine the cash reserve required. The National Bank and the Epeiro-Thessalian Bank set aside 5 per cent for their reserve fund. (J) The accumulation of surplus is determined by the banks' regulations. 5. All banks receive deposits bearing interest. The interest varies from 1-J per cent to 5^ per cent, according to the time that money is to be left on deposit. Certain banks allow as much as 6 per cent. The National Bank allows 4 per cent. All of the banks receive deposits not bearing interest, which can be withdrawn at any time. 6. The Government is not interested as a shareholder in any of the banks. 7. All of the banks are permitted to conduct branch banks or offices. The Nationel Bank, for example, has branches in 26 towns of Greece, the principal establishment being at Athens; and the Ionian Bank, whose head office is in London, has branches at Athens, Corfu, Patras, Cephalonia, and Zante. 8. Information as to the condition of banks is given to the public by monthly or semimonthly balance sheets, and by the annual reports of the managers and auditors. 9. In return for the privileges granted them the banks pay a tax of 5 per cent on their dividends, the customary house tax, and transport the money of the Government free of charge. 10. The closing up of its business, when insolvent, is determined by the regulations of each bank. In general, it may be said that when a bank has lost one-half or two-thirds of its capital stock a meeting of its shareholders is held. Three examiners appointed at this meeting examine the book.* of the bank and make a detailed report to the shareholders, who then decide whether the bank shall close up or continue its business. In other cases the court of first instance is called upon to decide any matters relating to insolvent banks which may be brought before it. 11. Since October 1, 1885, Greece has had forced currency. Only the three privileged banks are permitted to issue bank notes. Under the agreement for forced currency the National Bank can issue 70,000,000 drachmas for the Government and 60,000,000 for its own account, the Ionian Bank 2,000,000 drachmas for the Government and 5,000,000 for its own account, and the Epeiro-Thessalian Bank 800,000 drachmas for the Government and 4,200,000 for its own account. By special agreement the three privileged banks have been authorized to issue also 14,000,000 drachmas in fractional currency (notes of land 2 drachmas). Of this amount 7,000,000 are issued by the National Bank, 3,500,000 by the Ionian Bank, and 3,500,000 by the EpeiroThessalian Bank. 12. No provision is made for the redemption of bank notes. 13. Balance sheets issued by two banks are here given in the way of additional information. National Bank of Greece, established 1842; capital subscribed and paid up, 20,000,000 drachmas, in shares of 1,000 drachmas. Balance sheet October 12, 1895: LIABILITIES. Capital subscribed and paid up Reserve fund Notes in circulation Deposit and current accounts Savings bank Dividends payable and credit Profit and loss, sundry liabilities Deposits without interest Notes of 1 and 2 drachmas Bills payable Government deposits Service of bank's loan Different accounts Total Drachmas.1 „ 20,000,000.00 11,500,000.00 106,252,864.37 88, 629, 015.06 1,413,011.26 607,172.80 263, 544.29 6,098,709.48 7, 000, 000. 00 3,034,712.05 126, 737.50 1,372,480.00 954,848.76 247,253,095.57 x The paper drachma is now worth between 11 and 12 cents. 156 REPORT OF THE^ COMPTROLLER OF THE CURRENCY. ASSETS. Drachmas. Cash 1,852,396.05 Notes of other banks 2,965,500.95 Current accounts abroad 8, 938, 462.14 Shares in other companies , 2, 972, 325.19 Advances to Government 10,430,598.02 Government bonds , 38, 487, 457. 83 Sundry loans to public bodies 28, 435, 445. 38 Bills 12,091,897.65 Agricultural bills 1,479,633.95 Bills overdue 4,989,219.35 Advances on first mortgage 38, 818,548. 61 Advances on securities 3, 928, 738. 74 Bank premises -_ 5,817,628.76 Real estate 976,082.41 Sundry assets 1, 433,106.43 Loan to Government on forced currency and notes of 1 and 2 drachmas 77,787,754.19 Different accounts 5,868,299,92 Total 247,253,095.57 Ionian Bank, established in 1839, capital subscribed and paid up, £315,507 10s.; amount of each share and paid up, £25; liability of shareholders up to £50 per share. Balance sheet September 12,1895: LIABILITIES. Capital paid Notes in circulation Notes of 1 and 2 drachmas Current accounts Deposits bearing interest Bills payable Different accounts Undivided profits Provision for doubtful debts Drachmas. 7,887,687.50 8,566,061.97 3,495,298.00 3, 831,876. 69 8,150, 292. 84 397,360.76 47,510. 69 827,581.23 560,310.28 Total 33,763,979.96 ASSETS. Cash on hand , Cash on hand in London Notes of National Bank of Greece Notes of Epeiro-Thessalian Bank Loan to Government under agreement for forced currency Loan to Government, 1 and 2 drachma notes Government treasury bills Investments in London Investments in Athens Bills receivable, London Bills discounted (commercial, proprietors, etc.) Advances on securities Advances on mortgages Loans and current accounts Mortgaged property foreclosed Doubtful debts Freehold premises Total 402,578.99 230,874.80 1, 356, 864. 58 5, 958. 00 3, 894, 280. 94 3J 499, 999. 00 767, 587. 50 3,670,669.79 251,750.00 613, 707.81 5, 412, 908.41 2, 965,288.44 7, 498, 359.95 1, 774,561.42 232, 482.17 582,894.20 603,213.96 33,763,979/96 [D. Lynch Pringle, charg6 d'affaires.] 1. Banks of circulation and deposit. 2. The promoters of the concern first solicit concessions from the Government, then draw up a set of rales and regulations and present them to the Government for approval. 3. The Government. 4. (A) According to the statutes of the banks as may be set forth in No. 2. (B) Same. (D) Report and balance sheet published half yearly. (E) An expert is REPORT OF THE COMPTROLLER OF THE CURRENCY. 157 appointed by the Government, who should periodically examine the banks' transactions, etc. (F) Directed by the board of directors. (G) Same. (H) Same. (I) In some banks no limit is set; others are required to hold a reserve of two-thirds in cash to meet their notes in circulation. (J) Same as F, G, H. 5. None. Banks generally allow interest on term deposits only; or even on sight deposits by special arrangement, or when money is scarce. 6. The Government has no interest as shareholder,!, e., it holds no shares in any of the existing banks. 7. Yes. 8. By means of the half-yearly reports and balance sheet. Shareholders can obtain at any time information as to the standing of the bank. 9. None. 10. See articles 284 to 295 of the Commercial Code. 11. Unlimited. 12. The banks hold sufficient funds for the redemption. HAITI. [John B. Ferris, United States minister.] 1. There is only one bank existing in Haiti. It is a privileged Government bank, under the title of "The National Bank of Haiti," performing all the treasury service of the State. 2, 3, 4. The bank is a French establishment, formed according to the accompanying law and statutes (inclosure No. 1) by French capitalists. 5. The bank receives deposits in paper money (Haitien currency) as well as in American gold, but allows no interest on such deposits, according to amended regulation (inclosure No. 2). 6. The Government has no share in the bank. 7. The bank has branch establishments in all the open ports of Haiti. 8. The bank publishes once a month in the official journal (Le Moniteur) its monthly balance. 9. No taxes are paid in return for the privileges. 10 to 13. See law and amended statutes (inclosure No. 1). By a new agreement the bank has now the exclusive privilege of issuing bank notes, redeemable in American gold. Inclosure No. 1 gives all the information as to the working and privileges of the bank. When first established the bank issued a few $5 notes; at present there are none of these in circulation, and they have no issue at present, either of gold, silver, or notes. The Government has had $6,200,000 of paper money in circulation in $1 and $2 bills, which have been gradually redeemed and destroyed. The amount at present in circulation is about $4,200,000. This redemption is effected by a tax amounting to 50 per cent on every 100 pounds of coffee exported, which is set aside for the purpose. Besides this amount in paper the Government has $3,584,000 in silver in $1, 50, 20, and 10 cent pieces, which have the same intrinsic value as the French silver coins. This money remains in circulation and is not being redeemed. The only guaranty for this silver is the current value of silver. They have also in circulation $160,000 in copper coin of 1 and 2 cent pieces, w^hich are equal in value to the French copper coins. We have here in circulation ximerican gold and silver estimated at about $3,000,000, which rates at from 12 to 25 per cent above the Haitien currency. The rate of exchange depends on the season of the year. During the dull season, which is from about June to October, exchange is high, and this year it has run up to 25 per cent, and is now at 21 per cent, and will gradually fall during the coffee season and may decline to 12 or 15 per cent. A great deal of the fluctuation of exchange depends also on the indebtedness of the Government. If the Government is heavily involved by loans made from the bank and other sources, exchange keeps high. From the decree (inclosure No. 1) it will be seen that the bank receives all money for the Government and pays all indebtedness for it, as far as the receipts will allow. If the receipts are not sufficient, the Government negotiates loans with the bank or other sources. Besides the National Bank of Haiti and its branches there are in every city commercial houses that transact banking business. They advance money on loans to the Government, buy and sell drafts on Europe and the United States, and speculate in all kinds of Government paper. The only tax on these commercial houses is the local tax on all foreigners doing business. The head of the firm pays $300, Haitien currency, per year for a license, and all foreign clerks employed pay $50. That is the extent of the taxes on commercial houses, on payment of which they can transact all kinds of banking business with the exception of issuing money. The Government has an internal debt on the different loans made during the past five years, amounting to about $4,000,000 in American gold, on which they pay interest at the rate of H V6T c e n ^ i n g°ld P e r month. These debts are secured by a certain portion of the exportation duty on coffee, and it takes about three years 158 REPORT OF THE COMPTROLLER OF THE CURRENCY. to pay off one of these loans. They have been repeatedly made at different times during the past five years; thus, a loan is made, say for $500,000 at a time, and they find no difficulty in obtaining any amount they may ask for on the terms ^iven. The interest is paid regularly every month, and the principal gradually reduced. To give an example, a loan was negotiated for $500,000 last November; this loan has been reduced to less than one-half, and the interest has been regularly paid. I will also state that in making these loans if gold is at 120 against Haitien money the Government accepts it at 110, which really makes 28 per cent per year interest for the first year. The present session of the Haitien Legislature has passed a bill authorizing the Government to contract a loan (all loans made by the Government must be sanctioned by the Legislature) for 50,000,000 francs ($10,000,000), to be obtained in Europe at 8 per cent per year, for the purpose of paying off the $4,000,000 of the internal loans, redeeming the paper money at present in circulation, and with the balance to issue a gold currency. I have been informed that they will have no difficulty in obtaining the money on the terms mentioned, secured by a tax on coffee, in Europe. [Albert S. Willis, United States minister.] 1. Commercial banks only. 2. By payment of a license fee of $500 to the Hawaiian treasury, and a list of partners in the proposed bank. 3. The minister of the interior. 4. As there are no incorporated banks answers to interrogatory 4 are not required. 5. There are no regulations governing the receipt of deposits, and it is not the custom for the banks to allow interest on deposits. 6. The Government is in no way interested as a shareholder in the banks. 7. Banks may, if they desire, conduct branch offices; none such exist at present. 8. The banks being private concerns there is no public information given. 9. A tax of 1 per cent is levied upon the actual cash in hand on the 1st of July. 10. In the case of insolvent banks they would be treated as an ordinary insolvent partnership. 11. The banks here are not banks of issue. 12. Not being banks of issue no provision is necessary. 13. The banks carrying on business in Hawaii have maintained a high reputation, and there has been no instance of a bank going into liquidation. The principal connections of the banks in Hawaii are with the banks in San Francisco, with whom they correspond and secure advances. In connection with the general post-office is a postal savings bank with an aggregate deposit of $725,000. Depositors are allowed 5 per cent. ITALY. [Italian foreign office, per secretary of the United States embassy.] 1, 2. There are in the Kingdom banks of credit with power to issue money, banks of ordinary credit, and banks of popular credit. Only the first are under the supervision of the ministry of the treasury, and these alone are here described. Before the law of August 10, 1893, six banks were authorized to issue notes, four of which issued stock—the National Bank of the Kingdom, National Bank of Tuscany, Tuscan Bank of Credit, and the Roman Bank—and two public establishments of credit with no shareholders, viz, Bank of Sicily and the Bank of Naples. Under the abovementioned law three of the four existing banks issuing shares, viz, National Bank of the Kingdom, National Bank of Tuscany, and the Tuscan Bank of Credit, were authorized to merge into one single bank with shares, namely, the Bank of Italy, which began business on the 1st of January, 1894. The Roman Bank was compelled to liquidate, while the two southern banks of Naples and Sicily remained unchanged. There are no fixed requisites or special conditions by which a bank of ordinary credit can obtain the power of issuing money. This privilege is specially granted to the bank mentioned in a banking act, and therefore only obtained by special legislation. The law of 1893, giving right of emission only to the Bank of Italy and^ the two southern banks, has tacitly limited the operations they are authorized to transact. 3. There is, in the ministry of the treasury, a central office of inspection of circulation and the banks of emission intrusted with the duty of requiring exact observance of the law by these banks and that they comply with the conditions under which they are granted the power of emitting money and of carrying on the abovementioned operations. 4. The law of the 10th of August, 1893, prescribes for the Bank of Italy a capital of 300,000,000 lire, divided into 300,000 nominal shares of 1,000 lire each. However, by the convention of October 30, 1894, approved by royal decree December 10, 1894, REPORT OF THE COMPTROLLER OF THE CURRENCY. 159 referred to by the law of August 8,1895, the said capital was reduced by 30,000,000 to 270.000,000, divided into 300,000 nominal shares of 900 lire each. The capital of the banks of Naples and Sicily is not determined by law. Their capital has accumulated through the adding of annual net profits, as there are no shareholders to whom these profits would have to be returned. The Bank of Italy is administered according to its own statutes; the principal agents of administration are the general assembly of shareholders, the stfperior council, and the board of general directors. The statutes are approved by the Government, which also approves the nomination of the directorgeneral of the bank. The management of the banks of Naples and Sicily is also subordinate in its fundamental lines, to their respective statutes, approved by Government, and which are at this present moment being elaborately revised to make them conform to the law of August 8, 1895. The principal agents of their administration are the general council composed of delegates, communal, provisional, and commercial, of the districts in which they operate: the council of administration, composed of delegates from the general council and from the Government, and the board of general directors. The Bank of Italy, however, is based on shares. The responsibility of its shareholders is limited to the shares belonging to each. On the 10th and 20th and last day of each month, the banks must transmit to the ministry of the treasury a statement of their operations up to date. Such statements, compiled according to forms approved by the Government, contain the most important data concerning their profits and losses. They must also transmit their annual balances and returns. The said office of inspection, organized under the ministry of the treasury, to which is conceded the most ample powers in the matter, is intrusted with the verification of these returns and statements; besides this, delegates of this office attend all the meetings of the shareholders and of the superior council of the Bank of Italy, and all the meetings of the general councils and councils of administration of the southern banks, with the right to suspend proceedings if contrary to the laws or to the statutes. The banks of emission can: (1) Discount at the rate of exchange for not more than four months with signatures of at least two parties, unquestionably solvent; on the ordinary bonds of the treasury; on secured notes emitted by societies of wholesale trades legally constituted and having unineuinbered deposits; on the grant of titles on which the bank can draw advances. (2) Make advances, for not more than*six months—(a) on State bonds, for four-fifths of the current quotation value, including those of long maturity; (b) on ordinary bonds of the treasury, for the entire value; (c) on titles guaranteed by the State; on bills of funded banks of credit; on titles payable in gold emitted or guaranteed by foreign States, for three-fourths of the stock exchange value, but not beyond the par value; (d) on valuations of gold and silver, national as well as foreign, at legal exchange, and on bars of gold; (e) on silks, raw and worked, in gauzes and in the woof, or on silver bars, at less than the two-thirds of their value; ( / ) on pledges of unincumbered deposits from wholesale warehouses legally authorized; and on orders for manufactured articles or sulphur for not more than half the value they represent; ((j) on certificates of deposits of spirits and cognac in warehouses authorized by the laws of August 29, 1889, and of December 24, 1891, for not more than half the value of the alcohol or cognac deposited. The operations by which Nos. 1 and 2 can be effected to any amount are on condition that the amount of notes issued, by means of wkich they are transacted, does not exceed the maximum of the limit established for the circulation of each bank—that is, 800,000,000 lire for the Bank of Italy, 242,000,000 for the bank of Naples, and 55,000,000 for the bank of Sicily; in all, 1,097,000,000. This circulation, which is allowed in the interest of commerce, remains distinct from that allowed for advances to the treasury, which can amount to as much as 135,000,000 lire. The security for negotiable loans depends upon the solvency of the signatures covering the goods accepted on discount, and the security for loans on titles upon the quality; they must b© State titles exclusively and guaranteed by the State. The metallic reserve for circulation made available by these loans is fixed at 40 per cent, of which three-fourths must be in gold. The annual profits of the Bank of Italy are, first, to constitute an extraordinary reserve fund to meet losses caused either by the liquidating of the Roman Bank or by the closing up of its own real-estate operations or transactions contrary to law. Of the balance, an annual dividend of not over 40 lire can be paid to the shareholders; the surplus profits go to increase the ordinary reserve fund of the bank. The profits of the southern banks are applied to possible losses in the liquidation of their real-estate transactions, to protect some unimportant charitable payments, and to increase their respective capitals. 5. Banks of emission can receive, without any limit, deposits on noninterest bearing current accounts. By virtue of article 12 of the law of August 10, 1893, and of article 34 of the law of August 8, 1895, they can also receive deposits on current accounts bearing interest, with the condition, however, not to exceed for the Bank of Italy 130,000,000 lire, Bank of Naples 50,000,000 lire. Bank of Sicily 15,000,000 lire, and the further condition that the interest shall not, in any case, exceed one-half 160 REPORT OF THE COMPTROLLER OF THE CURRENCY. of the amount of the discount for three years from the enforcing of the abovementioned law, and the third of that amount during the following years. 6. The State has no interest as a shareholder in the banks of emission. However, it may consider itself the owner of the capital of the two southern banks, which have nt> shareholders, and in which no one else can claim rights of ownership. 7. In the past tbe banks of emission were authorized to negotiate real-estate loans. The law of August 10, 1893, has, however, prohibited them from undertaking such operations, and the branches transacting real-estate business are now in liquidation. The banks of emission can receive the provincial customs. The Bank of Naples has, since its origin, conducted the business of the national pawn offices, and has also a savings-bank branch which has no shareholders. The Bank of Italy, since February 1, 1895, has been intrusted with the provincial business of the treasury on account of the Government. All the banks of emission are required to allow the public, in exchange for notes with the addition of the exchange according to the rate of the preceding day, certificates for the payment of charges for entry which otherwise would have to be paid in metallic value, and to keep the corresponding sums in coin, at the disposal of the foreign branch of the treasury, for its needs. 8. The banks are required to transmit to the ministry of the treasury every ten days the condition of their transactions. These statements are published in the Official Gazette of the Kingdom, by the bureau of inspection. The law provides for both ordinary and extraordinary examinations of the banks. An annual report on their operations and the report of the extraordinary examinations, which occur biennially, are submitted to Parliament. The statements and annual balances of the banks are made public. The correspondence with the State relative to their management and their accounts are audited and certified to by the central office of inspection. 9. On the circulation on account of trade, after having deducted the amount of the metallic reserve, a tax of 1 per cent per year is assessed for the first two biennial periods following the enforcement of the law of August 10, 1893. At the end of the second biennial period, when the liquidation of the real-estate transactions of the banks, certified to by the Government, proceeds regularly according to law, the tax on circulation shall be reduced to a fifth of the average rate of discount, in the six months to which the taxed circulation belongs, on condition that the tax itself does not exceqtf. the proportion of 1 per cent. Whenever the circulation exceeds the normal limits, and when the excess is guaranteed by a special metallic reserve of 40 per cent and not beyond—45,000,000 lire for the Bank of Italy, 14,000,000 lire for the Bank of Naples, and 3,500,000 lire for the Bank of Sicily— the surplus circulation is subject to an extraordinary tax, equal (including the normal tax) to two-thirds of the sum of the discount. However, the part of the circulation exceeding these limits, when it is entirely covered by the metallic reserve, is not subject to this extraordinary tax. Beyond these limits, and to double the sums above mentioned, the surplus circulation is subject to an extraordinary tax equivalent (including the normal tax) to the entire amount of the discount. If the circulation exceeds double the above-mentioned sum, or the prescribed reserve is not maintained, it would be liable to an exceptional tax corresponding to double the amount of the discount. The banks of emission are required to make advances to the treasury to the amount of 100,000,000 lire for the Bank of Italy, 28,000,000 lire for the Bank of Naples, and 7,000,000 lire for the Bank of Sicily. In consideration of the advances made, the banks have the privilege of issuing their own notes (circulation on account of the State), with a condition, however, to maintain a metallic reserve of not less than a third of the amount. Such circulation is not taxed. The treasury returns an interest on the sums advanced, which has been fixed by the law of August 8, 1895, at 1£ per cent, clear of any tax. Another burden imposed on the three banks of emission is that of investing in real estate, when required to do so, 200,000,000 lire in gold, to be held at the disposal of the treasury, which will give them as compensation 200,000,000 lire in bonds of the State, with the privilege of including them, up to the amount of the sum thus invested in land, in their profits reserved for emission and for debts at sight. The 200,000,000 lire are thus divided: Jank of Italy 145,000,000, Bank of Naples 45,000,000, and Bank of Sicily 10,000,000. The treasury, if it is benefited by such transactions, shall, upon a deposit of bonds of the State, return to the banks an equal amount of gold. 10. The Italian banking legislation contains no special provision relating to the affairs of insolvent banks of emission, hence they would be subject to common law proceedings. At their liquidation provision would have to be made by ordinary methods, reserving to decide if the bearers of the bonds had preferred rights over the other creditors, at least on the metallic reserve applied as security for those same bonds, the right of issue not being recognized by the banking law of 1893. 11. The extreme limit of the banking "circulation for five years is fixed at the sum of 1,097,000,000 lire, thus divided: Bank of Italy, 800,000,000 lire; Bank of Naples. 242,000,000 lire, and Bank oi" Sicily, 55,000,000 lire. At the end of the five years each bank must begin and continue successively to reduce its circulation biennially by a REPORT OF THE COMPTROLLER OF THE CURRENCY. 161 proportionate annual quota in such manner that after fifteen years from the enforcement of the law of 1893 the circulation shall be within the following limits: Bank of Italy, 630,000,000 lire; Bank of Naples, 190,000,000 lire; Bank of Sicily, 44,000,000 lire; total, 864,000,000 lire. The bank that at the end of fifteen years does not possess the capital or assets corresponding to the third of the circulation allowed it shall have to diminish it proportionately within three months; the diminished circulation of a bank shall be allowed to those who have or shall pay in the corresponding capital and profits to secure the additional circulation. The issue of each bank can exceed these limits when the respective bonds are entirely represented by legal values or by gold in bars in the banks. The circulation corresponding to advances made to the State are also excluded from these limits. The circulation is guaranteed by a 40 per cent metallic reserve. Thirty-three per cent of such reserve must be exclusively in gold or silver in the proportion of three-fourths gold and onefourth silver, and the remaining 7 per cent may be bills of exchange payable abroad in gold or in values equivalent to the requirements of the Latin Monetary Union, or by certificates of deposit on foreign accounts current and payable in gold or in equivalent values of the union itself in account with the banks of emission, or with the bankers and the corresponding banks of the treasury. 12. The obligation to exchange the bank notes for metallic value and on sight is, as a principle, unlimited. Such an obligation remains unaffected by law, at least for banks that refuse to effect investments in real estate of the above-mentioned 200,000,000 in gold, at the disposal of the treasury of the State. All having consented to make such real-estate investments, the exchange of the notes is now being requested, for bonds of the State as well as specie, in which case the banks have the right to claim from the bearer the cost of the exchange at the day's rate. [Edwin Dun, United States minister.] 1. The different classes or kinds of banks existing at present in the Japanese Empire, according to the report of December, 1894, are as follows: Bank of Japan. Specie Bank National banks Private banks . Common banks Savings banks. Main offices. Branches or subbranches. 1 1 133 762 728 334 7 175 231 201 30 Certified capital. Ten. a 30,000, 000 6, 000,000 48, 816,100 54, 247, 900 52,777, 900 1,470, 000 Paid-in capital. Ten. 22, 500, 000 4, 500, 000 48,816,100 37, 380,78.1 37,380,781 683, 000 a November 30, 1895. The above is the general summary; the special details are given below, (a) Bank of Japan—Nature and organization: A stock company, founded in accordance with instruction No. 32, of date June, 1882. Its term of years is limited to thirty, which may be prolonged with the permission of the Government. It is a central bank, with the privilege of issuing convertible bank notes, and facilitates the working of the various banks throughout the Empire. The bank also acts as a central treasury, and manages the receipts and expenditures of the national treasury. Branches and subbranches: The main office is in Tokio. By the permission of the finance minister branches and subbranches have been established in the following important towns and districts: Branches, Osaka and Shimonoseki; subbranches, Wakayama, Sapporo, Hakodate, Nemuro, and Kyoto, (b) Yokohama Specie Bank—Nature and organization: A stock company, formed the 28th of February, 1880. Its term of years is limited to twenty, but may be extended with the permission of the Government. It principally acts as the medium of foreign trade, and its business has, therefore, to do principally with the negotiating of foreign exchange and facilitating home and foreign trade. Branches and subbranches: The main office is in Yokohama. By the permission of the finance minister two branches and six subbranches have been established, as follows: Branches, London and Kobe; subbranches, Lyons, New York, San Francisco, Hawaii, Shanghai, and Bombay. In addition to the above the bank has "correspondence" relations with sixteen other foreign countries, (c) National banks—Nature and organization: Stock companies established under the banking laws promulgated in 1872. The term of years is limited to twenty, but may be extended as private banks with the permission of the Government. The original object of the system was to redeem the paper currency of the Government by the issue of convertible bank notes, but in 1876 the banking laws were changed and the OUR 96, PT 1 11 162 REPORT OF THE COMPTROLLER OF THE CURRENCY. banks were allowed to issue banknotes on deposit of Government bonds bearing interest at 4 per cent or more. The amount of the issue is limited to 80 per cent of the capital, and a specie reserve must be kept in hand amounting to on6-fourth the amount of bank notes issued. Main offices, branches, etc.: According to the report of December, 1894, the number of main offices, branches, subbranches, and circulating capital was as follows: Main offices, 133; branch offices, 160; subbranch offices, 15; paid-in capital, 48,816,100 yen; regular accumulating capital, 14,956,636 yen; special accumulating capital, 2,678,011 yen. (d) Private banks—Nature and organization: All places that transact publicly the business of discounting commercial papers, negotiating exchange, receiving deposits, and making loans are called banks and come under the banking laws. The amount of capital for such banks is not fixed. Their organization may be either that of "joint name" or "joint capital/' "ordinary" or "limited" partnerships, companies or stock companies, or established by a single individual. Those banks that receive deposits with compound interest are called "savings banks," and are distinguished from common banks by the savings banks regulations. The number of common and savings banks is as follows: Number. Common Savings banks. Capital. Ten. 728 52, 777,900 34 1,470,000 Paid-in capital. Ten. 37,1)80,781 683, 000 2. Requirements to be met by each class of banks: (a) The Bank of Japan, as the center of the currency circulation, is responsible for facilitating the working of the money market, and is the highest medium for preserving the integrity of the convertible bank-note system. Its duties and privileges are determined by the laws and regulations of the Bank of Japan and by the laws relating to the issue of convertible bank notes. Beyond the limits of these laws and regulations it can not go, and it is under the strict supervision of the Government. (b) The Specie Bank observes the laws and regulations of the specie banks, and is under the special supervision of the Government, (c) National banks observe the laws and regulations of national banks, and are under the special supervision of the Government, (d) Private banks, (e) Common banks are established under the commercial law and in special points conform to the banking laws. (/) Savings banks are established under conimercial law and in special points conform to the savings-bank law. 3. Who determines when these conditions have been satisfied? The finance minister. 4. Regulations governing banks as to (A) Capital: To make any change in the amount of capital, the Bank of Japan and the Specie Bank must obtain the permission of the finance minister. The capital of a national bank must not be less than 100,000 yen. In a place where the population is more than 100,000 it is not allowed to establish a national bank with a capital less than 200,000 yen. But under special circumstances the establishment of a bank with a capital between 50,000 and 100,000 yen is allowed. Each share of a national bank is fixed at 100, 50, and 25 yen. But if the capital is more than 100,000 yen each share must be fixed at 100 and 50 yen. If the capital be between 100,000 and 50,000 yen the shares are fixed at 50 and 25 yen each. In case of reducing or increasing the capital of a national bank the permission of the finance minister must be obtained; in case of reduction, the bank is under the obligation to announce the matter pnblicly in three or more newspapers every day for three months, and to meet all liabilities. To reduce or increase the capital of a private bank or savings bank the permission of the finance minister must be obtained. The capital of a savings bank should be 30,000 yen or more. All other banks must conform to the regulations of the commercial law. (B) Management of the bank: The Bank of Japan is managed by a superintendent and a vice-superintendent, and four directors, conforming to the laws, regulations, and resolutions of the general meeting of the shareholders. The superintendent is regarded as of chokunin (first) rank, and the vice-superintendent as sonin (second) rank. The directors are appointed by the finance minister from among twice the number of candidates elected at the general meeting of shareholders. The business transactions of the Bank of Japan are managed by a meeting of its chief officers, consisting of the superintendent, vice-superintendent, and directors. There are besides from three to five inspectors, who supervise the business; their meeting is called the inspectors' meeting. The Specie Bank has a president and vice-president, chosen from among five or more directors, by the directors themselves. The directors are elected at the general meeting from among those shareholders who possess 50 or more shares. Under the president and vice-president there are a manager and several submanagers, who are responsible for the transaction of all busi REPORT OF THE COMPTROLLER OF THE CURRENCY. 163 ness. The other directors are mainly charged with the duty of inspection. The president of a national bank is chosen by the directors from among their own number. The directors aie five or more in number, elected at the general meeting of shareholders from among those shareholders who possess from 30 to 60 shares. Under the president is a manager and several subnianagers, who are responsible for the transaction of all business. Private banks are under the regulations of the commercial law relating to commercial companies. (C) Liability of shareholders, etc: The shareholders of the various kinds of banks are under limited responsibility. For claims against the bank each is liable only to the amount of his own shares. The regulations of the commercial law relating to commercial companies are the same for banks, viz, that a limited partnership ("goshi-kwaisha7;) has a limited liability, and an ordinary partnership ("gomeikwaisha") has an unlimited liability. (D) Reports of condition of the bank: The Bank of Japan is required to report once in a month to the finance minister the resources and liabilities of the main office and each of the branches and subbranches minutely; also to present to him, and publish in the Official Gazette and other newspapers, reports of the actual condition on the 30th of June and 31st of December of each year. A daily statement of account, showing the amount of issue and exchange of convertible bank notes, the increase or decrease of the reserve fund, and a weekly statement showing averages of the same, are to be prepared. The former must be presented to the finance minister by 10 o'clock of the following day, and the latter by Wednesday of the following week, to be published in the Official Gazette of that day. The Specie Bank must present a report giving a report of all business transactions whenever the finance minister may demand it. National banks must give to the finance minister a monthly statement of account of the business transactions of the main office and branches, in accordance with the form fixed by the finance minister, by the 5th of the following month. Details of business, reports of actual condition, distribution of profits, and balances, together with a list of names of shareholders, are to be rendered semiannually to the finance minister by the 10th of January and the 10th of July of each year. Besides the above, the finance minister may demand, whenever he deems it necessary, that a special statement of accounts be submitted to him. If the reports above mentioned be not submitted to the finance minister within ten days after he has demanded them, the bank is liable to a fine of from 50 to 100 yen a day. Private banks must send every half year to the minister of finance, through the governor of the province in which it is situated, a report of transactions, in accordance with the form fixed by the finance minister, within one month after the expiration of the business year. At the same time a statement of resources and copy of balance sheet should be published in the newspapers of the district, or by other means. If a bank makes no report and announcement of its transactions, or if its reports and announcements are fraudulent, the officers in charge of the business, together with the directors and inspectors, are liable to a fine of from 50 to 500 yen; or if the circumstances be more aggravated, they are liable to punishment by imprisonment at hard labor for less than one year in addition. (E) Examination by Government officers: For the Bank of Japan and the Specie Bank the department specially provides inspectors, from the highest official rank, to inspect the transactions of the said banks. For national and private banks, the finance minister, as he deems necessary, instructs examination of the main or branch offices to be made by officers of the finance department or local governors. An examination may also be had at the request of a number of shareholders representing one-fifth or more of the total shares of the bank. (F) Restrictions on the amount of loans: With regard to the amount of loans which may be made upon various bonds as securities, the Bank of Japan must receive the permission of the finance minister, after the resolution has been acted on by the meeting of the chief officers and the sanction of the inspectors obtained. The amount of loans must be limited to eight-tenths of the market value of the documents offered as securities. The amount of loans by the Specie Bank, either to individuals, companies, or partnerships, is limited to one-tenth of the amount of paid-in capital. A loan without security can not exceed one-tenth of the total amount of its capital and accumulated funds; loans on real estate as security not to exceed one-twentieth of the same. National banks can not loan more than one-tenth of its total capital at one time, and the officers of the bank must determine by mutual agreement what proportion of the one-tenth shall be loaned. (G) Other restrictions on loans: The rate of interest on loans made by the Bank of Japan must receive the sanction of the finance minister, after action by the executive committee (chief officers) of the bank. That the national banks must conform to the general laws of interest. (H) Security for loans: Security for loans from the Bank of Japan is limited to gold and silver specie, bullion, public loan bonds, Government bonds, and other documents certified by the Government. Real estate, shares of banks, and various companies, or shares of the Bank of Japan may not be received as security. Government loan bonds and other documents certified by the Government should be limited to those which, in the j udgment of the bank, seem to be good. The term of 164 REPORT OF THE COMPTROLLER OF THE CURRENCY. loans can not exceed six months. Although other banks are under no restrictions as to the nature of their securities for loans, they can not receive their own shares as security. There is an exception made to this limitation when debtors, failing of payment, possess no other security and have no other means of repaying the debts. (I) Cash reserve: The Specie Bank must provide a cash reserve amounting to more than one-fourth of the sum of the deposits in order to meet the demands of their creditors. National banks should have at hand at least 25 per cent of the total amount of deposits at hand for payments. If the reserve fund diminishes greatly on meeting the demand for repayment of deposits each shareholder is liable to make up the deficiency by advancing money in proportion to his own number of shares. When the repayment of loans extends beyond six months a reserve fund for this purpose must be provided. Savings banks must provide and deposit in the public vaults an amount of money not less than one-fourth of the total sum of the deposits as security for paying back the deposits, in the form of national or local bonds. If the amount of securities exceeds one-half of the capital the bank may employ commercial bills, stock certificates, and documents of reliable companies as security. The amount above mentioned is determined in accordance with the amount of deposits at the end of each half year. (J) Accumulation of surplus: The Bank of Japan must lay by one-tenth and the Specie Bank one-tenth or more of the sum that remains after deducting the dividends from the net profits to meet the loss of capital and the insufficiency of dividends. The specie bank is required to lay by an amount equal to the estimated loss when the reserve fund is reduced through th© delayed payment of loans. Private banks must accumulate at least one fourth of the yearly profits until the reserve fund amounts to one-fourth of th© capital, in accordance with the regulations of the commercial law. 5. Regulations governing deposits and interest: Deposits are divided into two classes, viz, fixed deposit and current deposits, both of which bear interest. With the Bank of Japan the current account draws no interest. Besides these there is deposit for safe-keeping, which bears no interest. Savings banks receive deposits at compound interest. 6. The interest of the Government as shareholder: The Government has no interest as shareholder in the banks. 7. Branches and subbranches: Any bank may establish branches and subbranches. The Bank of Japan and the Specie Bank must each time receive the permission of the Government. 8. Extent and medium of information regarding banks—(A) Extent and medium: Matters relating to the actual condition of the banks are as follows: (a) Balance sheets, semiannual report, inventory, daily account, and list of shareholders. In addition to the above the Bank of Japan must publish the following matters: A weekly statement showing the amount of convertible bank notes issued and the amount of the reserve fund. The national banks must publish the following information in addition to those points under (a): The amount of worn bank notes and notes of closed banks that have been exchanged or burned; monthly and semiannual reports of actual condition, together with a statement of the per cent of gain, the details of business transactions, and balances for the half year; also a list of the names of th© shareholders. The semiannual report of actual condition is specially printed. (B) Organs of publication: The common banks give public notice in the local newspapers or by other means. But the announcements of the Bank of Japan, the Specie Bank, and the national banks may be published in the Official Gazette. 9. Taxes and burdens imposed: The banks which enjoy special privileges in the Empire of Japan are th© Bank of Japan and the national banks. Their taxes and burdens are as follows: (A) The Bank of Japan—(1) Taxes: Although the Bank of Japan is not burdened with such special taxes as that upon the issue of notes, yet whenever the issue of notes is made in excess of the amount fixed according to the law regulating the expansion and contraction of circulation, a tax of not less than 5 per cent per annum for the excess is levied, the rate (above 5 per cent) to be fixed according to the condition of money circulation at the time. (2) Other burdens: (a) To loan to the Government, without interest, the sum of 22,000,000 yen for the redemption of Government paper currency previously issued. (&) The gradual reduction of the subsidy allowed for conducting th© business of the national treasury until no subsidy at all is given after 1898. (c) To conduct gratuitously the business of exchanging and redeeming bank notes, (d) To render all proper assistance to the national banks in the redemption of bank notes above mentioned, (e) To give all proper assistance to the Specie Bank in the negotiation of foreign exchange. (f) To afford various conveniences to th© Government for raising national loans and issuing the bonds of the finance department, (g) To hold in safe-keeping, without commission, deposits of money and other valuables. (B) National banks: For the privilege of issuing bank notes on the security of Government bonds, etc., a tax of seven one-thousandths of the amount of notes issued is levied. 10. Closing up insolvent banks: When a bank becomes insolvent and closes up its business it is required, according to the regulations of the bankruptcy law of the REPORT OF THE COMPTROLLER OF THE CURRENCY. 165 commercial law, to appoint an administrator of the bankrupt concern, who is charged with the settling up of the business. For national banks, however, there are special regulations besides the bankruptcy law. The main points are as follows: (A) Injunction to close the bank—When a national bank becomes unable to meet its obligations the finance minister suspends its business, and dispatching a special inspector investigates minutely the actual condition of affairs and orders the closing up of the bank; he also announces that the Government bonds deposited with the finance department as security for bank notes are forfeited, and gives orders to the same effect to the local governor and inspectors. At the same time the finance minister communicates with the minister of justice and the cabinet, requesting that all suits relating to the debts of the bank be suspended. The business of the specially appointed inspector is nearly the same as that of the commissioners acting in the case of other insolvent banks. The main points are as follows: (1) Putting the seal upon the gold, silver, books, and other things. (2) Forbidding all receipts and expenditures except such as are necessary to closing up the business of the bank. (3) Summoning and examining the shareholders and others interested. (4) When necessary, to request the assistance of the proper Government officials. (5) To direct and oversee all matters except those of great importance. (B) Appointment of liquidator: When a national bank is declared insolvent, the finance minister appoints a liquidator and requests the minister of justice to proceed with the suits for debt against the bank. The liquidator resembles the administrator appointed at other times, and there is no great difference in their duties. He is under the direction of the special inspector. His chief'duties are as follows: (1) To summon a general meeting of creditors and shareholders, with the consent of the finance minister. (2) To take charge of the gold, silver, and other possessions of the bank. (3) To collect all debts. (4) To become a party in the lawsuit. (5) To examine the business managers and investigate all books and documents. (6) To dispose of all the securities and possessions of the bank, on consultation with the court. (7) The redemption of all the debts of the bank and repayment of deposits; payment of all expenses incurred in closing up the office and management of distribution of payments. (C) Redemption of debts: The liquidator having been appointed it is publicly announced in the Official Gazette and newspapers during three months, that at a fixed time and place creditors should present their claims, and then the money realized by the sales, etc., is divided according to the amount of each claim. After the distribution of the effects of the bank, the liquidator hands over the books and any other documents to the respective prefectures for safe-keeping, and his duties then end. The expenses incurred by him in the performance of these duties is to be met from the proceeds of the bank sale. (D) Disposition of bank notes and government securities: The finance minister gives public notice that the notes of the insolvent bank are to be exchanged at a given time, and the notes thus taken up are to be burned. The forfeited securities are put up for sale either publicly or privately, and the proceeds applied to the redemption of the bank notes. If the value of the securities be insufficient to cover the notes issued, the Government reserves the right of first claim upon the bank's property. Any surplus that may remain after the redemption of the notes by the sale of the property is then returned to the bank. (E) Fund for exchanging notes of insolvent banks: According to the laws of special accounts, the fund for the above purpose must be presented to the Diet for approval together with the budget, but separate from the regular receipts and expenditures. The money to be used is deposited with the Bank of Japan, which renders to the finance minister a monthly report of the account, which is again forwarded to the department of account inspection. Each year any surplus of the fund, if there be any after redeeming the bank notes, is carried over to the account of the following year. 11. Issue of bank notes: The banks which enjoy the privilege of issuing bank notes are the Bank of Japan and th© national banks. (A) Bank of Japan : The Bank of Japan issues bank notes under the law regulating the expansion and contraction of currency, the amount being limited to 85,000,000 yen, depositing as security Government public loan bonds, certificates of the finance department, and other reliable documents. All other issue must be based on the reserve of specie, but if the conditions of the money market require it, it may issue an extra amount on payment of not less than 5 per cent per annum of the amonnt issued, subject to the approval of the finance minister, and the rendering of a daily account. (B) National banks: The issue of bauk notes by the national banks is based on the reserve of securities* which are limited to Government public loan bonds. The amount of issue is limited to eight-tenths of the capital of the bank, but it may not issue bonds on the increase of its capital after its establishment. The conditions of issue are as follows: (1) To deposit with the finance department, in proportion to the amount of issue, Government bonds bearing interest at not less than 4 per cent as security the value of the bonds to be fixed by the finance department. In case the bonds be below par, other Government bonds must be deposited to cover the amount of issue. (2) To accumulate a specie reserve amounting to one-fourth of the amount of issue for the purpose 166 REPORT OF THE COMPTROLLER OF THE CURRENCY. of exchanging the notes. (3) The bank notes should conform to the denominations and models fixed by the finance minister, but upon them should also be put the seals of the president and manager. (4) Such notes can not be used in paying interest on Government bonds and payment of tariffs. (5) The exchange of bank notes for coin is conducted by the Bank of Japan, but the replacing of worn notes must be done by the respective banks. (6) To observe all laws relating to national banks. 12. Provision for the redemption of such notes.—(A) Method of redemption: All bank notes are to be redeemed on the plan of a general redemption of all outstanding bank notes within the term of years fixed for the conduct of the bank's business (see No. i, C). The total amount of issue is to be redeemed by the semiannual interest of an amount specially devoted to that purpose, the interest being accumulated into a redemption fund. Accordingly, although the accounts of the bank may not show an exact correspondence between the amount issued and the amount redeemed, all notes are to be redeemed at the end of the bank term. (B) The fund for redemption of notes consists of the following deposits: (1) The reserve fund for the exchange of notes at every national bank. (2) A sum accumulated by the setting aside from the profits of every half year 2\ per cent of the amount of issue. The national banks deposit with the Bank of Japan the above sums as a reserve fund for the redemption of bank notes. (C) Method of procedure: The redemption of the bank notes is conducted by the Bank of Japan, which purchases Government public loan bonds with the fund for redemption and redeems the notes with the interest on those bonds; but the fund itself bears no interest and can not be circulated, even the national banks being unable to draw upon it. The Bank of Japan provides a special department for the business of redeeming the banknotes, and reports to the finance minister the condition of the accounts, etc., each half year. The amount, classes, numbers, and number of notes redeemed are to be reported to the finance minister. The finance department burns the notes so redeemed, giving public notice of the fact, and returns to the bank an amount of public-loan bonds amounting to the amount of notes redeemed. At the end of the bank's term, if there be any part not yet redeemed, those notes are to be redeemed at once from the amount of the Government bonds on deposit. The surplus, if any, should be given back to the bank. If within the bank's term the fund becomes insufficient, owing to the appreciation of Government bonds which are to be bought with the 2\ per cent of profits semiannually, with interest on that amount, then Government bonds previously purchased with this reserve are to be sold to make good the redemption fund. In case any of the Government bonds on deposit are redeemed, the amount received for them should be added to the redemption fund. (D) Closing up a national bank before the notes are redeemed: The Bank of Japan returns to the bank to be closed its redemption fund, and then compares the amount of notes redeemed with the amount to be redeemed. (1) In case the amount to be redeemed be greater, the Bank of Japan turns over to the finance department another redemption fund, with which the department redeems the remainder of the unredeemed notes. (2) In case the amount redeemed be greater, the securities deposited by the bnnk are sold and the amount deposited to the credit of some other redemption fund at the Bank of Japan, the finance department redeeming the remainder of the notes to be redeemed. (E) The convertible notes issued by the Bank of Japan may be redeemed on application to the main office or any branch of the bank. 13. Additional information of interest.