JOURNAL OF BANKING, CURRENCY, AND FINANCE.

NATIONAL BANKS AND THE NEW LAW-CONDITION OF THE OLD BANKS-SOME OF THEM GOING INTO LIQUIDATION-PUBLIC MONEY IN NATIONAL BANKS NOT PROFITABLE-LOANS AND DEPOSITS OF OLD BANKS-BANK RETURNS OF THREE CITIES-FINANCES OF ENGLAND-SHIPMENTS OF GOLD TO AND FROM-PRODUCTION OF THE VICTORIA GOLD FIELDS-BANK RETURNS-BANK OF FRANCE RETURNS, ETC.

THE operations of Banks under the National Bank Law have been very moderate since the enactment of the new bill and the change in the Secretary. The times are exceedingly unpropitious for the establishment of new Banks on purely business principles, since the present and prospective course of commerce and the currency is not such as to encourage the creation of any of those credits which constitute the basis of banking business. The most of the means of the old Banks have long since been absorbed in Government business,-the institutions having become more loan offices than Banks. Their position has been, however, good; a considerable portion of their capital is in gold, and their means have been so placed in Government paper that, for the present, they are readily available in legal-tender paper, applicable to the discharge of all debts. This situation has been regarded by many as one highly favorable to advantageous liquidation, and should be availed of, rather than to encounter all the hazards which the future holds out for credit institutions. Some institutions-the Seventh Ward Bank, of New York city for instance—have acted upon this view, and gone into liquidation, making a dividend of forty per cent of the capital, in specie, and proceeding to wind up on terms highly favorable to stockholders.

The institutions, generally, have been the main prop of the Treasury during the war, and they have now no means to lock up in long loans. The larger part of those discounts that come under the head of commercial, are really loans to those who have dealings with the Government, and who require Bank aid only because the Government does not pay promptly. It is merely a question of direct or indirect loan to the Government, and latterly, where the balances due have all, under the influence of the National Banks, been rigidly demanded in greenbacks, the Banks have been forced on the defensive. The National Banks themselves have already learned that the use of the Government money is very far from being an unmixed good. When that money is placed with them there is hardly any mode of using it safely. It may be called for suddenly in greenbacks, and these not being procurable, loss or default is imminent. Some of the institutions that inaugurated the running offers for greenbacks have been most severely caught in the rebound. If the money is loaned out even on stocks at call, when payment is demanded it comes in the shape of checks, not always payable in greenbacks. There is, therefore, little profit or safety in Government

money. Some institutions adopted the plan of lodging money every day with the Treasury, at thirty days, with ten days notice, on six per cent certificates, and giving the notice at the same time, thus creating, at the end of forty days, a constantly recurring maturity, for a certain amount, which, if not wanted, may be re-deposited, with notice, and thus kept compounded. This has the disadvantage of placing money at least forty days out of reach.

The new banks are now of no probable use, either to the Government or to the public. They only continuely inflate the currency with notes, which, if ever uttered at all, should have been put out by the Treasury direct. The chances are that they will soon shrink up as rapidly as they expanded, and we should not be surprised to hear that the Bank Comptroller had also resigned, thus making three resignations-the head of the Treasury, the Assistant Treasurer, Mr. Cisco, and the Comptroller, Mr. McCULLOUGH.

The following is an extract, from official sources, of the quarterly report of the National Banks, for the quarter ending with the month of March. From the Banks then organized 208 reports were received. We understand that for the quarter ending on the morning of the first Monday in July, there will be 373 reports to be received. By the subjoined abstract it will be seen that the whole number of bonds of the United States, owned by these banks, was, on the 30th of March, $41,175,203, as follows:

United States Bonds deposited for circulation...

do

do Total.....

do
do by Banks as U. S. depositaries.
do and other U. S. securities held by Banks.

$25,484,700

4,949,350

10,741,153

$41,175,203

It also appears, that upon the deposit of $25,484,700 of bonds to secure circulation, there had, at that date, been issued $12,144,650, of which there were

Abstract of the quarterly reports of the National Banks, for the quarter ending March 31, 1864:

Cash items and revenue stamps, and bills of solvent banks.

Overdrafts....

