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JOURNAL OF BANKING, CURRENCY, AND FINANCE.
BANK ITEMS AND BANK RETURNS.
UNITED STATES BANKS vs. State Banks.—We gave last month an article by one of our bank presidents, on the question whether the banks organized under the National Currency Act should be admitted to the Clearing-house, the publication of which has elicited much discussion, and one political paper, we see, has impeached its loyalty! The article in
question was handed us for publication, before it was issued in any other form, with the writer's name, and it struck us as a very fair, unimpassioned discussion of an important financial measure. We shall gladly publish any article of equal ability on either side of the same subject.
This United States Currency Act is, however, to us a strange piece of legislation. We can say, with the writer in last month's Magazine, that if the success of this scheme of banking were necessary to the suppression of the rebellion, we could submit to it. But in what respect does it benefit Government? The only suggestion in its favor we have heard is, that it furnishes a demand for United States bonds as a basis for the banks. But even granting it does, what advantage is that, since these same bonds are deposited with Government and circulation is issued on them, so that the sale of the bonds amounts simply to the issue of ninety per cent in currency? Why, then, could not Government have issued that currency directly, without ihe previous sale of the bonds ? Certainly, the inflation caused is just as great, whether the Government issued the notes directly, or indirectly through the banks. Where is the use, then, of Government selling the bonds, and paying these banks five per cent interest for the privilege of issuing through them ninety per cent in currency, when it could have issued the same currency without the banks and without paying any interest ? If any of our readers can see how the country is benefited by this operation, we should be glad to hear from them, for we are sadly in need of light. According to our view of the matter, the success of this banking scheme, as it now stands, not only will fail to advance, but must be directly opposed to, the best interests of the Government.
We publish this month the Circular of the Controller of the Currency, which has excited so much remark. It will be found valuable, as embracing the views of Government at the present time and for future reference.
National BANKS UP TO October 14, 1863.—The following is the official statement of the number, location, and capital of national banks formed up to October 14, 1863. It will be seen that the total capital amounts to less than $13,000,000: CONNECTICUT—New Haven, Stamford, Norwich..
$600,000 District of COLUMBIA— Washington City..,
500,000 Illinois-Chicago, Aurora, Cairo, Mopmouth..
250,000 INDIANA-Indianapolis, Anderson, Blufftown, Cambridge City, Center
ville, Evansville, Fort Wayne, Franklin (2), Kendallsville, Lafay. ette, Lawrenceburg, Richmond, Rockville, Terre Haute, Warsaw, Valparaiso...
1,621,600 Iowa-Davenport, Iowa City, Keokuk, Lyons
$100,000 MASSACHUSETES—Springfield, Worcester, Barre.
800,000 MICHIGAN-Ann Arbor, Detroit, Fenton.
250,000 MISSOURI-Columbia, St. Louis....
200,000 MARYLAND—None. * New HAMPSHIRE-Portsmouth, Nashua.....
200,000 New York, New York City (3), Adams, Ellenville, Delhi, Danville,
Fishkill Landing, Moravia, Rondout, Seneca Falls, S. Worcester,
1,840,000 NEW JERSEY—Newark....
125,000 0910-Cincinnati (4), Cleveland (2), Akron (2), Dayton (2), Cadiz, Can
ton, Findlay, Fremont, Germantown, Greenfield, Hamilton, Ironton,
4,458,000 PENNSYLVANIA-Philadelphia, Carlisle, Erie, Girard, Kittaping, Hollidays
burg, Huntingdon, Johnstown, Newville, Pittsburg, Scranton (2),
375,000 Total, to October 14, 105 banks. Capital .......
$12,776,000 On the evening of the 22d of October, Mr. McCULLOUGH, Controller of Currency, addressed a meeting of gentlemen at the Fifth Avenue Hotel. The object of the meeting was to take measures for organizing a large national bank in this city-probably the same one that was contemplated as the Third. The following was the call issued:
NEW YORK, October 19, 1863. Sik-You are respectfully invited to meet the Hon. Hugu McCullough, the Controller of the Currency, at eight o'clock on Wednesday evening, October 21, at the Fifth Avenue Hotel, for the purpose of a conference in relation to the establishment of a large national bank in this city.
(Signed,) Peter Cooper, John J. Astor, Jr. Freeman Clark, Johr. J. Phelps, Morris Ketchum, David Dews, Paul S. Forbes, Josepb Stuart, E. D. Morgan, Jonathan Sturges, George Opdyke, Isaac N. Phelps, 0. De Forest Grant, Isaac Sherman, A. Arnold, Elisha Riggs, B. H, Hutton.