—(1) General meetings of the national banks: For the purpose of discussing subjects of common interest and fixing of rates of discount, there are six general bank meetings. (2) Clearinghouses: (a) Tokio, Balances are settled at the Bank of Japan, which has more or less dealings with other banks, as the center of the money market, (b) Osaka, Has made great progress since its establishment in 1879. (3) The Bank of Japan renders a great service in the circulation of money between Tokio and Osaka by honoring at either place checks drawn upon either bank having proper indorsement. (4) The Bank of Japan, as the central medium, rediscounts commercial papers. KOREA. [H. N. Allen, charge d'affaires.] Korea has no banking system or anything to take the place of one. The Japanese banks operate here, but they will be fully covered by the reports from Japan. LIBERIA. A dispatch from the United States minister at Monrovia, Liberia, states that there is no banking system in that country. REPORT OF THE COMPTROLLER OF THE CURRENCY. 167 MEXICO. [M. Romero, Mexican minister.] As in the United States, banking in Mexico is a State affair—that is, the Federal Government issues grants to several banks in the Federal district, which includes the city of Mexico, and in the territories, and each State has a right to issue a charter to banks established within her own limits; but the Federal Government, by taxation and other means, can monopolize banking. The Federal Government chartered several banks previous to 1882, but only one was successful and is still in existence, formerly called the Bank of London, Mexico, and South America, which has been reorganized and is now called the Bank of London and Mexico. The other few chartered banks were consolidated in 1884 into one, called the National Bank of Mexico, which has the exclusive right to issue notes, which are received in payment of all taxes, but the Government does not guarantee them and only authorizes the bank to make that issue. The bank can issue notes for three times the amount of its capital and deposits not of a confidential character. To supervise the amount of the notes issued by the bank, so that they shall not exceed the amount allowed, the Government appoints two officers to act as supervisors of the bank for the purpose aforesaid. That bank has a right to establish agencies all over the country and has actually established them in all the principal cities of the Republic. The bank started with a capital of $20,000,000, of which 40 per cent was paid up, and the balance to be called upon by the subscribers, the bank having a right to increase its capital to any amount that they thought convenient. The bank agreed to advance the Mexican Government from $6,000,000 to $8,000,000 at 6 per cent interest, and to collect some of the Federal revenues, charging a small commission for that service. The Mexican Government appointed the bank its agent to pay the interest of the public debt. The bank enjoys all those privileges for fifty years from the date of the charter, which was May 31, 1884. You will see by this brief synopsis that we have really only one bank in Mexico, and that it stands in very much the same position as the Bank of England stands to the British Government. NETHERLANDS. [William E. Quinby, United States minister.] I, 2, and 3. The Bank of The Netherlands is the only institution subject to Government interference. All other banks are of an entirely private nature. Like all liability companies, they are required by the Commercial Code to submit their deed of foundation for the Royal sanction and to observe the provisions of that code, but for the rest they are perfectly free in their operations. Hence these replies refer to the Bank of The Netherlands only. 4. (A) See article 3 of the statutes; (B) see article 18 and following of the statutes; (C) thereare no special provisions ; (D) see article 21 of the law, the weekly balance, and article 20 of the statutes; (E) see article 20 of the law; (F, G, H) see article 7 of the law; (I) see article 16 of the law and the explanatory note at the bottom of the page; (J) see articles 8 and 9 of the law. 5. See the regulations relating to current accounts. 6. The State is not a. shareholder; it has, however, a share in the profits of the Bank of The Netherlands (see article 22 of the law). 7. See article 5 of the law. In addition to the principal establishment at Amsterdam and the branch bank at Rotterdam there are eighteen branches and many corresponding bureaus. 8. By the annual report and the weekly balance (see article 40 of the statutes, article 21 of the law, and the accompanying copy of the weekly balance sheet). 9. See articles 10, 11, and 11 bis of the law. II. One restriction only exists in the provision of article 16 of the law (see also article 12 of the law). 12. See article 43 of the statutes. 13. The bank notes of the Bank of The Netherlands are of 1,000, 300, 200, 100, 60, 40, and 25 florins. (See also article 12 of the law.) Further paper money of the value of francs, issued by the Government, is also in circulation. N. B.—No other bank in The Netherlands issues bank notes. Accompanying documents: (1) The law relating to the Bank of The Netherlands and also the statutes (in French text). (2) Regulations and conditions upon which the Bank of The Netherlands undertakes the charge of valuables (in French text). (3) Regulations respecting current account (in Dutch text). (4) A copy of the Weekly Balance Sheet (in Dutch text). 168 REPORT OF THE COMPTROLLER OF THE CURRENCY. THE BANK OF THE NETHERLANDS. [History of Modern Banks of Issue, by Charles A. Conant.] There is no fixed limit upon the note issues of th&Bank of the Netherlands, but the decree of August 16, 1884, fixed the proportion of the metallic reserve at 40 per cent of the aggregate of notes and deposits. The law imposes no restrictions on the proportion of gold and silver, but since 1872 the bank has ceased to buy silver and has added as much as possible to its gold. Holland suspended the free coinage of silver in December, 1877, and has maintained her monetary system at parity with gold by treating the silver coins as tokens, redeemable in gold. The Bank of the Netherlands held 42,996,000 florins in gold on December 28, 1895, and 82,164,000 florins in silver. The principal office of the bank is at Amsterdam. 'ihere is a branch at Rotterdam, and there are 13 agencies and corresj>ondents of three different classes in 56 other localities. The circulation of the bank has gradually increased from a mean of 104,859,994 florins in 1865 to 131,656,347 florins in 1870, 175,340,677 florins in 1875, and 203,600,000 florins ($82,000,000) in 1895. The issue of notes below 10 florins ($4) is prohibited. DUTCH GUIANA. [History of Modern Banks of Issue, by Charles A, Conant.] Dutch Guiana is provided with a circulation of about 1,000,000 florins ($400,000) by the Bank of Surinam. St. Thomas also has a bank of her own—the Bank of St. Thomas, which issues notes in terms of dollars, running as low as $1. JAVA. [History of Modern Banks of Issue, by Charles A. Conant.] The bank-note circulation of the Dutch East Indies, of which the Island of Java forms the most important part, is furnished by the Bank of Java. The bank was founded in 1828, with a capital of 6,000,000 florins ($2,400,000), but the chief interest of its history to the western world is the success with which it has maintained the gold standard in Java since the suspension of free coinage in Holland in 1875. The situation in Java has been in many respects the same as in the mother country, but the experiment is one which might have seemed more precarious because of the situation of Java in the midst of silver-standard countries and the almost entire absence of gold in the reserves of the bank. Silver was for many years the legal standard of Java, but the government of Dutch India continued for a considerable time, beginning in 1818, to make the bulk of its payments in copper. This resulted in driving silver from circulation and led to the introduction of paper currency to represent the copper coins. In 1875 the Bank of Java was empowered to regulate its operations according to the principles on which the Bank of Holland was working. A bill was brought forward and passed in 1877 by the Dutch ministry for the regulation of the currency of their Indian possessions. The principal features of this bill were the establishment of the double standard on the same basis as in Holland—the formal suspension of the further coinage of silver. The parity of the notes of the Bank of Java and of the silver coins is maintained through the foreign exchanges. All commercial operations, with Holland or other countries in Europe are settled by bills drawn on Amsterdam or London, and the exchange has shown an extreme fluctuation never greater than 5£ per cent on Amsterdam and 6 per cent on London. Since 1885 the fluctuation has not been greater than 3 per cent. The bank rate has varied from 9 per cent for a time in 1876 to as low a rate as 4 per cent in 1878 and in 1886. The mean rate in 1894 was 5.28 per cent. Settlements for merchandise balances between Holland and Java are made by shipments of silver. These shipments are taken up at home by the Bank or the Netherlands against bank notes or credits at par with gold. There was an industrial crisis in Java in 1886, which was attributed in some quarters to the maintenance of the gold standard of wages and prices, but the planters adopted improved methods of production, and recent years have been years of prosperity. The majority of Dutch and English observers have been disposed to regard the fixed par of exchange maintained with gold-standard countries as more advantageous to the island under actual conditions of production than the possible benefits of the declining cost of production in gold obtained in silver-standard countries by the comparatively slow rise in wages, rents, and raw materials. The actual gold holdings of the Bank of Java seldom exceed 6,000,000 florins ($2,400,000) against a note circulation of 45,000,000 florins ($18,000,000), and gold is seldom seen in general circulation. The smaller currency consists of silver coined in Holland and the larger of the notes of the bank. REPORT OF THE COMPTROLLER OF THE CURRENCY. 169 [John Thomas Barron, United States consul.] 1. There is at the present time but one bank here organized under the law of Newfoundland, and that one a savings bank under the control and direction of the colonial government of Newfoundland. The others doing a hanking business in this colony are simply branches of Canadian institutions; and governed b^ the provisions of the bank act of Canada. 2. There are no requirements exacted in the colony of Newfoundland for the privilege of doing a banking business other than a local u bank tax ;; of $500 and $600 per annum. 3. There is no government official examiner, or otherwise, who determines when these conditions are fulfilled, other than the board of revenue, who are charged with the collection of the bank tax. This refers to the Canadian branch banks. The Colonial Savings Bank, being a Newfoundland government institution, is under direct official control. 4. All the questions under this number, so far as they relate to the branch banks (Canadian) in Newfoundland, are answered by the provisions laid down in the bank act of Canada. As regards the Savings Bank of Newfoundland, the answers are: (A) No limit on capital stock. (B) The Savings Bank of Newfoundland is managed by eight governors appointed by his excellency the governor of the colony, and serve during the pleasure of his excellency. From these eight governors three are chosen as directors. The governors must meet once a month. (C) No shareholders are liable, as the government of Newfoundland is behind the Savings Bank. (D) Annual reports are made to the legislature of Newfoundland. (E) Examined by directors and report signed by them and by the cashier of the Savings Bank. (F and G) No restrictions on loans. (H) Public revenue is security for deposits in the Savings Bank of Newfoundland. (I) No law in regard to cash reserve. (J) Surplus profits go to the redemption of the public debt. 5. Regulations for the branch banks now doing business in this colony are those prescribed by the bank act of Canada. The Savings Bank of Newfoundland allows an interest of 3 per cent on deposits. 6. Public revenue is security for deposits in the Savings Bank of Newfoundland. The Government of Newfoundland is not interested as a shareholder in the branch banks of Canada, now doing business in Newfoundland. 7. There are branches of the Savings Bank of Newfoundland at the following towns in Newfoundland, viz : Harbor Grace, Hearts Content, and Placentia. 8. Annual reports of the Savings Bank of Newfoundland are printed and presented to the legislature of the colony. The branch banks now doing business in this colony are governed by the bank act of Canada. 9. No special privileges granted to banks in this colony other than those enjoyed in Canada under the bank-act tax of $500 and $600 per annum. 10. The bank act of Canada provides for winding up insolvent Canadian banks. 11. Governed by the bank act of Canada. 12. Canadian bank notes, which are now in general circulation in Newfoundland, are a first lien on all assets of the banks issuing them, and are further secured by a cash deposit with the Canadian Government. 13. Information given refers to Canadian banks only. [Lewis Baker, minister.] 1. There ia but one class of banks in Nicaragua. This is provided for under a general banking law, and may be denominated banks of issue and deposit. They are authorized to do a general banking business, such as issuing bills for circulation, receiving deposits with or without interest, discounting notes, buying and selling exchange, etc. 2. The chief requirement in order to do business is for the officers of the proposed bank to satisfy the Government that they have in hand not less than $100,000 in silver as a basis of credit. (Gold is not known in the currency of this country.) 3. The State treasurer is the official on whom devolves the duty of determining if the law's requirements have been met. 4. There is but one class of banks in Nicaragua, and there is but one of the class. (A) This institution is now known as the "London Bank of Central America, Limited." It was founded in 1888 and began operations under the name of the "Bank of Nicaragua." It has a nominal capital stock of £600,000, divided into shares of £10 each. Only 19,567 of its 60,000 shares of capital have been issued, upon which 50 per cent has been paid in. Of the shares, one-third have been allotted to Central America and two-thirds are reserved in Europe. (B) The management of the bank is conducted at the headquarters in London, where all meetings 170 REPORT OF THE COMPTROLLER OF THE CURRENCY. of the directors are held. There is, besides, a local board, with limited powers and with two local managers. The latter are sent out from the London house. (C) The shareholders are liable for claims against the bank only to the extent of face value of their respective shares. (D) Reports of the condition of the bank are made annually and are published in the official paper of the Government. (E) The proper official of the Government may, at any time and without previous notice, make an examination of the condition of the bank. (F) There are no legal restrictions as to the amount of loans, so long as the proper reserve is maintained in the bank for the redemption of its own bills. (G) Under the bank's own regulations loans are made only on two good signatures, and for three months—being payable or renewable as may be agreed at the time of falling due; interest in all cases to be paid in advance for the period stipulated in the note. This was, four years ago, 24 per cent, at which rate this bank loaned this Government $400,000. Later the prevailing bank rate was 18 per cent, and this rate continued until a few months ago, when it was reduced to 12 per cent per annum. (H) Neither the shares of the bank nor the bonds of the Government are accepted as security or collateral for a loan; nor are mortgages on real estate accepted. (I) A cash reserve in silver must always be in the safe of the bank up to 40 per cent of the amount of notes issued for circulation. (J) The surplus of this bank equals less than 13 per cent of the paid-up capital. The surplus, as well as the annual dividends to the stockholders, is determined by the directors in London. 5. Deposits on call are accepted, but no interest on them or on daily balances is allowed. Interest on time deposits now paid ranges, owing to length of time, from 5 to 6^ per cent. 6. The Government is not interested in the bank as a shareholder. 7. This bank is itself but a branch of the London Bank of Nicaragua, Limited; but it has also a branch in Leon, one in Granada, Nicaragua, and one in San Salvador. Under the State banking law branches may be established at any point in Central America. 8. The annual report of the condition of the bank is printed for the benefit of the public in the official newspaper in Managua. 9. Banks are not taxed on their capital, circulation, profits, or on any character of property. No import duty is levied upon any of its imports. It has the right to transfer money or property of the national railroad and steamship lines free, and it has the free use of the telegraph and telephone lines. 10. In case of insolvency, banks wind up their business in accordance with the mercantile code. There are no special provisions of law applicable to banks. The directors alone determine when and by whom the affairs shall be administered. 11. The bank is permitted to issue notes up to 60 per cent of the amount of silver in its safes. 12. There is no stipulation for the redemption of its notes by the bank other than that it must retain not less than 40 per cent in silver of the whole amount of paper money placed in circulation for redemption purposes. 13. Bank notes, before they are signed by the manager of the bank and issued, are registered in the State treasury. It is claimed by the bank management here that this institution has suffered no considerable loss from its clients. Many people here claim that there is not only room but a demand for another bank and a greater amount of banking capital. I am inclined to this opinion, especially in view of the considerable increase now taking place, and which must take place in the near future, from the recent planting of the coffee crop, and the consequent need of money to handle the exchange,"etc. The raising of coffee is exceedingly profitable, and the planters are often justified in paying a large interest on temporary loans for the extension of their plantings and for handling their crops. I herewith hand you as an inclosure a copy of the last report* made public by the directors of the bank located in this city. The item u Depreciation in exchange" has, I understand, cut quite an important figure in the affairs of the bank, and accounts for the meager dividends paid to the stockholders during the early years of the bank's existence. At the time of the founding of the bank the price of exchange against this country was but a few cents. As the price of exchange mounted higher, the bank set apart a " Reserve fund for depreciation in exchange," and divided it from time to time among those original stockholders the value of whose sharea was constantly diminishing. For the past year there has been no material advance in the value of gold here; hence the price of the bank shares has gone up. The shares of this bank now command a premium of 50 per cent upon the amount paid in. * From this report it appears that the total liabilities of the bank on December 31, 1894, were £319,956, of which the paid-in capital amounted to £97,835; the reserve fund and fund for depreciation in exchange, £23,734; unclaimed dividends, £347; deposits, £89,752; bills payable, £492; notes in circulation, £99,270; profit and loss, £8,525. The assets were: Cash on hand and with bankers, £154,075; bills receivable, £88,526; loans, etc., £68,759; bank premises, etc., £8,595. EEPORT OF THE COMPTROLLER OF THE CURRENCY. 171 [Eben M. Flagg, United States vice-consul.] 1. The following banks are in actual existence in Paraguay to-day: Banco Agricola, Banco Paraguay y Rio de la Plata, Banco Territorial, Banco Mercantil, and Banco Milleres & Co. They may be classified as follows, translating as literally as possible from their statutes: Banco Agricola, to stir up and protect agriculture (Government bank). Banco Paraguay y Rio de la Plata, an incorporated society under law of June 25, 1889. The Government is a heavy shareholder. Banco Territorial, an incorporated society having for its object to speculate in land, purchasing areas that may be presented for subdivision under the security of an increase in value of the property; to form districts (wards) in those places that are already set apart, selling the ground on easy conditions of payment, putting it within the reach of all; to exploit the markets of Buenos Ayres, La Plata, Montevideo, and other centers of population; to cause unproductive land to produce income (such land as the society shall purchase and consider convenient to retain); to fence,build, and mortgage; to make leases, form savings bank, give money on bill of sale of properties, and to perform all other operations, civil or mercantile, as shall tend to increase land values. Moreover, it has the following objects: (1) Receive deposits at interest, in current account at sight or on time; (2) to discount and loan; (3) to realize any class of credit operations; (4) give and take exchange upon markets at home and abroad, and (5) finally, to practice whatever banking operations, civil or mercantile, that its administrative council may find convenient. The bank is free of Government control. Banco Mercantile del Paraguay, an incorporated society whose object is to aid the commerce of Paraguay by banking and commission operations. To fulfill this object the society may practice the following operations: (a) Receive deposits with or without interest; (&) discount documents with two or more indorsements, exchange received, collect promissory notes or other commercial titles, always giving preference to the discounting of commercial paper; (c) do every class of exchange; (d) make advances and establish credits upon titles and precious metals, general merchandise, products of the country—harvested or about to be, present or future—with such guarantees as the directory shall esteem convenient; (e) buy and sell on commission products of the country; (/) make advances on consignments to brokers; (g) receive and fulfill every kind of commercial order or commission; (h) to perform any other operation that shall not be prohibited by the general law and that appertains by its nature to a banking establishment. The bank is not under Government control. Banco Milleres & Co., devoted to discounts and exchange. A commercial partnership, Miller & Rieva, doing principally a business in yerba mate (Paraguayan tea) grown on their own estate, and the credit of the firm pledged to the fulfillment of its banking obligations, and entirely independent of Government. 2 and 3. A banking institution may be established in Paraguay with the same facility that any other corporation, society, partnership, or individual enterprise may be. On application to the Government (Congress) stating the object of the corporadon and the internal organization which is to govern it, and which should not contravene any organic law of the Republic, permission will be issued to the banking company to establish itself under full recognition by the law. The bank will then be entered in the commercial register and from that moment may proceed to business. In case the bank is to enjoy any special privilege under Government, such special privilege is made the subject of special legislation, the Government and the bank entering into such contract with one another as they may find to be mutually agreeable. 4. (A) In the nongovernment banks the directory of the bank emits its share of capital stock in such proportions and at such times as it considers to be convenient, and in accordance with the best business interests of the institution. The Government, as such, has no more control over the bank's capital than it would have over the capital of a mercantile house. When the bank enjoys a Government privilege, the launching of its stock may be made the subject of special arrangement with the Government. In the case of the Banco Paraguay y Rio de la Plata, where the Government was a heavy shareholder and gave said bank right to issue notes, the regulations governing its* capital stock were as follows: Capital of bank $8,000,000, Paraguayan money (at the time of opening the bank the dollar was worth silver, or about 66f cents gold; it is now worth about 18 cents gold), divided into 80,000 shares of $100 each—$70,000 intended for subscription, $10,000 for compensation of initiators and founders, to be delivered to them and considered as paid up, the burden of such full payment being " distributed at so much per share and paid proportionally on installments paid in advance by shareholders/' Of the 70,000 shares intended for subscription, 20,000 to be taken up by Government, and Government to give a bond for £400,000 to be negotiated at 6 per cent j 30,OOQ to be taken by the syndicate (the 172 REPORT OF THE COMPTROLLER OF THE CURRENCY. syndicate must not be confounded with the initiators); 20,000 offered for public subscription—shares to be paid as follows: Twenty per cent previously to the opening of the bank; 30 per cent by three installments of 10 per cent, in three, six, and nine months; 50 per cent when so determined by the general ltmeeting of shareholders in conformity of the law. (B) (Translation.) Article 4. The Banco Agricola shall be in charge of a directory of five members, of which one shall be president. They shall be named by the Executive with consent of the Senate, and preferably those who are in the farming trade." The Banco Paraguay y Rio de la Plata is managed by a board of nine directors, of which five are named by the bank and four by the Government. The Banco Territorial is managed by a board of eleven directors; Banco Mercantil by seven, and Banco Milleres & Co. is managed by the two partners. (C) The liability of shareholders for claims against the bank is limited to the value and amount of their shares. That is to say, the creditors of a bank could not force any payment nor encroach upon any property owned by the shareholder other than was invested in the bank shares. (D) Reports of the condition of the bank are printed and published yearly by the management and distributed among shareholders, depositors, etc., and often a balance sheet is advertised in the public prints. (E) Nongovernment banks are not subjected to any official espionage. The Banco Paraguay y Rio de la Plata was permitted to issue three paper dollars for every silver dollar in its vaults, and a Government official, whom the bank paid $200 per month, made the examination monthly, in order to report that the paper note emission was not in excess of what was allowed by law. (F and Gf) The directories of the different banks, either at their general or special meetings, decide upon the advisability of diminishing, restricting, or suspending loans, and it should be remarked that they generally lean to the side of conservatism, and all the banks act in unison, so that frequently the money market is tied up and speculators obtain enormous interest. (H) Already answered in question 1. (I) With the exception of the case of the Banco Paraguay y Rio de la Plata, above reported, no cash reserve is exacted. (J) Have never known such a contingency to occur as the accumulation of surplus. 5. The regulation governing receipt of deposits is to never reject it, but always receive it, and the following is allowed by all the banks: Paper, current account, 4 per cent annual; paper, thirty days deposit, 5 per cent annual; paper, sixty days deposit, 7 per cent annual; paper, ninety days deposit, 9 per cent annual; paper, one hundred and eighty days deposit, 10 per cent annual. Gold coin, current account, no interest; gold coin, ninety days deposit, 4 per cent annually; gold coin, one hundred and eighty days deposit, 6 per cent annually. It will be remarked from the above that gold coin has not one-half the interest-drawing power that Paraguayan paper has. 6. The interest of the Government as a shareholder in the Banco Paraguay y Rio de la Plata has already been mentioned. In compensation for this interest, 5 per cent of the profits of the bank were to go to the Government. For the benefit of the Banco Agricola, which is more closely allied with the Government, the following taxes are imposed: A specific exportation tax of 2 cents for every 25 pounds of yerba mate' or tobacco; 2 cents for every hide exported; 1£ cents for every vara (32 inches) of hard wood 10 by 10 square; one-half cent for every vara of boards 1 inch thick and over; 3 cents for every railroad sleeper; 50 cents for every beef that is butchered for public consumption. What benefit the Government is to derive from these tax-gathering powers accorded to the Banco Agricola it is difficult to see, unless it is supposed to fr d its compensation in the improvement7 of the agricultural business which the bank is expected to "stir up" and "protect/ However, Paraguay is not the only country whose people are supposed to be "stirred up" and "protected" by having burdens laid upon them, and probably it does not make much difference to the people, so long as they are "protected/ 7 whether they are prevented from baying or whether they are prevented from selling. 7. The banks are permitted to conduct branch offices and some of them have opened such in the larger towns outside the capital, but what seems strange to the writer is that in view of the enormous interest that the very best security yields to capital, no foreign banking institution has opened a branch in Paraguay. I could only account for it on the supposition that there must be some specific restriction operating to prevent it, and so addressed a note to the secretary of state on the subject. It will be seen by the note and answer, which, together with translation, is hereto annexed, that such an institution as I describe would meet with no legal disqualifications, so the reason must be sought in the fact that Paraguay is so far out of the way of capitalistic ventures that the large interest which capital draws is not known abroad, and that, with some other facts to be mentioned at the close of this article, will explain what would otherwise be considered an anomalous condition. 8. Information as to the condition of the banks is given through the medium of the public press and reports printed in pamphlet form that are issued under the name of " memorials" every year. REPORT OF THE COMPTROLLER OF THE CURRENCY. 173 9. The Banco Paraguay y Rio de la Plata pays annually 5 per cent of her profits to the Government in compensation for the concession she obtained. Private banks pay biennially a patent or license for permission to work, and it amounts to 1,000 Paraguayan paper dollars yearly, or about $170 United States gold. 10. As to the closing up of the business of insolvent banks, Mr. Schantens, attorney for the syndicate of the Banco Paraguay y Rio de la Plata (in liquidation), writes me as follows: "In the same manner as bankrupt merchants. The court appoints a receiver and the liquidation follows. The Government does not interfere. The responsibility of directors exist only on paper (in name)." The writer regards the case as only partially stated. What the learned attorney states may be the theory from a legal point of view, but what has actually occurred and is occurring may be inferred by reading a description of the liquidation of the Banco Nacional, which is here appended. When the writer came to Paraguay, ten years ago, this bank, backed by the Government, was emitting all the paper currency then extant. Its notes read, "The Banco Nacional will pay to the bearer and at sight dollars, in gold or silver coin, legally current according to law," etc. The monetary gold standard was the £. It stood for $5, and no one thought of paying any more than five paper dollars for a British sovereign. Paraguay was then in intimate commercial relations with Argentina, and on the 1st of January, 1885, Argentina suspended specie payments, or rather permitted its National Bank to do so, and the Argentine National Bank was then accounted the third richest bank in the world. To the astonishment of everybody, Paraguayan paper did not depreciate. The same causes that had produced the financial crisis in Argentina (which will be described later on) had not yet commenced to operate in Paraguay, and month after month went on without much depreciation of her currency. At lengh, toward the end of 1885, certain events occurred which drove up the gold premium to nearly 50 per cent. But the National Bank of Paraguay was not considered on that account insolvent, for by an interpretation of the law the expression "will pay in gold or silver coin" was understood to mean that the bank had the option of redeeming in silver coin, but the holder of the note had not the option of demanding gold coin; and so silver coin was at a discount of about 33^ per cent—it corresponded with a gold premium of 50 per cent—and so matters stood till 1889, about which time the Banco Paraguay y Rio de la Plata was founded, redeeming its notes in silver, but the following year both banks were subjected to a "run." Their silver reserve was drawn out by holders of notes anxious to realize, and gold went speedily to 300 per cent. There was now no pretext for declaring that the National Bank was not insolvent, for any society or individual who does "not fulfill the conditions subscribed to in their commercial paper can not be considered solvent. An individual under such circumstances would in any honest community have been instantly and legally confronted by his liabilities and his assets demanded. But the Banco National explained that large sums were owing to them by many people, some of them officials high in authority, who were perfectly solvent and only suffering from temporary pecuniary embarrassments that no doubt would soon pass over; that these people were large landowners, and the price of land was sure to go up after the financial crisis had passed over. So, instead of demanding the bank to show what it could pay, and—even if it were 7only 20 cents on the dollar—forcing it to pay, the bank was granted a ten years extension of time (movatorio>, and all its debtors were expected to pay off their indebtedness in ten years at 12 per cent a year, quarterly payments. Nearly all the money had been borrowed from the bank during the time of specie payments, but the bank was to receive the money back in depreciated paper, for by 1891 gold had reached a premium of 600 per cent; but the payments were not made, and in August of 1894 the bank agreed to compromise with its debtors for 50 per cent. Some debtors did pay up at that rate and received discharge of their obligation, but there was such a rush foi money, for the offer did not last but three months, that interest rose enormously, and many could not in the straitened condition of the money market avail themselves of the opportunity. The price of gold remained virtually the same, though the bank did get in some hundreds of thousands of dollars. What debts it has not been able to collect are now about to be handed over to a syndicate, but it is not certain when the business will be finally settled, and a liquidation that was commenced four years ago may drag on two years more, producing in the commercial community a continual doubt about the value of the circulating medium, which will prevent the making of contracts, since no man can prophesy how they may turn out. 11. The banks, such as were allowed to issue notes, issued, as I have already stated, three paper dollars to one silver dollar. 12. The only provision now made for the redemption of the notes is through the custom-house. Custom-house taxes are either paid directly in gold coin or in papei money at the quotation furnished by the Government and 5 per cent of the customhouse receipts are set apart for the redemption of the notes each month. This business is conducted by the Banco Agricola, and there is still some question as to the 174 REPORT OF THE COMPTROLLER OF THE CURRENCY. best means of carrying out the provisions of the law—some contending that it would be better to burn the notes coming in from this source, and others not to burn them but buy gold with them, which gold should be deposited in reserve. There must always remain, however, this objection to a custom-house tax for such a purpose, that it lacks the element of steadiness. A general 25 per cent tax that passes off very well this year when the harvest is good and no locusts to eat it may prove a serious burden'next year if the country suffers from drought and locusts. The merchants will complain loudly against the tax, not so much on account of its amount as upon their inability to re-collect it from the consumer, and they will sto|) importing, thereby crippling the resources of a Government that depends more for its existence upon taxing commerce than any other means. The merchants have done so before, compelling the Government to yield, and there would be nothing to prevent them from doing so again. 13. In 1885 the population of Paraguay was only 250,000, while it is to-day (1895) more than 600,000. fn 1885 the paper emission was $4,000,000 and redeemable in gold; to-day (1895) it is about $5,000,000, but its gold value is only $850,000, or about $1.35 gold per capita. The foreign debt, counting accumulated interest for several years, is only $5,000,000 gold. The home debt is about $1,000,000 gold. The country, besides possessing rare beauty in the way of natural scenery, has most abundant natural wealth, requiring only the application of labor to develop it. The constitution (with the exception of one clause, that dictates what theological opinions the chief magistrate shall profess) is considered to be as fair to mankind as any constitution can be. The climate is mild and the soil productive. On the best security, such as bond and first mortgage, the capitalist can get 1% per cent a month, or 18 per cent per annum. This large interest is not due to insecurity of the circulating medium, for the loan can be made on a gold basis if desired. In stating 18 per cent per annum as the rate of interest the writer is well within the limit, as many loans are made at 24 and 36 per cent per annum, and bills discounted at the same rate, with interest paid in advance every three months. Under such circumstances it may well be asked why capital is not pouring into the country and the banks flourishing. The answer may be dated back to 1885. At that time the war of extermination had been closed for more than twelve years. The country, no longer under a dictatorship, was in possession of a constitution and had entered the family of nations as a sovereign State, fully recognized as such, sending to and receiving from all the principal nations her consular and diplomatic representatives. At this time the Government had in its possession a large quantity—many square leagues—of fiscal land, which amount was considerably increased by the concession of the Paraguayan Chaco through the arbitration award of President Hayes. Instead of retaining these lands for the benefit of actual settlers the Government was induced to make sale of them to speculators under the belief that they would colonize them. It is needless to say that all hopes of that nature have proven fallacious, and the speculator is doing as much to prevent the settlement of the land as though he were an enemy to the progress of the country, for he manages to keep at least one step in advance of the immigrant, so that if the land is not actually monopolized it is relatively so, while the absorption of so large a quantity of the element that everyone must make use of in one form or another operated at first to drive up rents to an enormous price, and landowners, capitalizing their possessions on this fictitious basis, were enabled to borrow from banks on bond and mortgage sums that actually amounted to far more than the intrinsic value of their pledge. It was useless at the time to point out the danger of the situation; if one bank would not lend the money another would, and the banks soon became swamped with lands whose actual value was worth hardly one-fourth of what had been loaned on them. The same thing had happened before in Argentina, but Paraguay, in the fever of excitement, did not heed the warning. Had the lands been in the possession of actual settlers, of laborers whose work was producing wealth, and whose wants were employing the wealth produced by others, Paraguay would soon have been in possession of sufficient collateral, not only to have redeemed the notes of her banks, but to have warranted an increased emission. As it was, some squatters were driven off the lands, and vagabonds drifted into the cities, immigration ceased, and merchants who had to pay their outside debts in gold (oin soon found that there was little in the country to attract that gold coin, so that $2, $3, and very soon $4 in paper was requi red to pay for $1 in gold. While labor was thus suffering, it was at the same time bearing all the burdens of Government and privilege was going scot-free. Any person might own a million dollars7 worth of land in the heart of the capital, levying rent in every direction on the labor of others, and for that enormous privilege did not return one cent to the community. In fact, to make matters worse, labor had to bear an increased burden of taxes by raising- the license fees that a man had to pay for permission to work at his trade or profession. No one was exempt—physicians, dentists, carpenters, down to boatmen, porters, and washerwomen were all taxed as though industry were so heinous a crime that if it dared to show itself it must be immediately punished by a line. At this crisis some REPORT OF THE COMPTROLLER OF THE CURRENCY. 175 few men in Congress, with Don Jose Segundo Decoud at their head, succeeded in obtaining the passage of a law imposing a tax on land values in the hope that owners of valuable land would be stimulated to put it to some use and give employment to labor. The land of the country was Aalued by Government assessors without much difficulty, improvements being valued separately, and though the tax was only $3 per thousand, its beneficial effect was immediately apparent. Fences were erected, fields planted, and deserts artificially created were being redeemed. Soon after the passage of the law Congress adjourned. It had taken months of labor to frame and pass the law, but when Congress met the following April it took only ten minutes to repeal it, and matters relapsed into their former condition, gold reaching 700 per cent premium at one time last year. However, there is now another project for a land tax before Congress, and since its agitation commenced gold has fallen more than 100 points. One would think that this fact alone should indicate the direction that legislation ought to take in order to increase the prosperity of the country and establish the banks once more in the position of security that such institutions must necessarily occupy for the well-being of the citizen and the credit of the nation. [Inclosure.] CONSULATE OF THE UNITED STATES, Ascuncion, Paraguay, October' 3, 1895. SIR : Can you kindly inform me if there is any legal impediment in the Republic of Paraguay to the establishment of a bank here that is a branch of a foreign bank? During the ten years since I have been a resident of your country I have never known of any banking corporation having its principal establishment in another country to open a branch in Paraguay, notwithstanding the high rate of interest that has obtained here. This information is requested most respectfully for the Department of State of the United States, and your answer at the foot of the present document will be most gratefully appreciated by Your obedient servant, EBEN M. FLAGG, Vice-Consul of the United States. Hon. JOSE SEGUNDO DECOUD, Secretary of State for the Republic of Paraguay. Distinguished Senor Vice-Consul: In reply to the request that you make me in the preceding note, I should inform you that in my opinion there exists no law or disposition that prohibits the establishment in this country of a branch of any foreign bank. To enjoy the rights that the Commercial Code accords, it should solicit the approval of its statutes by the Executive and its consequent inscription in the respective commercial register. It is understood that the banks do not possess the privilege of emitting paper money without the authority of Congress. JOSE S. DECOUD. PERSIA. [Alex. McDonald, United States minister.] 1. There are only three banks in Persia—the Imperial Bank of Persia, a British institution, founded in 1889 under royal charter (British) and a special Persian firman; the Banque de Prets de Perse, a Russian establishment, which has, it is said, been taken over by the Russian Government, and a branch of the International Bank of Moscow. 2. A permission or firman of the Shah, which is,a matter of private negotiation. 3. Once a bank established, rules are so elastic and Persian superintendence so lax that it requires only little management to evade regulations. 4. With regard to the Imperial Bank of Persia, the capital, originally £1,000,000, has been reduced to £650,000 through fall of silver. Number of shares, 100,000 [£10 (£6 10s.)] which are fully paid up, with a reserve liability in case of liquidation of £10 per share. (B) A board of directors in London undertakes the administration of the bank and appoints a chief manager in Persia and local managers in various towns of Persia, also in Bombay. In London there is only a secretary under the control of the board. (C) Reserve liability of £10 on liquidation. (D) Reports published yearly in London. (E) Government official certifies the existence in Teheran of a reserve of 33 per cent in specie (gold or silver) against the issue of bank notes, of which the Imperial Bank has the monopoly. (F, G, H) Conditions fixed by the board from time to time, but loans on real property require Persian Government approval. (I) See E. (J) At discretion of board. Banque de Prets, capital 3,000,000 francs, say, £120,000; no issue of notes; board in St. Petersburg; little or 176 REPORT OF THE COMPTROLLER OF THE CURRENCY. no Persian Government control5 business almost exclusively loans on jewelry or any objects—in fact, pawnbroking. International Bank of Moscow; banking principally connected with raw produce; board in Moscow; no issue of notes; practically no Persian control. 5. The Imperial Bank of Persia allows an interest on (silver) deposits of 4 per cent per annum for six months, or 6 per cent per annum for one or more years. No interest on deposits at call. The Banque de Prets and the International Bank of Moscow allow the same, but give 3 per cent on deposits at call. 6. Not at all, but in the Imperial Bank of Persia it has a royalty of 6 per cent, minimum £4,000, on net profits. 7. The Imperial Bank of Persia has branches at Tabriz, Resht, Meshed, Isfahan, Yezd, Shiraz, Bushire. The other banks have no branches, 8. By annual reports published in London for the Imperial Bank of Persia and in Russia for the other two banks. 9. See 6 for the Imperial Bank of Persia; 10 per cent of profits of the Banque de Prets (no profits have been made). We think no stipulation for the International Bank of Moscow. 10. The New Oriental Bank Corporation had branches in Persia, which were bought up by the Imperial Bank of Persia before the insolvency of the former. No other case to report. 11. The Imperial Bank of Persia issues notes against 33 per cent reserve under Government control to an amount equal to the extent of its capital. 12. Notes are paid on demand and reissued. 13. The paper of the chief manager of the Imperial Bank transmitted and the annexed report give all information obtainable. There are a number of private bankers in Persia, but it is impossible to obtain any information concerning them. The Imperial Bank of Persia.—Balance sheet, September 20, 1894. ASSETS. Cash in hand and at bankers Coin in transit £121, 204 63, 654 £184,858 Investments: Imperial Government of Persia, 6 per cent loan, 1892, £151,000 at 90. 135, 900 Loan to Persian Government 26,724 New Oriental Bank Corporation, Limited 4, 000 Bills discounted, loans, etc 1,072, 837 Bills receivable, including past-due bills 478, 535 Bank premises, etc , 17, 407 Total 1,920,261 LIABILITIES. Capital Reserve fund Notes in circulation Deposits: In London In Persia (in silver) Elsewhere (in silver) Bills payable, etc Profit and loss account , 1, 000,000 14,489 95,515 £17,189 228, 704 23, 268 • .' Total 269,161 510,139 30, 957 1,920,261 [Richard R. Neill, United States charge d'affaires.] 1. The three banks established in Lima may be classified as loan and discount banks. One of these banks, the " Banco del. Callao," has a "Seccion Hipolecaria." 2. A license from the municipality would be necessary to establish a bank, and for obtaining same a copy of the statutes should be presented for inspection. 3. The municipality. 4. There are no regulations for banks. The liability of the shareholders does not go beyond the nominal value of the shares, A statement showing the general REPORT OF THE COMPTROLLER OF THE CURRENCY. 177 balances on the last day of each month has to he published in one of the local papers. There is no examination Ly Government official; no restrictions on the amount of loans. The securities for loans are generally shares of companies domiciled here, like gas, water, infernal debt, railways, or any kind of document which, to the judgment of the hanker, could be considered as good. The amount of cash held by each of the banks is 1,000,000 (national money) soles, but it is owing to the bad state of business that a good part of this sum is not invested. There are no restrictions in regard to cash reserve, but of course all banks are careful to have enough to meet their requirements. 5. The banks receive money in current accounts and allow 2 per cent per annum; for deposits at sight, 2 per cent per annum; for six months, 3 per cent per annum, and one year, 4 per cent. 6. The Government is not interested in any of the banks as shareholder. 7. All banks are allowed to conduct branches. 8. By the monthly statement published and by the half-yearly reports presented to the local shareholders. 9. Five per cent of the net profits is paid for patent. 10. Nothing can be said about this. 11 and 12. These matters should have to be put before Congress and discussed. PORTUGAL. [George William Caruth, United States minister.] 1. The banking system of the Kingdom of Portugal is conducted by the Bank of Portugal, which is the fiscal agent of the Government, and such other banks as may be organized and conducted under the decree of July 12, 1894, 2. The Bank of Portugal has been in operation many years. The organization of other banks consists in obtaining the special permission of the Government to so organize, and in the subscription of a capital stock, the amount to be determined by the shareholders, which must be paid in. 3. This is determined by the commercial section of the department of public works, which is charged with the control of the entire banking system. 4. (A) The capital stock of the Bank of Portugal was fixed by the law of its creation at 13,500,000$000 reis, divided into 135,000 shares of 100$000 reis each. As to other banks, it is determined by the shareholders at the time of organization what the capital stock shall be. (B) The Bank of Portugal is managed by: (1) A governor appointed by the Government, and who holds his office for three years, subject to removal; (2) a board of directors composed of ten members, presided over by the governor, and elected by the shareholders at the annual general meeting; (3) a fiscal board composed of seven members, elected by the shareholders at the annual general meeting, charged with the duty of examining the weekly balance sheets of the bank, seeing that the statutes, rules, and orders relating to the administration of the bank are duty complied with, and to examine the books and accounts, the safes, vaults, etc., of the bank whenever deemed necessary, with the securities on which loans have been made. As to the other banks organized under the general banking law, known as the decree of July 12,1894, a different rule as to the management obtains. They are managed simply by a board of directors selected by the shareholders. The law, however, disqualifies the following persons from serving on the board: (1) Any person having a relative engaged in any of the managing departments of the same bank; (2) any person who is a partner of any other member of the board; (3) any person who is a member of the board of directors of any other bank. (C) Shareholders are not liable in the event of insolvency of the bank; they lose their investment and nothing more. (D) Reports as to the condition of the Bank of Portugal are made weekly. Other banks make monthly reports to the commercial section of the department of public works. These reports are then published in the official journal. (E) The examination of the condition of the Bank of Portugal is made by the governor of the bank, who is appointed by the Government as a general supervisor of the business of the bank. Examination of all other banks is made by the commercial section of the department of public works, being the same office to which the monthly reports are made. (F) There are no restrictions on the amount of loans made by the Bank of Portugal except the provision requiring certain reserves, to be mentioned hereafter. In the case of other banks, in addition to thereserve required, to be set out hereafter, the law provides that when the balance sheets show securities for loans of a fluctuating character there shall accompany them a detailed account of each security. (G) There are no other restrictions on loans except loans secured by the shares of the bank shall not exceed 15 per cent of the capital. (H) The law does not provide for any particular class of securities to be accepted on loans; that is left to the judgment and discretion of the management. (I) The bank of Portugal is required to have two reserve funds, viz: 20 per cent of the paid-up capital; formed by a yearly CUR 96, PT 1 12 178 REPORT OF THE COMPTROLLER OF THE CURRENCY. contribution of not less than 5 per cent taken from the net profits, which is destined to constitute a supplementary capital as the bank's permanent reserve, and a fluctuating reserve limited to 10 per cent of the capital, formed by a yearly contribution of not less than 5 per cent taken from the net profits, for the purpose of making good any losses or depreciations. Other banks are required to maintain a reserve of at least 20 percent of the amount of the deposits. (J) There is no provision as to accumulation of a surplus except that mentioned in a preceding section in relation to the Bank of Portugal. 