$29,583,559 78

1,744,876 10

755,696 41

852,720 77

3,318,912 36

265,507 55

8,537,908 94

4,699,479 56

22,961,411 64

992,951 60

25,481,700 00

4,949,350 00 10,741,153 00 482,059 95

.$114,820,277 66

Exhibit of the capital stock, bonds, and circulation of the National Banks of the United States at the close of the month of June, 1864:

The gross amount and kinds of bonds deposited by the Banks to June 30, in

The National Banks have, as yet, done but little of the legitimate business of banking. At the close of March their loans and discounts were only $29,583,559, while their deposits were $51,274,912. This, at least, is conservative banking. This limited employment of the funds placed at the disposal of the banks is, of course, attributable to the banks having been so short a period in operation that they have formed only limited business connections. It has, however, this inconvenience, that, for the time, a large amount of money is kept idle, and may hence be reckoned among the minor causes that have contributed to the late stringency of the money market. It is, as yet, early to judge of the operation of these Banks from their actual results.

As a fiscal expedient, on the part of Mr. CHASE, they have not answered the expectations of their founder. On the 30th of June the National Banks had absorbed $44,266,850 for deposits in the Treasury to secure their circulation. At the same date, the circulation actually issued was only $31,285,270, or about twenty-five per cent below the amount authorized by law, to be issued upon the bonds to be deposited as security at the Treasury. The extension of the National Banking system has not yet been sufficiently important to perceptibly effect the operations of the State Banks.

The amount of capital paid into these institutions is unimportant compared with the aggregate banking capital of the country; and their circulation has not yet proved sufficiently large to materially aid the existing inflation. Now that the fostering aid of their parent is withdrawn, by the retirement of Mr. CHASE, the probability is that the further extension of these institutions will be gradually reduced by the natural operation of supply and demand; for banking institutions, like everything else, are ultimately regulated by that universal law.

The weekly returns of the old Banks of New York city, shows a continuation of the movement we pointed out last month, with a curtailment of the deposit line. This fell eleven millions in four weeks, showing a depression of twenty-seven millions since June 4. The figures are as follows:

NEW YORK BANKS.

NEW YORK BANKS. (Capital, Jan., 1864, $

Date.

9,..

Loans.

; Jan., 1863, $69,494,577.)

Specie. Circulation. Net Deposits. Clearings. January 2,.. $174,714,465 $25,161,935 $6,103,331 $140,250,856 $300,753,147 173,009,701 25,122,002 6,032,546 134,861,977 887,546,217 165,991,170 23,884,264 6,008,182 130,311,046 416,962,806 162,925,880 24,077,513 5,049,807 130,136,203 460,811,543 162,296,896 24,203,632 5,913,558 130,665,415 427,306,608

February

16,..

23,.. 30,..

6,..

13,.

20,..
27,..

5,..
12,..

19,..
26,..

2,..

9,..

16,..

23,..
30,..

163,076,846 24,070,791 5,974,762 133,849,042 425,430,985 165,090,329 23,521,453 5,916,707 140,464,616 467,751,745 168,302,935 22,523,918 5,908,394 148,014,106 514,887,411 174,928,205 22,301,687 5,907,851 154,875,059 575,442,304 182,317,378 21,188,034 5,937,167 158,999,668 518,951,433 189,757,746 20,750,405 5,918,807 168,044,977 688,822,273 198,229,513 21,059,542 5,889,197 169,637,975 618,338,858 199,372,437 20,425,504 5,514,139 168,315,904 576,253,989 203,993,131 19,526,665 5,708,908 171,151,297 676,372,745 204,333,192 20,924,287 5,804,511 170,513,020 658,852,112 198,703,699 21,687,670 5,779,650 168,350,790 646,593,643 196,286,72% 24,868,003 5,679,947 161,978,166 672,442,840 194,157.495 24,087,348 5,626,978 164,578,919 446,587,420 7,.. 192881,246 23,082,028 5,594,832 168,562,197 410,052,013 194,178,921 22,635,155 5,482,357 174,426,682 413,552,127 197,356,939 22,091,691 5,367,355 173,111,884 486,884,114 195,813,462 21,973,180 5,240,812 171,765,696 410,972,198 196,740,609 22,461,604 5,180,639 174,516,367 477,648,207 194,935,822 24,041,704 5,049,457 172,537,248 445,519,165 195,773,583 22,916,291 4.959,096 169,445,767 431,158,427 197,077,002 22,000,988 4,807,195 158,772,982 442,840,362 198,089,016 21,206,685 4,752,917 154,989,844 452,583,531 199,699,742 20,084,917 4,696,107 153,525,977 336,521,426 199,043,887 21,234,354 4,724,538 151,816,947 190,885,761 21,033,912 4,688,892 147,981,325

14,..

21,..

28,..

4,..

11,.

66

66

18,.. 25,..

2,..

9,..

16,..

