Show Sank Circnletion Washington 29 Comptroller Knox states that propositions for the issue of circulation without the fullest security cannot be too carefully care-fully considered The security o the national bank note under the present system is perfect In twenty years not a single bank note failed to be redeemed at its face value I Aanks organized under the general law located so often at great distances from commercial centres render security for circulation ot a uniform and positive value an absolute necessity Eightyseven national banks failed since the organization of the system with an gggregate capital of over 819000000 Fortyfour would have paid in full their circulation if the limit of 90 per cent of the capital had been issued besides small dividends tq depositors The remaining fofty three its it-s estimated would have paid 75 per cent on the circulation and nothing to depositors entailing a loss to bill holders of over 2000 000 Half of this number would not have paid over fifty per cent to bill holders The comptroller argues therefore against any general banking law without some such security curity as that at present in vogue if the public debt is to be paid hereafter as rapidly as during the past three years all of the interest bearing bonds will soon be surrendered and cancelled and there is danger that the bank circulation will be so rap idly retired as to cause a contrac tion of the currency which will affect the price of commodities commo-dities and create embarrassments in business but there is now no such pressing necessity for a speedy payment of the public debt as there is for a reduction of abun dant revenue It is believed that Congress will soon provide for so large a reduction of the amount of bonds will remain for security of bank circulation if the whole public debt were reduced to a uniform rate of three per cent The present high premium upon bonds would almost entirely disappear arid the volume of circulation would respond more readily to the demands of business The temptation to sell such bonds for the purpose of receiving premium prem-ium would no longer remain If it shall bs the policy of government to accumulate revenue instead of largely reducing it thus rendering it necessary to continue a rapid reduction of the debt even if it is to be purchased at a price fixed by holders It is of the greatest t great-est importance that the basis upon which bank currency is issued should be enlarged so as to include some other form of security besides government credit Upon the subject of restricting loans the report says The attention of Congress Con-gress had previously been called to secion 5200 of the Revised Statutes which places restrictions upon loans and to the difficulty of enforcing its provisions in cities where large amounts of pioduc1 are received and stortd It is represented as impossible for bank to transact I I this ClaSS of business if restricted to loans for an amount not exceeding in any instance onetenth of their capital if the limitations does not apply to loans upon produce in transit where drafts are drawn ou existing value but if the produce is to be stored instead of being shipped ship-ped large loans cannot be be made except in violation of the law It is evident the law should be amended as to exclude from the limitation mentioned legitimate loans upon produce or warehouse receipts and some other classes of collateral security as well as loans upon United States bonds lie also repeats his recommendation that r 11 f the law imposing a tax upon bank J i i j capital and deposits and requiring I I i t 1 stamps on checks be repealed for t Ht the year 1SS2 Proportion of divi t j1 11 dends to capital in banks in the United States was S and 7 per cent I r i t t of dividends to capital and surplus If 6 to 8 per cent and of earnings to I 1 capital and surplus 8 to 0 per cent l 1 f 1 One hundred and seventythree I p dU banks haying a capital of 817000000 i k ill paid no dividends for the six I months ending March 1st 1882 and I f i tl two hundred and eighteen banks i I I iJ with a capital of 8200000JO i paid J i no diudends for the six months j 1 E ending September 1st it > t > It lis I estimated that the total currency of 1 I the country on November 1st ap I 1 pears to have been more than I r r 81488000000 which is8433000000 in excess of the amount held on Jan i i t uary 1st 1879 and 186000000 i in excess of the amount held a year ago November 1st j f 1 The gain in gold coin since the resumption I re-sumption of specie payments alone 11 has been 8288000000 and in gold 11 j and silver coin 394000000 The t j increase in national bank notes has 1 been nearly 829000000 No change I i has been made in the amount of J legal tender notes outstanding Tha 11f same causes which operated to I bring about the rapid reduction of I I tho public debt also tended to increase j tr in-crease the circulating medium The I 1 i per capita of circulation is larger I i and it is probable proportion to IJ 1 Ir 1 wealth greater than at any previous I i time It is undoubtedly large enough I r I to supply all legitimate demands of business and there is little h f L 1 j I doubt that the addition to the coin I t + of the country since the resumption j i J of specie payments has been in advance i t ad-vance of the enlarged demand of ii i business There has been no complaint t < 1 com-plaint of scarcity of money which 1 j cannot probablybe traced to those engaged in speculative business I 1 I |