5. The banks may and do allow interest on deposits, but the law requires that the amount allowed shall never exceed half the average rate of discount at the Bank of Portugal during the half year preceding the settlement of the interest. 6. The Government is not a shareholder in any of the banks. 7. The law permits the banks, if they see proper, to conduct branch banks or offices. 8. The public is advised as to the condition of the banks by the publication of the reports in the official journal, the Diario de Governo. 9. Thers are no special taxes or burdens imposed upon the banks in return for the privileges granted them. 10. When a bank fails to fulfill entirely or in part the obligations incurred in the course of its operations, the Government appoints a commissioner of its own, whose duty it is to act with the directors until the settlement of the crisis, either by restoring the normal state of affairs or by a declaration of bankruptcy. 11. The only bank issuing bank notes is the Bank of Portugal. The entire paper currency of the Kingdom, and there is no other sort of money in circulation, is issued by that institution. 12. There is no provision for the redemption of their paper currency, It is supposed, however, to be in some way protected by gold, silver, and bronze coins in the vaults of the'bank. 13. Banks are forbidden to buy on their own account their own shares. Shareholders having snares pledged at the bank are not qualified to take part in general meetings to represent such shares. Banks are forbidden to draw from the reserve fund in order to complete a dividend any sum exceeding one-tenth of the amount of the reserve, and this deduction must be replaced, as far as possible, in the next succeeding year. Balance sheets mustJbe signed by an acting director and by the manager or bookkeeper, who shall certify as to its accuracy. The present charter of the Bank of Portugal dates from January 1, 1888, and is to continue for the term of forty years. [E. Alexander, United States minister.] 1. Joint-stock and private banks. 2. In the case of joint-stock banks established with foreign capital, the law prescribes that the majority of the board of directors be Roumanians, that the seat of the company be in Roumania, and that the statutes must be submitted to and approved by the Roumanian Government. In the case of private banking firms they are required to register the firm, stating the amount of capital placed in the business by each of the partners and giving the names of the same. 3. To the best of my belief the commercial tribune determines when these conditions have been satisfied. 4. Of the only two joint-stock banks here I inclose the statutes. 5. There are none, and the banks here do not make a business of receiving deposits. The Government Caisse des D6p6ts et Consignations receives deposits and allows about 3 per cent interest on money deposits for any time beyond sixty days. For any time less than this no interest is allowed. The rate of interest is subject to change. 6. The Government is interested only in the National Bank of Roumania to the extent of one-third of the capital. 7. Yes. 8. The joint-stock banks have to publish their balance sheets annually. 9. There are no special taxes for banks. They are taxexL in proportion to the capital. 10. Up to the present, cases of banks becoming insolvent have not been known in Roumania. So far as I can find out, there is no special law for the closing up of the business of insolvent banks, but I presume that the ordinary commercial law would be applied to such cases. 11 and 12. The only bank in Roumania allowed to issue notes is the National Bank. The bank has to hold a cash reserve in gold of 40 per cent of the amount of notes issued. 13. The notes issued are redeemable on presentation in gold only. REPORT OF THE COMPTROLLER OF THE CURRENCY. 179 BULGARIA. [History of Modern Banks of Issue, by Charles A. Conant.] The bank-note circulation of Bulgaria is issued by the national bank which was founded on February 8, 1885, by the Government, with a capital of 10,000,000 lei ($2,000,000) in gold. The bank has the exclusive privilege of issuing notes, and they are received in the public depositaries and in all other offices of the Government. It is required to hold a cash reserve in gold equal to one-third the value of the notes in circulation and to redeem the notes on demand at the central office or at any of the branches. The governor of the bank is named by the Prince upon the nomination of the minister of finance, and four administrators are appointed in the same way. The Government is represented by two delegates, one a counselor of the court of accounts and the other a member of the ministry of nuance, who exercise official supervision over the operations of the bank. SBRVIA. [History of Modern Banks of Issue, by Charles A. Conant.] The bank-note circulation of Servia is issued by the National Bank of Servia, which was established by the law of January 6, 1883, subsequently modified by the law of September 23, 1885. The capital of the bank is 20,000,000 dinars ($4,000,000). The privilege of the bank is fixed for twenty-five years and includes the monopoly of note issues. The notes of 10 dinars ($2) are redeemable in silver and those of larger denominations in gold. The bank is authorized, however, to redeem in silver at its market value in a proportion fixed by the minister of finance upon the special petition of the bank. Silver may also be substituted for gold to the amount of not more than 25 per cent of the cash reserve, and the bank is not permitted to increase its note issues above two and a half times its reserve. RUSSIA. [Clifton K. Breckinridge, United States minister,] 1. The different classes or kinds of banks are seven in number. First, there is the Imperial or State Bank, which is not a sharehold bank, but is a part of the treasury machinery of the Government. It issues the Government notes, similar to our greenbacks, has branches in various parts of the Empire, and does a general banking business, such as receiving deposits, discounting paper, and dealing in bills of exchange. This is the only bank of issue. All other banks are sharehold or stock banks, and the Government, While it has control over them, which will be explained farther on, has no stock or interest in any of them. The second class is the commercial banks, which do a general banking business. The third class is the discount banks, which make a specialty of discounting paper and making loans on stock, bonds, etc. They are closely akin to commercial banks, but are nevertheless classed separately. The fourth class is the Lombard banks. These make loans only on movable property. They are virtually pawn shops, though the business is upon a far more extended scale than the pawn business is supposed to be in the United States. They are said to be closely overlooked by the Government, and admirably conducted. The fifth class is the mutual credit banks. In banks of this class the interested parties are associated by membership. They are also called mutual credit societies. New members are accepted upon being properly recommended, and at the time of joining they are given a certain amount of credit, which they can use by giving their notes whenever they wish to do so. They are required, upon joining, to deposit, as apart of the permanent capital of the bank, 10 per cent of the credit that they will be entitled to command. This is equivalent to holding paid-up stock to the extent of 10 per cent of the credit the bank is permitted to give them. This deposit, however, is not deducted from their line of credit, and the working capital of the bank is made up of such deposits from those who make them simply as an investment, and of the current deposits of the members. The principal business of these banks is discounting paper, which, as indicated, is restricted to their own membership. The sixth class is known as the land property banks. They are permitted to make advances only upon lands in the provinces, and are equivalent to our farm-mortgage companies, with this distinction, that they issue 4 and 4^ per cent bonds to the borrower to the extent of the loan, and the borrower gets his money by selling these bonds. He can also make his payments to the bank either in money or in bonds. Sometimes the borrower makes and sometimes he loses by this operation. Much information in regard to the business of these banks is contained in dispatch No. 90, of June 12, 1895, by Mr. Pierce, charge* d'affaires, to which reference is made at the State Department. The seventh class is the town credit banks. They are limited to making loans upon city and town real estate, improved or to be improved, 180 REPORT OF THE COMPTROLLER OF THE CURRENCY. and they issue 4£ per cent bonds to the extent of their loans, as the land banks do. The above exhausts the list of the different classes or kinds of banks. 2. The requirements which must be met to enable a bank of any class to begin business are not definitely fixed, and hence they can not be definitely stated. In a general sense, the proposal must come within one or another of the foregoing classes, unless those desiring to organize a bank can devise some new branch of the business. They form their plan and make their rules or statutes for their own government, and submit the whole to the ministry of finance. It is accepted, with or without change, or rejected, by the ministry, or, officially speaking, by the Emperor, as may appear advisable at the time. There are doubtless some general rules which serve as a guide in the matter, and which are not lightly departed from, but the latitude appears to be largely one of broad and varying discretion, according as the proposition may commend itself at the time. 3. A bank having been authorized to begin business, the right to continue is practically determined by the ministry of finance, to whom it is required to send monthly reports of its transactions, a report of shareholders' meetings, and a copy of all published statements of its affairs. 4. The regulations governing each class of banks are too numerous and varied to admit of reply, except by noting a few leading points and referring to the accompanying translation of statutes for fuller details. This follows from what is stated about the requirements to begin and continue the transaction of business in Nos. 2 and 3; but I take up your points in their order and remark upon them separately as the facts may seem to warrant. (A) Capital stock is not subject to any regulations that I know of except such as may determine the amount and time of payments prior to beginning business. (B) As to the management of banks, reference must be had to the accompanying statutes. (C) The liability of shareholders for claims against a bank is always limited to the amount of their paid-up shares, they being the last to realize in case of failure, but not subject to any further liability or assessment. (D) Reports of the condition of the bank are covered by reports of transactions and condition, as stated in No. 3. Newspaper publication therein referred to is general and obligatory. (E) Government officials examine the books and affairs of a bank at the discretion of the ministry of finance, but such an examination is seldom made if a bank appears to be going on successfully and satisfactorily. (F) As to restrictions on the amount of loans, they are of a varied character. Land and loan credit banks, which issue bonds to the extent of their loans and there stop, are under a very clear, though liberal, restriction. In the case of a commercial bank, the oldest in the Empire, it can not exceed, as regards the relation between loans and security, 80 per cent of the market value of merchandise, 80 per cent of the same value of stocks, and 90 per cent of Government bonds. No relation is specified between loans and deposits and capital, except such as may be embraced in a general restriction that all business at any given time must not exceed ten times th e volume of the paid-up capital and surplus. While it does not bear strictly upon this point, yet I will add that in buying and selling exchange it must not exceed at any time one-fourth its paid-up capital, plus one-half its surplus or "reserve," as they call it, there being in this case, and generally, so far as I am now informed, no definite reserve in the sense in which the word is used in the United States. (G), (H), and (I) are practically covered, as far as I am able to cover them, by (F). I think what is there said states the general policy as definitely as it permits of being stated, and that it will be more satisfactory to you to refer to the inclosures for further details than for me to attempt to enumerate them or to generalize upon them. (J) There are no uniform regulations about the accumulation of surplus. Having finished this list of interrogations, I will add that all of these points, of course, have such judgment passed upon them as can be exercised by the ministry of finance, which oversight, being backed by peremptory power, combined with the natural prudence of the interested parties who havo been permitted to do business, secures much better results than would be supposed. By way of illustration, I am told that only one bank has failed in St. Petersburg, whero thirty are doing business, within the past ten years. 5. The only regulation in regard to the receipt of deposits, of which I am aware, is as to the amount. In one charter the limit the bank can receive is five times the surplus and paid-up capital. It varies with other banks. Interest is allowed on deposits at the discretion of the bank management, as the current profits and the state of the monthly market may justify. 6. The Government is not interested as a shareholder in any bank except the State Bank, and the State Bank is exclusively a Government concern. It is as if we had a bureau in the Treasury Department with power to do a great and varied banking business, and with branches all over the country. 7. Banks are permitted to have branch banks, and most commercial banks find it to their interest to have a few branch establishments. 8. They publish monthly statements in the newspapers. 9. A tax of from 3 to 5 per cent is imposed upon the net profits of banks. REPORT OF THE COMPTROLLER OF THE CURRENCY. 181 10. Insolvent banks are closed up under the general insolvency law like any other insolvents, a translation of the essential parts of which law is herewith inclosed, I will briefly state that, in making settlement, debts due the Government are preferred above all others. Then come amounts due employees, outstanding bills of exchange, and liabilities for brokerage and commission. Depositors come third, and shareholders come last. 11. No banks are permitted to issue notes. The only bank of issue is the State Bank, or, in other words, the Government. 12. The provision for the redemption of these notes can best be explained by first stating what is said upon that subject, and then by stating how it works. Taking one of the ruble notes, I find the contract or promise printed upon the note. Upon one side it reads as follows: " Imperial credit note. On presentation there will be paid at the exchange cash room of the Imperial Bank one ruble [or more] in silver or gold." Upon the other side these words are used: " Extract from the Imperial manifesto concerning credit notes: First. The Imperial credit notes are guaranteed by the whole property of the realm, without detention at any time, to be exchanged against ringing (hard, pure) metal of the above-mentioned fund. Second. These credit notes enjoy the right of circulation throughout the Empire on an equality with silver coin. Third. For the counterfeiting of credit notes the guilty party is liable to the loss of all rights and will be sentenced to hard labor." There are now reported outstanding 4,194,800,000 francs of ruble notes, amounting, when reduced to gold, to roundly onehalf, say 2,100,000,000 francs. The "redemption" fund is reported at 1,403,252,000 francs in gold, including the "ordinary" and "extraordinary." This large fund is not used, however, for purposes of redemption, and the result is that the ruble notes are not even at par with silver. Practically, then, there is no provision for redemption. Translations of the law relating to insolvents, including insolvent banks, and of the statutes of the St. Petersburg Toula Land Bank, the Russian Bank of Foreign Trade, and the Discount Bank of St. Petersburg were inclosed. The following information relates to the GRAND DUCHY OF FINLAND. 1. The Bank of the States, "Finlands Bank," is the sole bank of circulation, and it also transacts discount, loan, and other kinds of banking; joint-stock banks for deposit, discount, loan, and other banking; joint-stock banks for loans granted upon mortgage in town estates; the mortgage bank, "Finlands Hypoteksforening,7'for loans on country estates; savings banks in most parishes of the country, and postoffice savings banks at the post-offices. The two last-mentioned classes are formed to promote saving, and are not allowed to be managed with any purpose of profit for the founders. 2. The Finlands Bank is guaranteed and supervised by the States of Finland. The other banks are allowed to transact banking after obtaining license from the Imperial Senate of Finland. Before beginning banking one-fourth part of the jointstock bank's capital must be paid in, and the remaining three-fourths within one 3^ear. The managers must be Finlanders. 3. The Imperial Senate of Finland, after receiving reports from the public bank controllers appointed by them for the joint-stock banks, and the supervisor for the savings banks. 4. (A) The capital of the various banks is as follows: The Finlands Bank, 10,000,000 Finnish marks; in joint-stock banks the fixed and invested funds; and in the savings banks not less than 1,000 marks. (B) The Finlands Bank is governed by four deputies for the States and managers nominated by these deputies and appointed by the Emperor, Grand Prince of Finland. Controllers are elected by the States. The managers and revisers of the joint-stock banks are appointed, reelected, or dismissed by the meeting of shareholders. The savings banks are managed by at least five principals and a board of managers. The post-office savings banks are administered in connection with the post. (C) Shareholders are not liable for claims against the banks to a greater extent than the amount of their invested shares. (D) The Bank of the States and the joint-stock banks every month publish their reports in the official journal and in the most widely read paper of the country. (E) A public controller appointed for each bank by the Senate supervises the jointstock banks. (F and G) The discounted bills and loans from the Finlands Bank are not considered a security for the circulation. (H) The loans are given upon security in stock, bonds, mortgage, ana merchandise, and in the joint-stock banks also upon personal credit. (I) Most banks have reserve funds. (J) The surplus or net profits for each year are, first of all, to be used for the accumulation or increase of the reserve fund; to the reserve fund of the Bank of the States is yearly added one-fourth of the net profits until this fund amounts to 15,000,000 marks. The remainder of the profits is then disposed of by the States for various useful purposes. In the case of jointstock banks 10 per cent of the net profits is annually carried to the reserve fund, 182 REPORT OF THE COMPTROLLER OF THE CURRENCY. until ttiis fund has reached a fixed amount, this varying with the different banks. The remainder of the net profits is divided among the shareholders, or becomes a part of the pension fund for clerks, etc. 5. Deposits are received in the joint-stock banks, and interest allowed. Should the legally fixed capital stock of such a bank be diminished by losses to 90 per cent of its original amount, and its liabilities exceed live times such amount, unless this deficit is made good by the shareholders before the lapse of three months the bank is allowed to transact no further business until such losses are replaced. No interest is allowed on deposits by the Finlands Bank. 6. The Government is not a partner or shareholder in any of the banks. 7. The Finlands Bank is licensed to conduct branch offices by the Imperial Senate. The States issue licenses to other banks to conduct branches. 8. Full reports of the condition of the banks are published monthly in the most widely read papers of the country. 9. No separate taxes or burdens are imposed on the banks. 10. Should the capital stock of any bank be diminished by losses to 75 per cent of the original amount such bank is compelled to stop business and to liquidate its liabilities. The amount remaining after this is done is divided among the shareholders. 11. Finlands Bank, the Bank of the States, is now the sole authorized bank of issue of this country. 12. The total amount of notes in circulation and other liabilities of the bank payable on demand is not allowed to exceed 35,000,000 marks, and the total amount of the gold coin and'bullion in the bank is fixed at not less than 20,000,000 marks, the silver coin in cash, the claims due to the bank from abroad, and the bonds and coupons in foreign money possessed by the bank. The amount of circulation not disposed of amounted on the 30th of last September to 32,500,000 marks. 13. License to issue bonds is given by the Senate only where a bank has a paid-up capital for that purpose of at least 1,000,000 marks, and as security for the proper payment of these bonds when due, in the custody of the public controller, Government or municipal bonds, the sum of wrhich must exceed at least 10 per cent of the amount of bonds issued. Loans on mortgage are given only for half the value of the mortgaged estate. Bonds on foreign money issued by the mortgage bank, "Finlands Hypoteksforening," are guaranteed by the State up to 30,000,000 marks. Finland has never had a bank failure. The following summary is extracted from the reports of September 30 last of the Bank of the States and of six of the jointstock banks: [Amounts stated in Finnish marks.] Finlands Bank. Capital funds . Reserve funds Notes in circulation Deposits Gold in Finlands Bank. Bonds In our favor abroad Inland bills Loans NorForendiska ingsbanken i AktieFinland. banken. Wasa Akties Bank. AktieKanbolagd ^"ylands Helsingsalis Aktiefors Osakebank. Folkpankki. bank. 10,000, 000 3,000,000, 8,000,000 1,500, 000 4, 000, 000 1, 000, 000 700, 000 289,000 644,000 13, 458, 000 5,113,000 1,617,000 10,000 70,000'. 55, 547, 000 17, 369, 00059,192, 000 56,971, 000 23, 322, 000 23, 955, 000 5, 715, 000 2, 260, 000 21,860, 000 20,177, 000 9,112.000 7,447,000 2,459, 000 1, 374, 000 962, 000 792, 000 31,008,000 9,119,000 3,840,000 2,160, 000 3,619, 000 193,000 31, 000 17, 298i 000J19, 027, 000 19, 228,000 8.262,00011!., 706, 00(5 2, 331,000 711, 000 9, 389, 000 21, 222, 000;25, 392,000 7,663,000 6, 368, 000 2, 782, 000 1, 870, 000 Present rate of discount, 4 and 4h per cent. Translation of the charter of the Helsingfors Public Bank transmitted. SALYADOR. [Lewis Baker, "United States minister.] I am gathering the necessary data for a report on the financial situation in Costa Rica, in which country there are but two banks, and but one bank of issue. In Nicaragua there is no bank other than a branch of the London Bank of Central America, with headquarters in London, England. Of its operation here it is rather difficult to gain accurate and trustworthy information. But I will, at a later day, send you a report covering such information of a reliable nature as I can gather. 1. There is only one class of banks in the Republic of Salvador—banks of emission. In order of date of their creation: The Banco Internacional del Salvador, capital $3,000,000, divided in 3,000 shares of $1,000 each, 2,100 shares emitted, $1,050,000 paid REPORT OF THE COMPTROLLER OF THE CURRENCY. 183 in; reserve fund, $566,000; present quotation of shares, $1,300; probable dividend, $60 per half year, February and August; headquarters, San Salvador. The Banco Occidental, nominal capital $2,000,000, divided in 1,000 shares, all issued, of $2,000 each; $500,000 paid in; reserve fund, about $230,000; present quotation of shares, $1,400; probable dividend, $60 half yearly, January and July; best managed bank in the Republic; headquarters, Santa Ana. The Banco Salvadoreno, nominal capital $3,000,000, in 3,000 shares of $1,000 each, 1,800 issued; paid in, $900,000; reserve fund, $200,000; present quotations, $800; probable dividend, $30 per half year, January and July; headquarters in San Salvador; for a longtime a Government bank, it has taken a new impetus lately. The Banco Industrial del Salvador, nominal capital $2,000,000, in 2,000 shares of $1,000, all subscribed, one-fourth called in, is beginning operations on November 3 with $500,000 paid in; headquarters, Santa Ana; shares command $100 premium before beginning of operations. The London Bank of Central America, with headquarters in London and a capital of £600,000, shares of £10 each, has also a branch in the capital and agencies in other parts of the Republic. The amount of money Avith which it operates in Salvador is unknown. 2. In order to transact business the banks must operate under a concession granted by the Government. To become a body politic it must make an escritura social, the concessionnaires forming a company in accordance with the codex governing stock companies, viz, presenting their statutes, deeds, public documents, by-laws, and books to the juez de comercio (judge of commerce) of the respective districts. 3. That official determines whether the conditions of the concession have been complied with, the statements being sworn to before him by the manager of the bank, elected by a majority of the stockholders at the meeting of organization. 4. (A) Each concession speciiies the regulations as to the capital stock. The approval of two-thirds of the stockholders and of the Government is required to change the statutes or to increase the capital stock. The amount paid in as maximum is 50 per cent of the nominal value of the stock, the other half being the responsibility of the stockholder. As a rule a bank may begin operations when onefourth of the subscribed capital is paid in. (B) The management of the bank is in the hands of a gerente (gerant) or manager, He is elected by the general meeting, and is the official head and representative of the bank, his powers being denned by the by-laws of each institution. In the International Bank, for instance, the management consists of three directors, who instruct the gerente, the latter merely representing the board with the public; while in all the other banks the manager is the actual head of the bank, and in cases of need advises with the consulting director. The board in those banks consists of the first and second director and of the manager. (C) In all cases, and under the general law of anonymous societies as well as under specification of the different statutes the liability of the stockholders is limited to the nominal value of their shares. (I)) Reports of the condition of the bank are made in all the institutions seiniannually to the shareholders, and published in open sheets accessible to the public. (E) The sole examination of banks by Government officials consist: First. Of a statutorily compulsive examination every half year as to the relative proportion of bills issued and of the silver coin existing in each institution. Second. Of an examination Which may be made at any time as regards the same subject. No other examination may be made except by the competent courts as to the books of the bank, and that only upon mandate of the court. (F) There are no restrictions as to the amount of loans except such as provided by the rules adopted by the board of directors of each institution, such as limit of qualification of a certain signature. (G) Two of the banks, the Occidental and the Industrial, prescribe in the by-laws that no loan may be made to Government, municipalities, or charitable institutions without the approval of a majority of the general meeting, be these loans withor without guaranties. The othershave repeatedly made loans of this character, which have in some cases assumed the shape of permanent loans. (H) Loans are given against two or more acceptable signatures to the same note of hand for a time of three months commercial and up to six months agricultural. In very few cases mortgages on rural or urban real estate have been accepted. It is the intention of the new Industrial Bank and of another bank now in process of formation, the Agricola-Commercial, to lend money on mortgages, the first for a period not exceeding three years, the latter for a minimum of ten years—a clause in its concession which endangers the progress of the bank. Bank shares, market and pier shares, and any other similar collateral guaranties are also readily accepted by the banks to supply the aval of another signature. The want of another signature may also be supplied by any document or note of hand legally indorsable and of recognized value. (I and J) In most cases the statutes provide that 5 per cent of the net profits of each half year should be placed to a reserve fund. In some cases the banks, in view of extraordinary profits, have distributed only certain dividends, placing the remainder to an extraordinary reserve fund or to a fund for future dividends 5. The receipt of deposits is not governed by any special regulation. The bylaws of the banks provide the method of making the deposit, the kind of currency 184 REPORT OF THE COMPTROLLER OF THE CURRENCY. insisted upon, and the mode of taking note of the depositor's signature. Check books, pass books, etc., are provided free of cost, and little care is exercised generally as to identification, most checks being extended " to bearer." The banks allow interest on deposits when there is a stringency or when their portefenille is complete, the rate varying from 1 to 3 per cent on sight deposits or current accounts; on time deposits it ranges from 3 to 5 per cent and from three months to one year. 6. The Government is interested in no bank as a shareholder. 7. All of the banks are authorized to and do conduct branch banks or offices in the principal towns of the Republic. 8. The examination referred to above, made by the minister of finance or his subordinates,,as to the relative existence of paper' and bullion, is published in the official paper; and, as said before, the banks publish semiannually their estado, or report, in loose sheets, which are available to the public. 9. Far from there being any taxes or burdens imposed upon the banks, they are, as a rule, exempt by their concessions from any taxes, general or municipal, and from stamp dues, and are not liable to imposts in time of peace nor to reprisals in case of war. 10. In each concession an article provided for the duration of the privileges of the bank twenty-five years, unless: "The general meeting should decide to liquidate it beforehand, and three-fourths of the shares must concur in favor of such a resolution. It will forcibly enter into liquidation in case any of its half-yearly balances should show the loss of its reserve and of 40 per cent of its capital. In. that case the general meeting shall dispose as to the person who shall have charge of the liquidation, and of the method of conducting it." This is the extent of the statutory provisions as to insolvency. Any other contingency would be covered by the existing laws as to individuals. 11. In all cases, I believe the banks have been allowed to issue bills under their concessions up to twice the amount of their subscribed capital, the only condition being that they shall at all times have in their vaults coin to the amount of 40 per cent of the value of the bills in circulation. In the concession of the Banco Industrial 50 per cent is the amount insisted upon, but 30 per cent of the mortgages in portefenille is considered as bullion, a rather unwise measure, as no guarantee would be less easy to realize in case of need. Some of the bank notes are made in England; of late years some were engraved by the American Hank Note Company of New York. 12. The notes are all redeemable in silver coin, Peruvian, Chilean soles, Guatemala pesos, or the dollar of the Salvador coinage known as the colon, of the same fineness (900) and weight (25 gr.) as the other Spanish-American standards. The only provision made for their redemption lies in the 40 per cent reserve of silver and in the responsibility of the stockholders. So far this has been more than sufficient, but the time may come when, owing to the great competition between banks and the excessive desire to increase business at the expense of safety, the circulation of bills will be increased for the purpose of augmenting credits not easily withdrawn. A run on any bank would naturally precipitate a general crisis, the depositor class being in the minority, and, as a rule, very timid. 13. All the banks use their reserve fund for general business, thus exposing it to all the risks of their capital and counting it as cash reserve when it should be solely a bank reserve immobilized by being invested as much as possible in the safest investments, such as consol or gold bonds. The greatest object of the bank managements seems to be the increase of the circulation and the paying of the largest dividends irrespective of safety. Similar speculation on the part of the Intern acional, added to otherwise indifferent management, caused a loss of at least $350,000 in their reserves at one fell swoop. Notwithstanding this, the quotation price of shares are not affected by any means. To resume: For a population of 700,000, scattered over an area of 7,225 square miles (Salvador is in territory the smallest of the Central American republics), we have the banking facilities expansible to $10,000,000 among four banks, the International, the Occidental, Salvadoreno, and the Industrial. Limit of issue of bills is $20,000,000. Add to this the capital and circulation of the London Bank of Central America (available capital in Salvador unknown) and that of the new mortgage bank when it shall begin operations ($5,000,000). These figures are silver dollars, which, at the mean rate of exchange, would rate 50 cents gold to the sol. The actual circulation of bills between the four banks is about $5,000;000, or $2,500,000 gold to a present cash capital of $3,450,000, not including reserves amounting to about $950,000. The amounts loaned to the Government on such securities as pledging of—per cent from the customs dues, etc. (interest varying from 10 to 12 per cent annually), are, more or less: Internacional, $400,000; Salvadoreno, $325,000; London Bank of Central America, $200,000. These loans are dangerous because they assume, as a rule, the nature of permanent loans, upon which Government after Government pays the interest, but which immobilize a goodly amount of the banks' capital, this being unavailable in a critical moment. A number of capitalists, one firm especially with a capital larger than that of any of the REPORT OF THE COMPTROLLER OF THE CURRENCY. 185 banks, give money out at interest on long time, or make loans on mortgages. Under a fairly good government the situation of Salvador is excellent, and will continue so as long as coffee, its chief article of export, will command good prices. The balance of trade is always in favor of the country and wealth is somewhat disseminated. It is undoubtedly the richest of the Central American States, without any foreign debt and burdened only by an interior debt, arising from late revolutions, with their accruing array of claims, just or unjust, forced loans, etc., in settlement of which the Government has created bonds more or less in the following denominations and quantities : Twelve per cent bonds, about $1,000,000, $100 nominal; 6 per cent bonds, about $4,000,000, $100 nominal; 3 per cent bonds, $6,000,000, $100 nominal. The 12 per cents Avero a forced loan of the other Government; the 6 per cents a railway loan and a funding of a former debt; the 3 per cents are the result of claims, etc., arising from the last revolution. There are other obligations of the Government—bonds against a certain percentage of the customs receipts—as a rule transactions ruinous to the country by the pledging or sale of papers to foreign firms doing business in the Republic. The interest has been paid monthly on all this paper and with great regularity, the Banco Internacional doing the service of the debt; moreover, every month there is a public auction of a certain amount of each class of bonds, the Government buying them, in lots from $100 to $5,000, at a maximum rate below the nominal value, from the lowest bidder. The situation of the country is virtually a good one. The rate of discounts of the banks has ranged within theyear from 4 to 12 per cent; a mean rate of 8 or 9 per cent being really the normal rate in the country, the one which, if upheld by the banks, would be the one best calculated to give the necessary banking facilities under present circumstances. Competition, however, and animosities between the various circles controlling the different institutions have created, and will, I fear, continue to create these fluctuations, to the detriment of safety. It would be useless, however, to theorize against fiat money and the silver standard in a country which has so long worked purely under a silver standard, and for which a gold standard, suddenly imposed by legislation or otherwise, would mean utter ruin. [John Barrett, United States minister.] Siam has no regular banking system. There are, however, excellent banking facilities m Bangkok, the capital. To one who is told that the commerce of Siam amounts to $40,000,000 a year, and that nearly 600 ships, mostly steamers, enter this port in twelve months it might at first appear surprising that there is no system under the control or guidance of the Siamese Government. This may be accounted for in several ways: First, the Siamese as a people arc not commercially inclined, and the business of the country that demands banks is largely in the hands of Europeans and wealthy Chinese; second, under the provisions and protection of extraterritoriality the great British banks, the Hongkong and Shanghai Banking Corporation, and the Chartered Bank of India, Australia, and China, have established permanent branches here, while the Mercantile Bank of India has a lesser agency; third, in the interior there is little need as yet of banks, as there are no large commercial centers aside from Bangkok, and all products are brought to this port for a market; fourth, the feeling of uncertainty as to the future of Siam, whether it will maintain its autonomy or become a dependency may deter the Government from establishing its own banks or adopting a banking system. It is therefore impossible to answer satisfactorily the questions asked by the Comptroller of the Currency. The consul at Hongkong in his report will give the rules governing the Hongkong and Shanghai Banking Corporation, which apply equally here, as Siam has no jurisdiction over it whatever. As part of this report I append a letter from the resident manager of the Hongkong and Shanghai Banking Corporation which, though brief, may be of interest and applicable. By that it will be seen that there is a note issue of this bank in the currency of the realm, but that again is part of its general issue allowed by its British charter. These notes are not necessarily legal tender, but they are accepted for most transactions in Bangkok. At first the natives were not prone to accept notes instead of coin, but now they are looking upon them with more favor. The money of Siam is silver, of which the principal unit is the "tical," which is exactly equal to 60 cents of a "Mexican" dollar. By imperial order five "ticals" make three "Mexicans," and "ticals" are chiefly coined from melted ''Mexicans." This "tical" is in turn subdivided into 64 "atts." The actual " a t t " is a copper piece about the size of the United States cent. Larger divisions of the "tical" are the "salung" (silver) of 16 " atts," and the "fuang" (silver) of 8 "atts." These are all coined by the Siamese mint and come into circulation in three w a y s first, by direct payment of the Government for all classes of work, contracts, and purchases, etc.; second, by exchange of Mexicans, minus a small seigniorage charge if presented at the mint for coining; and, third, through the local banking institutions above mentioned, In. a previous report to the Secretary of the Treasury, dated 186 REPORT OF THE COMPTROLLER OF THE CURRENCY. June 19, I had the honor to report more specifically upon the amount of silver in circulation. This report, therefore, on the banking system that obtains in Siam would come principally under the last question of the Comptroller's circular, but in order to comply strictly with the request the following answers are given: 1. There is only one class of banks in Siam, branches of main institutions having British charters. 2. Compliance with the regulations of the British charter. 3. British officials. 4. Same as main institutions not located in Siam. 5. Deposits receive interest the same as in the main institutions. 6. The Government has no interest whatever as a shareholder. 7. Branches regulated by provisions of main charters. 8. 9,10,11,12. Branches here are governed by regulations of main banka. 13. Answered in first part of this report. A semiannual report and balance sheet of the Hongkong and Shanghai Banking Corporation was inclosed with a copy of the following letter addressed to Minister Barrett: "1 have the honor to acknowledge your letter of yesterday's date, handing me a list of questions regarding the present system of banking in Siam. "To begin with, it is difficult to answer the questions, as they refer to countries which have national banks. As yet Siam has not any native-owned banks, nor are institutions of this kind required in any part of Siam with the exception of the capital, Bangkok, as the country is not yet used to commercial ways, being satisfied with the primitive mode of barter. With the port of Bangkok a large rice trade is carried on with Europe, Hongkong, and Singapore, and the necessary banking facilities are rendered by two branch banks, namely, Hongkong and Shanghai Banking Corporation and the Chartered Bank of India, Australia, and China, The first of these institutions has a note issue in the currency of the country, i. e., ticals, but this issue, being a part of the bank's issue under British charter, is consequently not under Siamese control. These two banks receive deposits for periods of one year, six months, and three months, allowing interest at the rate of 4, 3£, and 2\ per cent, respectively; also receiving current deposits and allowing interest at 1 per cent per annum on the daily balances. " 1 hand you a statement of the Hongkong and Shanghai Banking Corporation for the half year ended 30th of June last, which may be of assistance in answering some of the questions; but I should say that this institution will be treated by your country's representatives so obtained at. Hongkong. Should there be any other information you may think I can give you I shall be happy to do so to the best of my ability. {i I am, sir, your obedient servant, " T. McC. B.ROWNE, Agent." CUBA. [History of Modern Banks of Issue, by Charles A. Conant.] The Spanish Bank of Cuba has provided the paper circulation of the largest island of the West Indies. The government utilized the bank during the insurrection several years ago for the issue of legal-tender paper on government account, but this paper was withdrawn in 1893. The capital of the bank is 8,000,000 piasters ($7,400,000). Puerto Rico also has a bank of issue, known as the Spanish Bank of Puerto Rico. The institution was founded in 1891 and has a circulation of about 1,500,000 piasters. [T. B. Ferguson, United States minister at Stockholm.] There are three kinds of banks in Sweden, viz: (1) The Government Bank of Sweden, (2) private banks with the right of issuing bank notes of their own, and (3) banking companies. Besides there are various credit establishments in some respects corresponding to banks, as savings banks, conjointly responsible popular banks, and others, but as these establishments can not be said to do banking business in the proper sense of the word no reports of such establishments will be given here. The Government Bank is a State institution placed under the guaranty and care of the Riksdag. Its work is regulated partly by a law made by the King and the Riksdag, principally composed of regulations'* as to the liabilityof the bank to cash its circulating notes, and statutes concerning the funds of the bank, and by regulations for the bank issued by the Riksdag. The private banks of issue and the REPORT OF THE COMPTROLLER OF THE CURRENCY. T 187 banking companies on the other hand are establishments operated b} private persons nnder the control of the Government; their business is regulated partly by laws made by the King and the Riksdag, and containing the principal regulations for these banks, and by special memoranda of association settled by His Majesty for the banks. The principal established rules of these banks are as follows: Private persons desirous oi forming a company for the purpose of doing banking business with the right of issuing bank notes of its own, and working by the agency of an appointed board of managers, should apply to His Royal Majesty for the necessary license, and at the samo time present the proposed constitution for the company. The partners of such a company should be Swedish citizens, and at least 30 in number. The regulations of the company being found to agree with the law issued for private banks of issue and laws and statutes in general, and His Royal Majesty considering this banking establishment a useful one to the country, a license will be granted for transacting banking business for at most ten years beyond the close of the calendar year. Should the company wish to obtain a prolongation of the license, an application should be made for this purpose within a certain date before the expiration of the existing license. Before starting business the company should prove to Kongl. Majts. Befallningshafvaiide that a notice of the formation of the company and a list of the partners had been published in the manner specially defined by law, and also that at least 10 per cent of the capital stock had been paid to the bank on the shares, and that bonds, which have been approved by the organization on exami nation, had been left with the bank as securities for the payment to the bank of the rest of the capital stock subscribed within a year. Persons wishing to forma joint company for the purpose of transacting banking business should likewise apply for His Majesty's sanction to the memorandum of association, at the same occasion prove that the minimum amount fixed by the memorandum of association for the capital stock had been subscribed, and that the number of partners were not less than 20. The partners of a joint banking company should be Swedish citizens. His Majesty will examine into the accordance of the memorandum of association with the laws issued for banking companies and other laws and statutes, likewise if and to what extent beyond these special regulations might be, necessary to regulate the extent and character of the business of the company. In case His Majesty sanctions the memorandum of association His Royal Majesty will grant a license for carrying on the banking business for a period not to exceed twenty years beyond the close of the current calendar year, bufc in case the bank should wish to obtain a prolongation of the license, an application should be made to this purpose within a certain date before the expiration of the license. Before the opening of a banking company it should be proved to Kongl. Majts. Befallningshafvande that a notice of the formation of the company and a list of the persons composing the board of managers of the company and of those entitled to sign the bonds of the company had been published in the prescribed way, and also that at least 20 per cent had been paid on the shares, and security furnished for the payment of at least 20 per cent more within three months, and for the payment of the rest within one year from the opening of the company's business. 4. The Government Bank must have a capital stock of 50,000,000 kronor and a reserve fund of 5,000,000 kronor, invested in safe foreign government bonds. These funds, which are not included in the real estate or chattels of the Government Bank or the cabinet of coins and medals, must not be encroached upon except in case the bank incurs losses which can not possibly be covered by existing funds reserved for such disposition. The partners of a private bank of issue are jointly and severally liable for the fulfillment of all engagements of the bank. They are called conjointly responsible partners and are not empowered to leave the company during the period of license without the consent of the company. Private banks with the privilege of issuing their own notes should have a capital stock of at least 1,000,000 kronor subscribed by the conjointly responsible partners. For consolidating the capital stock of the bank the conjointly responsible partners may associate with themselves shareholders, the liability of whom with regard to the engagements of the bank is limited to the total amount of their shares. They are called silent partners, and can not hold more than at most half the amount invested in the capital stock by the conjointly responsible partners. The capital stock should be divided into equal shares and the certificate of stock should be registered. At least 60 per cent of the capital stock should be changed into capital stock bonds, of which at least the half should consist in easily negotiable, interest-bearing bonds and the rest in mortgages invested in landed property in the country within the half of the latest fixed appraised value, or in city real estate within the half of the fire-insurance value, or of the latest fixed appraised value. The capital stock bonds, which should be examined and approved by the company and by Kongl. Majts. Befallningshafvande or his attorney, should be deposited in public charge. The shareholders of joint stock banking companies are not liable for the engagements of the company beyond the investments made by each of them, in the company, or those which they have engaged to make. The capital 188 REPORT OF THE COMPTROLLER OF THE CURRENCY. stock of a joint stock banking company should amount to at least 1,000,000 kronor; tlie capital stock, however, may, with His Royal Majesty's consent, befixedat a lower sum, though no bless than 200,000 kronor, incases where special provisions are desired and the character of the business of the company, and the conditions must be stated in the memorandum of association, and show that the purpose of the company is not to transact a banking business on a large scale, but only to advance limited circulation at a certain place. The capital stock should be divided into shares certified to be registered to a fixed person. The memorandum of association of joint stock banking companies may not empower the company to increase the capital stock beyond the double amount of the minimum one settled by the memorandum of association for the capital stock. The capital stock of t\> private bank of issue or of a joint-stock banking company may not be diminished by divisions or other reimbursements to the partners as long as the business is carried on. At least 10 per cent of the annual profits of a private bank of issue, and at least 15 per cent of that of a joint-stock banking company, should be put aside for forming a reserve fund. The reserve fund of private banks of issue, amounting to 20 per cent, and that of joint-stock banking companies, amounting to 50 per ct3iit of the capital stock of the bank, the reservation of the reserve fund may cease; but in case of its falling short of this amount at any time the reservation should bo renewed. The reserve fund must be used only for covering losses incurred in the entire banking business of the year and which cannot be balanced by other existing funds reserved for future use. The administration of the Government Bank is managed by seven deputies appointed by the Riksdag. Concerning private banks of issue and joint-stock companies, ifc is prescribed that every bank should have a board of managers, composed of five persons at least. For the private banks, the board of managers is elected by the conjointly responsible partners out of their own numbers, and for the joint-stock banking companies by the shareholders and out of their numbers. Reports on the Government banks should be made, printed, and distributed by the public newspapers; monthly ones, showing the assets and debts of the Government Bank at the close of each month, semiannual summaries showing the condition of the discount bank, and complete summaries for each year. Concerning private banks of issue and joint-stock banking companies, it is prescribed that, at the close of each month and in the presence of Kongl. Majts. Befallningshafvande or his attorney, a summary should be made in accordance with forms issued by the finance department, showing the assets and debts of the bank and stating the rates of interest for the borrowing and loan transactions of the bank and its discount, the summary then to be presented to the finance department and to be published under its supervision. The revision being completed, the report on the same should be presented likewise to the finance department and published in the public newspapers. The board of managers is also bound to furnish the chief of the finance department and the bank inspector with every kind of information on the condition of the bank which they might require. There is no examination of the Government Bank by Government attorneys; but this bank is inspected by a select committee (bank deputies), appointed by every regular Parliament, as well as by commissioners of audit chosen by the Riksdag. The inspection and control of private banks of issue and joint-stock banking companies is ext3rcised by the finance department, where a special section called the bank office has been established for this purpose, with the bank inspector for its chief. All the accounts and deeds should, at any time, be held at the disposal of the bank inspector and the special examination which His Royal Majesty or the chief of the finance department might think proper to have made. A person appointed by Kongl. Majts. Befallningshafvande should join the annual revision. Concerning the other banking establishments, it is prescribed that private banks of issue may not accept their own bills or those of other private banks as securities for loans, nor a joint-stock banking company its own paper. Beyond this there are no restrictions to speak of with regard to the loan transactions of the banks, except that private banks may not issue loans on one name only and are not allowed to lend on security to a total amount exceeding a tenth part of the capital stock; theu certain restrictions have been made concerning loans to members of the board of managers of a bank. 5. The banks will receive money on deposit account to be refunded at a fixed date or at a fixed term of notice, and also on account current to be refunded on demand. The private banks as well as the Government Bank will allow interest for funds placed on deposit account and account current, but the Government Bank does not pay any interest for money received on folio account. 