Besides the gentlemen above named, there were present Hon. Samuel Hooper, of Massachusetts, Chairman of the Committee of Ways and Means in Congress; Mr. H. B. Hurlbut, President of the First National Bank at Cleveland, Ohio; Samuel T. Dana, of Boston ; Mr. Leonard Jerome, General Wm. K. Strong, Colonel Vermilyea, Mr. Jaques, VicePresident of the Metropolitan Bank, Mr. Cisco, Mr. David Hoadley and others. After listening to the remarks which Mr. McCULLOUGH had to make, the chairman of the meeting presented the following resolutions, which were adopted :
Resolved, As the sense of this meeting, and after listening to the able exposition of the necessity which exists for such an institution from Hon. Hugh MOCULLOUGH, that it is expedient to organize a national bank in this city, with sufficient capital to meet the wants of the country, under the system recently inaugurated by Congress.
Resolved, That the capital of said bank be $5,000,000, with privilege to increase the same to $60,000,000, from time to time, as may be fouud expedient.
Resolved, That a committee of three be appointed by this meeting to select seven suitable persons as commissioners to receive subscriptions to the capital stock of said bank.
Messrs. Hutton, Grant, and Vermilyea were appointed a committee under the last resolution, and after a vote of thanks to Mr. MOCULLOUGH for his interesting and able address, the meeting adjourned.
THE $50,000,000 Loan to Government. We gave last month the history of the late bank loan to Government. The following have been the payments on it:
New York banks. Other banks. 5 per cent when loan was taken..
$1,750,000 $750,000 10 September 20....
3,500,000 1,500,000 10 27...
3,500,000 1.500,000 10 October 3....
3,500,000 1,500,000 10 19
$15,750,000 $6,750,000 Making the total paid....
$22,500,000 And leaving still to be paid..
27,500,000 Amount of loan.....
$50,000,000 But two calls have been made on this loan this month, on account of the unusually large receipts at the United States Treasurer's office from increased sales of bonds and custom duties. The balance with the Assistant Treasurer, October 23d, was $35,745,688 77. The banks receive interest on the whole amount of the loan from the cime it was taken, irrespective of the dates on which they actually pay the money. As yet the banks have not been troubled in the least to make their payments to the Treasury on account of the loan. It may not be known to all of readers that the loan committee was revived to equalize the holding of the legal tenders among the banks, as the specie was managed during a late financial crisis. Then the specie was put into a pool and the banks which ran below a certain per centage were allowed to draw from the banks which accumulated, by depositing securities with the committee. In this way, however, there was an inducement for each bank to keep up its line, because when it ran down, and the bank had to borrow, interest must be paid, and this interest of course inured to the benefit of the stronger bank. In the recent arrangement, the legal tender notes were all to be held as common stock, with this exception, that no provision was made for compelling each bank to maintain a certain per centage. Thus, a bank which foregoes interest to hold a million in legal tenders really maintains this surplus at its own expense, but for an equal benefit to the institution that allows its surplus to run out. If the latter were obliged to borrow of the former when its balance run down, and pay interest for such accommodation, the arrangement would conform to that made concerning the coin when the loan committee was constituted.
Semi-ANNUAL Bank Dividends of Boston.—The following table from the Boston Shipping List, presents the capital of each of the Boston banks paying dividends at this time, together with the last two semi-annual dividends, and amount paid on Thursday, October 1st. Of the fortythree banks in the table, the dividends average 8.64 per cent. Three banks divide 5 per cent, two 41, fourteen 4, fourteen 31, eight 3; the Massachusetts Bank pays 3} per cent, or $8 per share, and the Traders' passes its dividend. The Metropolis is closing up its affairs. Sixteen of ihe banks increase their dividends :
-Dividends.-- Amount, Stock, dividend on. Capital. April, '63. Oct., '63. Oct, '63. April, '63. Sep., '63. $500,000 2 3 15,000 84 88 1,000,000
81 35,000 103 1031 750,000 31 4 30,000 103 107 900,000 4
86,000 70 64 400,000
41 18,000 116 116 150,000
4 6,000 102 104 1,000,000 81 35,000 105
103 1,000,000 3
30,000 111 111 2,000,000 8 31
70,000 105 1041 300,000 3 3 9,000 99 100 1,000,000 31 4 40,000 110 112
600,000 3 3 18,000 102 1,000,000 4 4 40,000 118
120 500,000 4 5 25,000 116
118 400,000 3 +3 12,000 99
100 1 000,000 4 4 40,000 125
125 900,000 31 4 36,000 112 114 500,000 41 5 25,000 135 140 1,000,000 31 37 35,000 1011 105 500,000 3$ 31 17,500 102 103 560,000 31
22,400 74 75 800,000 $8* $8 25,600 260
270 400,000 3 34 14,000 100 100 260,000
4 10,000 114 114 4,000,000 3
120,000 99 100 200,000 31 31 7,000 99 101 661,700 0 4 22,468 750,000
8 3 22,500 95 95 1,000,000 4 4
115 116 860,000 3
99 750,000 3 31 26,250 105 105 1,000,000 3 3+ 35,000 99 99 1,000.000 31 34 35,000 108 108 1,000,000 8
35,000 102 105 750,000 3
31 26,250 95 98 1,000,000 41
130 1,800,000 31 31 63,000 72 69 1,000,000
5 50,000 147 147 600,000 0 0.
