Savannah morning news. [volume] (Savannah) 1868-1887, 1886-11-29
NATIONAL BANK NOTES.
COMPTROLLER TRENHOLM ON
THE KNOTTY PROBLEM.


ranking Systems Explained-PopuIar
preiudices Against the system Speci-
fed and Answered-Issuing of Cur
rency Deemed AN Indispensable Privi-
iege by the Banks.
WASHINGTON, Nov. 2S.-Comptroller
nj the Currency Trenholm, in concluding
his report to the Secretary of the Treasu-
rv. devotes q good deal of space to the
consideration of the present status and
future prospects of the national banking
system. After referring to the rapid pay
ment of the per cent. bonds, he says:
ssThe present financial prospects of the
country induce the expectation that the
funded debt will be paid off as fast as the
bonds mature, and IN consequence the
question has arisen as to what changes
should be made in the national bank sys-
tenn in order th at 1t shall not suffer dete-
rioration or destruction upon the with
drawal of the support upon which 1t is
based by the present laws.
DATES OF MATURITY.
"The payment of 8 per cent. bonds
maturing in 1891, OF AZ per cent. bonds
amounting 10 $3.50, 900. 900, and In 1907 of
S73S, 900. 600, com bine to produce pros
pective scarcity in securities available to
hanks as a basis for their corporate ex-
;stence, and this is reflected In the advance
of these bonds to q premium so high that
every day their enforced purchase be-
comes more and more Onerous. The banks
now holding only per cent. bonds and
newly organized national banking asso-
Citations are forced into the market as
purchasers of per cent. or the AZ per
cent. bonds and this constant demand in
connection with the prospective scarcity
already referred to snstains and tends
still further to elevate the premium on
these bonds.
INCREASED DEMANDS.
GAS the time approaches for the payment
of the Az per cent. bonds, it is reasonable
TO expect still create: demand for the
per cents, and it is question of seri-
Ous importance whether banks can afford
to hold or to buy per cent. bonds after
1891. 1t is not now too early to consider
what legislation may be proper for the
removal of this element of future uncer-
tainty from the national banking system,
and looking to the possibility of cOnsd-
Grafton OF this subject by Congress, |
respectfully submit the following
statement of the question as it
appears lIOm buS pOlnb vi view Ol-
fcally occupied by the Comptroller of the
Currency. The fundamental postulates
underlying every banking system estab-
lished by law, whatever may be its form,
must necessarily be, first, that banks pro-
mote the general welfare of the CON-
munity, and second, that the particular
system established by law is the best OBJ
tainable under the conditions prevailing
at the time and place.
THE FOUNDATION OF THE LAWS.
"These postulates therefore underlie
cur national banking laws. The first
p0stulate will not be questioned. at least
in this country, where besides 2,S6S
national banks now in operation we have
aver 5000 State banks, savings banks and
private banks and bankers, whose
operations extend into the minutest
ramifcations of the employments
and resources of our 100000 OF popula-
tion. The second postulate involves the
question whether the present national
bank system should be preserved, and if
so, whether it is good enough as it is or
whether it can be improved. Ii the sys-
TEN could be preserved purely as one of
deposit and discount, there would proba-
bly, arise an almost universal sentiment
In favor Of it.
CURRENCY ISSUE.
"But is doubtful whether the banks
w0ulG md sufficient inducement to remain
In the system without enjoying some
privilege as to the issue of currency, and
IT has been questioned whether there is
power under the constitution for the
charter of national banks, except as in
strumentalities for money circulation. 1t
Iollows, therefore, that any iegisla-
uOn directed to the improve
mE0t and net0hlfah-
ment of national banking system
must include some provision for the main
tenance OF national bank circulation;
Nhlle, on the other hand, it appears that
Whatever opposition exists to national
Danks attaches to them mainly as banks
OIL issue, and under our system of govern
ment nothing can be regarded as perma-
nehtly established until it has obtained
the support of well settled public opinion.
hence II IS evident that the problem now
10 De solved Is how to remodel the cur
Iency features of the national bank sys-
them.
THE OBJECTIONS.
Inc objection to the present national
U9hk currency appear to be compressed
Mltnln three classes, namely: /. General
OoJectlon to paper money in any form !;
= ooJectlon TO national bank notes based
upon the ASSUMPTION that they take the
pace OF an equal amount of paper money
MaI might be issued directly upon the
vIeuit OF the government; 3, objection
sust currency determined in value by a
sueuhlte percentage upon deposited secur-
nttles OF nigh value can never possess the
neAlolllty and elasticity OF volume which
ne tne chief commercial advantages of
'"nA currency in any form.
ANSWERING THE OBJECTIONS.
~ Against these objections it is answer
To, & nrst, that the question as TO having
iiope ipiopei money at all is not at present prac-
~Saole because 1t is evident that our
peopie VIII have paper money IN one form
y, another, and that OF all forms of paper
a,oney ot which we have bad any expert
ta NtHee toe present national bank currency
.ue least Objectionable even to those
a "no thlnk that all such money should be
'olued' Second. that while bank cur
nuof' naBed on government bonds and re-
ISeulhole In greenbacks, may be con-
Ieu as kind of government money
w,,hch phlch banks are getting q profit, yet
en,I1ut thls privilege or some other
,du''alent 10 IL the national bank sys-
No. could never have been established,
M. can u now be maintained, and that
nso,ib the cheapest price at which the
sPie or tne government could have got
a. pahklng system so good In all re-
10 be. 's NO '"i' "a9 Pi0'eu
a., MAKES A MARKET.
nsn, ,notner argument is that the govern