6. The Swedish State is the sole proprietor of the Government Bank, but the State does not hold shares in any other bank. 7. The Riksdag will resolve on the establishing of branch offices of the Government Bank. The opening of branch offices of the private banking establishments is resolved upon by the partners; a notice whereof should be left with the finance department. Certain small joint-stock banking companies may not open branch without the permission of His Royal Majesty. Digitized foroffices FRASER REPORT OF THE COMPTROLLER OF THE CURRENCY. 189 8. See the above for 4. 9. The private hanking establishments will pay taxes on real estate and on income just as other business establishments. The private banks of issue moreover have to pay a special fee for the license of issuing notes, this fee being at present fixed at 10 kronor for every 1,000 kronor of the highest amount of the notes of the bank issued for circulation at anytime during the preceding year. The Government Bank is exempt from paying taxes on real estate and on income, as well as from paying a special fee for the license of issuing bank notes. 10. See 12. 11. The Government Bank and private banks have the privilege of issuing bank notes of their own, but the joint-stock banking companies have no right of issuing notes. The Government Bank is entitled to issue notes to an amount to I so balanced by the following means: (a) The metallic cash which will comprise all the Swedish and foreign gold coin, gold in bullion, and silver coin coined in Sweden, Norway, and Denmark in accordance with the convention of May 27, 18/3, to be found in the country and being the property of the bank; (b) gold coin or gold in bullion deposited in foreign places or on its way from sucli places and furnished Avith marine insurance, and (c) funds invested on account current in foreign banking establishments or business. Beyond the amount balanced by the means just mentioned the Government Bank is entitled to issue at most still 45,000,000 kronor isi notes, provided that these notes be balanced by the joint amount of the following means: (a) Easily negotiable foreign government bonds; (b) the Government bonds, those of the Public Mortgage Bank, and other Swedish bonds marked in foreign exchanges, and (c) bills payable within or without the Kingdom, the notes not covered by bullion, however, exceeding 35,000,000 kronor; the Government Bank, which should always keep a metallic casli with at least 15,000,000 kronor, should increase this cash with at least 30 per cent of the amount by which the notes thus issued Avill exceed 35,000,000 kronor; the metallic cash should consist in gold to four-fifths of its entire amount. Private banks may not commence the issuing of their own notes before having proved to Kongl. Majts. Befallningshafvande (»"that the capital stock bonds have been deposited in public charge in the prescribed way; (b) that samples of blanks for the notes have been left with the finance department, and (c) that lists of the persons intrusted with signing the bank notes have been given in the public newspapers. The notes issued by the bank or left in general circulation at a time may not exceed an amount the total value of which is balanced by (a) the.capital stock bonds deposited in public charge; (b) the reserve fund of the bank if composed of securities of a nature to correspond to capital stock bonds and deposited in public charge; (c) the debts due to the bank until at most 50 per cent of its total capital stock, provided that the cash of gold coin of legal tender in the realm found at the chief office will amount to 10 per cent of the capital stock, and (d) all the gold belonging to the bank to be found at the chief office exceeding in value 10 per cent of the capital stock, and consisting in. gold coin passed as legal tender in the realm, as well as gold in bullion and foreign gold coin pursuant to the principles of estimate in force for the Government Bank. The notes issued by the Government Bank, as well as those of the private banks of issue, should be payable to the bearer, to be cashed on demand and without interest. The notes of the Government Bank should have a value of 5, 10, 50, 100, and 1,000 kronor. The notes of private banks should have a value of 50, 100, 500, and 1,000 kronor, and at present and until His Royal Majesty should otherwise ordain also a value of 10 kronor. 12 and 10. In case of the Government Bank refusing to cash on demand the notes issued by the bank, the bearer of the note may give a notice in writing of this matter to the Swedish appeal court of His Royal Majesty and the realm, which will then proceed according to the law and statutes and after hearing the opinion of the deputies. The dishonoring of the note being then found to result from the insolvency of the bank to fulfill its engagements immediately, the court of appeal should notify this to His Royal Majesty; it will then rest with His Royal Majesty to consider the measures which would prove most effective for enabling the bank to cash its notes. Private banks of issue not discharging their duty in cashing their notes on demand, the bearer of the notes is entitled to notify this to Kongl. Majts. Befallningshafvando after having entered his protest through the notary public, Kongl. Majts. Befallningshafvande then being charged with speedily reporting the matter to His Royal Majesty, and with the stopping of the banking business in case of the dishonoring of the notes not being directly proved to have been caused by casualty. Concerning private banks of issue, as well as joint-stock banking companies, it is prescribed that in case of the bank having incurred losses, as shown by the regular revised balance to the extent of the reserve fund, and 10 per cent of the capital stock being lost for private banks of issue, the capital stock subscribed by the jointly and the severally liable partners, the bank should be subject to liquidation and subsequently dissolved, provided the shareholders do not agree, at a meeting summoned immediately from this cause, to subscribe within three months the means required for restoring the regular amount of the, capital stock, and such subscription then being made 190 REPORT OF THE COMPTROLLER OP THE CURRENCY. within the above-mentioned date. Private banks of issue or banking companies having become insolvent, the chief of the finance department should appoint a general attorney to partake of the administration of the general mass of the bankrupt as an assignee and administrator, together with the assignees and administrators appointed in the way prescribed by the bankrupt law. The general attorney, equally with the trustee, is empowered to summon the creditors for being heard on subjects concerning the estate of the bankrupt, and is also entitled to assist in the administration of the estate in each particular case. The assignees should make a list of those creditors who, according to the accounts of the bank, have claims on the bank on account of investments on deposit account, account current, or others. This list, in which each creditor should be noted down for the amount of his claim, and which should also show the date of the interest being due in case of its being allowed for the claim, should be presented at the earliest possible date to the person entitled by the bankrupt law to receive the deeds of assertion for the bankruptcy, it should likewise, in copies, be held at the disposal of any one wishing to read it; claims noted in the list should be considered to be asserted for the bankruptcy. A private bank of issue having become insolvent, His Royal Majesty will moreover publish a proclamation charging every bearer of notes issued by the bank to present the note within two years from the date of the proclamation to the general attorney at the risk of forfeiting his claim of reimbursement, the general attorney having to enter the note in the books and to furnish gratuitously a certificate of its being presented. The person presenting the note, wishing to leave it with the attorney, is entitled to a receipt of its being delivered, which will furnish the addressee with the same right of reimbursement as the note itself. For claims founded on bank notes no assertion at the bankruptcy will be required. The means of the bank should be estimated at the earliest possible date by a board composed of the general attorney as president and of two members, one of which is to be appointed by the creditors and the other by the jointly and severally liable partners. The assets should then be estimated at the value which, on minute examination, is thought probable to have realized in money in the course of the liquidation. The assets of the bank being proved insufficient at the estimation or subsequently in the course of the bankruptcy to cover the debts of the bank and the cost of the liquidation, the trustees or administrators should immediately make a distribution on the jointly and severally liable partners proportionately to the number of shares held by each, for the sum required for covering the (deficit in the assets of the bank and one-tenth beyond the same. In case of a new distribution being necessary after the first one.being completed, it should be speedily effected on the same principles. Partners not paying the sum thus rated on them at the date fixed will be subject to extent without sentence and to assign in bankruptcy on the demand of the trustees or the administrators. 13. A proposition has been made to the Riksdag by His Royal Majesty on the suppression of the license of issue for the private banks and on its being transferred on the Government Bank, the business of this bank then to be limited to certain kinds of transactions adapted for its new task as the only bank of issue existing in the country, and the principles now stated in the bank statutes for regulating its work to be ratified by a law made by the King and the Rikskag in common, and also that some influence on the administration of the bank might be reserved His Royal Majesty by his having the right of appointing a certain number of members of the bank board of managers. This proposition, however, has not gained the assent of the Riksdag. But the Riksdag of 1894 has addressed an application to His Royal Majesty for the presenting of a new proposition for solving the bank question with the purpose of transferring the entire right of issuing notes to the Government Bank. S W I T Z JG RL^JNTD. [James 0. Broadhead, United States minister.] The "bank system of Switzerland, and especially the financial institutions based on shares, are subject to the provisions of the federal law of June 14, 1881 (titles 23-26), concerning the force of bonds. We have not at our disposal any official data with regard to the several institutions. In Switzerland only those banks which issue notes are under the control of the Government, and consequently the following information refers to that class alone. 1. They are divided, according to the manner in which their capital stock is created, into (a) cantonal, and therefore State institutions; (b) private institutions; (c) institutions of mixed system. 2. All banks of issue have to make public reports. In addition to this essential requirement they are subject, as to everything else, not only to the above-cited provisions of the bond law, but to those of the federal law of March 8, 1881, concerning the issue and redemption of bank notes, to those of the ordinance of December 21, 1881, for carrying the same into effect, and to those of various regulations. REPORT OF THE COMPTROLLER OF THE CURRENCY. 191 3. The authority controlling these banks is "the inspectorate of the banks of issue/' under the jurisdiction of the federal department of finance, to which the banks are obliged to make regular reports, such as weekly statements of their condition, monthly balance sheets, annual reports, and business reports for examination, statistical use, and publication. 4. The existing provisions regarding capital stock, the management of the banks, liabilities of the stockholders for claims against the banks, the methods of management on the part of the officials, restrictions of other kinds with reference to loans made by the banks, securities for loans, compulsory reserves of coin, accumulation of surplus (reserves), etc., are contained partly in the statutes and regulations of the banks themselves, so far as they are consistent with the provisions of the abovecited laws and regulations, and partly in legal provisions. A special restriction as to management is laid upon those banks which protect their circulation, not by the deposit of securities, but by putting up their negotiable paper as collateral security. The kinds of business prohibited those banks are: (a) Giving credit without security ; (6) purchase and sale of chattels or securities on their own account or for others on time, or guaranteeing the fulfillment of such engagements; (c) purchase of real estate, except such as is needed for the transaction of their own business; (d) industrial, trade, and commercial enterprises and investments, excepting trade in the precious metals; (e) insurance business; (/) issues of redeemable stocks and bonds, except in the case of Swiss national and communal loans; (g) partnership in firms carrying on such prohibited kinds of business. 5. With regard to the receiving of deposits, the provisions of the statutes and regulations of the banks themselves on the subject have exclusive authority. All institutions of issue are authorized to receive deposits, and, with very few exceptions (checks and negotiable paper), pay interest on the deposits. 6. Under the now existing system of having a number of banks of issue the State or Federation is in no way interested in these banks as a stockholder, although some of the Cantons are. There are at present in Switzerland eighteen cantonal institutions—that is to say, institutions whose capital stock is exclusively furnished by the respective Cantons, and for all whose liabilities the respective Cantons are responsible; thirteen purely private institutions, in which the Cantons have no interest; three banks of mixed system, the State (cantonal) interest in which varies. In one of them it amounts to one-half (of the stock), in another to six-tenths, in the third to only 200 shares out of 24,000. The respective Cantons are liable only to the amount of their stock. Their share in the administration varies in the three cases. 7. All these thirty-four banks are authorized to establish branches or agencies, and twelve of them"now have one or more branches. 8. The condition of the banks is communicated to the public in regular publications of the weekly statements, monthly balance sheets, and annual reports made to the controlling authority by the banks in an official organ, the Swiss Commercial Gazette. These publications are made, as above stated, by the inspectorate of the banks of issue. 9. The State (the Federation) imposes upon all the banks of issue a yearly tax of 1 per cent of the average circulation (bank-note control tax). The Cantons are allowed on their part to lay a tax of not more than 6 per cent of the average circulation on the banks of issue within their limits. 10. With regard to proceedings in stoppages of business in cases of insolvency, we refer to articles 26-34 of the bank-note law, and to the provisions of the federal law concerning prosecution for debt and apportionment of assets (of the insolvent). 11. The banks are allowed to issue notes to double the amount of their endowment capital. They must obtain permission to issue notes from the Federal Council, which gives it as soon as the conditions prescribed by the law of obligations and the bank-note law have been fulfilled by the banks. Only those financial institutions can be authorized to issue notes which (a) have their principal seat in Swiss territory and whose title (name) has been approved expressly by the Federal Council; (b) those which are legally constituted as cantonal institutions or as joint stock companies; (c) those which make public reports; (d) those which possess an actual, paid-up capital of at least 500,000 francs, exclusively liable for their own transactions; (e) those which bind themselves to accept in payment the notes of the other Swiss banks of issue* The notes are prepared through the inspectorate of the banks of issue; they are kept in the custody of the inspectorate and delivered to the banks as they need them; they are of the same identical type for all the banks. 12. If a bank wishes to renounce the right of issue which it has acquired it must notify the Federal Council, Which thereupon, by public proclamation, calls in part or all of the notes. The case of insolvency is excepted; in that case the notes are called in by a commissioner appointed by the federal court. The notes called in are destroyed under the supervision of the federal authorities as worthless notes. At the expiration of the term fixed for the redemption of notes which have been called in the bank calling them in must pay the coin equivalent of the still outstanding 192 REPORT OF THE COMPTROLLER OF THE CURRENCY. notes into the federal treasury, which undertakes to redeem in coin the still outstanding notes, during a period of thirty years from the date of the calling in. At the expiration of this period the equivalent of the notes which have not been presented for redemption will bo paid into the Swiss invalid fund. 13. As to all points not given here in detail, the bank-note law, which we inclose you, together with the ordinance for carrying the same into execution, and all the regulations, will give you, together with the above-designated passages of the law of obligations, sufficient information as to the Swiss bank-note system. For further information we inclose one copy each of the inspectorate's business reports for 1892, 1893, and 1894, and a copy of the law concerning debt and insolvency. It remains for us to state, in conclusion, that a central bank-note institution with the exclusive right to issue notes is projected and will probably be founded in the form of a Swiss national bank, in which case, of course, the thirty-four independent banks of issue now in existence will be abolished. TURKEY. [Alexander "W. Terrell, United States minister.] 1. Private banks and limited liability companies. 2. An imperial firman for limited liability. 3. The Turkish Government. 4. (A, B, C) Their own statutes only. (D) None. (E) The Imperial Ottoman Bank, being the State bank, is under the nominal supervision of an imperial commissioner. There are no regulations for the others. (F) None. (G, H) None save their own statutes. (I, J) Are determined by the statutes of the particular company. 5. The statute regulations of the particular bank or company. Various rates of interest are generally allowed on sums deposited for fixed periods. The Imperial Ottoman Bank allows 2} per cent on sums deposited for one year or longer, l^per cent on sums deposited for six months, 1 per cent on sums deposited for three months. 6. In no way. 7. The Imperial Ottoman Bank is free to establish branches in any town in the Empire. As regards other banks, permission must be obtained. 8. Generally by half yearly or yearly reports. 9. Certain obligations are imposed on the Imperial Ottoman Bank in return for permission to issue bank notes. 10. Formalities vary with nationality. 11. The Imperial Ottoman Bank only is allowed to issue bank notes to extent fixed by the statutes. 12. A cash reserve is kept (33 per cent of face value of notes). [Granville Stuart, United States minister.] 1. The existing banks are all private, the National Bank being in a state of liquidation which is likely to prove disastrous, as they will probably be unable to pay their emission (some $500,000 which does not circulate) and an equal amount of judicial deposits, both of which are supposed to be privileged debts. 2. To enable a private bank to transact business the statutes of same must be presented to the Government for approval. 3. The Government after consultation with the attorney-general. 4. The only regulations which govern the private banks are those contained in their statutes, which must declare, (A) the amount of capital and (B) the management of the bank, in which the Government has no interference; (C) the banks being limited shareholders are only liable for the amount of their shares; (D) only banks of emission are obliged to publish their balance sheets; (E) Government inspector is required to certify the balance sheets of the banks of emission only, and has no interference in the rest; (F) there is no restriction on loans of any of the banks; (G) there are no restrictions of any character on loans; (H) nor on security for loans; (I) no restrictions for reserve; (J) nor for the accumulation of surplus. 5. There are no Government regulations regarding deposits. The principal banks do not allow any interest on deposits at sight, but receive deposits at from thirty days to twelve months with scaling rates, which vary according to the standing of 9 the bank. 6. The Government is not interested as a shareholder in any of the existing banks, but is responsible for the ruins of the extinct National Bank. 7. Any of the private banks are allowed to open branches in any part of the country, but the only instance is that of the London and River Plate" Bank, which, has a branch in Paysandxe\ REPORT OF THE COMPTROLLER OF THE CURRENCY. 193 8. The only medium of information given to the public as to the condition of the banks is the monthly publication of the balance sheets of the two banks of emission. The condition of the rest of the banks is only made public when they present their accounts to their shareholders, six monthly. 9. Banks of emission pay yearly $2,000. Banks which do not emit pay yearly $1,000. Both classes of banks pay besides $6.50 per annum on each $1,000 of their declared capital. 10. In the case of the English Bank of the River Plate, which became insolvent, a liquidating committee of three persons, one named by the directors, another by the shareholders, and a third by the Government, was formed to carry out the liquidation by mutual consent. 11. The law permitting emission has been repealed, but there exist two banks of emission, the London and River Plate Bank and the Italian Bank of the River Plate, which acquired their rights before the repeal and still preserve them. They are allowed to emit notes of not less than $10 up to double the amount of their respective capitals, but the notes of neither of these two banks are of legal tender, the only legal tender in the country being gold. 12. Each bank makes its own provision for the redemption of its notes, which must be converted into gold on presentation, or if not, the bank be declared insolvent, in which case the notes are considered a privileged debt, and must be paid in full before any other creditor. 13. There are at present no State banks existing. The private banks are mostly established by British capital and governed by private boards of directors in London. They are entirely independent of Government intervention, except in so far as the emission of notes is concerned. All banks hitherto established with State intervention have proved a signal failure, and have been ruined by flagrant mismanagement. [Seneca Haselton, United States minister.] 1. Banks of deposit, drafts, loans, and discounts, circulation banks, and banks of mortgage credit. (See article 1 of the law.) 2. They must beestablished according to the law. (See articles 22, 23,24,25, and26.) 3. An inspector appointed by the Government in accordance with the law. (See article 31.) 4. The whole banking law explains. 5. Deposits are received at sight in account current and for a fixed term, and the same draw interest according to the conditions of the deposit. 6. The Government is not at all interested as shareholder in any of the existing banks, but always maintains a special contract with one of the banks for the collection of the national revenues and for the purpose of supplying funds. 7. The law entitles the banks to establish branches or agencies, but always in accordance with the corresponding stipulations. (See articles 22 and 27.) 8. The law establishes the quarterly publication of a balance of each bank, and points out the conditions upon which such balance is to be published. (See article 24.) 9. Only the payment for a permit, which varies according to the capital of each bank, and the obligation to pay for the salary of the inspector appointed by the Government. (See article 31.) 10. No practical case established the rule in this matter, but it is understood that the banks are under the same regulations established for any other commercial institution. 11. According to the new law the banks can only issue bank notes for one-half their capital. (See articles 5 and 6.) 12. The law does not establish any, but at least 33£ per cent of the amount of the issue is generally reserved in cash. A copy of the laws transmitted, OUR 96; PT 1 13 STATE BANKING SYSTEMS. Reports received relative to State banking systems are given herewith. Portions of the reports and of the laws accompanying them have been omitted for the sake of brevity. The following questions were the basis for the reports: 1. Give the different classes or kinds of banks permitted by law to do business in your State. 2. What legal requirements must be met in order to enable each class of banks to begin the actual business of banking? 3. What officer determines when these conditions have been satisfied? 4. Give the legal provisions governing each class of banks as to the following, viz: (A) Amount and payment of capital stock; (B) the management of the bank; (C) liability of shareholders for claims against the bank; (D) making reports of condition; (l!) examination or supervision by State officials; (F) restrictions of any character on loans by the bank; (G) amount of cash reserve required; (H) accumulation of surplus required. 5. Give the legal provisions, if any, governing the receipt of deposits by each class of banks, and state if it is generally the custom of the banks to allow interest on deposits. 6. To what extent, if any, is the State interested as a shareholder in any of the banks ? 7. Are any of the banks permitted to conduct branch offices or banks? 8. To what extent and by what medium is information furnished to the public as to the condition of any of the banks? 9. What taxes or burdens are imposed upon the banks in return for the banking privilege granted them ? 10. Give as full information as possible as to the legal provisions for closing up the business of insolvent banks. 11. Give the legal provisions covering or referring to the issue of bank circulation. 12. Give a brief sketch showing the principal points in the law of your State relating to savings banks. [W. H. S. Burgwyn, national-bank examiner.] Article 14, section 14, of the constitution prohibits the general assembly from incorporating banks to issue bills of credit except under conditions prescribed by the constitution. Section 15: No banks to be established otherwise than under a general banking law or upon a special basis. Section 16: Bills and notes issued as money must be redeemable in gold and silver. No law to be passed sanctioning suspension of specie payments. Section 20: State prohibited from being stockholder. "Nor shall credit of the State be given or loaned to bank." Section 1522, Code of Alabama, 1886: Banks of deposit and discount authorized; must have at least three shareholders, at least $50,000 capital, of which not less than $25,000 must be actually paid in. Section 1523: Subscribers must file, in the office of the judge of probate of the county where the bank is to be located, a declaration in writing signed by each, stating their names and residences, amount of capital stock, number of shares into which it is divided, etc. Said declaration must be accompanied by the affidavits of the subscribers, verified before the judge of probate, that $25,000 of the capital has been paid. Section 1524: Certified copy of declaration and affidavit to be filed in office of secretary of state, whereupon he must issue a certificate of incorporation, under the seal of the State, certifying * * * that the subscribers, their associates and successors, are a body politic and corporate, * * * and thereafter such corporation shall be deemed fully organized. Section 1526: Management to be by board of directors, not less than three, to be elected as provided by the by-laws. Section 1527: Capital may be increased to $500,000 and decreased to $50,000. Section 1528: Existing banks and loan associations may be reorganized under this law. Section 1529: No certificate of deposit for which interest is to be paid can be reissued, but on its return must be canceled. Section 453, sub. 8: Each share of stock to be assessed and tax collected in the county, city, town, or village where the bank is located or doing business. 195 196 REPOBT OF THE COMPTROLLER OF THE CURRENCY. ALASKA. [J« sepli Murray, Treasury agent.] The Bank of Juneau, ac Juneau, Alaska, is the only bank established in the Territory transacting a general banking business, buying and selling bills of exchange on London, New York, San Francisco, and Seattle. Their correspondents are the AngloCalifornia Bank, London and San Francisco; J. and G. Seligman & Co., New York, and Boston National Bank, Seattle. Certificates of deposit are issued, collections made, and commercial and time deposits received and gold dust bought. They have also made arrangements with their correspondents at Forty Mile, Youkon River, the North American Transportation and Trading Company, whereby safe facilities are afforded for the transportation of funds, and remittances can be made by Youkon miners to all cities of the United States, Canada, and Europe. ARIZONA. [Joseph T. Talbert, national-bank examiner.] 1. State banks, savings banks, and private banks. 2. Banks of discount and deposit are incorporated under the statute relating to incorporations in general, which provides that any number of persons may associate themselves togetherforthe transaction of lawful business, and shall have power: (1) Perpetual succession; (2) to sue and be sued; (3) to have a common seal; (4) to render the interest of stockholders transferable, and to prescribe the mode of making such transfers; (5) to exempt the private property of members from the liability of corporate debts; (6) to make contracts, acquire and transfer property; (7) to establish by-lawe, make rules and regulations for the management of their business. Before commencing business, except that of organization, they must adopt articles of incorporation, which must be signed and acknowledged by them, and be recorded in the office of the county recorder of the county where the principal place of business is located. The articles of association must contain: The names of incorporators; the name of corporation, and its place of business; the general nature of the business to be transacted; the amount of capital stock authorized, and the time when and conditions upon which the same is to be paid; the time of the commencement and termination of corporate existence; by what officers and persons the affairs of the corporation are to be conducted, and the times at which they are to be elected; the highest amount of indebtedness or liability to which the corporation is at any time to subject itself, and whether the private property of incorporators is to be exempt from corporate debts. Before commencing business banks must also obtain a license from the bank comptroller. 3. The territorial auditor, who is exofficio bank comptroller. 4. (A) There are no provisions in regard to the amount and payment of capital stock. (B) No provisions as to management except such as stated in articles of association. (C) Shareholders are individually liable for the indebtedness of the incorporation in the proportion which the amount of stock owned by them bears to the whole amount of the capital, unless the liability is limited in the articles of association to the amount of their respective holdings of stock; or unless it is stated in the articles that private property of incorporators shall not be liable for debts of the corporation. (D) Every bank shall make to the comptroller not less than three reports during each year, under oath; and said report shall state the amount of capital stock and number of shares; the names of directors and shares held by each; the amount of capital paid in; the amount of reserve fund (if any); the amount due to depositors; the amount and character of all liabilities; the value of its real estate; the amount loaned on real estate; the amount invested in bonds, designating the particular class and amount; the amount loaned on stocks and bonds; the amount loaned on other securities; the actual amount of money on hand or deposited in any other bank or place, and the amount in each place; the amount of property held, or any amount of money loaned, deposited, invested, or placed not otherwise enumerated. The bank comptroller makes a general report of the business of his office to thelegisture at each session. (E) The bank comptroller personally, or by a competent expert appointed by him, shall, once in each year or oftener, if necessary, without previous notice, visit and make a full examination of each bank and banking institution, and inspect all its books, papers, notes, bonds, securities, etc., and report same to the attorney-general. Said bank comptroller or examiner must examine under oath officers and servants of the bank in relation to its affairs, and such officers and servants must answer the questions put to them on oath, or be guilty of misdemeanor. (F) Savings banks are restricted to loan on real estate, unless their capital stock or reserve amounts to not less than $100,000. No loans must be made for.a longer period than six years, and loans made upon real estate must not exceed 50 per cent of the market value of the security, except when made for the purpose of facilitating the sale of REPORT OF THE COMPTROLLER OF THE CURRENCY. 197 property owned by the corporation. Savings banks shall not loan or invest their own capital or the money of their depositors in any mining shares or mining stocks. Where the capital stock of the savings bank or reserve fund is greater than $100,000 they may purchase and hold securities and evidences of indebtedness not secured by real estate. There are no restrictions in regard to loans of banks other than savings banks. (G) State banks are required to keep on hand at all times in cash 15 per cent of the aggregate amount of their deposits, including borrowed money. Failure to do this authorizes the bank comptroller to declare the bank insolvent. This law does not apply to savings banks. (H) There are no requirements in regard to the accumulation of surplus, except that each savings association which has no capital shall, on each dividend day, retain at least 5 per cent of the net profits to constitute a fund for the payment of losses. 5. None. 6. Not at all. 7. Branch offices not provided for. 8. Reports of condition are published in the newspapers. 9. A license fee of $5 is paid for the privilege. A charge of from $15 to $25 is made by the bank comptroller for each examination. In addition to this, banks are taxed on their capital stock in the same proportion as other corporations; usually assessed on a basis of about 50 per cent. 10. When the bank comptroller is informed that any bank is insolvent or unsafe, it is his duty to report in writing the fact of such insolvency ta the attorney-general, and his neglect to do so shall be deemed a felony. It is the attorney-general's duty thereupon to bring suit in the district court of the Territory and. if the bank is found to be insolvent or in an unsafe condition to do business, the court will appoint a receiver to wind up its affairs. 11. There are no legal provisions in regard to or referring to the issue of bank circulation. 12. The principal points regarding the law relative to savings banks are embraced in the above answers. AEKANSAS. [Edward I. Jolmson, national-bank examiner.] 1. Banking may be carried on by individuals or by corporations composed of three or more persons organized under the general incorporation law of the State. The State law prescribes no special regulations for banking. 2, 3. Corporations are organized only under general incorporation laws. Business corporations must consist of not less than three persons, who shall elect a board of directors. The president and secretary are to be elected by the board, and the president must be a member of it. The secretary and treasurer must reside and keep the books of the company within the State. The articles of association must be signed by the president and a majority of the directors, and must be accompanied by a certificate, signed in like manner, and sworn to by the president and a majority of the directors, setting forth the purpose of the corporation, the amount of its capital stock, the amount actually paid in, the names of its stockholders, and the number of shares held by each, respectively, and the articles and certificates must be filed in the office of the secretary of state, and a duplicate with the clerk of the county in which the corporation is to transact business. The stock can be transferred only upon the company's books, and a record of the transfer has to be deposited with the county clerk in order to be valid as against creditors of the transferrer. The corporation has a lien on its stock for debts due from the stockholders. The president and secretary are required to file with the county clerk an annual statement of its financial condition, and, in case of a failure to do so, become liable for its debts. If the directors declare a dividend when the corporation is insolvent they become liable for all the corporate debts. Any corporation which is insolvent or has ceased to do business may be wound up on the suit of any creditor or stockholder by a decree of the chancery court. Preferences by insolvent corporations are forbidden. Shares of stock are in denominations of $25 to $100. 4. (C) Shareholders liable only for amount of holdings. (E) Not subject to examination. 5. No legal provisions governing the receipt of deposits; allow interest on deposits to about the same extent as national banks. 6. The State is not interested in any of the banks. 7. Yes; if they so desire, there being no restrictions. 8. No channel, except voluntary. 9. Same as others. 10. See answer to 2, 3, and 4. 11. Prohibited by the State constitution. 12. No law relating to savings banks. 198 REPORT OF THE COMPTROLLER OF THE CURRENCY. [Board of bank commissioners of California.] 1. There are three classes of banks permitted to do business in this State, viz, commercial, .savings, and private banks. 2. Articles of incorporation must be prepared by commercial or savings banks, setting forth (1) the name of the incorporation; (2) the purpose for which it is formed; (3) the place where its principal business is to be transacted; (4) the term for which it is to exist, not exceeding fifty years; (5) the number of its directors or trustees, which shall not be less than five nor more than eleven, and the names and residences of those who are appointed for the first year; (6) the amount of its capital stock and the number of shares into which it is divided; (7) if there is capital stock, the amount actually subscribed, and by whom. The articles of incorporation must be subscribed by five or more persons, a majority of whom must be residents of this State, and acknowledged by each before some officer authorized to take and certify acknowledgments of conveyances of real property. Upon filing the articles of incorporation in the office of the county clerk of the county in which the principal business of the company is to be transacted, and a copy thereof, certified by the county clerk, with the secretary of state, and the affidavit mentioned in the last section, where such affidavit is required, the secretary of state must issue to the corporation, over the great seal of the State, a certificate that a copy of the articles containing the required statement of facts has been filed in his office; and thereupon the person signing the articles, and their associates and successors, shall be a body politic and corporate, by the name stated in the certificate, and for the term of fifty years, unless it is in the articles of incorporation otherwise stated or in this code otherwise specially provided. A copy of any articles of incorporation filed in pursuance of this chapter and certified by the secretary of state must be received in all the courts and other places as prima facie evidence of the facts therein stated. 3. Secretary of state and board of bank commissioners. 4. (A) No savings bank, or bank, or banking corporation shall be incorporated in this State and conduct such banking business in a city or town of 5,000 inhabitants or under with a capital stock of less than $25,000, or in a city or town of over 5,000 and not exceeding 10,000 inhabitants with a capital stock of less than $50,000, or in a city or town of over 10,000 and not exceeding 25,000 inhabitants with a capital stock of less than $100,000, or in a city or town of over 25,000 inhabitants with a capital stock of less than $200,000. Before the secretary of state issues to any corporation that proposes to do a banking business his certificate of the filing of the articles of incorporation there must be filed in his office the affidavit of the persons named in said articles as the first directors of the corporation that all the capital stock has been actually and in good faith subscribed, and at least 50 per cent thereof paid in lawful money of the United States to a person in such affidavit named for the benefit of the corporation. The remainder of the capital stock must be paid in within two years after the said banking corporation receives from the commissioners its first license to transact business, and if not so paid no further license shall be issued to it: Provided, however, That the provisions of this section shall not apply to corporations now in existence. (B) Immediately after their election the directors must organize by the election of a president, who must be one of their number, a secretary, and treasurer. They must perform the duties enjoined on them by law and the by-laws of the corporation. A majority of the directors is a sufficient number to form a board for the transaction of business, and every decision of a majority of the directors forming such board made when duly assembled is valid as a corporate act. (C) Each stockholder of a corporation or joint-stock association shall be individually and personally liable for such portion of all its debts and liabilities contracted or incurred during the time he was a stockholder as the amount of stock or shares owned by him bear to the whole of the subscribed capital, stock, or shares of the corporation or association. The directors or trustees of corporations and joint-stock associations shall be jointly and severally liable to the creditors and stockholders for all moneys embezzled or misappropriated by the officers of such corporation or joint-stock association during the term of office of such director or trustee. (D) Any corporation mentioned in section 3 of this act, including banks in liquidation or insolvency, shall, whenever required by the board of bank commissioners, make a report in writing to the commissioners, verified by the oath of its president and its secretary or cashier, or its two principal officers. Said report shall show the actual financial condition of the corporation making the report at the close of any past day by the commissioners specified; (2) the names of the directors, and the number of shares of stock held by each. The oaths of the officers to the statements above required shall state that they, and each of them, have a personal knowledge of the matters therein contained, and that they believe every allegation, statement, matter, and thing therein contained, is true; and any willfully false statement in the premises shall be perjury and shall be punished as such. The reports, as REPORT OF THE COMPTROLLER OF THE CURRENCY. 199 provided for by this section, shall by the commissioners be required from each and every corporation herein mentioned at least three times in each year, and shall be transmitted to the commissioners within fifteen days after the receipt from them of a request or requisition therefor. Any corporation mentioned in section 3 of this act failing to furnish the bank commissioners any report by them required under the provisions of this act within the time herein specified shall forfeit the sum of $100 per day during the time of such default. (E) It shall be the duty of one or more of the bank commissioners, as designated by the commissioners, once each year, and as often as in their judgment may be deemed necessary, without previous notice, to visit and make, personally, a full examination of each and every corporation mentioned in section 3 of this act; to inspect all books, papers, notes, bonds, or evidences of debt of such corporation, and all securities; to ascertain the condition of every such corporation, its solvency, its ability to fulfill its obligations, and, if in their opinion it is deemed necessary, report its condition to the attorney-general as soon as practicable after such examination. (F) No restriction by law regarding commercial banks. Corporations organized for the purpose of accumulating and loaning the funds of their members, stockholders, and depositors may loan and invest the funds thereof, receive deposits of money, loan, invest, and collect the same with interest, and may repay depositors with or without interest. No such corporation must loan money except on adequate security on real or personal property, and such loan must not be for a longer period than six years. No savings bank shall receive the license in this act provided for un less at least 50 per cent of its loans shall be secured by first mortgage or other prior lien upon real estate situate within this State, such loans, at the date when made, hereafter not to exceed 60 per cent of the market value of the security, except when made for the purpose of facilitating the sale of property owned by the corporation. And it shall be unlawful for any savings and loan society, or savings bank, to purchase, invest, or loan its capital, or the money of its depositors, or any part of either, in mining shares or stocks. Any president or managing officer who knowingly consents to a violation of the above provisions shall be deemed guilty of a felony. (G) No legal provision governing cash reserve. (H) The directors of any savings bank, bank, or banking corporation having a capital stock may semiannually declare a dividend of so much of the net profits of the stockholders as they shall judge expedient; but every such corporation shall, before the declaration of such dividend, carry at least one-tenth part of the net profits of the stockholders for the preceding half year to its surplus or reserve fund until the same shall amount to 25 per cent of its paid-up capital stock. But the whole or any part of such surplus or reserve fund, if held as the exclusive property of stockholders, may at any time be converted into paid-up capital stock, in which event such surplus or reserve fund shall be restored in manner as above provided until it amounts to 25 per cent of the aggregate paid-up capital stock. A larger surplus or reserve fund may be created, and nothing herein contained shall be construed as prohibitory thereof. 5. There is no legal provision governing the receipt of deposits. It is the custom of savings banks to pay interest on deposits. Some commercial banks pay interest on term deposits. 6. The State is not interested as a shareholder in any of the banks. 7. There are some banks which have branch offices. 8. Commissioners make, on or before the 1st of October in each year, a report to the governor of the State, containing a tabular statement and synopsis of the several reports which have been filed in their offices since their last report, and any other proceedings had or done by them under this act, showing generally the condition of the respective savings, commercial, and other banking corporations or institutions of this State and such other matters as in their opinion may be of interest to the public, with a detailed statement, verified by their oaths, of all moneys and fees of office received by them during the same period. Copy provided each member of the legislature. Reports are public, and delivered to citizens free of charge upon application. 9. There are no taxes imposed upon banks other than those assessed upon all classes of property, except to pay the salaries and all other necessary expenses of the commissioners, as provided for by this act. Every corporation receiving a license shall pay annually, in advance, to the commissioners, in gold coin, its share of the amount required to pay such salaries and expenses; the share to be paid by any corporation to be determined by the proportion which its deposits bear to the aggregate deposits of all such corporations receiving licenses, as shown by the latest reports of such corporations to the commissioners. 10. If the bank commissioners, on the examination of the affairs of any corporation mentioned in section 3 of this act, shall find that any such corporation has been guilty of violating its charter, the laws of this State, or any of the provisions of this act, or is conducting business in an unsafe manner, they shall, by an order addressed to the corporation so offending, direct discontinuance of such illegal and unsafe practices and a conformity with the requirements of the law and its charter and of the 200 REPORT OF THE COMPTROLLER OF THE CURRENCY. provisions of this act. And if such corporation shall refuse or neglect to conform with such requirements hefore the expiration of the time in the order specified, or if it shall appear to said commissioners and they shall unanimously decide that it is unsafe for any such corporation to transact business, it shall be the duty of the commissioners immediately to take such control of such corporation and all the property and effects thereof as may be necessary to prevent waste or diversion of assets, and to hold possession of th© same until the order of court hereinafter mentioned, and to immediately notify th© attorney-general of their action; and it is hereby made the duty of the attorney-general, upon receiving such notification, to immediately commence suit in the proper court against such corporation and all the directors or trustees thereof, to enjoin and prohibit them from the transaction of any further business. If, upon hearing of the case, the court shall find that it is unsafe for such corporation to continue business, and that such corporation or institution is insolvent, said court shall issue the injunction applied for, and shall cause the same to be served according to law, and shall order the commissioners to surrender to the corporation the property thereof in their possession for the purpose of liquidation; or if the court shall find that such corporation is solvent and may safely continue business, it shall dismiss the action and order that the corporation be restored to the possession of its property. The issuance of the injunction hereinabove provided for shall by operation of law dissolve any and all attachments levied upon any property of such corporation within one month next preceding the date of the notification by the commissioners to the attorney-general, as provided for in this section, and no attachment or execution shall, after the issuance of such injunction and during the process of liquidation hereinafter provided for, be levied upon any property of said corporation, nor shall any lien be created thereon. And if it shall appear to the court at such hearing or at any time during the liquidation hereinafter provided for, on the petition of one or more of the bank commissioners or any other interested party, that any of the directors or trustees or officers of said corporation have been guilty of fraud, malversation, or criminal carelessness or negligence, and that any of them are not the proper persons to be instrusted with the closing of the affairs and business of such corporation in the interest of the depositors, creditors, and stockholders thereof, the said court shall cause to be issued in said action and served upon said directors or trustees or officers, or any of them, an order to show cause why they, or any of them, should not be removed from office, which order shall briefly recite the grounds of the application, and shall be returnable at a time to be fixed by the court; and if on the hearing the court shall find that such directors or trustees or officers, or any of them, ought to be removed from office it shall enter its order of removal accordingly, which order shall be final in the premises; and if the board of directors or trustees of the corporation shall neglect for the period of ten days after such removal to elect or appoint a successor or successors to the person or persons so removed, then the court, by an order entered in said cause, shall appoint such successor or successors; and the court shall also have power in like manner to fill all vacancies occurring in the board, and to appoint directors or trustees in their stead whenever from any cause there are no directors or trustees, or not a sufficient number thereof to constitute a quorum for the transaction of business ; or when from any cause there are no directors or trustees, the court may order an election by the stockholders, to be held according to law. Subject to this right of removal and appointment, the directors or trustees of all banking corporations in liquidation shall be permitted to continue the management of the affairs of such corporations during the process of liquidation, under the direction of the bank commissioners, as hereinafter provided. The affairs of every corporation mentioned in this act which is hereafter forced into liquidation under the provisions of this act, or otherwise goes into liquidation; shall be closed, and the business thereof settled within four years from the time it shall enter into liquidation, unless at the expiration of such time it shall obtain the consent in writing from a majority of the board of bank commissioners to continue in liquidation for a longer period. The bank commissioners shall, however, have no power to grant a continuance for such purpose for a longer period than one year at each time; and the affairs of any corporation in process of liquidation at the time of the adoption of this section as amended shall be closed within a time to be designated by such bank commissioners. Any corporation mentioned herein now in liquidation, or that hereafter goes into liquidation, shall make reports of the condition of its affairs to the bank commissioners, in the same manner as the solvent banks mentioned in this act, and, in addition thereto, shall state the amount of dividends paid, debts collected, and the amounts realized on property sold, if any, since the previous report. The bank commissioners shall have the power, and it is hereby made their duty, to examine the condition of every such corporation in liquidation, in the same manner as in the case of solvent banks, and they shall have a general supervision of any such corporation. They shall have the power to limit the number of employees necessary to close up the business of any such corporation, and to also limit the sala REPORT OF THE COMPTROLLER OF THE CURRENCY. 