466,125,408 403,144,195

The rule of the Banks, in carrying under the head of loans all that draws in

terest, placed there, the six per cent deposit certificates that they hold from the Treasury. When under the pressure for money that was anticipated, from the loan offered by the Secretary, the price rose very high, and the Banks gave the These notices fell necessary notice to have the six per cent deposits paid off. due to some extent July 23d, and the loans showed a decline of over $8,000,000. The drain of deposits has also being very large on account of the country Bank The opbalances being drawn down, the money being wanted in the interior. erations of the Clearing House were reduced, however, to a very low figure, and the stock transactions for the month have been very small. The returns of the Boston Banks show a greater reduction in the loans than even those of New York. The Bank balances have also been drawn down to a remarkable extent:

BOSTON BANKS.

BOSTON BANKS. (Capital, Jan., 1863, $38,231,700; Jan., 1862, $38,231,700.)

Date.

Loans.

Specie. Circulation. Deposits.

Due to banks.

Due from banks.

Jan. 4,.. $76,805,343 $7,503,889 $9,625,043 $32,525,679 $12,831,000 $12,351,500 11... 77,747,734 7,531,195 10,185,615 31,524,185 12,703,600 11,019,000

66

46

18,.. 75,877,427 7,464,511 9,963,389 31,151,240 12,041,000 11,769,000 25,.. 74,146,000 7,440,000 9,729,000 30,893,000 11,106,700 12,227,000 Feb 1,.. 73,959,175 7,385,413 9,660,163 30,655,782 10,825,000 11,854,500 8,.. 71,765,122 7,265,104 9,579,020 30,030,292 11,315,000 12,272,000 15,.. 71,088,849 7,224,924 9,741,471 30,412,647 11,615,000 13,448,000 22,.. 71.074,000 7,215,500 9,411,000 31,831,000 11,329,600 14,925,400 29,.. 72,189,003 7,179,310 9,371,440 33,155,888 12,224,603 16,189,724 Mar. 7,.. 72,687,363 7,108,519 9,606,318 33,688,017 12,313,829 16,535,992

14,.. "21,. 28,..

April 4,..

11,..

18,..

"25,.. May 2,..

72,105,111 7,052,181 9,490,311 33,891,204 12,704,181 17,315,231 73,207,121 7,033,721 9,548,211 35,090,181 13,092,531 17,266,741 73,485,514 7,016,086 9,210,096 34,859,508 13,352,706 17,071,782 71,838,506 6,856,708 9,442,082 32,861,609 13,601,005 15.786,091 72,620,348 6,932,192 10,447,916 33,324,978 15,094,360 17,362,371 72,328,896 6,869,726 10,331,806 33,510.054 14,447,997 17,054,244 72,538,611 6,952,498 10,988,991 31,810,971 14,715,981 15,790,498 71,270,181 6,642,798 10,127,097 31,461,499 14,206,581 14,206,592 69,471,481 6,726,484 10,521,591 81,172,584 12,801,000 16,239,000 68,888,581 6,644,493 10,126,473 31,633,071 12,500,671 16,201,083 66,683,510 6,573,181 9,899,193 36,605,191 11,871,719 15,733,691 69,201,301 6,541,201 9,681,204 34,391,208 11,101,307 15,925,201 67,093,500 6,509,181 9,160,621 32,771,821 10,875,181 16,130,720 67,942,400 6,524,207 8,771,181 33,305,220 10,710,089 15,057,131 68,880,121 6,507,021 8,983,121 82,740,201 11,681,602 14,790,012 28,.. 69,691,000 6,470,600 9,068,712 30,865,101 12,260,080 12,872,111 July 5,.. 66,950,111 6,290,521 9,574,009 29,940,102 11,889,312 13,809,002

66 9,..

" 16,..

❝ 23,..

"30,..

June 7,..

“14,..

46

21,..

12,.. 66,452,107 6,301,101 9,936,491 32,260,004 11,306,002 13,434,528 19,.. 66,079,000 6,246,211 9,890,081 30,584,101 10,003,181 13,942,001 « 26,.. 59,973,511 5,733,010 9,775,481 27,905,491 9,151,111 13,473,621

PHILADELPHIA BANKS. (Capital, Jan., 1863, $11,740,080; 1862, $11,970,130.)

Loans.

Due Due Date. Specie. Circulation. Deposits. to banks. from banks. Jan. 4,... $35,698,808 $4,158,585 $2,055,811 $29,878,920 $4,316.763 $2,963,563 66 11,... 35,458,967 4,158,235 2,950,891 30,484,227 4,001,473 2,814,188 18,... 34,896,842 4,158,125 2,044,427 31,194,851 4,330,120 8,063,148 25,... 34,849,959 4,103,065 2,047,846 32,354,253 8,500,693 2,905,921 Feb. 1,... 34,345,126 4,108,109 2,056,532 82,027,147 3,453,431 3,271,306

66