Total, October, 1863.. $38,431,700
4 60,000 115 115 1,000,000
4 40,000 116 116 750,000 31 31 26,250 104 105 1,500,000 4
60,000 105 107
BANK OF France vs. Bank Of Savoy--Power TO ISSUE NOTES.--A great commotion has been excited in commercial circles at Paris, by a singular affair. At the time Savoy formed part of the dominions of King Victor Emanuel, there existed a Bank of Savoy with a capital of only 4,000,000f. ($800,000), but possessed of the of issuing notes privileges of establishing branches, of increasing its capital at will, and of being of in
* The dividend of the Massachusetts Bank is 3 1.5 per cent (par $250,) equal to $8 per sbare.
| Freeman's not official.
definite duration. In the treaty annexing the province to France, no special stipulation was made with regard to this bank, and accordingly it came within the clause by which France guaranteed to all companies and establishments in that province the maintenance of the rights and privileges they had enjoyed. After a while the directors of the Bank of Savoy fancied that they bad no chance of maintaining their ground against the Bank of France, and they accordingly proposed to sell purely and simply their business and their privileges to that establishment. Negotiations took place and extended over an unreasonably long time. But at last they were broken off, because the Bank of France would not consent to give the price demanded by the Bank of Savoy. On the rupture of these negotiations, the directors of the Bank went to Messrs. PEREIRE, and these great financiers saw it once that the Bank of France bad committed a gross blunder as regarded its own interests, and that the Bank of Savoy might be turned to account in a manner which it had not the sagacity to foresee. They entered into a provisional agreement for purchasing the privileges of the Bank, and about the first of October that agreement became definitive. The Bank of Savoy, therefore, is theirs. When their purchase had become a fait accompli, the great fact that the Bank of Savoy can issue notes presented itself, with appalling sternness, to the directors of the Bank of France. This latter Bank, as our readers are aware, has hitherto had the exclusive privilege of issuing notes; and it has certainly good reason to be troubled at seeing that great privilege invaded by financiers of such high authority and vast resources as Messrs
. PEREIRE. Yet, although the Bank of France is determined now to make a vigorous opposition to the Bank of Savoy, it appears that it not only peremptonly refused to allow the Bank of Savoy to amalgamate with it, as the latter wished, and as the Emperor himself
, it is alleged, desired, but that it would not even consent to buy up its privilege of issuing notes, except for a sum absurdly small ($120,000), and except on the condition that the bank should undergo a complete transformation, which would have rendered its other privileges useless, and have made it an abject dependence of the French establishment: What is still stranger is, that the Bank of France strongly recommended the Bank of Savoy, for its own sake and for the sake of the people of the province, to continue its operations—that is, to exercise its privileges of issuing notes, increasing its capital at will, forming branches, &c. " The maintenance of this bank is useful and necessary,” said the Bank of France directors, in a “memoir” (as such things are called there) which they drew up against the projected amalgamation; "it is desired by the Bank of France itself.” The' Bank of Savoy,” they added, " has been useful; it is still indispensable ; its suppression would be evidently injurious, and even a political error.” These facts, as to the action of the Bank of France, came out at the meeting of the directors of the Bank of Savoy, held Sunday the fourth of October.
After thus refusing to buy up the Savoy Bank, and after making such admissions as these, the Bank of France has clearly no moral right to raise clamors against that establishment, because, following the advice given, it has resolved to continue to exist, and in order to do so effectively has obtained the co-operation of two distinguished financiers. It must be evident to everybody that if the Bank of France thought the maintenance of the Savoy establishment "useful and necessary” before Messrs. VOL, XLIX. —NO, V.