201 ries of the same, and shall do all in their power to make such liquidation economical and as expeditious as the interests of the depositors and stockholders will admit. If any officer or employee of any corporation, insolvent or in liquidation, mentioned in this act, shall refuse to comply with the provisions of this section, or disregard or refuse to obey the directions of said bank commissioners, given in accordance with the provisions of this act, such officer or employee shall be punished by a fine of not exceeding $5,000, or by imprisonment in the county jail for not exceeding one year, or by both such fine and imprisonment, as a court of competent jurisdiction may determine. 11. Constitution of State prohibits issue and circulation of money by State banks. 12. Covered under section 4. (Copy of banking laws transmitted.) COLORADO. [Joseph T. Talbert, national-bank examiner.] 1. The different classes of banks permitted by law to do business in Colorado are: (a) National banks; (&) banks incorporated under State laws other than savings banks; (c) savings banks incorporated under State laws; (d) private banks unincorporated. 2. Banks incorporated under State laws must file a certificate with the secretary of state and another certificate with the county clerk and recorder of the county where the bank is located, specifying as follows: First. The name assumed to distinguish such corporation or association and to be used in all its dealings. Second. The place where the operations of discount and deposit of such banking corporation or association are to be carried on, designating the particular county, city, or town at which place such association shall keep an office for the transaction of its business. Third, The amount of the capital stock of such association and the number of shares into which the same is divided. Fourth. The names and places of residence of the stockholders and the number of shares held and owned by each of them respectively. Fifth. The period at which such association shall commence and terminate. Sixth. The names and places of residence of the several directors and officers and the number of shares of the capital stock of such corporation or association owned and held by each of such directors and officers, which certificate shall be acknowledged. Private savings banks not incorporated are not permitted to do business in Colorado. 3. There is no provision making it the duty of any particular officer to determine when the conditions have been satisfied. 4. An ordinary State bank must have a capital of not less than $30,000, and is not permitted to transact any business until at least 50 per cent of its capital has been paid into the treasury of the bank in cash, nor until a certificate to that effect, under oath of the president and cashier, shall have been filed in the office of the recorder of deeds of the county where such bank is located; nor is such bank permitted to continue to transact business beyond the period of one year unless the entire capital stock has been fully paid up in cash, and a certificate to that effect filed in said offices. Savings banks must have a capital of not less than $25,000, all of which must be paid in cash. The management of incorporated banks is in the hands of the directors. Shareholders in banks and savings banks are held individually responsible for debts, contracts, and engagements of said associations in double the amount of the par value of stock owned by them respectively. The directors of an ordinary bank, whenever a dividend is declared, shall make a full, clear, and accurate statement to the State treasurer of the condition of the bank at that time, and the same must be published at least once a week for three successive weeks in some newspaper of the county in which such*bank is located. The directors of savings banks are required to make similar statements to the State treasurer quarterly, which statement must be published, as in the case of other banks. There is no provision for examination of banks by State officials. Banks are not permitted to take as security for any loan or discount a lien upon any part of their capital stock. In case of ordinary State banks the stockholders, collectively, of any bank shall at no time be liable to such bank, either as principal debtors or sureties, or both, to an amount greater than two-fifths of the amount of the capital stock actually paid in and remaining undiminished by losses or otherwise. No officer of a savings bank shall be a borrower or surety for a borrower of any of its funds, nor shall any savings bank discount any paper made, accepted, or indorsed by its cashier or any of its clerks, or by any partnership of which either is a member. The following additional provision with reference to savings banks is found among our laws: "Section 523. The board of directors or trustees may invest one-half of the deposits made with them upon personal security, or in the bonds or stock of this State or of the United States, or in the bonds of any county, city, town, or school district in this State legally authorized to issue such bonds, or loan the same upon bonds 202 REPORT OF THE COMPTROLLER OF THE CURRENCY. secured by mortgage upon unincumbered real estate worth at least double the amount loaned, or in such other manner as is authorized by this act; and from the remainder of said deposits temporary deposits may be made by said board in any national bank, or in any banks of this State which may be incorporated under the general banking laws, said deposits not to exceed $25,000 in any one bank; or they may keep the whole or any part of the said remainder to .meet the current payments of such bank, and which may by them be kept on deposit, interest or otherwise, or in such suitable form as the directors or trustees may direct/' Savings banks and other banks are required to at all times hold, either in their own keeping or on deposit subject to call with some national bank or with other banks organized under general laws, at least 20 per cent of the savings deposits of such bank or association. There is no provision requiring the accumulation of a surplus. Section 223, Mills7 Annotated Statute, is as follows: "No corporation organized under the laws of this State and doing business in this State shall loan its money, or the money deposited with it, to any individual, corporation, firm, or company, directly or indirectly, or permit any individual, corporation, firm, or company to become indebted to it in a sum exceeding 25 per cent of its capital stock actually paid in, or permit a line of loans to any greater amount to any individual, corporation, firm, or company, nor shall any such corporation loan to any officer or director of the same as principal or surety or indorser upon paper for an amount greater than 90 per cent of the capital stock of such corporation actually paid in and owned by such director or officer, unless such borrower deposit with such corporation collateral security or execute a deed of trust or mortgage upon real or personal property which at the time is assessed or assessable for taxable purposes at a valuation 10 per cent in excess of such loan." 5. Section 222, Mills' Annotated Statutes, is as follows: " I f any banker, or any president, director, manager, cashier or other officer, or any agent, clerk or employee of any banker, bank or banking institution doing business in this State shall receive or assent to the reception of any deposit of money or other valuable thing by such banker or in such bank or banking institution, or if any such banker, officer, or agent shall create or assent to the creation of any debts or indebtedness by such banker, bank, or banking institution, in consideration or by reason of which indebtedness any money or other valuable property shall be received by such banker, or into such bank or banking institution after he shall have had knowledge of the fact that such banker, bank, offense under this section evidence of the failure of any such banker, bank, or banking institution at any time within thirty days after the reception of such deposit or the creation of such indebtedness shall be received as prima facie evidence of knowledge on the part of the person charged that such banker, bank, or banking institution was insolvent at the time of the reception of such deposit or the creation of such indebtedness. Section 224, Mills7 Annotated Statutes, is as follows: " No president, director, manager, cashier, or other officer, agent, or employee of any bank or banking institution, organized and doing business under any laws of this State, shall receive or assent to the reception of deposits or create or assent to the creation of any indebtedness by such bank or banking institution after he shall have had knowledge of the fact that it is'insolvent or in failing circumstances. Every person violating the provisions of this section shall be individually responsible for7 such deposits so received and such indebtedness so contracted." Section 225, Mills Annotated Statutes, is as follows: "In all suits brought for the recovery of any deposits received or debts contracted in violation of the provisions of section 2 of this act all officers, agents, or managers, or the executors or administrators of such as may be deceased of such bank or banking institution, may bejoined as defendants or proceeded against severally, and the fact that such bank or banking institution was insolvent or in failing circumstances at the time of the reception of such deposit or the contracting of such indebtedness shall be prima facie evidence of knowledge of such fact and of assent to such reception or contracting on the part of such officer, agent, or manager so charged therewith." It is generally the custom of savings banks to allow interest on deposits, and we believe also of other banks where the deposit is left with the bank for as long a time as one year, in case of special agreement to that effect. 6. The State is not in any manner interested as a shareholder in any bank. 7. There is no provision of law permitting banks to conduct branch offices. 8. State banks are not required to furnish information to the public as to their condition, except as stated above in answer to question 4. 9. The shares of stock in national banks doing business in Colorado are subject to taxation in the county where the bank is located, whether the owner resides there or elsewhere, and the bank is required to pay such tax as agent for the shareholder. 10. The usual method of closing up business of insolvent banks organized under State law is by deed of general assignment, all creditors standing upon an equal REPORT OF THE COMPTROLLER OF THE CURRENCY. 203 footing, except employees to the extent of $50 each, and in the case of the insolvency of savings banks the savings depositors are entitled to preference in the payment over other creditors. 11. State banks are not permitted to issue notes, bills, or other evidence of indebtedness for circulation as money. 12. The principal points in the Colorado law concerning savings banks have already been mentioned. [Edward K. Doyle, bank commissioner.] 1. State, savings, and private banks, trust companies. 2. Must be incorporated by general assembly. 3. General assembly and bank commissioners. 4. (A and B) Stated in petition for incorporation. (C) No double liability. (D) Reports made by State banks and trust companies quarterly, savings banks annually—no supervision of private banks. (E) Examinations made by bank commissioners semiannually or oftener. (F) No bank shall discount any paper made, accepted, or indorsed by its cashier or any of its clerks, or by any partnershix> of which either is a member. No director in any bank shall be obligated to such bank to an amount exceeding 5 per centum of the capital actually paid in and surplus combined, and no bank shall permit the directors to become obligated to it to an amount at any time exceeding in the whole the sum of 20 per centum on its capital stock actually paid in and surplus combined. Any bank which shall violate the provisions of this section shall forfeit to the State not less than $500 nor more than $1,000. If any director of any bank shall receive any compensation for indorsing • any paper discounted by such bank, he shall forfeit to the State the full amount of such paper. (G) Every bank and trust company shall always keep in its banking office gold and silver coin, bullion, bonds, legal-tender notes of the United States, or national-bank currency to an amount not less than one-tenth of all its liabilities, except its capital stock, but the bonds of the United States so included in said reserve fund shall never exceed one-twentieth of said liabilities. (H) Savings banks at least 3 per cent of deposits and no more than 10 per cent. 5. Savings banks not to exceed $1,000 in one year. Savings banks allow interest; State and trust companies, in certain cases. 6. Do not know. 7. No. 8. Reports issued by bank commissioners and statements published in newspapers quarterly. 9. One per cent on capital stock; bank commissioners7 salaries apportioned according to deposits. 10. Forward copies of law. [Michael F. Dooley, national-bank examiner.] 1. Banks of discount, Trust companies, which exercise the same functions and enjoy the additional privilege of receiving and investing trust funds, acting as receivers, administrators, etc. Savings banks of a purely mutual character, which receive deposits, from whose investment the depositors are paid dividends. 2. They must obtain a special charter from the legislature of the State. In the early charters certain conditions were needed to be complied with before banks began business. For instance, one bank had to pay for its franchise a bonus of $10,000 to erect a normal school, and another had to build a fence around the statehouse yard, etc. But such requirements have not been exacted in recent years. One provision was that one-half of the capital stock had to be paid in before beginning business. Now the full capital has to be paid in. 3. This is governed by the provisions of the charter. Formerly it was generally provided that commissioners named in the charter should receive subscriptions for the capital, and when this was fully subscribed said commissioners called the subscribers together to elect directors, and when 50 per cent of the capital stock was paid in the bank was allowed to commence business. Under recent charters commissioners are named therein to receive subscriptions, and when capital is fully paid in the banks are allowed to begin business. 4. (A) This is regulated by charter. Capital stock is required to be actually paid in before beginning business. (B) This is also fixed by charter. A board of directors manages each bank, and trustees manage savings banks. (C) There is no such liability. (T>) Banks and trust companies make quarterly sworn statements to the bank commissioners. Savings banks make annual reports to the same officials, who in turn make an annual report to the governor of the condition of each bank, trust compapy, and savings bank. (E) There are two bank commissioners appointed by the 204 REPORT OF THE COMPTROLLER OF THE CURRENCY. governor, with the consent of the senate, who are obliged to make two examinations a year of each bank, trust company, and savings bank. (F) No bank or trust company shall loan to any party more than 15 per cent of its capital stock actually paid in together with the surplus. No bank or trust company shall discount anypaper made, accepted, or indorsed by cashier or any of its clerks or by any partnership of which either is a member. No director of any bank or trust company shall borrow to an amount exceeding 5 per cent of the capital actually paid in and surplus combined, and no bank or trust company shall permit the directors to become obligated to it to an amount at any one time exceeding in the whole the sum of 20 per cent on its capital stock actually paid in and surplus combined. No loan shall be made by any bank or trust company on a pledge of its own stock. No loan shall be made by any savings bank to a manufacturing corporation or ecclesiastical society secured by mortgage upon its property, unless the same shall be accompanied by the individual guaranty of some responsible party or parties ©r by collateral security of equal value to the amount of the loan. No savings bank shall loan any money upon any obligation on which only one person or firm shall be holden without taking additional security for the same equivalent to the guaranty of some other responsible party. No officer of a savings bank can borrow its funds. (G) Every bank or trust company shall always keep in its banking office gold and silver coin, bullion, bonds, legal-tender notes of United States, or national-bank currency to an amount not less than one-tenth of all its liabilities except its capital stock, but the bonds of the United States so included in its reserve fund shall never exceed one-twentieth of said liabilities. (H) No accumulation of surplus is required for banks or trust companies except that no dividend shall be declared unless from its net earnings after deducting all losses, overdrafts, and obligations suspended or overdue. No savings banks shall make any dividend until its surplus shall have accumulated to an amount equal to 3 per cent of its deposits, but no savings bank shall carry to its surplus or contingent fund a sum larger than 10 per cent of its deposits, and any surplus above that sum shall be divided among the depositors entitled to it in sums of not less than 1 per cent of its deposits. 5. There are no restrictions as to deposits in banks or trust companies, but no savings bank can receive more than $1,000 on deposit from one depositor in one year. Interest is paid on many accounts by banks and trust companies, but generally on those where the funds are left on deposit for some specified time or on accounts where the average balance is large. Hartford banks, State and national, are as a rule more generally doing this than other banks in the State, but the evil of interest paying has grown greatly during the past ten years, until to-day concentrated effort on the part of both banks and trust companies here is made to mitigate, if not entirely to eradicate, it. Outside of Hartford little interest is paid on deposits. 6. The State and every educational, ecclesiastical, and charitable corporation, in addition to the authorized capital stock, may subscribe for stock to the extent, in the aggregate, of one-tenth of the capital stock actually paid in. The State, through its school fund, is interested in some of the banks as stockholder. 7. No branch offices are permitted. 8. Banks and trust companies inform the public of their condition by reports published four times a year in newspapers printed in the towns and counties where the banks are located and by the annual reports of the bank commissioners to the governor. In these last reports appear the statements of the savings banks. 9. The stockholders of banks and trust companies, if residents of the State, pay taxes on their stock in the towns where they reside; and if nonresidents, a tax of 1 per cent is collected by the State. Every cashier of such bank or trust company must forward annually to each town a list of its shareholders resident therein, and must also make to the State treasurer a return of all the nonresident stockholders. Taxation is based upon the market value of the stock after deducting therefrom the amount invested in real estate, upon which bank or trust company pays tax. Savings banks pay one-fourth of 1 per cent on their deposits—certain deductions for real estate owned and taxable, bonds issued by towns in favor of railroads, and $50,000 in addition being permitted. 10. When in the opinion ©f the bank commissioners a bank has impaired its capital or the public are in danger of being defrauded, the commissioners may apply to the superior court for a receiver. Upon hearing and for cause shown, the court has power to appoint a receiver to wind up the affairs of such bank. 11. In the revision of 1866 there appears a law specifying that a bank may issue bills to an amount equal to 75 per cent of its capital actually rjaid in and unimpaired by losses. In the revision of 1888 this law does not appear. There are no provisions that I can find. 12. The answer to this question is largely embodied in much of what appears in the other answers. To summarize, savings banks are created by charter. They are managed by trustees and entirely distinct in their powers from banks of discount. Treasurer must give a bond for not less than $10,000. All loans must be approved REPORT OF THE COMPTROLLER OF THE CURRENCY. 205 by trustees and & record kept, showing names of those assenting. No officer can borrow money from a savings bank. At least one-half of the deposits must be loaned upon unineumbered real estate in this State. Bonds issued by the State of Connecticut or any municipality therein may be classed as real estate. Net earnings, except a small reserve fund, are divided in form of dividends twice a year among the depositors. In declaring dividends the trustees may discriminate to an amount not exceeding 1 per cent in favor of depositors having less than $2,000 on deposit. DELAWARE. [Francis N. Buck, national-bank examiner.] 1. There is no general law under which banking corporations can be organized; must be under special charter by act of assembly, and privileges granted are only such as are embraced in charter or in subsequent amendments. Private banks, receiving deposits and granting discounts, do not exist because of practical prohibition by taxation on deposits. There are one State bank (principal bank and three branches), two trust companies, and two savings banks, all of which are organized and conduct business under special charters. 2. As required in charter. 3. None. 4. (A) Farmers'Bank. Dover (principal), $224,000; New Castle (branch), $100,000; Georgetown (branch), $120,000; Wilmington (branch), $236,000; total, $680,000. Equitable Guarantee and Trust Company, Wilmington, $500,000; Security Trust and Safe Deposit Company, Wilmington, $500,000, all fully paid. Savings banks are conducted on the mutual plan; both of these are strong and conservative, with large guaranty funds. (B) By directors. (C) None. (D) None, except semiannual and annual publications of statements, and in case of Farmers' Bank, of annual report to governor, for transmission to general assembly. (E) None. (F) None, or nominal if at all. (G) None. (H) None. 5. No legal provision; interest seldom paid by banks, but paid by trust companies and savings banks. 6. State owns: Farmers' Bank, general fund, 1,275 shares, par value $50; school fund, 2,439 shares, par value $50; school fund, 5,000 shares, $36 paid. National Bank of Delaware, Wilmington, general fund, 20 shares, par value $200; school fund, 37 shares, par value $200. National Bank of Smyrna, school fund, 114 shares, par value $50. Union National Bank, Wilmington, 254 shares. 7. Farmers' Bank has principal bank at Dover, branches at Georgetown, New Castle, and Wilmington; organized and conducted at these specifically designated places, under charter and amendments. 8. Only by occasional publication of summarized statements and in case of savings funds, publication of annual statements. Farmers' Bank makes annual report to governor. 9. State tax of 1-| per cent on market value of shares, but not levied on trust companies. 10. None, except those governing all corporations, usually chancery proceedings for appointment of receiver. 11. None, other than in Farmers' Bank charter, which provides that circulation shall not be greater than double the amount of capital stock. 12. No general provisions. NOTE.—The trust companies practically do a banking business, taking paper and paying and receiving currency over their counters. FLORIDA. [American Bank Reporter.] Any incorporated town or city with 3,000 inhabitants or more may have a banking institution with corporate powers, the capital, howe\rer, to be not less than $50,000. Any place not exceeding 3,000 inhabitants may, subject to the approval of State comptroller, organize a banking institution with a capital of not less than $15,000. Prior to commencing business the persons interested shall enter into articles of association specifying the object for which the same is formed. These articles must be signed by the persons uniting to form the association, and a copy thereof forwarded to the State comptroller to be filed in his office. The persons forming the association shall under their hands make an organization certificate which shall specifically state (1) the name of the association subject to approval of comptroller; (2) the place or places of business; (3) amount of capital stock and number of Bhares; (4) names, address, and number of shares held by shareholders; (5) the fact that certificate is made to enable such parties to avail themselves of the advantages of the act. The organization certificate must be duly acknowledged before some 206 REPORT OF THE COMPTROLLER OF THE CURRENCY. officer authorized to take the acknowledgment of deeds. On filing these articles ot association and organization certificate the association shall become a body corporate with the privileges appertaining thereto. Fifty per cent of the capital stock must have been paid in. No less than five persons are legally qualified to start a bank, and a dissolution can only be effected by a concurrence of a two-thirds majority. Stockholders are individually responsible equally and ratably and not one for the other. Banks are required to have on reserve an .amount equal to 20 per cent of their deposits. Banks must half yearly make a report to the State comptroller according to the form prescribed by him, verified under oath of president or cashier, and attested by the signatures of at least two directors. Each report shall exhibit in detail the resources and liabilities of the association at the close of business on any day by him specified, and shall be submitted to the comptroller within five days after the receipt of a request therefor by him; the comptroller may further at any time call for special reports whenever in his judgment they may be necessary. In any banking institution in the State there must be not less than five directors each owning, in his own right, at least ten shares of capital stock. Each director during his time of service must be a citizen of the United States, and three-fifths of them muts have resided in the State at least one year preceding their election, and one of the directors chosen by the board shall be president thereof. Banks not organized under the laws of the State or under the United States banking law, and all persons or corporations doing the business of bankers are prohibited from using the word "bank" except those doing business prior to the act, and such must append to their name or title the words "not incorporated." GEOEGIA. [W. H. S. Burgwyn, national-bank examiner.] Act 1893, chapter 343, section 1: Any three persons may form a corporation to do a banking business by filing in the office of the secretary of state a declaration in writing stating * * *. Such declaration must be accompanied by the affidavit of the subscribers, verified by the ordinary of the county in which it is proposed to do business, that $25,000 of the capital subscribed has been actually paid in. Section 2: Said declaration to be filed in the office of the secretary of state, whose duty it shall be to certify and deliver to said subscribers a copy of such declaration and affidavit; and it shall be the duty of said subscribers to cause such certified copy, declaration, and affidavit to be published once a week for four weeks in the official organ of the county. Section 3: When said declaration and affidavit has been published as above, it shall be the duty of the ordinary to certify the fact to the secretary of state, who shall then issue a certificate of incorporation * * * and he shall then and there record the declaration, affidavit, and certificate of the ordinary and the certificate of incorporation in the order named. Section 4: Such corporation, when organized, shall have power * * *. None given in this act to issue its notes to circulate as money. (See act of same year below giving this power.) Section 5: Management by board of not less than five or more than twelve directors, holders of one or more shares of stock. Section 6: Capital stock may be increased to any amount, or may be decreased to a sum not less than $50,000. Section 7: Capital must be $50,000, and $25,000 must be paid in cash before the filing of the declaration. Section 8: Corporation liable to the extent of its capital and assets, and each stockholder individually liable to the extent of his or her unpaid shares, "and shall be further and additionally individually liable equally and ratably (and not for another as surety) to depositors in an amount equal to the face value of their respective shares." Chapter 355, section 1: " The stock of each stockholder shall be bound for any debts matured or maturing that the stockholder may owe or be liable for to the company, either by indorsement, acceptance, or otherwise." Chapter 344, section 1: Authorizes circulating notes to be money to be issued to banks. Section 2: Governor, treasurer, and comptroller-general of the State to be a commission to have notes engraved and printed, to be numbered and registered, and countersigned by comptroller-general. Section 3: Banks wanting notes to make application to said commission. Application must contain * * * and that said bank has complied with all other conditions and requirements of the act to authorize it to become a bank of issue. Section 4: Commission to inquire into the truth of the recitals in the application. Section 5: Capital of bank to be not less than $25,000, all paid in. Section 6: One-half of bank's capital to be kept on deposit in the bank as a fund for the redemption of the notes issued to the bank. Section 7: Other half to be invested in valid county, municipal, State, or United States bonds, provided none of said bonds are below par of their face value, and provided the commission approves such bonds. Section 8: Said bonds to be deposited with the State treasurer. Section 9: Said commission to issue to said bank notes to an amount three times the amount of United States legaltender coin or currency deposited in said bank under section 6, said notes to be a first lien on all the assets of the bank. Section 10: Said notes to be promptly redeemed REPORT OF THE COMPTROLLER OF THE CURRENCY. 207 jn United States legal-tender coin or currency. Section 11: The bonds deposited with the State treasurer, and the United States legal-tender coin and currency set apart and kept on deposit in the vaults of the bank, and all other assets of the bank, shall each and both be and remain security in pledge for the redemption of the notes. Stockholders also doubly liable for the redemption of said notes. Section 12: Such double liability of stockholder not to cease until sixty days from date of any transfer of such share. Section 13: Banks to keep as a reserve fund in cash 25 per cent of the aggregate of deposits. Section 14: Should bank fail or neglect for thirty days to make good its reserve as aforesaid, the governor shall direct the attorney-general to institute proceedings for appointment of receiver. * * * Section 15: Depreciation of bonds in possession of treasurer of the State to be made good by substitution of other bonds. * * * Section 16: Banks to have the right to receive the interest due on the bonds deposited with the treasurer, unless. * * * Section 17: Said bonds may be withdrawn by paying to said commission, to be turned into the State treasury, an amount of lawful money of the United States equal to bank's outstanding circulating notes. Section 18: Banks to make quarterly reports to the commission ; commission also authorized to call for special reports. Section 19: Duty of bank inspector to visit every bank as often as directed by the commission. Section 20: Unlawful for the bank to loan in the aggregate more than 25 per cent of its capital to the officers and directors, or more than 10 per cent to any one officer or director. Section 21: Unlawful to loan money on the indorsement of its officers or directors. Section 22: Penalty for violating sections 6, 20, and 21 a felony, and punished by confinement in the penitentiary not less than one nor more than twenty years. Section 23: No dividends to be declared until net earnings shall equal 5 per cent of the capital, which shall be a surplus, to which shall be added annually thereafter 5 per cent of net earnings; and no dividends to be declared except from the net earnings after deducting therefrom 5 per cent to be added to the surplus. Section 24: Cashier of said bank to furnish the governor a bond in an amount equal to the redemption fund held in the vaults of the bank, conditioned on the good and faithful stewardship of said redemption fund, said bond to be made payable to the State treasurer and deposited with him. Act of 1894, chapter 90, section 1: All banks incorporated under the laws of Georgia are authorized to issue circulating notes under such terms and conditions as may hereafter be prescribed by the Congress of the United States. Section 2: That in the event of an act of Congress requiring that a deposit be made with some designated officer of the State as a condition precedent to a bank issuing circulating notes, the treasurer of the State is hereby designated as the officer with whom said deposit should be made, and he is hereby authorized to receipt for and assume safe keeping of the same. Chapter 81, section 1: Banks required to make statement, under oath, at least four times each year to State bank examiner, and to publish the same at expense of bank, said statements to be made when requested by State-bank examiner, to be transmitted within ten days. Penalty for neglect or failure to comply, fine of $50 for each violation. rD-A.HO. [S. R. Flynn, national-bank examiner.] 1. Idaho has no State banking law. Incorporated banking associations are governed by the general corporation laws. There is no restriction as to classes or kinds of banks, except that a special partnership can not be formed for the purpose of entering the banking business. Banking business is done by private parties without incorporation and without capital. 2. No requirements in case of unincorporated concerns. Five or more persons, of whom a majority shall be bona fide residents of the State, can form any private corporation. Articles of incorporation must be prepared, setting forth (1) name of corporation; (2) purpose for which it is formed; (3) place where its principal business is to be transacted; (4) term for which it is to exist, not exceeding fifty years; (5) the names of its directors and trustees and the names and residences of those who are appointed for the first year; (6) the amount of capital stock and the number of shares into which it is divided; (7) if there is capital stock, the amount actually subscribed and by whom. The articles of incorporation must be subscribed by five or more persons, a majority of whom must be resident freeholders of the State, and acknowledged by each before some officer authorized to take and certify acknowledgments of conveyances of real property. Be*fore the secretary of state or the recorder of a county issues a certificate of incorporation, there must be filed in his office an affidavit of the president, secretary, or treasurer named in the articles that the amount of the capital stock required by law has been actually subscribed; but the only corporations required to have a specified amount of capital subscribed are railroad, wagon road, or telegraph corporations. 3. Recorder of county in which corporation does business, or secretary of stateissue certificate when requirements are complied with. Digitized formust FRASER 208 REPORT OF THE COMPTROLLER OF THE CURRENCY. 4. (A) No requirement except as to railroad, wagon road, or telegraph corporations. (B) Not less than five nor more than eleven directors. (C) Each stockholder is individually and personally liable for its liabilities to the full amount unpaid upon the par or face value of the stock or shares owned by him. The liability of each stockholder is determined by the amount of stock or shares owned by him at the time the debt or liability was incurred by the corporation; and such liability is not released or discharged by any subsequent transfer of stock. Any creditor of the corporation may institute actions against any of its stockholders jointly or severally, and in such action the. court must determine the amount unpaid upon the stock held or owned by each defendant, and a several judgment must be entered against him for a sum not exceeding such amount. (D) None required. (E) The governor may order an inquiry into the affairs or management of any corporation. (F) No restrictions, except that officers and employees of savings banks who knowingly overdraw their accounts are declared guilty of misdemeanor. (G) No requirement. (H) No requirement. 5. No provisions, except that any officer, agent, teller, or clerk of any bank, and every individual banker, or agent, teller, or clerk of any individual banker, who receives any deposits, knowing that such bank or banker is insolvent, is guilty of a misdemeanor. It is customary to allow interest on deposits. 6. Not interested. 7. Nothing in the law to prevent. 8. No information furnished the public through any regular channel. 9. No taxes, except such as are imposed on capital stock and credits. Private and incorporated banking associations have a distinct advantage in the matter of taxation over national banks in this: In estimating assessable property all credits secured by real or personal property are deducted, or rather not included in such estimates. 10. Upon the dissolution of any corporation, the district court of the county in which the corporation carries on its business or has its principal place of business, on application of any creditor of the corporation, or a member or stockholder thereof, may appoint one or more persons to be receivers or trustees of the corporation, to take charge of the estate and effects thereof, and to collect the debts and property due and belonging to the corporation, and to pay the outstanding debts thereof, and to divide the moneys and other property that shall remain over among the stockholders or members. The receiver has, under the control of the court, power to bring and defend actions in his own name as receiver, to take and keep possession of the property, to receive rents and collect debts, or to compound for or compromise the same, to make transfers, and generally to do such acts respecting the property as the court may authorize. Funds in the hands of a receiver may be invested upon interest by order of the court, but no such order can be made except upon the consent of all tbe parties to the action. 11. No corporation shall emit paper money or create or issue bills, notes, or other evidences of debt, upon loans or otherwise, for circulation as money. 12. No provision of law regarding the organization of savings banks, and there are none doing business in the State. [David Gore, auditor of public accounts.] 1. Under the general banking act entitled "An act concerning corporations with banking powers," approved June 16, 1887, as amended by act approved June 3,1889, banks may be formed " for the purpose of discount and deposit, buying and selling exchange, and doing a general banking business, excepting the issuing of bills to circulate as money, and such banks or banking associations shall have the power to loan money on personal and real estate security, and to accept and execute trusts." 2. First, application must be made for permit to organize, stating place of business, amount of capital, the name under which they desire to organize, and the duration of the association. When permit is issued, they may proceed to take subscriptions to stock, and when all subscribed for the stockholders meet and determine upon the number of directors and proceed to elect same. The directors then meet and organize by the election of officers. The capital stock must be paid in in full in cash, and the directors make affidavit to that effect, and the auditor of public accounts also verifies this by an examination into their affairs, and if satisfied that the organization has been legally effected and the association has on hand in cash the full amount of the capital and is otherwise equipped for business, the auditor issues his certificate authorizing them to commence business. Upon filing with the county recorder of deeds this certificate and the permit previously issued, they may open their doors for business. 3. The auditor of public accounts. 4 (A) The amount of capital stock is regulated by the population of the place where bank is located as follows: Under 5,000 inhabitants* $25?000 capitalj over REPORT OF THE COMPTROLLER OF THE CURRENCY. 209 5,000 and less than 10,000 inhabitants, $50,000 capital; over 10,000 and less than 50,000inhabitants, $100,000 capital; over 50,000 inhabitants, $200,000 capital. The above is the minimum amount of capital allowed by the law. The entire amount of capital must be paid in in cash before the bank commences business. (B) The directors elect officers to carry on the business of the bank. (C) A stockholder is liable for double the amount of his stock for all liabilities accruing while he remains a stockholder, and no transfer of stock operates as a release from such liability. (D) Reports of condition under oath are made at least once in each three months, and as often as the auditor of public accounts may call for the same. (E) Each bank is examined at least once in each year, and as often as the auditor of public accounts may determine, by some competent person appointed by him. (F) The restriction as to loans is covered by section 10 of the banking act as follows: "The total liabilities to any association, of any person or of any company or firm, for money borrowed, including in the liabilities of a company or firm the liabilities of the several members thereof, shall at no time exceed one-tenth part of the amount of capital of such association actually paid in. But the discount of bills of exchange drawn in good faith against actually existing values, and the discount of commercial and business paper actually owned by the person negotiating the same, shall not be considered as money borrowed." (G) The law fixes no amount of required reserve. The department rule has been 15 per cent of deposits subject to notice, and 20 per cent of other deposits. (H) The law does not require the accumulation of a surplus. 5. The law contains no provisions governing the receipt of deposits. Banks having a saviugs department and issuing time certificates of deposit pay interest. It is not the practice to pay interest upon commercial accounts or individual deposits subject to check. 6. The State is interested to no extent whatever as a shareholder in any bank, 7. The law contains no reference to branch banks; they are neither specifically permitted nor prohibited. In practice this department rules that they are not permissible. 8. The reports called for by the auditor of public accounts are required to be published in a newspaper published where the bank is located. The auditor also issues and distributes after each call a tabulated statement showing the condition of each bank. 9.' Banks, of course, pay taxes on their assets. There are no special taxes or burdens imposed, however, except the expense of examination, which is $10 per day for each day employed, and mileage for necessary travel at the rate of 8 cents per mile; also a fee of $5 to accompany each report of condition, and the cost of publishing report. 10. The following are the provisions of section 11 of the banking law: " Should the capital stock of any bank organized under this act become impaired, the auditor shall give notice to the president to have the impairment made good by assessment of the stockholders or a reduction of the capital stock of such bank, if the reduction should not bring the capital below the provisions of this section; and if the capital stock of said bank shall remain impaired for thirty days after notice by the auditor, he shall have power, and it is hereby made his duty, to enter suit against each stockholder, in the name of the people of the State of Illinois, for the use of said bank, for his or her pro rata proportion of such impairment, and when collected shall pay over the amount thereof to said bank, and the judgment in such case shall be for the amount claimed, with all costs and reasonable attorneys' fees, which fees shall be fixed by the court; or he may, in his discretion, file a bill in the circuit court of the county in which said bank is located, in the name of t^e people of the State of Illinois, against said bank and its stockholders for the appointment of a receiver for the winding up of the affairs of said bank. And said court, upon the presentation of said bill, and upon being made satisfied that the capital of said bank has become impaired, shall immediately appoint a competent and disinterested person as such receiver, and shall determine and fix his bonds, and shall prescribe his duties. And said cause shall proceed as other cases in equity." 11. A bank circulation is not permitted. 12. The general banking law makes no reference to savings banks. We have no law governing savings banks, as such. A bank formed under the general bankinglaw may be exclusively a savings bank. I will add that the information given applies to State banks only. Private banking is fully recognized in this State; indeed, three-fifths of all the banks in the State are private banks. These have never been brought under supervision of any kind, and carry on their business without regulations as to capital, publication of reports, or other requirements common to incorporated banks. (Incloses copy of banking law.) CUR 90, PT 1 14 210 REPORT OF THE COMPTROLLER OF THE CURRENCY. [A. C. Daily, State auditor.] • 1. There are authorized under the laws of this State, hanks of discount and deposit, sayings hanks, and trust companies, although the latter could not properly he termed hanks. Of course private banks are not prohibited, although they are under no kind of supervision, hut their husiness is conducted the same aa any other ordinary business partnership. 2. The State hanks, or hanks of discount, are required, before heginning husiness, to file articles of incorporation entered into hy not less than five persons and also to pay in cash one-half of the amount of their capital stock, which capital can not he less than $25,000. Savings hanks are required to file certificate under the hands of the in corporators, who can not he less than seven nor more than twenty-one, and who must have resided for at least five years, next preceding the incorporation in this State, and who must severally own unincumhered real estate therein, worth at least $5,000, and must obtain a certificate from the judge of the circuit court in the county in which the hank is to be established that they are qualified to act under the provisions above stated. Trust companies are required to file articles of incorporation entered into by not less than ten persons, and before heginning business must obtain a Certificate of the auditor of state that $100,000 of its capital stock has been subscribed and paid in, and is in the custody of his ©nice. 3. I have answered this question practically in answering question 2. 4. State banks of discount can not have a capital of less than $25,000, and one-half of this amount must be paid in before beginning business, and the other half within six months. Savings banks have no capital. Trust companies are required to pay in $100,000 of their capital before beginning husiness, and the remainder can he paid as ordered by the stockholders or directors. State hanks are under the management of a board of directors, which shall not be less than three. Savings hanks are managed by the trustees who incorporate the same. Trust companies are managed by a board of directors consisting of not less than six nor more than twelve. All of these banks have authority to appoint other officers to assist them in the management. State banks are required to make and publish at least five reports to the auditor of state, at such times as he may call for the same, and to make and publish an annual statement, the time for which is fixed by the fiscal year of the hank. Savings banks make an annual report to the auditor of state of their condition on the 1st day of January of each year. Trust companies make an annual report to the auditor of state on or before the 1st day of April in each year. Shareholders in banks of discount and trust companies are liable for double the amount of the capital stock held by them. All these banks are under the supervision of, and subject to examination by. the auditor of state, or hy an examiner appointed by him. There are practically no restrictions in the character of loans by State banks. Savings banks are limited in their investments to stock or bonds or Treasury notes of the United States; orders or bonds of any county, city, or town in this State issued pursuant to law; stocks or bonds of any State in the Union that has for five years previous to such investment being made, regularly paid the interest on its legal bonded debt in lawful money of the United States; bonds or notes secured by mortgages on unincumbered real estate in Indiana, worth, exclusive of perishable improvements, at least twice the amount loaned thereon; promissory notes or bills of exchange before their maturity, payable at some chartered bank in this State, and not having to exceed twelve months to run from the date of the loan or purchase, made or indorsed hy two or more responsible freeholders of the State of Indiana, provided that any such notes or hills shall not exceed the sum of $10,000, and that no more than $10,000 shall be loaned upon the same security; in real estate for the purpose of a banking house, or in such that it may be required to purchase under mortgages executed to it. No amount of cash reserve is required to he held by any of these banks. State banks are required to set apart 10 per cent of the annual net profits for a surplus fund, until the same shall amount to 25 per cent of its capital stock. Savings banks are required to set aside not less than one-half of 1 per cent per annum from its gross profits, until tlie same amounts to 10 per cent of its deposits. 5. There are various provisions concerning receipt of deposits in these hanks, and I inclose you a copy of the law under which they operate, as it would require a good deal of space to answer this question in full. It has been the custom to allow interest on deposits, but in the last year or two a good many of the State banks have ceased doing this. 6. The State has no interest as a shareholder in any of these banks. 7. There is no provision in the law authorizing any of these banks to conduct branch orifices or banks. 8. All reports of the condition of State banks are published in a paper printed in REPORT OF THE COMPTROLLER OF THE CURRENCY. 211 the county in which the bank is located. The reports of savings hanks and trust companies are not required to he printed, hut it is the custom of these hanks to do so. 9. There are no special taxes or burdens imposed upon any of these hanks for hanking privileges granted them. They are subject to taxation the same as an individual or other corporation. 10. Insolvent banks are closed up as a rule by receiver appointed by the court having j urisdiction over them. By recent amendment of the State bank law, the auditor of State is authorized to take charge of a failing bank pending the appointment of a receiver, and it is made the duty of the president or cashier of said bank to immediately notify him of the failure or suspension. He is also authorized by same amendment to take charge of any bank found upon examination to be in an insolvent or failing condition, and to make application to the proper court for a receiver for the same. 11. There are no provisions in the banking law for the issuing of bank circulation. 12. In answer to this question a copy of the law is inclosed. IHNTDI-AJNT T B R E I T O R Y . [D. M. Browning, Indian Commissioner.] There is no provision of law, so far as I am aware, under which corporations such as you mention would have a right to engage in business in the Indian country except under such conditions as other corporations or individuals would be permitted to engage in business. A State banking corporation desiring to operate a bank in the Indian Territory must comply with all the laws of the nation in which such bank is proposed to be located, and obtain a permit in accordance therewith, and must also obtain a license from this office as a trader with said nation. The foregoing applies to the territory occupied by the Cherokee, Creek, Seminole, Choctaw, and Chickasaw nations of Indians in the Indian Territory, and commonly known as the Five Civilized Tribes. [C. Gr. McCarthy, auditor of state.] 1. State and savings banks are the only class of banks under State supervision in Iowa. Private hanks are authorized to do business, but are not subject to State supervision or regulation. 2. State banks must adopt articles of incorporation, file and record the same in the offices of the county recorder and secretary of state, publish notice of such incorporation for four consecutive weeks in some newspaper published in the county where the business is done, and furnish the auditor of state with a schedule, duly sworn to, of its capital stock, setting forth that the same has been fully paid up. Savings banks must pursue substantially the same method in organizing as State banks do, with this diffierence, that in the organization of State banks one or more persons may constitute the corporation, while in that of savings bank any number of persons not less than five may organize the corporation. The directors of a savings hank must also take an oath as to the discharge of their duties, a copy of which must be filed in the office of the auditor of state. 3. The auditor of state is charged with the supervision of the State and savings hanks and must be fully satisfied that the requirements of law have been complied with before they are authorized to commence business. 4. First, State banks: (A) State banks may be organized with not less than a capital of $50,000, except in cities and towns having a population not exceeding 3,000, when such associations may be organized with a paid-up capital of not less than $25,000. (B) The State banks are managed by a board of directors elected by the stockholders, which board selects the officers of the bank. (C) Stockholders or shareholders in ail banking associations are individually and severally liable to the creditors of such association over and above the amount of stock by them held therein to an amount equal to their respective shares so held for all its liabilities accruing while they remain such stockholders. (D) State banks are required to make reports of their condition, under oath, to the auditor of state, whenever that officer may call upon them to do so, but not oftener than four times a year, which reports must also be published in some newspaper published in the county, for one week. (E) State banks are subject to examinations by bank examiners appointed by the auditor of state, which examination takes place whenever, in the opinion of the auditor, it is necessary. Usually this examination is made once a year, unless there are reasons why it should he made oftener. (F) State banks are prohibited from loaning to a director or trustee except upon such securities as are required of other borrowers, and, furthermore, all loans made to directors or trustees must be passed upon by the board of directors of the bank in the absence of the person making application therefor. The total liabili 212 REPORT OF THE COMPTROLLER OF THE CURRENCY. ties to any State bank of any person, or of any company, corporation, orfirm,for money borrowed, including the liabilities of a company or firm, the liabilities of the several members thereof, shall at no time exceed 20 per cent of the capital stock. (G) The law fixes no specific amount of cash reserve to be held by the State banks, although the auditor of state insists upon the reserve of at least 15 per cent of the deposits. (H) There is no legal provision regarding the accumulation of a surplus fund. Second, savings banks: (A) Savings banks may organize with a paid-up capital of notes less than $10,000, in cities and towns of 10,000 inhabitants or under, aud a paid-up capital stock of not less than $50,000 in cities of over 10,000. (B) The business of savings banks is managed by a board of directors or trustees of not lees than five nor more than nine members, all of whom must be shareholders and citizens of the State of Iowa. (C) The liability of shareholders in savings banks for claims against the bank is the same#as that of shareholders in State banks noted above. (D) Savings banks are required to make the same reports of condition as State banks. (E) Savings banks are subject to examination and supervision the same as State banks. (F) Savings banks are restricted in their loans to the same extent as State banks. Savings banks are further prohibited from borrowing money for any purpose whatever except for the payment of depositors and the necessary running expenses of the bank. (G) No amount of cash reserve required, nor is there any legal requirement as to the accumulation of surplus. 