Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1886-11-29
NATIONAL BANKS.
Remarks on the Sabject by Comptroller of
the Currency Trenholm.


financial prospects of the country is due to
the expectation that the funded debt will
be paid off as fast as the bonds mature and
in consequence question has arisen as to
what change should be made i'll the
National Bank system in order that it
shall not snfler deterioration or destruc-
tion upon the withdrawal of the support
upon which it is based by represent laws
which require every hank before beginning
business to deposit certain amount
in United States Bonds. The payment Of
the per cent. bonds, the maturity in
1891 of the 4! per cent. bonds, amount
ing to $25O, 600, 900, and in 1907, of the
per cent. bonds amounting to nearly S73S,-
900, have combined to produce prOspec-
tive sccarity, inthe securities available to the
bankers as Il basis of their cooperative eX
istence, and this is reflected in the advance
of these bonds to the premium so high
that every day their purchases are more
and more enormous. Banks now hold
ing per cent. bonds, and
newly organized National Bank
ing associations are forced in to
the market rs purchasers of the per cent.
or the 4l per cent. bonds. And this con-
slant demand, in connection with the pros
pectiye scarcity already referred TO, SuS-
tainS and lends still further to elevate the
| premiums on these bonds. As the time
approaches for the payment of the AZ per
cent. bonds, it is reasonable to expect a
| still greater demand for the 4 per cents,
and it is question of serious Importance
whether the banks can afford 20 hold or to
| buy per cent. bonds after 1891. In the
present age, business men try to antici-
pate future conditions and to provide
| well in advance against fOreSeen COntin-
gcncieS, hence it is to be expected that the
banks will not wait until the approach of
1891 to shape their policy with reference
to the continued holding of high priced
bonds.
For this reason it is not so early now to
consider what legislation may be proper to
remove this element of future uncertainty
from the National Banking system, and
looking to the possible consideration of the
subject by Congress, | respectfully submit
the following statement of the question as
it appears from the point of view officially
occupied Iby the Comptroller of the cur
reuCy. The fundamental p0Stulatcs un-
derlying every banking system established
| by law, whatever may be its form must
necessarily be:
FirSt-That banks promote the federal
welfare ul the community; and second l.
| That the particular system, established by
law is the best Obtainablc under the cOndi-
| tionS prevailing ut the time and place.
These pOStulateS therefore, underlie, our
National banking laws.
The first pOStulate will not be questioned
since no people in modern times have ever
risen to civilization, or maintained their
civilization without banks; and least fall
can it be questioned in this country, where,
besides 2SS National banks now in opera
tinn, we have over 5000 State haukS,
saving banks and private banks and bank
erS, whose operations extend into the
minutcSt ramilicatiOn of the employ
mentS and resources Of our 6O, 900, OOOpop-
| ulation.
The second pOstuIatc involves the ques-
tion whether the present National hank
system should he preserved, and il 50,
whether it is good enough Us it is, or
whether it can be improved.
The National currency act, February L.,
| 1863. wiIS controlled rs to its purposes by
! the paramount necessity OF inducing the
banks and Other capitalists to become pur-
chasers of government bonds under con
ditiOns that would give u basis
of solid value TO the currency
then being paid out in immense volumes
under the pressure of military eXigencIes,
hence the consolidation of these banks in
to national banking system adopted to
commercial and industrial needs appears
only asa subordinate incident in the gen
cral scheme. AS early, however, rs the
year 1S6i, it was perceived that the gen
cral welfare ofthe people would be pro-
NOTED by giving greater cOheSiycneS5 and
method to the system regarded more cS-
peCially in its banking than in its currency
features, and from that time to this the
effort of legislation has been to subordinate
the issuing OF currency to the more impOr-
tant functions performed by the banks
Us institutions OF discount and de-
poSit The effect OF this leg
iSlation and its wisdom are excmplfied
! in the present high credit and the conSe-
quent commercial usefulness OF National
banks. If the system could he preserved
purely rs one of deposit and discount,
there would probably arise an almost uni
verSal sentiment of beStowing up
on its preservation immediate and
careful attention but it is doubt
| ful whether the banks would find
sufficient inducemcnt to remain in the
system without entering some privileges rs
TO the issue of currency, and it has been
questioned whether there is power under
| the constitution for the charter of
National Banks except rs instru-
mentalitieS for money circula-
tion. 1t follows, therefore, that
any legislation directed to the improve
ment and permanent establishment of the
National banking system must include
some provision for the maintenance of n
| National Bank circulation, while on the
hand it appears that whatever is
the position to the National banks it at
tachcS to them mainly rs banks Of issue
and under our system of government moth
ing can be regarded aS permanently eStab-
| liShed until it has obtained the support of
we'll settled public opinion.
Nearlya Million Loss.
| DI-TI-Tu MINI November 0S The