288 



FINANCES OF THE UNITED STATES. 



outstanding at that date $371,827,220.^ The 

 amount of national-bank notes outstanding at 

 the same date was $343,741,532, of which 

 $2,087,860 were notes of national gold banks. 

 Previous to the passage of the act of June 

 20, 1874, the law required the national banks 

 in New York City to hold in lawful money, as 

 a reserve fund, an amount equal to at least 25 

 per cent, of their deposits and circulation. It 

 also required the banks in the other redeeming 

 cities to hold an equal proportion of reserve, 

 but provided that each of such associations 

 might keep one-half of its lawful money reserve 

 in cash deposits in the city of New York. 

 Every other association was required to have 

 on hand, in lawful money of the United States, 

 an amount equal to at least 15 per cent, of the 



aggregate amount of its notes in circulation 

 and of its deposits, three-fifths of which might 

 consist of balances due from approved associa- 

 tions in the redeeming cities. The act of June 

 20, 1874, repealed the requirements as to a re- 

 serve upon circulation, but made it the duty 

 of the national banks to deposit in the Treasury 

 of the United States, in lawful money, a sum 

 equal to five per cent, of their circulation, to be 

 held for its redemption, the sum so deposited 

 being authorized to be counted as a part of the 

 required reserve on their deposits. 



The following table exhibits the circulation 

 and deposits, together with the specie, United 

 States notes, and other kinds of reserve, held 

 at three different periods in each of the years 

 1873 and 1875 : 



In the above table the amount of " reserve 

 required" for the year 1875 is the amount 

 which would have been required under the 

 law in force prior to the act of June 20, 1874. 

 The cash portion of the reserve held on Octo- 

 ber 1, 1875, including the redemption fund 

 with the United States Treasurer ($16,233,- 

 193), was $43,523,275 in excess of the amount 

 required bylaw, and the total reserve was simi- 

 larly in excess to the extent of $82,258,620. 



From the date of the passage of the act of 

 June 20, 1874, to January 1, 1876, $248,663,- 

 533 of national-bank notes were returned to 

 the Treasury Department for redemption. The 

 whole amount received at the office of the 

 Controller of the Currency for destruction, 

 during that period, was $185,840,292 ; and the 

 amount of new notes issued during the same 

 time was $177,197,071, of which $17,523,405 

 was to banks newly organized, or to banks in- 

 creasing their capital and circulation. 



The amount and different kinds of registered 

 bonds held by the Treasurer of the United 

 States to secure' the outstanding circulation of 

 national banks, on January 1, 1876, were as 

 follows: 



CLASS OF BONDS. 



Sixes of 1881, 6 per cent, gold .................. $82,041,500 



Five-twenties of 1 864, 6 per cent, gold .......... 1 140 300 



26,104,850 

 864, 5 per cent ....... 97 394 800 



f 1881, 5 per cent ............... '. 14^302'jOO 



Tf -f i 

 Ten-forties of 1864, 5 



Funded loan of 1881, ............... . 



Pacific Railways, 6 per cent, currency ........... 12,61 7,512 



Total ................................. "$363,601,662 



The amount of circulation secured by the bonds 

 on the date above mentioned was .... $321 671 814 



The amount of lawful money on deposit with ' 

 the Treasurer, for the redemption of national- 

 bank notes on presentation, was .............. 22,070,218 



Total outstanding ..................... $343,741,532 



The report of the Controller of the Cur- 

 rency for 1875 states that the percentage of 

 lost or unredeemed notes of 286 banks organ- 

 ized under the laws of New York, having a 

 total circulation of $50,754,575, was 2.63 per 

 cent, of the amount issued. Of thirty of these 

 banks which are still in operation in New 

 York City, having a circulation of $7,753,- 

 010, the percentage unredeemed is 1.83. Of 

 240 Wisconsin State banks, having a circulation 

 of $7,565,409, the percentage is 1.78; and of 

 fifteen national banks which had closed busi- 

 ness prior to 1870, it is 1.39 per cent, upon a 

 total circulation of $1,554,400. 



The exchanges at the clearing-house in New 

 York City for the year ending October 31, 

 1875, were more than $23,000,000,000, the 

 average daily exchanges being $75,301,000, 

 while the daily balances paid in money were 

 but $3,608,000, or only 4.8 per cent, of the 

 amount of the settlements. 



The amount of the coin and paper currency 

 of a great nation is small in comparison with 

 that of bank checks, certificates, and bills of ex- 

 change, which are used as credit circulation. 



The law provides that the national banks 

 shall, before the declaration of a dividend, 

 carry one-tenth part of their net profits of the 

 preceding half-year to surplus fund, until the 

 same shall amount to twenty per cent, of 

 their capital; but that losses and bad debts 

 shall be deducted from their profits before a 

 dividend shall be declared. The following ta- 

 ble gives, by geographical divisions, the capi- 

 tal, surplus, dividends, and net earnings, and 

 the ratios of dividends to capital, to capital 

 and surplus, and of earnings to capital and sur- 

 plus, for the year ending September 1, 1875 : 