5. State banks have a general common law power of receiving deposits and discounting commercial paper without any particular restrictions or limitations as to the amount. Savings banks may receive deposits amounting to ten times their capital stock, under such regulations as the board of directors or trustees shall from time to time prescribe. As a general rule both State and savings banks allow interest on time deposits. 6. The State is not interested to any extent as a shareholder in any of the banks doing business therein. 7. State and savings banks are not permitted by law to conduct branch offices or banks. 8. State and savings banks are required to publish their quarterly reports made to this office in some paper published in the county where they do business. In addition thereto the auditor of state is required to publish a report every year setting forth the condition of the State and saviugs banks under his supervision. 9. The capital invested in State and savings banks is subject to the same rates of taxation for State, county, and municipal purposes as other property. In addition thereto the banks are required to pay the examiner's fees whenever an examination is made. 10. Whenever the auditor of state is satisfied, from an examination or reports, that a banking institution under his supervision is insolvent, it becomes his duty to direct the attorney-general to commence the proper proceedings to have a receiver appointed and the affairs of said institution wound up and the assets thereof ratably distributed among the creditors thereof, giving preference to the depositors. 11. State and savings banks are prohibited by the laws of this State from issuing any bills to circulate as money. 12. I can best answer your question by forwarding to your address, under another cover, a copy of the laws of this State relating to the organization and management of sayings banks. On pages 13 to 24, inclusive, you will find full answers to this question. KANSAS. [Charles M. Sawyer, national-bank examiner.] 1. Private and incorporated banks. 2. A State bank may be incorporated by five or more persons. Its existence dates from the filing of its charter. No business shall be transacted except that incidental to the organization until it has been examined by the proper officer and a certificate has been issued by him authorizing it t© transact a banking business. Private banks must also be examined by the same officer and authorized to do business in the same way before they can commence the business of banking. 3. Bank commissioner. 4. (A) The capital stock can not be less than $5,000, one-half of which must be paid before the bank is authorized to do business; 10 p-er cent of the balance must be paid each month until the full amount is paid in. (B) The management of the bank is vested in a board of directors of not less than five or more than thirteen members. (C) Stockholders are liable for an amount equal to the amount of the stock owned in addition thereto. (D) Reports of condition must be made four times a year, or oftener at the discretion of the commissioner. (E) It must be examined at least once a year by the commissioner or his deputy. (F) No more than 15 per cent of the capital and surplus shall be loaned to one person, firm, or corporation. There REPORT OP THE COMPTROLLER OF THE CURRENCY. 213 is no restriction as to the character of the security to he taken for loans. (G) A reserve of 20 per cent of the deposits must he kept on hand, one-half of which may he on deposit with solvent banks. (H) Ten per cent of the profits of the six months preceding the dividend period must he carried to the surplus fund until this fund equals 50 per cent of the capital. 5. There are no regular provisions covering the receipts of deposits. It is the general practice of hanks in the State to allow interest on puhlic funds and on individual deposits if left a specified time. The rates vary in different parts of the State. 6. The constitution provides that the State shall not he a shareholder in any hanking institution. 7. There are no provisions in the law in regard to hanks conducting hranch offices. 8. Information in regard to the condition of hanks is furnished only hy way of puhlished statements at least four times a year. 9. No taxes are imposed upon hanks hy the State in return for the hanking privileges except the expense of examinations. 10. Where the hank commissioner finds that a hank is insolvent he immediately notifies the attorney-general, who applies to the proper court for a receiver, and the hank is then without the jurisdiction of the hanking department. 11. The constitution provides that all hanking laws shall require as collateral security for the redemption of circulating notes a deposit with the auditor of state of the interest-paying bonds of the several States or the United States at the market prices of the New York Stock Exchange, in amount equal to the amount of circulating notes which the hank is authorized to issue and shall keep on hand in the vault at all times in cash 10 per cent of the total amount of circulating notes. 12. Savings hanks are operated in the same way as other State banks. KIGISTTTJCKY. [John W. Headley, secretary of state.] 6. The State is interested to th.e extent of $28,420 in the stock of the Bank of Louisville, located in Louisville. 7. The Northern Bank of Kentucky, Lexington, has branches in Paris and Covington; the Farmers' Bank of Kentucky, Frankfort, has branches in Georgetown and Henderson •; the Bank of Kentucky, Louisville, has a branch in Frankfort; the O wensboro Banking Company, Owensboro, has a branch at West Louisville; Wilson & Muir, Bardstown, have a branch at Bloomfield. I know of no restriction as to the number of branches a bank may have. 8. State-chartered banks make quarterly reports to the secretary of state of their condition. Each alternate report is published by the banks in the newspapers. Private banks make semiannual reports, which are published. The reports are kept as public records in the office of the secretary of state, and are open to public inspection at any time. The secretary of state publishes no report. 9. Under the present constitution banks are taxed as any other propertj7", an allowance being made for franchise. Under the old law they we^re taxed 75 cents on the $100 on the face of their capital stock. They claim that under this law they had a contract with the State, and refused to pay in accordance with the first law mentioned. They have been sustained by a recent decision of the court of appeals, but a motion for a new trial has been entered. 11. No banks are allowed to issue circulation in the State, except, of course, national banks, but some of the old State banks still have some notes out that have not been redeemed. 12. No laws especially relating to savings banks. (Copy of corporation law inclosed.) [James S. Escott, national-bank examiner.] 1. Banks of deposit and discount, savings banks, and trust companies. 2. A charter from the legislature granted to reputable persons and a sworn statement to the secretary of state as to payment of capital stock. 3. The secretary of state. 4. (A) Regulated by charter. (B) Devolves upon board of directors. (C) Are only liable to extent of holdings of stock. Double-liability laws go into effect September, 1897. (D) Five sworn statements are made annually to secretary of state upon call from that official. (E) There are no examinations and no supervision by State officials. (F) Loans to any one in dividual or interest are restricted to 20 per cent of capital stock paid in. (G-) Amount of cash reserve not fixed. (H) Accumulation of surplus required but not rigidly enforced. 5. No legal provisions govern the receipt of deposits. It is almost a universal custom to allow interest on time deposits and very often on open account. Rate yaries from 2 | to 6 per cent. 214 REPORT OF THE COMPTROLLER OF THE CURRENCY. 6. The State is not interested as shareholder in any bank. 7. By special provision of charter banks are permitted to conduct branch banks. There are three such institutions at present. 8. The statements called for by the secretary of state are similar in general form to that called for by the Comptroller of the Currency, and are published in the local newspapers. 9. A tax of 75 cents per $100 on capital and surplus is levied on all banking institutions, both national and State. This tax goes into the State treasury. There are no city or county taxes. 10. Insolvent banks are wound up by the assignee without special legal provisions. 11. There is no special provision referring to the issue of bank circulation. 12. There are no special points in the law relating to savings banks. (Copy of laws inclosed.) [M. J. Cunningham, attorney-general.] 1. The law in this State relative to banking gives the right to establish banks of circulation, discount, deposit, safe-deposit, savings, and trust banks. 2. Any number of persons more than five may organize a bank under our State laws. They must be organized by written articles of association, executed by notarial act and recorded in the office of the recorder of mortgages, or other officer exercising the functions of recorder of mortgages, at the place named in the act as the place of business or domicile of the corporation; a certified copy must be deposited in the office of the auditor of public accounts; it must be published once a week for four weeks in the official journal of the State, and if the official journal of the State should not be a newspaper in the city of New Orleans the act shall also be published for the same time in at least one daily newspaper of the city of New Orleans and also in a newspaper at £he place named in the act as the place of business, if there be one published there. The act of corporation must contain and set forth, under the signatures of the subscribers and associates, the name assumed to distinguish such banking company, and to be used in its dealings; the place where the banking business of such association is to be carried on, designating the particular parish and city or village in the State; the amount of capital stock of the banking company, and the number of shares into which the same shall be divided; the names and places of residence of the shareholders, and the number of shares held by each of them, respectively, and the time when and the manner in which the payments on stock subscribed shall be made; the period at which the association shall commence, and the period of its duration; the number of its directors and managers; the mode of election, and liquidation at the end of the term. All stock subscribed must be paid up in full in specie within twelve months after the company shall commence business. 3. The State treasurer or the secretary of state. 4. (A) The amount of capital stock required is $100,000, except that banks may be organized in any incorjiorated town the population of which does not exceed 2,000 inhabitants with a cash capital of $10,000; where the population does not exceed 4,000 inhabitants, with a cash capital of $15,000; where the population does not exceed 6,000 inhabitants, with a cash capital of $20,000; where the population does not exceed 10,000 inhabitants, with a cash capital of $25,000; where the population does not exceed 15,000 inhabitants, with a cash capital of $30,000, and where the population does not exceed 25,000 inhabitants, with a cash capital of $50,000. (B) The banks are managed by a board of directors. (C) No shareholder is liable for the debts of the bank beyond the amount of his stock. (D) Reports of the condition of the banks must be published every three months. (E) The supervision of the banks is delegated to the State treasurer and the secretary of state. Whenever they deem it necessary, they shall be furnished with a weekly statement showing the condition and affairs of the bank. (F; see G.) (G) Every bank is required to have on hand at all times, in specie, an amount equal to one-third of all their other cash and liabilities, and for the other two-thirds of said liabilities an equal amount in specie, specie funds, bills of exchange, or discounted paper maturing within ninety days and not renewable. Should the specie, specie funds, and short paper fall below the proportions of the cash liabilities, and remain so for a period of ten days, it shall not be lawful to make any loan or discount whatever until the bank shall again have the reserve above required. (H) No accumulation of surplus is required. 5. There are no legal restrictions upon the receipt of deposits; on the contrary, the law is very liberal; minors and married women are allowed to deposit in savings banks without any authorization and upon their own order. Interest upon deposits is the exception rather than the rule. REPORT OF THE COMPTROLLER OF THE CURRENCY. 215 6. The State is not a shareholder in any of the banks. 7, 8. All banks are required to make only quarterly statements of their condition, under oath, and publish the same in the daily journals of the city of New Orleans. Banks which are established in any incorporated town or city of the State shall publish a similar statement in a paper published in the town or city where the bank is organized. 9. A license tax is imposed upon banks ; based upon their declared or nominal capital and surplus, the licenses ranging in amount from $150 to $4,500. The capital stock of banks is assessed and taxed at their actual value as shown by the books of the bank, to the shareholders, who appear as such upon the books, regardless of any transfer not registered or entered upon the books. The president shall furnish the assessor a complete list of those who are borne upon the books as shareholders, and all taxes so assessed shall be paid by the bank, which shall be entitled to collect the amount from the shareholders or their transferees. All real estate owned by the bank shall be assessed directly to the bank, and the pro rata of such direct property taxed, proportioned to each share of capital stock, is to be deducted from the amount of taxes assessed to the shares. The book value of the shares is ascertained from a sworn statement by the president, cashier, or secretary, and chairman of finance committee, or, in the absence of such latter officer, by one of the directors. 10. Every banking company shall, on proof of any act of insolvency or noncompliance with any of the conditions imposed upon it, forfeit its corporate rights; and it shall be the duty of the district judge of the district in which such corporation is situated, at the instance of any creditor or of the auditor of public accounts, and on proof of the alleged facts, to decree such forfeiture and to appoint thereupon commissioners to effect the liquidation of the affairs of the corporation; to convert into cash, as speedily as may be, under the direction of the court, all the assets of the corporation, including the sum that may have remained unpaid by stockholders upon their respective shares of the capital stock; and, after providing for any unpaid balance which may be due to the bill holders, to distribute the same as in the insolvency of individuals. 11. The auditor of public accounts engraves and prints circulating notes, in blank, of the different denominations, not less than $5 each, which the incorporated banks are authorized to issue. The blank notes are countersigned, registered, and numbered by the auditor. All circulating notes must have stamped across their face "Secured by pledge of public stocks." The form and devices are optional with the banks using them. To obtain the circulating notes the banks requiring them must deposit with and legally assign to the auditor stocks, at their market value, equal to the amount of circulating notes withdrawn by them. Should the stocks at any time fall below the value at which they were deposited with the auditor, the banks shall make the difference good or surrender enough of the circulating notes to equalize the values. The securities left with the auditor shall be fully described, signed by the auditor and the parties, which description shall be filed and recorded in the office of the auditor and treasurer of the State. The banks receiving such circulating notes are authorized to execute and sign them in such manner as to make them obligatory in law as promissory notes, payable to bearer on demand, and without interest, at the place of business of the banker or banking companies. All circulating notes shall be signed by the banker and his cashier, or by the president and cashier of the banking company issuing them. 12. Savings banks are required to conform with nearly all of the duties imposed upon banks of discount, deposit, and circulation, except that they are required to have a cash capital of $50,000, of which at least $10,000 shall be subscribed before the bank shall begin business. [Edward I. Johnson, national-bank examiner.] 1. In Louisiana there is no limit to the kinds or classes of banks permitted bylaw to do business. Under the law of this State any person, or association of persons, or corporation formed in compliance with the provisions given in answer 2, may transact the business of banking in this State, and establish offices of discount, deposit, and circulation for that purpose. 2. So far as any individual is concerned, the law allows him to carry on the business of banking as in the case of corporations. Corporations established to carry on the business of banking have power to discount bills, notes, and other evidences of debt; to receive deposits; to buy and sell gold and silver bullion, foreign coin, and bills of exchange; to lend money on real and personal security, and to exercise all incidental powers necessary to carry on the business. Since 1879 the constitution of this State forbids the legislature from passing any local or special law creating corporations or amending, renewing, extending, or explaining the charter 216 REPORT OF THE COMPTROLLER OF THE CURRENCY. thereof} and, in consequence, all banking corporations now must be chartered under the general laws of the State. This is done by written articles of association executed by notarial act. There must not be less than six persons organizing the corporation. The existence of any banking corporation is limited to ninety-nine years. The act of incorporation must be recorded in the office of the recorder of mortgages or other officer exercising the functions of recording of mortgages at the place named in the act as the place of business or domicile of the corporation. A certified copy of the act must be deposited in the office of the auditor of public accounts. It must be published once a week for four weeks in the official journal of the State and at least one daily newspaper of the city of New Orleans, and also in a newspaper at the place named in the act as the place of business, if there be one published there. This act of incorporation should contain, under the signatures of the subscribers and associates, (1) the name of the bank; (2) the place where the banking business is to be carried on; (3) the amount of capital stock and number of shares into which it is divided; (4) the names and places of residence of shareholders, the number of shares held by each, respectively, the time when and the manner in which payments on stock subscribed shall be made; (5) the period at which the association shall commence and the period of its duration; (6) the number of its directors and its managers and mode of their election, and (7) mode of liquidation at end of term. 3. In Louisiana banking corporations can begin and carry on their business without the approval of any officer. There is no officer to determine when they have complied with the legal provisions. 4. (A) The aggregate amount of the capital stock of the banker or banking corporation shall not be less than $100,000. All stock subscribed must be paid up in full in specie within twelve months after the company shall commence business. (B) The corporation is managed by its directors and managers prescribed by its charter. These must all be citizens of Louisiana. (C) No shareholder is liable for the bank's debts to a greater amount than the whole of his shares. Unincorporated bankers are liable to the full amount of their obligations and contracts. (D) The only legal provision for any character of report of condition to be made by banks is that given in answer to question 8. (E) There is no examination or supervision by any State official. (F) No loans of any banking company shall be made to any of its stockholders on a pledge of its own stock. There are no other restrictions on loans by the bank save such as prevent the managers, under the penalty of criminal or civil personal responsibility, from making loans when the bank is in insolvent condition. (G) Every banker or banking company is required to have on hand at all times in specie an amount equal to one-third of all their other cash liabilities; and for the other two-thirds of said liabilities an equal amount in specie, specie funds, bills of exchange, or discounted paper maturing within ninety days and not renewable. (H) No surplus is required to be accumulated. 5. There is nothing peculiar to the law of Louisiana governing the receipt of deposits by banks of this State. Banks in insolvent conditions are forbidden to receive deposits. Except savings banks, banks do not generally allow any interest on deposits. Savings banks allow after four months 3 per cent interest. 6. There is no law forbidding banks from conducting branch offices. 7. Since 1879 the State is prohibited from subscribing to or purchasing the capital stock of any corporation or association whatever. 8. Banks are required to make quarterly statements of their condition under oath and publish the same in one or more of the daily journals of the city of New Orleans, and banks in any incorporated town or city in the State must publish such a statement in any daily paper published in the town or city in which the bank is situated, and if there is no daily paper in such place, in a weekly paper. 9. Banks have to pay a license tax to carry on the business in this State, as any other corporation, any trading firm, or business man. This license is based on the declared or nominal capital and surplus, whether the surplus is owned or in use or on deposit in the State or elsewhere. 10. Banking incorporations, on proof of insolvency, are wound up by commissioners appointed by the district court where the corporation is situated, at the instance of any creditor or of the auditor of public accounts, and the duties of such liquidating commissioner are to convert into cash as speedily as possible, under the court's direction, the assets of the corporation, including the sum that may have remained unpaid by the stockholders upon their respective shares of the capital stock, and to distribute the funds as provided by law in the case of the insolvencies of individuals. 11. There are numbers of provisions for bank circulation, but the Federal Government has virtually taxed such circulation out of existence. 12. Savings, safe-deposit, and trust banks, without power to issue bank notes, may be organized under the banking laws of the State. The capital must be not less than $50,000, of which $10,000 must be paid up before the business is begun. REPORT OF THE COMPTROLLER OF THE CURRENCY. 217 MLAJGNTE. [F. E. Timberlake, State bank examiner.] 1. Savings "banks and trust companies. 2. Savings banks may be organized under the general law; trust companies are chartered by the State legislature. 3. The bank examiner. 4. (A) Savings banks have no capital stock. The only funds of the bank are the deposits and their accumulations. Trust companies: The amount of capital stock is fixed by their charters. (B) Savings banks are managed by a board of trustees elected by corporators annually, and a president and treasurer elected by that board, and trust companies by a board of directors elected annually by stockholders the same as in national banks. (C) Savings banks have no stockholders, as already stated. Trust companies: Liability of the stockholders the same as in national banks. (D) Savings banks: The trustees and treasurer each make at least one report to the bank examiner in each year, and each in addition reporting as often as required so to do by the bank. Examiner: Trust companies are under the supervision of the bank examiner, and are required bylaw to report condition of bank to him as often as he may direct, and by custom are required to make such report twice in each year. (E) The law provides that both classes of banks shall be examined at least once in each year by the bank examiner. (F) Savings banks are restricted in their loans and investments as shown by copy of statute hereto attached. Trust companies are not restricted by law in making loans and investments, but can invest in all kinds of stocks and securities and loan money upon notes, collateral, or mortgages of real estate. (G) Savings banks are not required to keep a cash reserve. Trust companies are required by law to keep a cash reserve equal to 15 per cent of the aggregate amount of all deposits which are subject to withdrawal upon demand or within ten days. (H) Savings banks are required semiannually, before declaring a dividend, to carry one-fourth of 1 per cent of the average deposits for the preceding six months to a surplus account to be held as a guarantee for the protection of depositors. Trust companies are not required by law to accumulate a surplus. 5. Savings banks are not allowed to receive over $2,000 from any one person, excepting from widows, orphans, administrators, executors, guardians, charitable institutions, and trust funds, and pay such dividends, not exceeding 5 per cent per annum, as the profits will allow. Trust companies are not restricted in any way as to what deposits they shall or may receive, such contracts for the payment of interest as they please, but usually pay from 2 to 4 per cent per annum on time deposits. 6. The State has no direct pecuniary interest in any of these institutions. 7. Savings banks are not permitted to conduct branch offices or banks. A part of the trust companies are authorized by their charters to conduct branch offices or banks, and two of them have such branches established that do a small amount of business, making report of the same daily to the home office. 8. The law provides that all examinations by the bank examiner shall be published in some newspaper printed in the locality of the bank, and all returns and examinations are, at the close of the year, incorporated into a report to the governor and council, and that report is printed and distributed through the State. 9. Savings banks pay a tax direct to the State of about three-fourths of 1 per cent upon the average amount of their deposits, surplus, and undivided profits for the year. This tax is by law so regulated that it gives a discrimination in favor of such portion of their funds as may be invested within the State of Maine. Trust companies pay no tax, except upon such real estate or other corporeal property as it may own. The stockholders are liable to municipal taxation, the same as stockholders in national banks. 10. When the bank examiner is of the opinion that a savings bank is insolvent, or that further proceedings by the bank will be hazardous to the public, he may apply to the supreme court of the State for an injunction restraining it from doing further •business, and after hearing in court a receiver may be appointed to close up its affairs, or the court may, on application of the trustees of the bank, reduce the deposit account of each depositor to an amount necessary to make the bank solvent. Trust companies, if insolvent, on application to the courtB, a receiver maybe appointed to settle the affairs of the bank. 11. No State bank has authority to issue bank circulation. 12. A savings bank in this State has no stockholders to share in the profits and losses of the institution. The officers receive a lixed salary for services performed. The corporators forming the corporation are usually taken from among the leading business men of the section where the bank is located, and they contribute their services to maintain the bank to furnish a safe and convenient place for the laboring people to deposit and invest their savings. (Copy of State banking law transmitted.) 218 REPORT OF THE COMPTROLLER OF THE CURRENCY. [Frank Brown, governor.] 1. Savings banks. Associations for carrying on the business of banking. 2. In the case of savings banks the only requirement is to have not less than five incorporators, and apply to the clerk of the court for a charter, mentioning the names of those who wilf serve as directors for the first year. In the case of regular commercial banks the law states that the capital stock of said corporation, when located in the city of Baltimore, shall consist of not less than $300,000, divided into shares of $100 each, and when $300,000 of said capital stock shall have been fully paid in the "lawful money of the United States/' and so certitified by a majority of the said commissioners or directors to the treasury and comptroller of the State, and a certificate of their organization be transmitted to the clerk of the court of appeals, to be by him recorded among the records of his office. When the corporation is located other than in the city of Baltimore, the capital stock may be not less than $50,000. 3. No special officer only as indicated above. 4. (A) As specified above for commercial banks. Savings banks have no capital stock. (B) And be it enacted, that the affairs of the several singular corporations herein provided for shall be managed by a president and directors in each of said corporations, and the number of directors in any of the said corporations shall not be greater than seven, nor less than five, and the number of directors in any of said corporations may be changed by the stockholders from time to time, within the limits as to number aforesaid; and no person shall be a director in any of the said corporations who is not a stockholder thereof and who is not also a citizen of the State of Maryland. (C) And be it enacted that the continuance of the said several corporations shall be on the condition that the stockholders and directors of each of said corporations shall be liable to the amount of their respective share or shares of stock io such corporation, for all its debts and liabilities upon note, bill, or otherwise; and upon this further condition that this act, and every part of it, may be altered from time to time, or repealed by the legislature. (D) The treasurer of this State shall be furnished with statements of the amount of the capital stock of the corporation, and of the debts due to and from the same, specifying those due to and from other banks, of the moneys deposited therein, of the notes in circulation, of the cash on hand, specifying the amount of coin, and of the notes of other banks, of the value of the real estate held by the corporation, and of the amount and value of public or other stocks owned by the corporation; said statement to be furnished twice in eacli year, and to show the condition of the corporation in the said particulars as they may appear at the close of the business transactions of the day in settlement thereof, on the first Monday of January and the first Monday of July; and each of th© said corporations shall publish said statement so made to the treasurer in at least one of the daily newspapers published in the city of Baltimore, if the corporation be located in said city, or in a newspaper published in the county in which the corporation maybe located, if not located in said city, said statements in all cases to be verified by th© oath or affirmation of the president or cashier of the corporation. (E) No provision made. (F) That, the corporation shall not deal or trade in anything except bills of exchange, promissory notes, and bullion; or in the produce of their lands, or of such goods and effects as shall have been bona fide pledged or mortgaged to it by way of security, or conveyed to it in satisfaction of debts contracted in the course of its dealings, or purchased at sales upon judgments which shall have been obtained for such debts; Provided, however, that nothing herein contained shall be construed to prevent the said corporation from making temporary investments of its funds in purchase of the public debt of the United States, or any one of the United States, or of the city of Baltimore, or of the county or other city in which said corporation may be located, as the president and directors for the time being may deem safe and beneficial. No loan shall be made by the said corporation for the use on account of this State, or the United States, to an amount exceeding $50,000, or to any other State of this Union, or to any foreign prince or State, to any amount whatever, without the previous consent of the legislature. (G) No provision made. (H) No provision made. 5. There are no legal provisions governing receipt of deposit. It is not generally the custom to allow interest on deposits, though a great many of the banks allow interest from 2 to 3 per cent for bank balances, and some of them about 2£ and 3 per cent in special cases. It largely depends upon the character of the business the bank wishes to do, though it is not thought that any of the four State banks in Baltimore City ever allow any interest. 6. The State is not interested as a shareholder in any of the banks. 7. No provision is made for the banks to have any branch offices, nor is there any prohibition of it. 8. By the publication of a statement of the condition of the banks twice each year is mentioned in answer 4 (D). Digitized forasFRASER REPORT OF THE COMPTROLLER OF THE CURRENCY. 219 9. No special taxes are put upon the banks. 10. And be it enacted, that if the said corporation shall at any time suspend its payments the assets which said corporation may hold or be in anywise entitled to at the time of such suspension of payment shall be ratabjy distributed to and among all the persons who shall be its creditors at such time and to their assigns respectively. 11. The issues or notes, usually denominated bank notes, which it shall be lawful for the corporation to issue, shall not at any time exceed the amount of its capital stock actually paid in, and no note shall be issued of a less amount or denomination than $5, nor of any amount intermediate between $5 and $10; and the general assembly may at any time restrict the issue of such notes, both in the amount which may be issued and in the denominations of the notes. That all bills or notes which may be issued by order of the said corporation, signed by the president and countersigned by the principal cashier or treasurer thereof, promising the payment of money to any person or persons, his, her, or their orders, or bearer, though not under the seal of the corporation, shall be binding and obligatory upon the same, in the like manner and with the like force and effect as upon any private person or persons, if issued by him or them in his, her, or their private or natural capacity or capacities ; and shall be assignable and negotiable in like manner as if they were so issued by such private person or persons—that is to say, those which shall be payable to any person or persons, his, her, or their order, shall be assignable by indorsement in like manner and with the like effect as foreign bills of exchange now are, and those which are payable to bearer shall be negotiable or assignable by delivery only. And be it enacted, that if at any time any of the said corporations shall neglect or refuse to pay in gold and silver, or lawful money of the United States, any of its notes, bills, obligations, or money received on deposit, in violation of the contract, promise, or undertaking of said corporation, the person or persons entitled to demand and receive such payment shall respectively receive and recover interest on said bills, notes, obligations, and deposits, until the same shall be fully paid and satisfied, at the rate of 6 per cent per annum from the time of such demand. And be it enacted, that if the said corporation shall neglect or refuse to pay as aforesaid any of its notes, bills, obligations, or money received on deposit, the holder of such note, bill, or obligation, or .the person or persons entitled to demand and receive such money, shall be repectively entitled only to demand and receive as creditor or as debtor, to claim and set off such part of the sum of its assets as shall be actually distributable and payable to such creditor or debtor at the time when such claim or demand may be made. MASSACHUSETTS. [Board of commissioners of savings banks.] 1. Savings banks, cooperative banks (known elsewhere as building and loan associations), and trust companies. The provisions of chapter 118, Public Statutes, permit the formation of banks of deposit and discount, with right to issue circulating notes, but there are no such institutions now in existence in the Commonwealth. 2. Savings banks and trust companies are required to obtain an act of incorporation from the general court. Cooperative banks can, by and with the consent of this board, be organized under the provisions of a general faw. (Chapter 117 of the Public Statutes.) 3. See answer to No. 4. 4. The legal provisions governing each class of banks is given in full in,the copies of statutes sent herewith, viz, (A) relating to savings banks, (B) relating to cooperative banks, (C) relating to trust companies. 5. The legal provisions governing the receipts of deposits is shown in the copies of statutes referred to, as is also the interest to be allowed in the savings banks. The trust companies usually allow interest on deposits upon such terms as maybe agreed upon. In some cases interest is allowed on all daily balances; in others only upon balances of or exceeding certain sums, varying in the different institutions from $200 to $1,000. 6. The Commonwealth is not interested at all as a shareholder in any of the institutions. 7. None of the institutions are permitted to have branch offices. 8. All of the institutions are required to make annual reports to this board showing their condition at the close of business on the last business day of October, and these reports are published in the annual report of this board made to the general court in the January following. Coi>y of our last report is sent you by to-day's mail. The trust companies also make semiannual reports, which are published in some newspaper approved by this board, at the time, as are also their aunual reports. 9. Savings banks are annually taxed by the Commonwealth one-half of 1 per cent on the average amount of deposits computed each six months, the amounts invested 220 REPORT OF THE COMPTROLLER OF THE CURRENCY. in bank stock, in real estate, and in loans on real estate being deducted. The capital stock of the trust companies is taxed by the Commonwealth upon its market value at the same rat© as other corporations, the amounts invested in bank stock and real ©etat© being deducted from the market va]ue of the stock, the property deducted in each case being subject to local taxation at its fair cash value. Cooperative banks are not taxed. 10. See provisions of sections 6, 7, and 51 of the statutes regulating savings banks (Exhibit A). 11. See Public Statutes, chapter 118, sections 60-79; but, as previously stated, there are not any State banks in existence in this Commonwealth. 12. See Exhibit A. (Incloses (A) statutes relating to savings banks and institutions for savings; (B) statutes relating to cooperariv© banks and to foreign corporations; (C) statutes relating to safe deposit, loan, and trust companies.) [J. Gatchell, national-bank examiner.] 1. Banks permitted by law are State banks, savings banks, trust companies, and cooperative banks. 2. State banks, savings banks, and trust companies are chartered by the legislature, and cooperative banks by approval of commissioners of savings banks. Each class comes under the provisions of a general law; State banks and trust companies are required to have capital stock paid in full; savings banks and cooperative banks commence when a legal organization of th© trustees named has been accomplished. 3. The board of commissioners of savings banks. 4. No State bank has been organized since th© passage of the national-bank act, and none are now doing business. Th© present law is practically inoperative, and unsuccessful efforts have been made to legislate on revision. Savings banks: (A) No capital stock. (B) Management intrusted to persons named in act of incorporation, who elect their successors. (C) N© liability. (D) Report annually to commissioners of savings banks. (E) Examined at least annually by commissioners of savings banks. (F) Investments allowed; no limit on United States bonds, bonds of New England States, New York, Illinois, Pennsylvania, Ohio, Indiana, Iowa, Wisconsin, Michigan, District of Columbia; bonds or notes of any county, city or town in Massachusetts; bonds or notes of incorporated districts in Massachusetts whose net indebtedness does not exceed 5 per cent of valuation; bonds or notes of any city of the State of Maine, New Hampshire, Vermont, Rhode Island, or Connecticut, whose indebtedness does not exceed 5 per cent of last valuation; bonds or notes of any county or town of the States of Maine, New Hampshire, Vermont, Rhode Island, or Connecticut whose net indebtedness does not exceed 3 per cent; bonds of cities ia New York, Ohio, Illinois, Pennsylvania, Indiana, Michigan, Iowa, and Wisconsin, of more than 30,000 inhabitants, debt not exceeding 5 per cent of valuation. First-mortgage bonds of any railroad incorporated in New England States, operating its own road and paying dividends two years preceding; bonds of roads in this State unencumbered by mortgage, paying dividend two years preceding, and special authority for bonds of the Old Colony, Fitehburg, Boston and Lowell, Concord and Montreal, Maine Central, Boston and Maine, and New York and New England railroads. Not exceeding 35 per cent of deposits may be invested in stocks of banks of this State and national banks of the New England States; 5 per cent of deposits, but not exceeding $200,000 in banking house; real estate acquired by foreclosure to be held not exceeding five years; loan not exceeding 70 per cent of value on real estate in this State, not exceeding one-third of deposit in personal notes, with at least two sureties, all residents of this State; loans to citizens of this State, with pledge as collateral, any of securities authorized for purchas© and stocks of railroads in the New England States paying dividends not less than 5 per cent, said loans not exceeding 70 per cent of market value. All loans not named prohibited. (G) No reserved required. (H) Guaranty fund not less than one-eighth nor more than onefourth of 1 per cent per year until 5 per cent of deposits has accumulated. Trust companies: (A) Amount fixed by charter, shares $100 each, full payment before commencing business. (B) Directors elected annually by stockholders. {C) Previous to 1888 the liability was fixed in each charter, and in several instances there is none. Under general law of 1888 it is 100 per cent of par value. (D) Annual to commissioners of savings banks. (E) At least once each year by commissioners of savings banks. (F) Trust departments when established restricted to class of investments, ^ther loans not to exceed one-fifth of capital in corporations sine© 1888; previous corporations not uniform. (G) Under law of 1888 15 per cent, two-thirds of which may be in national banks; previous corporations not uniform. (H) Optional. Cooperative banks only loan to shareholders and do not do a commercial busmes*. REPORT OF THE COMPTROLLER OF THE CURRENCY. 221 5. Sayings banks are limited to $1,000 for each depositor; dividends semiannually. Trust companies: No limit to deposits and nearly all pay interest on daily balances. Cooperative banks sell shares, receiving monthly payments of $2 each. 6. 7. No branch offices allowed. 8. All make annual reports to the commissioners of savings banks and are required to publish same. 9. Savings banks pay one-fourth of 1 per cent on deposits. Trust companies, same as assessed on other corporations. 10. Commissioners of savings banks file information in equitj^ court asking injunction, which is granted, and a hearing ordered; if cause is shown a receiver is appointed by the court who is authorized to liquidate and distribute assets among creditors or depositors. 11. No institution now doing business in this State is acting under a law authorizing circulation. 12. Savings banks are created by special charter, but are governed by a general law which carefully restricts loans to a class of securities thought most secure and free from speculative influences. The amount of deposits is restricted to not exceeding $1,000, with permission t© accumulate to $1,600 by dividends. Dividends are restricted to 5 per cent per annum with requirement of an extra dividend once in live years, if a surplus is accumulated. The corporators are named in the original charter and elect their successors, and they elect from their number a board of trustees, but the law holds them rigidly to the discharge of their duties and provides that absence from two successive quarterly meetings shall cause a vacancy. MICHIGkAJNT. [George B. Caldwell, national-bank examiner.] 1. Two kinds of banks are provided for under the State law in Michigan—commercial aud savings. Either may be operated, having a separate capital, or both may be operated upon one capital. The latter method prevails. 2. The legal requirements are that 50 per cent of tke subscribed capital must be paid in and a board of at least fine directors elected to get a charter, and that articles of association shall be executed and tiled with the secretary of state. The minimum capital required is $15,000 in a town where the population does not exceed 1,500, and $50,000 in a city of 20,000 people. 3. The commissioner of banking determines when these conditions are complied with. 4. (A) Fifty per cent paid in when organized and 10 per cent each month thereafter until paid up. (B) At least five directors. (C) Liable for twice their stock. (D) Reports of condition are made to banking department but four times a year on call by commissioner, usually-at same dates as called by Comptroller of the, Currency. (E) Examinations yearly by deputy commissioner or clerk of banking department. (F) Loans are restricted to 10 per cent of bank's capital, except the surplus is figured as part of the capital, and upon a vote of two-thirds of all directors 20 per cent of bank's capital is loanable to one firm or person. (G) Fifteen per cent of commercial or savings deposits, except in reserve cities or cities of over 100,000 population, where 20 per cent of commercial deposits is required—one-third of 15 per cent, or 5 per cent, on savings deposits is all that is required in cash. (H) One tenth ©f net profits shall be passed to surplus until surplus equals 20 per cent of capital. 5. Either commercial or savings banks are allowed (and have been encouraged) by commissioner t© pay interest on deposits. There is no legal provision fixing the rate or compelling payment of interest. 6. The State is in no way a shareholder. 7. Branch banks are permitted. There are four branches to savings banks in Detroit—the Dime Savings has two, City Savings Bank one, and Home Savings Bank one. 8. The four published statements of condition are for information of the public. 9. No fees or taxes are imposed upon banks for a charter. Their stock is considered as personal property and assessed as such. 10. Ninety days are given for making good any deficiency of capital found to exist by the commissioner. If not made good, the commissioner, in concurrence with the attorney-general, applies to a circuit judge for the appointment of receivers. Receivers give bonds and are accountable to the judge of the circuit court in the district where the bank is located. 11. No bank circulation provided for. 12. The growth of State banks here is largely due, first, to the small capital as compared to that required for national banks for a given population; second, because 222 REPORT OF THE COMPTROLLER OF THE CURRENCY. of the more liberal advantages for making loans (commercial banks may loan 50 per cent of their capital upon mortgage security and 20 per cent to one person or firm; three-fifths of all sayings deposits are to be invested either in municipal bonds or notes, bonds or mortgages upon unencumbered real estate worth at least double the amount loaned; the remainder of savings deposits shall consist of bank balances and loans upon negotiable paper approved by directors); third, th® dual business of commercial and savings banks upon one capital. (T. C. Sherwood, commissioner, State banking department, transmitted copy of banking law and an address on resources, banking law, and finances of Michigan.) [M. D. Kenyon, public examiner and superintendent of banks.] 1. Commercial and saving banks are the kind that are incorporated in this State. Private banks are common in this State as personal or firm enterprises. 2. Incorporated commercial banks must have three persons as incorporators. 3. The superintendent of banks determines when the conditions have been satisfied as to commercial banks, and the public examiner, who is ex officio superintendent of banks, and the attorney-general and the State auditor determine when savings banks may become incorporated. 4. (A) Banks in towns of 1,000 inhabitants or less, must have a capital of $10,000; in towns of more than 1,000 and not exceeding 1,500 inhabitants, must have a eapital of $15,000; in towns of more than 1,500 and not exceeding 2,000 inhabitants, must have a capital of $20,000; in towns of more than 2,000 inhabitants, $25,000 capital is required. The capital must be paid in cash before the banks can be allowed to commence business. (B) The aifairs of the bank are to be managed by a board of not less than three directors, to be elected by the shareholders. (C)vA shareholder's liability is an additional amount equal to tho amount of his stock. (D) Banks are required to make not less than four reports during each year to the superintendent of banks, and are required to publish the same at the place where the bank is located. (E) Each bank is to be examined once a year under the supervision of the superintendent of banks. The superintendent has power to take possession of the assets of the bank in cases where there is an insolvency or where its capital stock has become impaired and has not been restored. (F) Loans are restricted to 15 per cent of capital stock and surplus to ordinary customers, and to 10 per cent of same to directors and officers, except in certain cases where there is collateral security of warehouse receipts covering agricultural products in store, on which products there is no limit to loans. (G) There must be a cash reserve of 10 per cent of the immediate liabilities and an additional reserve in banks of 10 per cent, making a total reserve of 20 per cent. (H) One-tenth of the net profits of the bank for each dividend period is to be carried to the surplus fund until such surplus fund amounts to 20 per cent of its capital stock, and that amount of surplus must be maintained. 5. Deposits may not be received by insolvent banks; otherwise there are no laws governing deposits. It is the custom of banks generally to allow interest on time deposits. 6. The State is not a shareholder in any class of banks. 7. Banks are not authorized to conduct branch offices. 8. Commercial banks are required to publish each report made to the department. Savings banks have to report to the department, and such reports are published biennially in the department reports. 9. Commercial banks are taxed upon their capital stock and surplus in the locality where they are situated. Savings banks are taxed practically upon what might be a surplus accumulation, and furniture and fixtures, office buildings, and real estate. • 10. Herewith are transmitted copy of the printed sections of the law'in regard to commercial banks. Savings banks are closed under the general insolvency act. 11. The old banking law provided for pledge of public stocks for the protection ©f bank circulation. As that law has become obsolete, if not repealed (of which there may be some doubt), it is hardly necessary to give the full details. 12. Savings banks: Seven persons may unite to form a savings bank. Such bank has (1) perpetual succession; (2) may sue and be sued, etc.; (3) make and use a seal; (4) appoint officers, etc.; (5) make by-laws; (6) contract and be contracted with; (7) receive money on deposit and invest same; (8) exercise corporate powers necessary to carry out the objects of the corporation. Each incorporator becomes a trustee of the bank, and must give a bond of $5,000 conditioned for the faithful discharge of his duties as trustee. Deposits in savings banks may be invested (l)in stocks or securities of the United States; (2) in the stocks or bonds of any State in the Union; (3) in the stocks or bonds of any city, county, town, village, or school district in the States of Minnesota, Wisconsin, North or South Dakota, or in any warrants REPORT OF THE COMPTROLLER OF THE CURRENCY. 223 issued by the State, or any city, county, town, village, or school district in which such bank is situated, or in any town, city, county, or school district in the United States which has at least 10,000 inhabitants, such bonds to be limited to 10 per cent of the assessed valuation of such city, county, town, village, or school district; (4) in notes secured by mortgages on real estate, worth at least twice the amount of the l©an, but not to exceed 70 per cent of the capital of the bank, and in case the loan is on unimproved or unproductive real estate, the amount loaned thereo» shall not exceed 30 per cent of the actual value; (5) an amount not to exceed one-fourth part of the deposits may be loaned, on personal securities with at least two sureties not to exceed $5,000, to any one person. MISSISSIPPI. [American Bank Reporter.] Banks are governed by their charters and the common law. There are some statutes to prevent insolvent banks from continuing business. There is no system 91 official examination, but all except national banks are required by statute to make a report not less than four times each year to the auditor of state, and he shall make requisition on all banks for these reports to be made on dates prior to the date of the requisition and such date to be known only to himself. Such reports shall be verified and published in full in a newspaper of the town or city where the bank is located. Their resources and liabilities shall be stated in such form as the auditor shall determine (acts, 1888). Banks other than national are taxed according to their capital stock from $100 to $2,000 and the amount of stock ascertained from the president and cashier under oath. The issuing of notes or other evidence of debt to be used as a circulating medium unauthorized by law, either by person, company, partnership or corporation, is made a misdemeanor and punishable by a fine of at least $1,000, and their notes, debts, and securities declared to be void. It is a felony punishable with imprisonment in the penitentiary for the president, manager, cashier, teller, assistant cashier, or other employee or agent of any bank to receive anything of value on deposit knowing or having good reason to believe that such bank is insolvent, unless he informs the depositor of the condition of the bank. [W. H. S. Burgwyn, national-bank examiner.] Code of 1892, section 246: Banks shall make balanced statements to auditor @f public accounts at least four times each year and shall publish the same. Section 247: Auditor shall, at least four times each year, make requisition for such statement. Section 248: Penalty for bank's refusal or neglect, without excuse to return such statement: auditor shall cause suit for forfeiture agb once, and shall also, after ten days, publish the fact of the failure to make the* statement. Section 3750: Banks to be assessed in the county in which its principal place of business is situated or where the business is carried on. Section 851: Banks of deposit not to loan to any one person or firm more than one-fifth their capital. Section 1088: "If the president, manager, cashier, clerk, * * * or other employee or agent of a bank * * * shall receive any deposit knowing or having good reason to believe the establishment to be insolvent, without informing the depositor of such condition, on conviction he shall be imprisoned in the penitentiary not longer than five years." MISSOURI. [A. A. Lesueur, secretary of state.] 1. State incorporated banks, State private banks, State incorporated trust companies. 2. State incorporated banks must file articles of agreement with the secretary of state containing (1) the corporate name of the proposed corporation, which shall not be the name of any corporation heretofore incorporated in this State for similar purposes, or an imitation of such name; (2) the name of the city or town and county in which the corporation is to be located; (3) the amount of capital stock of the corporation, the number of shares into which it is divided, and the par value thereof; that the same has been bona fide subscribed and one-half thereof actually paid up in lawful money of the United States and is in the custody of the persons named as the first board of directors or managers; (4) the names, places of residence of the several shareholders, and the number of shares subscribed by each; (5) the number of directors or managers and the name of those agreed upon for the first year; (6) the num 224 REPORT OF THE COMPTROLLER OF THE CURRENCY. ber of years the corporation is to continue, which in no case shall exceed fifty years. The articles of agreement must be signed by and acknowledged by the parties thereto, and must have been recorded in the office of the recorder of deeds of the county or city in which the corporation is to be located, and a certified copy of such recorded instrument is the paper to be filed in the office of the secretary of state. If incorporated by the secretary of state, a certified copy of the certificate of incorporation must also "be placed on record with the recorder of the county (or city of St. Louis) where the bank is located. The cash capital of such corporation can in no case be less than $10,000 nor more than $5,000,000. In a city having a population of 150,000 inhabitants or more, the cash capital of such corporation can be no less than $100,000. All of the capital stock must be paid up within one year next after the date of the certificate of incorporation, at such times and in such amounts as the board of directors may require. As to private banks: These must file with the secretary of state a statement of their intention to engage in the business of banking, subscribed and sworn to before a notary public, which must set forth (1) the names of all persons interested in the business and the amount of capital invested, and (2) the name under which the business is to be conducted and the place it is to be carried on, which statement must be acknowledged, recorded, and filed in the same manner as provided for articles of incorporation, supra. The paid up capital of such banks must be not less than $5,000. Trust companies are organized as corporations under a special law granting them certain powers which include a savings-bank feature. The management of the incorporated banks is in the hands of the directors. In incorporated banks the shareholders are liable only for the amount subscribed for their shares. In private banks the partners are liable for all their possessions. All banks and trust companies are subjected to examination by the secretary of state or examiners appointed by him at least once a year, or as many times oftener as the secretary of state may deem necessary. No banking institution is permitted to make a larger loan than an amount equal to 25 per cent of its capital stock. There is no provision of law regulating the cash reserve or accumulation of surplus. 5.. The legal provisions governing the receipt of deposits by banks are in these words: "Section 2760. * * * No president, director, manager, cashier, or other officer or agent of any bank or banking institution organized and doing business under the provisions of this article or of any law of this State, shall receive or assent to the reception of deposits, or create or assent to the creation of any debts by such banlt or banking institution, after he shall have knowledge of the fact that it is insolvent or in failing circumstances. Every person violating the provisions of this section shall be individually responsible for such deposits so received and all such debts so contracted: Provided, Any director who may have paid more than his share of the liabilities mentioned in this section may have the proper remedy at law against such other persons as shall not have paid their full share of such liabilities: And provided, further. That in case of the insolvency of one or more of such officers, agents, or managers, the same shall bo paid, for the time being, by those who are solvent, in equal proportions. Section 2761. In all suits brought for the recovery of the amount of any deposits received or debts so created, all officers, agents, or managers of any such banking institutions charged with having so assented to the reception of such deposit, or the creation of such debt, may be joined as defendants or proceeded against severally, and the fact that such banking institution was so insolvent or in failing circumstances at the time of the reception of the deposit charged to have been so received, or the creation of the debt charged to have been so created, shall be prima facie evidence of such knowledge and assent to such deposit or creation of such debt on the part of such officer, agent, or manager so charged therewith. Section 2762. * * * This article shall extend to and may be enforced by and against the executors and administrators of such deceased officers, agents, and managers." There is no law limiting the amount of interest to be paid on deposits, but this department objects to the payment of more than 4 per cent on time deposits. In passing upon this question the amount of such deposits and the circumstances surrounding them are taken into consideration, and no absolute rule is enforced. 6. The State of Missouri is not a shareholder in any bank. 7. Branch banks are not authorized by the laws of Missouri, and are not permitted to do business in the State. 8. The law requires each bank, at least twice per year and as much oftener as the secretary of state may require, to make a sworn statement of its condition at a time set by the secretary of state, which must be a day previous to the call. These reports are accessible-to the public, but there is no provision made for their publication. The totals or abstracts of the statements are given to the press and sent to the Comptroller of the Currency at Washington. 9. Corporations generally in Missouri are assessed upon the property they have, just as individuals are assessed. Banks are assessed on their capital and surplus. It is unfortunately true that the manner of assessing banks in Missouri is not an REPORT OF THE COMPTROLLER OF THE CURRENCY. 225 equitable one, as the various counties assess them at different rates, running from 40 per cent to more than 100 per cent upon capital stock; but the laws as they now stand can not be corrected by the state board of equalization as is done in the case of other property. The levies for taxation upon banks are the same as those upon other property in the various counties. 10. In case a State bank examiner finds a bank to be in a failing or unlawful condition, or perpetrating fraud, he makes a full report of the condition of the bank to the secretary of state, who then, through the attorney-general, brings an injunction proceeding in the circuit court of the county in which the bank is situate, requesting the closing of the bank and the appointment of a receiver. This system, while it divides responsibility and is protective against an abuse of power, is wanting inflexibility and occasionally in adaptation to the situation. As a rule it works without friction, but in some cases delays occur which are detrimental to the interests of the innocent depositor who is uninformed as to the failing condition of the bank. When a bank is once closed it is under the control of the court through the receiver appointed thereby. Up to this time no provision has been made to keep the department of state informed as to the progress of settlement of the affairs of the bank. For statistical and other useful purposes this should be done, and probably will be arranged by Gomraon consent, even before the law can be amended. 11. There are now no legal provisions covering or referring to the issue of bank circulation. 12. While the State of Missouri has upon its statute books an elaborate and carefully drawn savings-bank law, yet it is true that under this law there has been but one such bank organized. This is a very successful institution. While this is a fact, it is not to be understood that no other banks do a savings business. Very many of the banks have lines of deposit of this kind. Probably fifteen of the trust companies of the State have a savings bank department. In this State, owing to a provision in the constitution, savings banks have a capital stock. The shares must be divided at a par value of $100. The entire amount must be subscribed and actually paid up in lawful money of the United States. The other provisions for incorporating are somewhat similar to those mentioned for banks. The capital stock can be not less than $10,000 in cities having a population of 50,000 or under, and not less than $50,000 in cities having a population of more than 50,000 and less than 150,000, and not less than $100,000 in cities having a population of 150,000 or over. This capital stock must be invested in certain bonds and stocks, as set out rather voluminously in the law. It is made unlawful for such banks to deal or trade in real estate, except under certain specific conditions laid down in the statutes. Banks of this kind having a capital of $10,000 may receive deposits to the amount of $200,000. Those having a capital of $25,000 may receive deposits to the amount of $500,000; those having a capital of $50,000 may receive to the amount of $1,000,000, and no greater amount of deposits shall be received without a like proportionate increase of cash capital. No such bank shall have a capital stock of more than $5,000,000. Strict regulation is made in the law for the declaring of dividends. The aggregate amount that may be received from any one individual or corporation shall not exceed $4,000. The law makes it the duty of the board of directors to regulate from time to time the rate of interest to be allowed the depositors out of the net profits, and to pay or credit the same semi-annually on dates to be fixed by the by-laws. No dividends can be declared or paid until at least one-tenth of the net profits of the corporation shall have been carried to the credit of the guarantee fund. The available cash fund of these banks must at all times be maintained at over 15 per cent of the whole amount of its assets. The deposits of the funds of the bank in any one bank, safe deposit, or trust company can not exceed 20 per cent of the total deposits, capital, and surplus of the deposit bank. No director ox* officer of such bank can be an indorser or surety or in any manner an obligor for moneys loaned or borrowed of the bank. Boards of directors of such banks must meet at least once in each month. [S. R. Flynn, national-bank examiner.] 1. Corporate State banks, savings banks, trust, deposit, security, and loaning corporations. Corporations organized under section 604, as follows: First, to receive moneys in trust and to accumulate the same at such rates of interest as may be obtained or agreed on, or to allow such interest thereon as may be agreed upon. Second, to accept and execute all such trusts and perform such duties of every description as may be committed to them by any person or persons whatsoever, or any corporations, or may be committed or transferred to them by order of any of the courts of record in this State or any other State, or of the United States. Third, to take and accept by grant, assignment, transfer, devise, or bequest and hold any real or personal estate or trust created in accordance with the laws of this State or aay othsr State, CUR 96, PT 1 15 226 REPORT OF THE COMPTROLLER OF THE CURRENCY. or of the United States, and execute such legal trusts in regard to the same, on such terms as may be declared, established, or agreed upon in regard thereto, or to execute or guarantee any bond or bonds required by law to be given in any proceedings in law or equity in any of the courts of this State or other State, or of the United States. Fourth, to act as agent for the investment of money for other persons or corporations and as agent for persons and corporations for the purpose of issuing, registering, transferring, or countersigning the certificates of stock, bonds, or other evidence of debt of any corporation, association, municipality, State, or public authority on such terms as may be agreed upon. Fifth, to accept from and execute trusts for married women in respect to their separate property, whether real or personal, and act as agents for them in the management of such property, and generally to have and exercise such powers as are usually had and exercised by trust companies. Sixth, to act as trustee, assignee, or receiver in all cases were it shall be lawful for any court of record, officer, corporation, or person to appoint a trustee, assignee, or receiver, and to be appointed, commissioned, and act as administrator of any estate, executor of any last will and testament of any deceased person, and as guardian of the person and estate of any minor or minors, or of the estate of any lunatic, imbecile, spendthrift, habitual drunkard, or other persons disqualified or unable from any cause to manage their estate. Seventh, to guarantee the fidelity and diligent performance of the duty of persons holding public or private trust and to certify and guarantee title to real estate. Eighth, to loan money upon real estate and collateral security, and execute and issue its notes, debentures, payable at a future date, and to pledge its mortgages upon real estate and other securities as security therefor. Ninth, to buy and sell Government, State, county, municipal, and other bonds, and all kinds of negotiable, nonnegotiable, and commercial paper, stocks, and other investment securities. Tenth, to become indorser and surety, and to secure indorsers and sureties, for a compensation, upon such terms and conditions as shall be agreed upon by the trustees of such corporation. Eleventh, to take and receive from any individual or corporation on deposit, for safe-keeping and storage, gold and silver plate, jewelry, stocks and securities, and other valuable and personal property, and. to collect coupons, interest, and dividends on said above-described securities, and to rent out the use of the safes and other receptacles on their premises upon such terms and for such compensation as may be agreed upon. 2. State banks: Capital stock must be paid into the treasury in cash, and certificate to that effect filed with State auditor and in county clerk's office. Can transact no business until authorized by the State auditor. Certificate of auditor must be published in city or county newspaper, at least four insertions, immediately after issuing certificate. Savings banks: Capital must be not less than $100,000, and paid in cash, but such corporation may be organized with not exceeding $500,000 capital, of which at least $100,000 must be paid in before deposits are received, balance upon call of directors within five years from date of filing articles of incorporation, but not more that 25 per cent must be called in during any one year. All calls to be made upon thirty days'notice. Trust-deposit, security, and loaning business : When $100,000 has been subscribed for and paid in in cash such corporation may proceed to business. They must commence within ninety days after filing articles of incorporation. Banks organized under section 604: Three or more persons can associate themselves by articles of agreement, in writing, as provided by law, for one or more purposes, included under the above section, and may become incorporated under title designating such business. The articles of agreement shall be signed and acknowledged and shall be filed in the office of the secretary of state, and a duplicate thereof recorded with the recorder of deeds in the county in which the corporation has its principal place of business. 3. State banks: State auditor. Savings banks: Find no special provision. Trustdeposit, security, and loaning business: Secretary of state. Banks organized under section 604: Secretary of state. 4. (A) State banks: Not less than $20,000. Can be increased, but must be paid up in cash. Savings banks: Not less than $100,000. May be organized on a basis of $500,000, of which at least $100,000 must be paid up, and the balance upon the call of the directors. Trust-deposit, security, and loaning business: Not less than $100,000, nor exceeding $500,000. The amount is fixed by articles of incorporation. Banks organized under section 604: Not less than $100,000 paid in, nor $10,000,000 subscribed. (B) State banks: Stockholders elect directors, who appoint officers. Savings banks: Stockholders elect directors, who appoint officers. Trust-deposit, security, and loaning business: Managed by not less than three directors. Banks organized under section 604: Managed by not less than three, nor more than twentyfive directors. (C) State banks: Liable for all debts contracted during term as officers or stockholders, equally and ratably to extent of their holdings. When stock is sold liability ceases at the end of six months from sale and transfer. Savings banks: Liability the same as above. Trust, deposit, security, and loaning business: Liability the same as above. Banks organized under section 604: Liability same as REPORT OF THE COMPTROLLER OF THE CURRENCY. 227 above. (D) State banks: First Mondays in January and July to State auditor Savings banks: First Mondays in January, April, July, and October to State auditor, and any other time auditor calls for it. Trust-deposit, security, and loaning business: Same as above. Banks organized under section 604: Same as above. (E) It is the duty of the State examiner to visit each year, without previous notice, each of the banks and banking corporations, and savings banks, investment and loan companies incorporated under the laws of this State, or doing business under any law of the State concerning corporations, and to examine into their affairs and ascertain their financial condition; to inspect and verify the amount of their securities and assets, and to inquire into any violations of laws governing such banks and institutions. (F) State banks: The total liability to any bank, including the liability of members of firms, is restricted to 15 per cent of actual paid capital and permanent surplus. Purchase of commercial paper is not considered as money borrowed. Savings banks: At least one-half of the capital paid in and one-half of the deposits must be invested in bonds or other securities of the United States, or any of the States or Territories, or county or city, town or school district of this State, on which interest is regularly paid, or loaned on unincumbered real estate, worth at least double the amount to be secured. The remainder may be invested in said bonds or loans as aforesaid, but no loan must be made on personal security of less than two responsible persons, or collateral security to be approved by the directors. No loan upon personal security shall be made to any one person or partnership exceeding $10,000. Trust-deposit, security, and loaning business: Find no special provison of restrictions. Banks organized under section 604: Organized for special purposes. (G) State banks: At least 20 per cent of immediate liabilities. One-half of this may be due from solvent banks. Savings banks: Find no special provisions. Trustdeposit, security, and loaning business: Find no special provisions. Banks organized under section 604: Find no special provisions. (H) State banks: None. Savings banks: Must set aside annually at least 5 per cent of its net profits, until such surplus amounts to 20 per cent of the capital stock. Trust-deposit, security^ and loaning business: Find no special provision. Banks organized under section 604: Find no special provision. 5. State banks: No provision. Allows interest. Savings banks: Section 624 provides that savings banks must receive on deposit all sums of money which may be offered, but have a right to limit the aggregate amount which any one person or society may deposit to such sum as it may deem expedient, and also provides that it may refuse to receive any deposits. The board of directors has a right to regulate the payment of deposits, and regulations must be posted in some conspicuous place in the room in which such corporation transacts its business, and must also print the regulations in its pass books delivered to depositors. Allows interest. Trustdeposit, security, and loaning business: Receives trust deposits for the purpose of loaning and investment. Allows interest. Banks organized under section 604: Organized for special purposes. 6. Find no special provision. 7. Find no special provision. 8. State banks: First Mondays in January and July. Statements signed by president or cashier on oath, attested by at least two directors, showing plainly resources and liabilities, amount of each kind thereof. Must be published once in some newspaper of the county where such bank is located, if any newspaper be published therein. Proof of such publication shall be furnished to State auditor. Savings banks: Report to State auditor first Mondays in January, April, July, and October, and publish same as State banks. Trust-deposit, security, and loaning business: Same as above. Banks organized under section 604: Same as above. 9. State banks: Taxed as national banks. Savings banks: Licenses scaled according to business transaction. Trust, deposit, security, and loaning business: Taxed as national banks. Banks organized under section 604: Taxed as national banks. 10. No special provision for closing up the business of insolvent banks. It would come under the general head of insolvent incorporations. 11. Find no provision referring to the issue of bank circulation. 12. Savings banks: Any number of persons, not less than three, may incorporate. Capital must be held by the bank as a guaranty to its depositors. Must be invested as provided. Stockholders participate in profits after depositors have been paid such rates of interest as may be provided by the by-laws. Stockholders elect not to exceed thirteen directors. Directors elect such officers as their business requires, and remove at their pleasure. Directors hold office until the first Monday in January next after their election or appointment and until their successors are elected and qualified. Elections must be held on the first Monday in January of each year. Directors must be citizens of the United States, and at least threefourths of them must be residents of the State. Every director must own, in his own right, at least ten shares of the capital stock. If he ceases to be the owner of these ten shares, or becomes in any manner disqualified, he shall cease to he a direc 228 REPORT OF THE COMPTROLLER OF THE CURRENCY tor. A majority vote of the members of the board of directors is required in making any order for or authorizing any investment of money, or the sale or transfer of any stock or securities, or other real or personal property belonging to the corporation, or the appointment of any officer receiving any salary. Section 627 says no president, vice-president, director, or other officer, or servant of such corporation, shall directly or indirectly borrow any of the funds of such corporation or of its deposits, or in any manner use the same in their private affairs or business, nor shall any director receive any pay, salary, or emolument until after such interest as the directors shall have determined to allow depositors shall be provided for in accordance with the regulations of the corporation. The corporation may purchase, hold, and convey real estate as follows: Such as may be necessary for their business, not exceeding the value of $150,000. Such as is mortgaged, to wit: For moneys loaned or given as security for money loaned or advanced^ such as is purchased at sale on judgment or decree obtained, etc. Said corporation shall not buy or sell any personal property, except such as may be necessary for the proper transaction of its business. Must at all times, during business hours, submit to an examination by the State auditor, or such other person or persons as the legislative assembly or the State auditor designates or appoints for this purpose. Any officer or clerk of such corporation who willfully makes a false oath or affidavit relative to the financial condition of such corporation is guilty of perjury, and upon conviction thereof must be punished accordingly. No greater sum than $50,000 shall be at any time deposited in any one bank or corporation. NEBRASKA. [E.. H. Townley, secretary State banking department.] 1. Incorporated and private banks. Permitted to transact either a commercial or a savings bank business. May be a corporation, a partnership, afirm,or an individual. 2. Every bank, corporation, partnership, firm, or individual, organized for and desiring to transact a banking business, shall, before commencing such business, make, under oath, and transmit to the State banking board a full, complete, and detailed statement of, first, the name of the proposed bank; second, if incorporated, a certified copy of the articles of incorporation; third, the names of the incorporators, partners, firm, or individuals; fourth, the county, city, town, of village in which the said proposed bank is located; fifth, the nature of proposed banking business, whether commercial or savings; sixth, the amount of paid-up capital stock. Whenever, after the examination and approval by the State banking board of the statement provided for in section 6 of this act, the corporation, partnership, firm, or individual shall file with the State banking board the oath of the president, cashier, partner, member of the firm, or individual, that the capital stock has been paid in as provided for, and in compliance with section 4 of this act, then the State banking board shall, without unnecessary delay, issue to said corporation, partnership, firm, or individual a charter for the same purpose, and in the same manner as in section 5. On receipt of said charter the proposed bank may begin to transact a banking business. 3. The auditor of public accounts, the State treasurer, and the attorney-general shall be, and they are hereby, made a board which shall be designated and known as the State banking board. 4. (A) It shall be unlawful for any corporation, partnership, firm, or individual to transact a banking business unless such corporation, partnership, firm, or individual has property of cash value as follows: In cities, villages, and communities having a population of less than 1,000 inhabitants, $5,000; more than 1,000 and less than 1,500, $10,000; less than 2,000 and more than 1,500, $15,000; less than 3,000 and more than 2,000, $20,000; less than 5,000 and more than 3,000, $25,000; less than 10,000 and more than 5,000, $30,000; more than 10,000, $50,000. (B) As specified in articles of incorporation for corporaied banks; no legal requirements for private banks. (C) Every stockholder in any banking corporation transacting a banking business in this State shall bo liable to the creditors of such bank for an amount, over and above the share or shares of stock so held, equal to the paid-up value thereof, for all liabilities accruing while such stock is owned or held by such shareholder. (D) Every bank and every corporation, partnership, firm, or individual transacting a banking business shall make to the State banking board not less than four reports during each year. Each report shall state such resources and liabilities at the close of business on any past day by the State banking board specified, and shall be transmitted to said board within five days after the receipt of a request or a requisition therefor. And a summary of such report in the form prescribed by the State banking board shall be published in a newspaper published in the place where such banking business is transacted, or if there is no newspaper in the place, then in one published in the same county, at the expense of such bank, corporation, firm, or individual j and proof of such publication REPORT OF THE COMPTROLLER OF THE CURRENCY. 229 shall be transmitted to tlie State banking boarcr within twenty days from the date fixed for such report. (E) The State banking board shall appoint a suitable person or persons having at least three years' actual experience in the banking business, or with the affairs of the State banking department, to make an examination of and into the affairs of every bank, and every corporation, partnership, firm, or individual transacting a banking business, as often as shall be deemed necessary and proper and at least once in every year. (F) No corporation conducting a banking business shall make any loan or discount on the security of the shares of its own capital stock, nor be the purchaser or holder of any such shares, unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith; and stock so purchased or acquired shall within six months from the time of its purchase be sold or disposed of at public or private sale; or in default thereof, a receiver may be appointed to close up the business of the bank. Provided, that in no case shall the amount of stock so held exceed 10 per cent of the paid-up capital of such bank. No partership,firm,or individual transacting a banking business in this State shall be permitted to carry any note or obligation of any such partnership, firm, or individual, or any of the members of such partnership or firm, as any part of the assets of the bank. And no officer, director, or employee of any corporation transacting a banking business in this State shall be permitted to borrow any of the funds of the bank upon his ownn note or obligation, or upon any note or obligation made to him for accommodation,, without having first obtained the approval of a majority of the board of directors of the bank, and the approval, if obtained, shall be made a part of the records of the1 bank. Any individual member of a firm, partner, officer, director, or employee wko* shall violate the provisions of this section shall be deemed guilty of the embezzlement of the funds of said bank to the extent of said notes or obligations so given, and on conviction thereof shall be punished by a fine not exceeding $1,000, or imprisonment in the penitentiary not to exceed five years, or both, at the discretion of the court. No* individual, firm, or corporation transacting a banking business in this State shall loan; to any single corporation, firm, or individual, including in such loan all loans made" to the several members or shareholders of such firm or corporation, more than 20 per cent of the paid-up capital of such bank. And in no case shall the total liabilities of the several stockholders of an incorporated bank to such bank exceed 50 per cent of the paid-up capital of such bank. But the discount of bills of exchange drawn in good faith against actually existing values, and the discount of commercial paper actually owned by the person negotiating the same, shall not be considered as money borrowed. Any officer, director, or employee of any corporation transacting a banking business in this State, who shall knowingly permit or allow the shareholders of such bank to at any one time become indebted to such banking corporation in a total sum exceeding 50 per cent of the paid-up capital of such banking corporation shall be deemed guilty of felony, and upon conviction thereof shall be subject to a fine of not to exceed $500, or by imprisonment not to exceed three years in the State penitentiary, or both, at the discretion of the court. (G) Every bank shall at all times have on hand as a reserve in available funds an amount equal to at least 15 per cent of the aggregate amount of its deposits. Two-fifths of said 15 per cent shall be in cash in the vaults of the bank; provided, that in cities having a population of more than 25,000 said reserve shall be 20 percent of the aggregate amount of the deposits; provided further, that savings banks shall have on hand at all times as a reserve in available funds an amount equal to at least 5 per cent of their aggregate deposits. (H) Any corporation, partnership, firm, or individual transacting a banking business may semiannually declare a dividend of so much of the net profits as it, they, or he may judge expedient, but such corporation, partnership, firm, or individual shall, before the declaration of a dividend, carry one-tenth part of its net profits to its surplus fund until the same shall amount to 20 per cent of its paid-up capital stock. No corporation, partnership, firm, or individual transacting a banking business in this State shall withdraw, or permit to be withdrawn, either in the form of dividends or otherwise, any part of its capital. If losses have at any time been sustained, equal to or exceeding undivided profits on hand, no dividend shall be made; and no dividend shall be made by any bank transacting a banking business under the laws of this State to an amount greater than the net profits on hand less the losses and bad debts. 5. No bank, corporation, partnership, firm, or individual transacting a banking business in this State shall accept or receive on deposit for any purpose any money, bank bills, United States Treasury notes or currency, or other notes, bills, checks, drafts, credits, or currency, when such bank, corporation, partnership, firm, or individual is insolvent. Savings bank shall receive deposits to an amount not exceeding ten times the aggregate amount of its paid-up capital and surplus. Interest paid on time certificates of deposit, also on public moneys under depository law of this State, for which bond is required. 6. None. 7. No. 230 REPORT OF THE COMPTROLLER OF THE CURRENCY. 8. Summary of report under call of State banking board published in local newspaper at least four times annually. List of shareholders with number of shares owned by each, subject to public inspection. 9. None except for examination fees. 10. Whenever it shall appear to the State banking board from an examination or report provided for by this act that the capital of any corporation, partnership, firm, or individual transacting a banking business in this State is impaired, * * * the said State banking board shall communicate the facts to the attorney-general, who shall thereupon cause an application to be made to the district court of the county where such corporation, etc., is located, or to any judge of such court, for the appointment of a suitable person as receiver to take charge of the business and affairs of and wind up such bank. 11. None. 12. Any corporation, partnership, firm, or individual designating its, their, or his business as that of a savings bank, shall have power to carry on a savings bank business as prescribed and limited in this act. Any savings bank may receive deposits from the general public. The funds of any savings bank, except the reserve provided for in tins act, shall be invested in bonds of the United States, or of any State in the United States, or in the public debt or bonds of any city, county, township, village, or school district of any State of the United States which shall have been authorized by the legislature of the State, or shall be loaned on negotiable paper, secured by any of the above-mentioned classes of security, or upon notes or bonds secured by mortgage lien upon unincumbered real estate (provided thab second-mortgage loans may bo made on improved farm lands, but no loan shall be made on such improved farm lands or other real estate which, including the aggregate amount of incumbrance thereon, shall exceed 50 per cent of the cash value thereof), or upon notes secured by collateral security of known marketable value, or held as cash, or shall be deposited in good solvent banks; provided, that chattel mortgages shall not be deemed collateral security, and savings banks are hereby prohibited from investing their funds in them, except chattel loans on cattle. Nothing in this section shall prohibit a savings bank from issuing certificates for legitimate deposits. Savings banks shall not be subject to the provisions of section 4 of this act relating to capital, but it shall be unlawful for any savings bank to transact a savings bank business in this State with a paid-up capital of less than $12,000, one-third of which may be invested in bank building and the lot or lots on which the same are situated and the necessary bank furniture and fixtures; provided that on and after the passage of this act it shall be unlawful for any savings bank to organize aod commence a savings bank business with a. paid-up capital of less than $25,000 in cities having more than 25,000 population; provided, further, that no savings bank in this State shall receive deposits to an amount exceeding ten times the aggregate amount of its paid-up capital and surplus. Any corporation transacting a banking business in this State may purchase, hold, and convey real estate for the following purposes only: Such as is necessary for convenient transaction of its business, not exceeding in value one-third of the paid-up capital; such as shall be conveyed to it for debts due the bank, and such as it shall purchase at sale under judgments or decrees upon its securities, but the bank at such sale shall not bid a larger amount than to satisfy its debt. No real estate so acquired in satisfaction of debts or at a sale upon its j udgments or decrees shall be held longer than five years, and within thirty days thereafter must be sold at private or public sale, and at no time shall the total amount of real estate held by any bank for any purpose exceed 50 per cent of the paid-up capital of such bank. Savings banks shall not be subject to the provisions of this section. (Copy of the banking law transmitted.) [John E. Jones, governor. ] 1. Under act of Nevada State legislature, approved March 23, 1891, banks are organized and are divided into seven classes, viz: Class 1, those doing business in the aggregate to the amount of $500,000 or more per month; class 2, $300,000 and less than $500,000 per month; class 3, $200,000 and less than $300,000 per month; class 4, $100,000 and less than $200,000 per month ; class 5, $50,000 and less than $100,000 per month; class 6, $25,000 and less than $50,000 per month; class 7, any sum less than $25,000 per month. 2, 3, and 4. See copy of act approved March 5, 1869. 5. See copy of act approved March 5, 1869, and interest allowed at bank's option of 4 per cent per annum. 6. The State is not interested as a shareholder in any bank. 7. At option of the bank corporations. REPORT OF THE COMPTROLLER OF THE CURRENCY. 231 8. Banks sometimes publish statements, but do so voluntarily. 9. Banks of the first class pay license of $200 per month; banks of the second class pay license of $150 per month; banks of the third class pay license of $100 per month; banks of the fourth class pay license of $75 per month; banks of the fifth class pay license of $50 per month; banks of the sixth class pay license of $25 per month; banks of the seventh class pay license of $12 per month. 10. Refer to act approved March 5, 1869. 11. Section 6, of article 8, of the constitution of the State of Nevada: "No bank notes or paper of any kind shall ever be permitted to circulate as money in this State, except the Federal currency and the notes of banks authorized under the laws of Congress.'7 12. Refer to act approved March 5, 1869. (Copy of act inclosed.) NEW HAMPSHIRE. [James 0. Lyford, bank commissioner.] 1. The different kinds of banks permitted to do business in this State are as follows : Mutual savings banks, governed by trustees elected by the incorporators, the incorporators having power to perpetuate themselves by filling vacancies as they occur; the depositors have no voice in the management of the banks. Guaranty savings banks, with a guaranty fund or capital stock paid in; which must at all times be equal to 10 per cent of the general deposits; the control of these banks is in the hands of the stockholders who elect the board of trustees, and the depositors have no voice in the management. State banks of discount; with a capital stock, controlled by the stockholders. Trust companies, having authority to do both a discount and a savings bank business, as well as the business of trust companies. The savings department is required by law to be kept as a separate department, and is amenable by the laws governing the savings banks of the State. 2. All banking institutions are incorporated by act of the legislature, and there is no general law under which they can incorporate. Having obtained the charter, the incorporators organize for business, with no other requirements than that guaranty savings banks and trust companies have to satisfy the bank commissioners that their capital or guaranty fund has been paid in in cash. 3. The answer to this question is contained in the preceding paragraph. 4. (A) The amount of capital stock is determined by the legislature in each case, and the payment of the capital stock must be in cash, to the satisfaction of the bank commissioners. (B) The management of all these classes of banks is in control of their trustees or directors, subject to the laws of the State and the supervision of the bank commissioners. As the reply to this inquiry might be elaborated at any length,! refer you to the law, copy herewith. (C) The liability of the shareholders extends only to the amount of their capital stock. (D) Semiannual reports of condition are required by statute to be made to the bank commissioners. (E) At least annual examinations must be made by the commissioners of all these institutions; and the bank commissioners are authorized to apply to the court for the protection of the stockholders and depositors. (P) The restrictions of investments of savings banks are to be found largely in chapter 114 of the session laws of 1895, on page 45 of the pamphlet, which prescribes the class of investments that savings banks may take. The trust companies and State banks are prohibited from making any loan to an officer and director except by the unanimous approval of the board of directors in writing. No savings bank, State bank, or trust company can hire money or give the note of such institution except by vote of the trustees or directors thereof, duly recorded. No savings bank or trust company can loan to any person, firm, or its individual members an amount in excess of 10 per cent of its deposits or capital stock, nor purchase or hold, both by way of investment and security for loans, the stock and bonds of any corporation to an amount in excess of said 10 per cent. (G) No amount of cash reserve is required. In explanation of this it perhaps should be said that we have only two State banks of discount, and but very few trust companies doing a discount business. (H) The savings banks are required to pass to the credit of the guaranty fund annually an amount equal to 10 per cent of their net earnings until the guaranty fund is equal to 5 per cent of the deposits. 5. There are no restrictions upon the receipt of deposits by either savings banks, State banks, or trust companies, and it is not the custom of the State banks and trust companies to allow interest on deposits. 6. The State is not interested as a shareholder in any of the banks of the State. 7. No banks are permitted to conduct branch offices or banks, although there is no statute on the subject. 8. The public is furnished with an annual report of the condition of the banks of the State, published at the expense of the State and distributed to those who ask for it. 232 REPORT OF THE COMPTROLLER OP THE CURRENCY. 9. The savingvS banks pay a tax of three-fourths of 1 per cent on the amount of their deposits, and are permitted to deduct from the gross amount of deposits the amount of real estate owned by the bank, whether acquired by purchase or foreclosure, and also the amount of all real-estate loans made at a rate of 5 per cent or less. The guaranty banks pay in addition a tax of 1 per cent on their guaranty fund or capital stock; and the same is true of the trust companies. While this tax is collected by the State it is redistributed by the State to the towns of the State in the proportion that the deposits of those towns in the savings banks bear to the total amount of savings deposits. The capital stock of the State banks of discount is taxed locally in the towns where the banks are situated at the local rate, with certain reductions on account of real estate held by the bank, and such other property as would not be subject to taxation if held by an individual owner, or it is by law exempt from taxation when owned by individuals. 10. If the bank commissioners are satisfied that it is not for the public safety that a banking institution should continue to transact business, they present the facts by petition to some justice of the supreme court, who is empowered to issue an injunction restraining the institution in whole or in part from the transaction of further business. If, in the judgment of the court or the commissioners, it is better for the creditors that the institution should continue under its existing managment, that may be done, or, if it is thought advisable, a receiver can be appointed by the court. Another method of dealing with insolvent savings banks is to reduce the deposit accounts of each depositor such a percentage that the assets will pay out the reduced amount. The bank continues to transact business, and when it has realized all that can be realized from the depreciated assets, the surplus thus accumulated is distributed among the depositors. If the bank takes new deposits they must be kept separate and invested separately, so that the old institution could be wound up and the new institution go on. To illustrate: The bank commissioners, from an examination, are of the opinion that a bank can with safety only pay its depositors 75 per cent of their deposit accounts. The deposits are accordingly reduced 25 per cent. Any depositor can then withdraw 75 per cent of his deposit at the date of reduction. If the bank is to be finally closed up because of loss of confidence in its management, each depositor receives the 75 per cent in the liquidation and as much more as the assets realize. The statute relating to this subject may be found on page 39 of the pamphlet, sections 26, 27, 28, and 29. 11. The legal provisions referring to the issue of bank circulation will be found in chapter 163 of the Public Statutes, on page 27 of the pamphlet above referred to. 12. By reading chapter 165 of the Public Statutes, on page 33 of the pamphlet above referred to, chapter 105 of the Session Laws of 1895, on page 42, and chapter 114 of the Session Laws of 1895, on page 45, you will find an answer to this inquiry. (Copy of banking laws inclosed.) JERSEY. [George S. Duryee, bank commissioner.] 1. Banks of discount, deposit, and circulation, individual or private bankers, savings banks, safe deposit and trust companies. Individual bankers are subject to the same control and supervision as incorporated banks of discount, deposit, and circulation, but are not required to become incorporated. They are not authorized to issue their "notes, bills, currency, or other circulating medium of exchange." No individual banker can legally transact a banking business in the State until he has filed a report of his condition, in form similar to that required of incorporated banks, nor until the commissioner of banking and insurance shall have made an examination of his affairs and ascertained that he is then solvent and able to pay his debts at maturity, and shall have issued his certificate to that effect. In case of the insolvency of any such banker, said commissioner may institute proceedings in the court of chancery as provided by law in the case of insolvent banking corporations, the court having the same power to appoint receivers, make distribution of the assets, etc., as in the latter instance. Safe deposit and trust companies have the trust powers usually conferred upon such institutions, and may " receive money on deposit to be repaid on demand or otherwise, as may be agreed upon by and between the depositor and the company, and with or without interest, as they agree/' They are distinguished from banks in that they are not given the power to discount bills, etc., unless located in a city or village having no national or State bank of discount and deposit (but two of the companies being so situated), nor have they the privilege of issuing notes to circulate as money. For the statutes governing the same see the accompanying pamphlet, marked A. The following answers, from 2 to 11, inclusive, relate to the incorporated banks of discount, deposit, and circulation. 2. A certificate of association must be executed, acknowledged, and recorded in the office of the clerk of the county where the bank is to be located and in the office REPORT OF THE COMPTROLLER OF THE CURRENCY. 233 of the commissioner of banking and insurance. Not less than $50,000 of the capital stock must be paid in. A certificate of authority by the commissioner of banking and insurance must be obtained. The commissioner is not authorized to issue such certificate except after due inquiry and information, from which he shall be satisfied that the institution is required for the public benefit; also that it has complied with all preliminary requirements of law, which comprehend the due execution and recording of the certificate of association and the payment of the prescribed minimum of capital. Evidence as to the latter is required to be submitted in the form of an affidavit signed by the president and cashier and a majority of the directors. The details as to organization and such payment are then inquired into by said commissioner, or someone appointed by him, and report filed. 3. The commissioner of banking and insurance. (See answer to preceding question.) 4. (A) The maximum of capital authorized by the general banking law is $2,000,000 and the minimum $50,000. At least the latter amount must be fully paid in before a bank is permitted to commence business. As the additional capital is called and paid in certificates thereof must be filed in the department of banking and insurance. By subsequent enactments amendatory of the general corporation law, corporations organized under any law of the State, general or special (except railroad or canal companies), are authorized to increase their capital stock to such amount as the board of directors may determine, with the consent of stockholders owning at least two-thirds in value of the existing capital stock, upon filing a certificate that such action has been taken and consent given. (B) The conduct of the business is vested in a board of directors, elected as may be provided in the articles of association or by-laws. Each director must be a bona fide holder of some of the stock, but not of any specified amount thereof or number of shares. No provision as to the number of directors, but the requirement that the number of incorporators must not be less than seven, citizens of the State, must be considered in this connection. The directors may choose from their number a president, cashier, and other officers and agents, and remove such officers and agents at pleasure; also may establish by-laws for their government and exercise such other incidental powers as shall be necessary to carry on the banking business. (C) Stockholders are not liable beyond the amount invested in their shares. (No personal liability in addition thereto.) They are liable for their unpaid subscriptions. (D) The institutions have one fixed time for reporting, viz, December 31, annually; but under the authority vested in the commissioner of banking and insurance to call for additional reports at any time, .returns are required to be rendered quarterly. Such reports must be filed within five days after receipt of notice, under penalty of $250. (E) The commissioner of banking and insurance is the supervising officer. He has full authority himself, or by such person or persons as he may appoint for the purpose, to investigate the affairs of any bank whenever he may deem it expedient, or at the request of the bank, or like request in writing by three or more of its creditors, depositors, or stockholders. Examinations are frequently made, one examiner being regularly employed by the commissioner. He receives a stated salary, which is paid by check of the State treasurer. The necessary expenses of all examinations must be paid by the institutions examined. These are paid to the commissioner of banking and insurance, and by him to the State treasurer, less the necessary traveling and incidental expenses of the examiners, which are paid by check of the commissioner upon proper vouchers. (F) The banks may loan money on real and personal security. No restrictions. (G) No cash-reserve requirement. (H) No provision for the accumulation of surplus. Dividends may be declared from the surplus or net profits (interchangeable terms) only. 5. No special regulations upon the subject. Some ten of the twenty-one banks now doing business allow interest on deposits, but in several instances only on special-deposit accounts. 6. None whatever. 7. The general banking act directs that the business must be carried on at the place specified in the certificate of association, and not elsewhere; but by subsequent legislation it is provided that no such corporation shall establish or maintain any branch or agency nor more than one place of business without the approval of the commissioner of banking and insurance. With a single exception, the required consent has not been granted. 8. By publication of abstracts of the reports of condition in the annual report of the commissioner of banking and insurance to the legislature. In addition, it has been the practice to issue printed summaries of the quarterly returns of each bank and distribute them to newspapers and persons applying for same, although there is no provision for this publication. The institutions themselves are not required to publish their returns in any newspaper, but some of them do so voluntarily. 9. The stockholders are taxed for the value of their shares. The tax upon resident stocholders is assessed to them in the township or ward where they may reside, and in the case of nonresident stockholders the bank is assessed therefor. National 234 REPORT OF THE COMPTROLLER OF THE CURRENCY. banks are taxed in the same manner. The fees and other charges payable by the banks are $20 for riling their December 31 report and the "necessary expenses" of any examination of their affairs. 10. The court of chancery has jurisdiction in such cases, with authority to appoint receivers and make distribution of tlie assets and property among the creditors and stockholders, according to the prescribed legal rules and the practice of said court. For the general powers, duties, etc., of such receivers, see Revision of New Jersey, 1709-1877; title Corporations, sections 60, 61, 62, 72 to 85, pages 187, etc. 11. The existing provisions of the old general banking law, as reenacted in the "revision" of 1875, are substantially as follows: The State treasurer is authorized and required to cause to be engraved and printed in the best manner to guard against counterfeiting, at the request aj d expense of any bank organized under the act, such quantity of notes for circulation in the similitude of bank notes, in blank, and of different denominations not less than $1, as he may from time to time deem necessary to carry into effect the provisions of the act, and of such form as he may prescribe. Such notes must be countersigned, numbered, and registered in proper books to be provided and kept in the office of said treasurer, under his direction, either by himself or by such clerks or registers as he shall, with the advice and consent of the governor and attorney-general, appoint for the purpose, so that each denomination of the notes shall bear the uniform signature of said treasurer or register. The treasurer and every such register or clerk, before entering upon the discharge of their trusts or duties under the act, must give bond to the State, with sufficient sureties, to be approved by the governor and chief justice, and in such sum as they shall direct. Whenever any such bank shall legally transfer to the State treasurer public stocks, or public stocks and bonds, and mortgages, as prescribed, it is entitled to receive an equal amount of notes for circulation, registered and countersigned as-aforesaid. Such notes, before delivery by the treasurer, must be exhibited to the State auditor, who, in a book to be provided for the purpose, must enter the amount delivered, the time when delivered, the name of the bank, the amount of each denomination, and a description of the securities deposited therefor. No such bank is required to issue circulating notes and deposit securities for their redemption unless it shall deem it proper so to do and shall make the request as above. The public stocks so to be transferred and deposited with the State treasurer shall in all cases be, or made to be, equal to a stock producing not less than 4 per cent per annum; and it is unlawful for the treasurer to take any such stock at a rate above its par value, or that shall not be worth "upon a sale made 100 cents on the dollar." Such stocks must be either the public stocks of the United States or the States of New Jersey, New York, Massachusetts, Pennsylvania, or Ohio; "and such other bonds as are now or may hereafter be by law authorized to be used for the purpose," and bonds of the county "public-road boards" of New Jersey. Instead of securing the whole amount of the notes by pledge of public stocks, a bank may secure not less than one-third thereof by bonds and mortgages, bearing at least 6 per cent interest, and covering improved, productive, unincumbered lands in the State of New Jersey, worth, independently of any building thereon, at least three times the amount for which they shall be mortgaged, no one mortgage to be for a greater amount than $5,000. The total amount of notes issued under the act and remaining outstanding at any time is limited to $10,000,000. Any bank is liable to pay the holder of every bill or note put by it in circulation as money, the payment of which shall have been demanded and refused, damages for nonpayment thereof, in lieu of interest, at the rate of 12 per cent per annum from the time of such refusal until the payment of the note. The charters of four of the five specially incorporated banks authorize the issue of circulating notes, the provisions as to which being substantially the same in each ease. Summarized, these provisions are as follows: Notes may be issued up to twice the capital stock paid in; no note to be of a less denomination than $1, except, perhaps, in the case of one bank, whose charter contains no such restriction. The penalty for any willful or intentional overissue is imprisonment for not less than one nor more than five years. All the notes are payable on demand at the counter of the bank, and in the event of its refusal or neglect to pay any of the same, after demand made at the banking house during the regular hours of business, the institution must cease its banking operations until the notes are fully paid, under penalty of forfeiture of its charter. The charters of two of the banks make the notes a first and paramount lien upon all the assets in case of insolvency, but in the case of the two others the claims of bona-fide judgment and mortgage creditors are given equal priority with the notes. The directors are made liable for all the notes in circulation at the time of insolvency, and may be proceeded against to recover the amount of any deficiency remaining after the assets have been appropriated to their payment. No director can resign or transfer his shares to avoid this liability. If the assets of the bank and the property of the directors prove insufficient to pay the notes in full the stockholders other than such directors are personally liable for the deficiency, but not, however, for an amount beyond the par value of their shares. They are not permitted to transfer their shares to avoid this liability. REPORT OF THE COMPTROLLER OF THE CURRENCY. 235 12. They are nonstock institutions, conducted by a board of managers of not less than nine. A majority of the managers must reside in the county where the bank is located and be freeholders in the State. All selections to fill vacancies are subject to the approval of the commissioner of banking and insurance. No manager can have any interest, directly or indirectly, in the gains or profits of the bank except as a depositor, or borrow any of its funds, or become an indorser, surety, or obligor in any manner for money loaned by or borrowed from the bank. It is the duty of the managers to so regulate the rate of interest or dividends (not to exceed 5 per cent per annum) that the depositors shall receive all the profits of the institution, after deducting necessary expenses and reserving such sum as they may deem expedient as a surplus fund, which, to the amount of 15 per cent of the deposits, the managers are authorized to gradually accumulate and to hold to meet any contingency or loss by depreciation of securities or otherwise. Investments are restricted to bonds of the United States; the State of New Jersey and the cities, counties, etc., therein; bonds of other States in the United States, or of any city or county thereof, whose net indebtedness is limited by law to 10 per cent of the assessed valuation of property therein, and first-mortgage bonds of railroad companies that have paid dividends regularly on their entire capital stock for thefiveyears preceding, or the consolidated mortgage bonds issued by any such company to retire its entire bonded debt. Loans on personal securities can not be made except upon the additional pledge of specified collaterals having a market-value margin of 20 per cent. Not more than 15 per cent of the deposits can be so loaned. Mortgage loans may be made, up to 80 per cent of the deposits, on real estate in New Jersey worth 50 per cent more than the amount loaned thereon, but if the real estate is unimproved or unproductive the margin of value must be 70 per cent. The cost of office building is restricted to 50 per cent of the net surplus of the bank, based on par values of securities. The managers are required to invest the moneys deposited as soon as practicable after their receipt, except that for the purpose of meeting current payments in excess of the receipts they may keep an available fund of not exceeding 10 per cent of the deposits, either on hand or deposited on call in designated banks or trust companies, or loaned on demand on specified collaterals. The aggregate deposit of any one individual or corporation is limited to $5,000, exclusive of accrued interest, unless made prior to 1876 or by order of a court of record or surrogate. Deposits of less than $1 need not be received. A deposit made not later than the third day commencing any interest period or month may draw interest for the whole of the period or month. Depositors may be classified according to the duration and nature of their dealings with the bank, and interest may be allowed them accordingly. Deposits are repayable after demand, in such manner and under such regulations as the managers may prescribe. The institutions must be examined at least once in every two years, and oftener if deemed expedient by the commissioner of banking and insurance. Reports of condition on January 1 and transactions for the year must be filed annually, within one month from said date, under penalty of $200 for each day's delay, for which the managers are personally liable. Savings banks having no capital stock are taxed upon all their u property and valuable assets," but the depositors therein are exempt from taxation on their personal estate to the amount of their deposits. No such institution can be established without a certificate of authority by the commissioner of banking and insurance, which he is not authorized to issue in any case until he has ascertained from the best sources of information at his command (1) whether greater convenience of access to a savings bank will be afforded to any considerable number of depositors by opening such a bank at the place proposed; (2) whether the density of the population in the particular neighborhood and in the surrounding country gives reasonable promise of adequate support to the enterprise, and (3) whether the responsibility, character, and general fitness for the discharge of such a trust of the persons named in the certificate of association are such as to command the confidence of the community in which the bank is to be located. NEW MEXICO. [Joseph T. Talbert, national-bank examiner.] 1. State banks and savings banks and trust associations. 2. Any number of persons not less than three may associate to establish a State bank, the capital of which must not be less than $30,000. No bank shall transact business until at least 50 per cent of its capital has been paid into the treasury of the bank in cash and until a certificate to that effect under oath of the president or cashier, shall be filed in the office of the secretary of the Territory and in the office of the probate clerk in the county where such bank is located; nor shall such bank continue to transact business beyond the period of one year unless the capital is fully paid up in cash and a sworn statement to that effect filed with the aforesaid officers. The same law applies to savings banks. 236 REPORT OP THE COMPTROLLER OF THE CURRENCY. 3. The secretary of the Territory. 4. (A) For both State and savings banks the least amount of capital required i& $30,000, one-half of which must be paid in before commencement of business, the remainder at the expiration of one year from date of commencing business. (B) For both State and savings banks there must be a board of directors, not exceeding nine, who elect a president and vice-president and appoint a cashier or treasurer. (C) For State banks stockholders are liable for all debts of the bank contracted during,the term of their being stockholders equally and ratably to the extent of their respective shares, such liability to continue for one year after the transfer of such shares. For savings banks the stockholders are liable to the extent of the par value of the shares of stock held by them. (D) For both State and savings banks statements are required to be made (to the treasurer for State banks and to the secretary for savings banks) at least twice a year, or whenever dividends are declared, the statements to be published once a week for three weeks in the nearest paper. (E) The secretary of the Territory may at any time make an examination in person or by an appointee. (F) For State banks there is no restriction on loans except that they are not allowed to loan on their own stock, nor is the stock permitted to be transferred while the stockholder owes the bank. For savings banks the last clause of the foregoing applies. They are also restricted to loans of 10 per cent of capital and to 5 per cent to officers or stockholders, unless on deed of trust or collateral. They may loan on real estate on a value of 50 per cent on improved and 30 per cent on unimproved appraisement, not to exceed valuation for taxes. (G) No requirement as to cash reserve. (H) For State banks no requirement as to surplus. Savings banks are required to apply to surplus 10 per cent of earnings semiannually. 5. The reception of deposits after the insolvency of savings banks renders the directors liable for such deposits. The fact that such insolvency existed is prima facie evidence of the knowledge of it. It is the custom of savings banks to allow interest on deposits. 6. The State is in no way interested as a shareholder in the bank. 7. There is no law bearing on this. 8. By statements, as above explained. 9. None. 10. When a bank appears insolvent on examination the secretary reports it to the attorney-general, who shall take such steps as the nature of the case may require, and may bring suit in the name of the Territory or a creditor of the bank before any court of competent jurisdiction, and on satisfactory evidence of such insolvency the court shall at once appoint a receiver. 11. Savings banks may issue their own evidence of indebtedness and negotiate the same to an amount not exceeding 90 per cent of the aggregate loans made and held by such association secured by mortgages or deeds of trust on real estate; which shall not be construed to empower the association to issue notes for circulation. 12. The reason for the wide difference in the law governing State banks and savings banks is that the law under which savings banks are organized was passed at a much later date than the one under which State banks are authorized. The last law provided only for the savings banks and only repealed such laws as were in conflict. The principal points in the law governing savings banks has been cited in the above with the exception of the law governing the purchase of real estate, which is, first, a plat of ground for the purpose of erecting a building for the transaction of busi ness, the cost of which shall not exceed 50 per cent of the net surplus (this includes the building); second, such as it may have to purchase to secure it for loans previously contracted, which shall not be held longer than five years. 3NTEW Y O R K . [Charles M. Preston, superintendent of banks.] 1. Banks of discount and deposit, individual bankers, private bankers having no supervision. 2. Filing certificate of organization in county clerk's office and banking department. Prepayment in full of capital in cash. Deposit of $1,000 in State or United States stocks in banking department as pledge of good faith and compliance with statutes. Oath of office of directors. Letters of authority to commence business from superintendent of banks. Individual banker must file certificate in office of superintendent of banks, stating town, city, or village in which he resides. (Sec. 42, revised banking law of 1892.) Before letters of authority from superintendent issue proofs of amount of capital to be specially used and paid in, resources of individual, or of the several partners, are required. Private bankers do business on personal credit in their own way. REPORT OF THE COMPTROLLER OF THE CURRENCY. 237 3. Superintendent of banks. In his absence or inability, deputy superintendent. 4. (A) In villages whose population does not exceed2,000, $25,000; in cities, villages, or towns exceeding 2,000, not exceeding 30,000, $50,000; not less than $100,000 elsewhere. Payment in full of all capital stock in cash required in advance after November 1, 1895. (B) Management by board of directors, not less than five, who elect executive officers: President, vice-president, cashier, etc. (C) Shareholders liable to extent of amount of their stock, in addition to amount invested in such shares. (D) Four times a year, once in each quarter, time named by superintendent of banks, inform and manner prescribed by superintendent of banks. (E) Regular annual examinations; special examinations when ordered by superintendent. (F) Loans to individual, firm, or corporation restricted to 20 per cent of capital and surplus of bank; bona fide commercial paper excepted. (G) Reserve of 15 per cent required in cities of 800,000 and over, and elsewhere 10 per cent, one-half of such reserve in cash and one-half in depository approved by superintendent of banks. (H) Surplus of 20 per cent of capital provided for by requiring one-tenth of net profits carried to surplus fund until such fund is 20 per cent. 5. No limit as to amount. Banks can not advertise for or receive deposits as savings banks. Deposits from savings banks preferred liability. It is a general rule to allow interest on deposits where certificates of deposit are issued. Some banks allow interest on balances of account. 6. The State is not interested as a shareholder in any of the banks. 7. Banks are not permitted to conduct branches. 8. Quarterly statements containing substance of quarterly reports are published in local paper. Superintendent of banks publishes annual summary statement in State paper at Albany, and in book form. 9. General assessment for support of banking department, annual, apportioned on resources, with savings banks, trust companies, and safe deposit companies. Special assessments for per diem allowances and expenses of examiners for regular annual and all special examinations. 10. (A) Section 18 (revised banking law of 1892), proceedings against delinquent corporations: If any such corporation or individual banker shall refuse to submit its books, papers, and concerns to the inspection of any examiner, or if any officer thereof shall refuse to submit to be examined upon oath touching the concerns of such corporation or individual banker, or if it shall be found to have violated its charter, or any law of the State binding upon it, the superintendent may report the fact to the attorney-general, who shall institute such action or proceeding against such corporation or individual banker as is authorized in case of insolvent corporations. If it shall appear to the superintendent that any such corporation or banker has violated its charter or any law of this State, or is conducting business in an unsafe or unauthorized manner, he shall, by an order under his hand and official seal, addressed to such corporation or banker, direct a discontinuance of such illegal or unsafe practices, and conformity with the requirements of its charter, and with safety and security in its transactions, and whenever it shall appear to the superintendent that it is unsafe and inexpedient for such corporation or banker to continue business he shall communicate the facts to the attorney-general, who shall thereupon institute such proceedings against the corporation or banker as are authorized in the case of insolvent corporations, or such other proceedings as the nature of the case may require. (B) Voluntary liquidation: Majority of directors may petition supreme court, praying for final order of dissolution. (Code of Civil Procedure, Title XI.) 11. In addition to the powers conferred by the general and stock corporation laws every bank shall have power: * * * (Of) obtaining, issuing, and circulating notes. * * * (Sec. 43, revised banking law, 1892.) Reference is made to sections 64 to 86, inclusive, of revised banking law, 1892, transmitted. 12. Savings banks have no capital stock. Thirteen or more persons, two-thirds resident of county, may establish a savings bank by executing under their hands and seals and acknowledging a certificate in duplicate, one to be filed in county clerk's office and one in banking department, within sixty days after acknowledgment, setting forth (1) name of corporation; (2) place where business is to be transacted; (3) name, residence, occupation, and post-office address of each incorporator; (4) declaration of all of acceptance of responsibilities and of faithful discharge of duties. (Sec. 100, revised banking law, 1892.) Notice of intention to organize published for four weeks in newspaper of largest circulation of locality and served on all other savings banks in county fifteen days before filing certificate. Superintendent of banks, on receiviug certificate, indorses same "Filed for examination." Sixty days allowed superintendent to examine as to convenience of locality, etc., needs of the population, responsibility, character, and general fitness of persons named in certificate. If satisfied superintendent issues certificate of authorization, on filing of which in county clerk's office such savings bank becomes a corporation. Must begin business within a year. Board of trustees, not less than thirteen, have entire management and control andfillvacancies in their number j also make by-laws. 238 REPORT OF THE COMPTROLLER OF THE CURRENCY. Quorum, seven, including president or vice-president. Have power to require security from officers. No trustee to have interest in gains or profits. Deposits of individuals limited to $3,000; of societies and corporations limited to $5,000 exclusive of interest. Courts may direct deposits in trust in larger amounts. Investments limited by chapter 813, Laws of New York for 1895 (copy annexed). Powers of trustees and limitations referred to in chapter 415, laws of 1895, annexed. Dealings and holding in real estate limited to banking house and lot, one-fourth in value of surplus, except excess approved by superintendent of banks and to properties acquired by foreclosure, or judgment, sales or settlements to secure debts to be sold within five years, except when time is extended by superintendent of banks. Available funds for current payments and expenses fixed at 10 per cent of whole amount of deposits. Loans on personal security prohibited. Buying or selling gold or silver (except such as received in payment of interest or principal of obligations or from depositors in regular course of business), exchange and collection of promissory notes or time bills of exchange prohibited. Issuing certificates of deposit on demand or at a fixed day prohibited. Payments to depositors prohibited except on presentation of depositor's pass book, unless loss of same, when regulations provide manner. Dividends or interests to depositors not to exceed 5 per cent. Surplus not to exceed 15 per cent of deposits. Debts due savings banks from insolvent banks preferred. When it appears to superintendent of banks that a savings bank has violated its charter or the laws, or is conducting its business in an unsafe or unauthorized manner, or is insolvent, he may take possession of said bank, report the facts to the attorney-general, who may bring an action for dissolution. Two-thirds of trustees may declare by resolution determination to close business, file resolution in banking department, publish notice to depositors and creditors, realize upon investments, pay off depositors and petition supreme court, on notice to attorney-general, for order declaring franchise surrendered and corporation terminated. (For further information and details refer to article 3, chapter 689, laws 1892.) Trust companies have many of the powers and privileges of banks. (Revised banking law, State of New York, 1892, transmitted.) [W. K". Worth, State treasurer.] 1. The different classes of banks doing business in the State are national banks, State banks, savings and private banks. 2. The legal requirements for the national banks are such as hold good in all the States. The State and savings banks must secure a charter from the general assembly, in which is stated the amount of capital stock, the amount required to be subscribed, and the amount paid up at the time of organizing, the place of business and the general line of business they intend to follow. Private banks begin business as persons or firms in other lines of trade, submitting to the laws as to taxation and supervision. 3. The State treasurer determines when the conditions of their doing business are complied with. 4. There are no legal provisions as to the points here involved, except that the banks must of course do as required in their charters; and, except as to (D), reports of their condition must be made over affidavit to State treasurer when required, which will be when the national banks are required to report to the Comptroller of the Currency; and these statements must be published in condensed form in newspaper in nearest city or town; and except also as to (E) examinations are made annually by direction of the State treasurer, the expense of which is borne by the banks severally. 5. There are no legal provisions in regard to receipt of deposits, except as below, in regard to savings banks. The banks allow interest at their own discretion and by agreement on deposits left with them a sufficient time. 6. The State is not interested as shareholder in any bank. 7. The banks conduct branch offices at their own discretion. 8. The public receive the published statements in newspapers provided for in No. 4. 9. The bank tax is laid on capital stock as follows: On $25,000 or less, $50, and $2 each for every $1,000 in excess of $25,000; and $25 additional for each county in which they have an agency. 10. If the condition of any bank is thought to be precarious or unsatisfactory, after due notice to them to make good the deficiency or losses, the State treasurer shall order a special examination; and if convinced of the necessity he shall institute proceedings in the superior court of Wake County (in which Raleigh is situated) for settling the affairs of such bank and appointment of a receiver. 11. The State banks have no circulation. REPORT OF THE COMPTROLLER OF THE CURRENCY. 239 12. The main points in the law relative to savings banks are as follows: Every savings bank shall have a commissioner, appointed by the governor, who shall visit it at least once a year, with full power to investigate its affairs completely, and shall do so when required by five or more who are interested to have an extra examination, and shall, if he deem its condition hazardous, restrain it by injunction from further proceeding until a hearing before court, and he shall report to the attorney general and have a prosecation issued on behalf of the State. Every continuous depositor of $1,000 is a member of the corporation. Deposits drawing interest shall not exceed $3,000 in one name, except by religious or charitable corporations. Its officers and members of committees of investments shall not borrow its funds, nor be surety for loans, nor take a fee on account of such loans. The bank shall reserve a guarantee fund not less than one-eighth nor more than one-fourth of 1 per cent of deposits every six months till the whole amounts to 10 per cent of the deposits. Dividends are carefully regulated by the law. The treasurer of the bank must make annual reports to the commissioner. 1STOR.TH D A K O T A . [H. A. Langlie, State examiner.] 1. The law of the State of North Dakota provides for only one class of banks, such as are authorized to carry on a general banking business only. 2, 3. Before authorized to do business three or more persons, two-thirds of whom must be residents of the State, may organize under the provisions of the law; such organization papers must be recorded in the office of the register of deeds of the county in which the bank is located, then filed with the secretary of state. 4. (A) Banks can be organized with a capital not less than $5,000, but upward according to the population of the town in which it is located. At least half of the capital must be paid in cash, and the balance in monthly installments of 10 per cent. (B) Not less than three directors, one president, vice-president, cashier, and assistant cashier, and such other help as may be required, to constitute the management of a bank, (C) The shareholders are liable for double the amount of the capital for claims against the bank. (D) Upon call by the State examiner, the banks must render four reports during the year in such form as said officer prescribes, and any special report that may be requested by saiu officer. (E) The State examiner is ex officio superintendent of banks, who must examine same at least once a year, and oftener if he deems it necessary. (F) They are restricted from making loans to any one person, company, or firm to exceed 15 per centum of their capital. (G) Cash reserve not to be less than 20 per cent of deposits, half of which may be in other banks and half in cash on hand. 5. There are no provisions governing the receipts of deposits, except in case of insolvency. Interest is paid on time deposits as a rule. 6. Tlie State has no interest whatsoever as a shareholder in the banks. 7. Branch offices are not provided for by law. 8. The public is kept informed as to the condition of the banks by publication of the statements rendered upon the call of the State examiner four times a year. 9. When organizing, $50 is paid to the State as a tax, and a fee, regulated by the •amount of the capital, is collected by the State examiner once a year and turned over to the State. 10. The law is weak on the point of closing up the business of insolvent banks, in that the examiner has no power to take control of the affairs of the association, but must apply to the courts for the appointment of a receiver. 11. There are no provisions covering or referring to the issue of bank circulation. 12. We have no law relating to savings banks. (Copy of laws transmitted.) OHIO. [Madison Betts, national-bank examiner.] 1. Unincorporated banks, savings and loan associations, and free banking. 2. Unincorporated banks are simply copartnerships subserving no other laws or restrictions than those generally regulating sucn companies. Savings and loan associations must file articles of incorporation with the secretary of state, to be approved by the attorney-general of state (section 3797). Free banking. Certificate to be made and deposited with the secretary of state and governor, auditor and secretary of state to furnish company a certificate (sections 7626 and 7629). 3. For savings and loan associations, secretary of state, and attorney-general (section 3797). For free banking, governor, auditor, and secretary of state (section 7629). 240 REPORT OF THE COMPTROLLER OF THE CURRENCY. 4. (A) Amount and payment of capital stock: For savings and loan associations, not less than $25,000, one-half to be fully paid up (section 3797). For free banks at least $25,000, and not to exceed $500,000, 60 per cent of the same to be paid in (sections 7627 and 7628). (B) Management: Savings and loan associations, by board of directors, as provided for in section 3798. Free banks by board of directors, not less than three nor more than five, provided for in section 7634. (C) Liability of shareholders for claims against the bank: Stockholders are liable over and above the stock owned by each in the further sum of an amount equal to the amount of stock. This is a provision of the constitution and relates to all corporations in Ohio. (D) Slaking reports of condition: Every banking institution incorporated or engaged in the business of banking under the laws of this State shall report to the auditor of state on the first Monday of the months of April and October of each year, (section 3817), which shall be published, as provided for in section 3818. (E) Examination or supervision by State official: Savings and loan associations, as provided for in sections 3816 and 3817. Free banks, as provided for in sections 7603 to 7606, inclusive. (F) Limit of loans: Savings and loan associations to one-fifth part of the actual capital stock actually paid in (section 3807). Free banks to one-tenth of the amount of capital stock actually paid in (section 7641). (G) Reserve required: Savings and loan associations, 15 per cent of deposits (section 3821 B). Free banks, 20 per cent of deposits ''section 7637). (H) Surplus: Savings and loan associations to set aside from net profits one-tenth part thereof until such surplus equals 20 percent of the capital stock (section 3808). Free banks to set aside one-tenth part of its net profits of the preceding half year to its surplus fund until the same shall amount to 20 per cent of its capital stock (section 7640). 5. The board of directors of savings and loan associations may prescribe the terms on which deposits shall be received and paid out (section 5799). For free banking, no special provisions regulating deposits. It is common for banks to allow interest on deposits. p 6. The State has no interest in any bank. 7. There are some of the unincorporated banks or partnerships that have branch offices., but there are no provisions of law regulating branch offices of iucorporated banks now in active operation. 8. Reports shall be made to auditor of state for examination and publication, as provided for in sections 3816 to 3818, inclusive, and October reports shall be compiled by auditor of state and transmitted to general assembly.. 9. The shares of incorporated banks shall be listed for taxation, as provided in section 2762. Unincorporated banks are to be taxed, as provided for in sections 2759 and 2761, inclusive. 10. Section 3809 provides for the distribution of the assets of savings and loan associations when the same cease to do business. 11. No banks of issue in the State of Ohio. 12. See pages 1089 to 1098, inclusive. (Copy of law inclosed.) OKLAHOMA. [William C. Kenfrow, governor.] It is hardly practicable for me to take up your list of questions in their order and give separate reply to each, for the reason that there are very meager provisions in our statutes relative to the subject of banking. The organic act of the Territory provides " that the provisions of title 62 of the Revised Statutes of the United States relating to national banks, and all amendments thereto, shall have the same force and effect in the Territory of Oklanoma as elsewhere in the United States: Provided, That persons otherwise qualified to act as directors shall not be required to reside in said Territory for more than three months immediately preceding their election as such." Under the corporation laws of the Territory private corporations are permitted to be organized for the purpose of conducting the business of " banks of discount and deposit, but not of issue." The property of banks and banking corporations under the revenue laws of the Territory are taxed the same as the property of other persons. Some of the provisions of the statutes on this subject are as follows : " Every bank located within the Territory, Avhether such bank has been organized under the banking laws of the Territory or any other Territory or State or of the United States, shall be assessed and taxed on the value of their shares of stock therein in the county, town, district, village, or city where such bank or banking association is located, and not elsewhere, whether such stockholder resides in such place or not. Such shares shall be listed and assessed with regard to the ownership and value thereof as they exist on the 1st day of February annually, subject, however, to the restriction that taxation of such shares shall not be at a greater rate than is assessed upon any other moneyed capital in the hands of the individual citizens of this Territory, in the county, town, district, village, or city where such bank ia REPORT OF THE COMPTROLLER OF THE CURRENCY. 241 located. The shares of capital stock of national banks not located in this Territoryheld in this Territory shall not be required to be listed under the provisions of this act." In the crimes act of the statutes, various penalties are prescribed for irregular banking, one of them making it a felony for any officer or employee of any banking institution to recehre on deposit any money or other thing of value at the time when he knows said bank to be insolvent. Another provision makes it a misdemeanor for any director of any banking corporation to consent to or make any loans and discounts by which the whole amount of the loans or discounts of the corporation is made to exceed three times the capital stock then paid in and actually possessed, or to make any loan or discount to any director of such corporation to an amount exceeding in the aggregate one-third of the capital stock then paid in and actually possessed. There are in the Territory three classes of banks, viz, national banks, private corporations organized under the laws of the Territory for banking purposes, and private banks conducted by individuals or partnerships. There is no lawrequiring statements from private banks. All the information the public can obtain from the last two classes of banks is that which may be voluntarily given by the managers thereof. The Territory is not interested as shareholder in any banking institution. There are no provisions of statute for closing up the business of insolvent banks other than the general provisions of law applicable to other insolvent partnerships and private corporations. The only banks of issue in the Territory are national banks. There are no savings banks in the Territory. It is the custom of some banks to pay interest on time deposits, but this is not the rule. In my message to the last legislative assembly of the Territory it was earnestly urged that a comprehensive and just law regulating the business of private banking in this Territory be enacted, and such a bill was introduced but failed of passage. The present meager provisions of the statutes on this subject are very unsatisfactory, and have been taken advantage of by certain dishonest persons engaged in the banking business to obtain possession of and carry away the funds of their credulous depositors. [William P. Lord, governor.] The constitution of the State of Oregon provides: The legislative assembly shall not have the power to establish or incorporate any bank or banking company or moneyed institution whatever, nor shall any bank, company, or institution exist in the State with the privilege of making, issuing, or putting into circulation any bill, check, certificate, promissory note, or other paper, or the paper of any bank, company, or person to circulate as money. Corporations may be formed under general laws, but shall not be created by special laws, except for municipal purposes. All laws passed pursuant to this section may be altered, amended, or repealed, but not so as to impair or destroy any vested corporate rights. The stockholders of all corporations and joint-stock companies shall be liable for the indebtedness of said corporation to the amount of their stock subscribed and unpaid, and no more. The State shall not subscribe to or be interested in the stock of any company, association, or corporation. There are private banks and corporations doing a general banking business under the general incorporation laws of the State, neither being subject to any legislative supervision or restrictions or otherwise—banking being placed on the same footing as other legitimate business. Nor has there been any legislation in relation to savings banks, they being also organized under the general incorporation laws of the State. As to taxation, officers of banks are required to furnish the assessor with a list of stockholders, who are taxed upon the value of the shares as other property is valued, nonresident stock being taxed where the bank is located. No special tax is imposed on banks. There is an old law requiring banks to furnish a list of depositors and amounts to the assessor for taxation, but it seems to be inoperative, as it has never been enforced in any instance. Inferior courts have refused to enforce it, but I think the supreme court has never passed upon its validity. It is not generally the custom of banks to allow interest on deposits, except those represented by time certificates. There are no legal provisions for closing up insolvent banks, except the general laws applicable to all insolvent debtors. [B. F. Gilkeson, commissioner of banking.] 1. The different kinds of banks permitted to do business in the State of Pennsylvania are classified by the banking department as follows: Banks (having discounting privileges), savings institutions (with or without capital, having no discounting privileges), to which is added trust companies, for the reason that they transact a general or quasi banking business in addition to that of trusts. The variance in Digitized forcharters FRASERof our different classes of institutions, as banks, saving fund, and trust http://fraser.stlouisfed.org/ CUR 96, P T I Federal Reserve Bank of St. Louis 16 242 REPORT OF THE COMPTROLLER OF THE CURRENCY. companies, with their multiplicity of specialties and accumulation of securities, makes examination of their condition and report far more laborious and tedious than that of banks created under our national system, where general rules apply to all. A large proportion of our banking institutions have been created by special acts of assembly, with powers and restrictions greatly varying, and with titles that do not indicate the character (which also applies to a number of corporations chartered under general acts) of the business conducted by them, banks of discount being indiscriminately confused with savings banks and savings banks mixed up with banks without powers of discount, and both further confused by the addition to their corporate name the title ''trust company." 2. To secure corporate privileges banks are required, before application is made for their creation, to advertise in two newspapers printed in the county where proposed to be located once a week for three months, setting forth name and style, the location, the specific object for which created, and the amount of capital Articles of association must be entered into by not less than three persons, specifying the object for which the association is formed, and may contain any provisions not inconsistent with the general banking act approved May 13, 1876, said articles to be approved by the attorney-general. The said persons forming the association, under their hands, are to make a certificate specifying: (1) Name (subject to the approval of the commissioner of banking), (2) location or place of business, (3) amount of capital and number of shares, (4) names and residences of shareholders with number of shares held by each, (5) a statement that the certificate is made to enable the persons named to form a corporation for banking purposes under the act. The aforesaid certificate to be acknowledged before a judge or notary public. After its receipt and approval by the commissioner of banking a copy is to be certified to the governor, who causes letters patent to be issued, under seal of the Commonwealth. Similar and additional requirements are requisite in the matter of savings institutions; information as to which you are respectfully referred to the act of May 20, 1889, inclosed herewith in pamphlet form. 3. Commissioner of banking (formerly auditor-general) and the attorney-general. 4. (A) See sections 5 and 9 of the act of May 13, copy inclosed. (B) See section 12 of the act of May 13, copy inclosed. (C) See section 5 of the act of May 13, copy inclosed. (D) See section 5 of act of February 11, 1895, copy inclosed. (E) See section 4 of act of February 11, 1895, copy inclosed. (F) See section 21 of act of May 13, 1876, copy inclosed. (G) None. (H) See section 16 of act of May 13, 1876, copy inclosed. Please observe that the answers to the foregoing refer to banks under the general laws. Banks under special laws vary as to privileges and restrictions. The legal provisions governing the same must be arrived at by reference to the several acts themselves. Specially incorporated banks form the larger portion of that class of corporations. 5. No legal provisions under the general law. It is the custom of banks to allow interest on deposits. 6. None. 7. No. 8. Through publications in newspapers, under call of commissioner of banking and the annual report. 9 It is elective for the banks to pay the State 4 mills tax on appraised value of shares in addition to local taxation on same, or 8 mills on the par value of shares of stock. 10. See section 9 of the act of February 11, 1895, copy inclosed. 11. Refer to Purdon's Digest of the Laws of Pennsylvania, Vol. I, pages 166 and 167. 12. Refer to act of May 20, 1889, copy inclosed. [William M. Hardt, national-bank examiner.] 1. State and savings banks and trust companies. 2. Application for charter must be made to the secretary of state, who refers the same to the commissioner of banking, and after his inspection it is sent to the attorney-general and then to the governor for their approval. Corporations for carrying on the business of banking may be formed by any number of persons not less than three, who shall enter into articles of association which shall specify the object for which formed, and being signed by the persons forming such association. They shall also under their hands make a certificate which shall specify the name; location or place of business, designating the county, city, borough, or village; amount of capital stock and number of shares in which divided; the names and places of residence of shareholders, and number of shares held by each. Savings banks may be formed by any number of persons not less than thirteen, and under the same general form of application for articles of association. The trust companies generally are operating under special charters granted by the legislature, the provisions of which differ materially, This is also the case with many of the savings banksF REPORT OF THE COMPTROLLER OF THE CURRENCY. 243 3. Commissioner of banking. 4. (A) Banks of discount and deposit must have capital stock of not less than $50,000, and before commencing business at least 50 per cent of its capital stock shall be paid in, and the remainder of the capital stock shall be paid in installments of at least 10 per cent on the whole amount of capital per month from the time of commencing business. Savings banks are unrestricted as to the amount of capital, but the trust companies shall have $125,000 of paid-up capital. (B) The affairs of every bank shall be managed by not less than five directors, one of whom shall be president and another vice-president. No cashier, clerk, or teller shall be eligible as a director. Savings banks shall have at least thirteen directors, and trust companies are unrestricted in this particular. (C) Banks of deposit and discount shareholders are liable, equally and ratably, but not one for the other, for all contracts, debts, and engagements of such corporations to the amount of their stock at the par value, in addition to the par value of such share. No liability of this character is imposed on shareholders of savings banks or trust companies. (D) All corporations mentioned shall make not less than two reports of its condition during each year according to the form and manner prescribed by the commissioner of banking, which reports shall be verified by the oath or affirmation of the president, cashier, or treasurer, attested as correct by tha signatures of at least three of the directors, trustees, or managers. Each such report of condition shall exhibit in detail and under appropriate heads the resources and liabilities of the corporation at the close of business on any past day specified, and an abstract summary shall forthwith be published in a newspaper, in the place where the corporation is located, at least three times. (E) It is the duty of the commissioner of banking, as often as he shall deem proper, to examine or cause to be examined the affairs of every corporation of the several classes mentioned. (F) None, except that no director of any corporation shall receive as a loan from such corporation an amount greater than 10 per cent of the capital stock actually paid in, and the gross amount loaned to all the officers and directors of such corporation, and to the houses or firms in which they may be interested, directly or indirectly, shall not exceed at any time the sum of 25 per cent of the capital stock paid in; and no shareholder shall sell or transfer any shares in the capital stock held in his own right so long as he shall be liable, either as principal, debtor, surety, or otherwise, to the corporation, for any debt, without the consent of a majority of the directors; nor shall such shareholder, when liable to the corporation for any debt that is overdue and unpaid, be entitled to receive any dividend, interest, or profit on such shares as long as such liabilities shall so continue. (G) None. (H) Banks of discount and deposit are required to carry one-tenth of the net profits of the preceding dividend period to its surplus fund until such surplus fund shall amount to 25 per cent of its capital stock. 5. Banks of discount and deposit are prohibited by law from paying interest on deposits. It is the custom, however, to allow interest on deposits, and it is not prohibited on the part of trust companies and savings banks. 6. Not interested. 7. No. 8. By publication of two reports yearly. 9. The regular State tax is imposed upon the shareholders of each corporation, and in addition the corporations are required to pay the sum of $25 each, and for each $100,000 of capital stock, or fractional part in excess, of $100,000, the sum of $5 shall be paid annually; and all such corporations shall pay annually the sum of 2 cents for each $1,000 of assets. Savings institutions without capital stock shall annually pay, in addition to the taxes imposed, the sum of $25, and for each $100,000 of assets, or fractional part, the sum of $1. 10. If the commissioner of banking shall have reason at any time to conclude that any banking corporation is in an insolvent condition, he shall forthwith communicate the facts to the attorney-general, who shall immediately make application to the court of common pleas of Dauphin County, or to a law judge thereof, for the appointment of a receiver to take charge of such corporation's property and wind up its business. Such receiver shall proceed under and subject to the orders of the court of common pleas. If the commissioner of banking should deem it necessary for the immediate protection of the depositors and other creditors, he may, after hearing before the attorney-general (of which hearing the corporation shall have notice) appoint a temporary receiver. He also has power to withdraw the temporary receiver and surrender possession and property to the corporation. When a corporation denies that there is good reason for the institution of either of the proceedings it shall file its answer in the court of common pleas. 11. An act passed about 1860 makes it illegal for banks to issue circulation. 12. Many of the savings banks are operating under special charters 'granted by the legislature, which have different and varied privileges. Savings institutions for the encouragement of savings, having no capital stock, are not very numerous, but 244 REPORT OF THE COMPTROLLER OF THE CURRENCY, the law under which they operate contains the following principal points: To receive deposits, and to invest the same, credit and pay interest thereon. The sums may be limited in the aggregate which any person or corporation may deposit. The aggregate amount of deposits to the credit of any one individual or corporation shall not exceed $5,000. Investment of funds may be made in stocks or bonds of the United States, Commonwealth of Pennsylvania, or of any State in the Union that has not within 10 years previous to making such investment defaulted in the payment of principal or interest of State debt; in the stocks or bonds of any city, county, town, or village of any State of the United States issued pursuant to the authority of any law of the State; in bonds or mortgages, or unencumbered improved real estate in this State. Loans upon notes, bills of exchange, or drafts are prohibited, as is also the discounting of them. Interest or dividends to depositors not to exceed 5 per cent per annum. When surplus amounts to 15 per cent of the deposits, at least once in three years the accumulation beyond such surplus (15 per cent) shall be divided among the depositors in excess of the regular dividends. RHODE ISLAJNTD. [A. C. Sanders, State auditor.] 1. State banks, savings institutions, and trust companies. 2. After receiving a charter from the legislature the following requirements must be met: (See chapter 153, sections 1 to 8.) The foregoing, you will note, does not include the organizations of savings institutions or trust companies. We have no legal requirements by which institutions for savings and trust companies are organized. The incorporators are given the power by charter (which is a special act) to perfect an organization. 3. In the case of State banks the commissioner is appointed by the governor. Institutions for savings and trust companies, no officer. 4. (A) Amount of capital stock and payment thereof fixed by provisions of charter. (B) See banking laws, chapter 153, sections 9 to 37, inclusive. (C) Not specifically stated in banking laws; stockholders in other corporations for amount of stock owned. Sections 22. 23, and 24 of chapter 153 may answer your question. (D) Reports must bo made within ten days from time of receiving notice to the State auditor. (E) Banks are not examined except by request of the legislature or by one or more persons, who shall be officers or stockholders, making a statement in writing to the governor, setting forth their interest (see sections 38 and 39, chapter 154). (F) No restriction whatever (see chapter 568, section 52, amended). (G) None. (H) None. 5. In relation to provision governing the receipt of deposits, there are none. I am not positive, but think that some banks allow interest on deposits. 6. None except the school fund in the following-named banks: Dividends on the school fund—National Exchange Bank, Newport, $28; Globe National Bank, Providence, $1,000; Merchants7 National Bank, Providence, $461.50; National Bank of Commerce, Providence, $2,032.50; American National Bank, Providence, $1,430; National Bank of North America, Providence, $2,532; Mechanics' National Bank, Providence, $996; Rhode Island National Bank, Providence $67.50; total, $8,547.50. 7. They are not (see section 11, chapter 153). 8. By the annual report. 9. A tax of 40 cents on each $100 of deposits and on each $100 of reserve profits (^see chapter 1215). 10 and 11. See banking laws. 12. A copy of the act incorporating the Centerville Savi