Fort Worth daily gazette. (Fort Worth, Tex.) 1882-1891, 1886-11-29
NATIONAL BANKS.
Comptroller Of the Currency Trenholm
Considers the National Banking
System a Good 0ue.
-----------~-
He shows The Objections Of the People
10 Che system and Gives tho
Reasons Thercfor>
Legislation suEeested In order than Evils
May 10 cured and the system
uieen Permnnenoy.
coMrTRoILrR rRENnoLNls RNroar.

CoMPTRoLLRR TRKNHoLM's REPORT.
wAsHISeroS, Nov, 2S.-Hun. william
l., Trenholm, comptroller OF currency,
his annual report to congress
with remarks on the subject of the
national banking system. The present
financial prospects Of the country induce
the expectation that the funded debt viii
be paid on as fast as bonds mature. In
consequence the question has arisen as
to what changes should be made in the
national banking system in order that
1t shall not suffer deterioration
or destruction upon withdrawal
Of tho support upon which 1t is based by
the present laws, which require every
bank before beginning business TO deposit
certain amount in United States bonds.
The payment Of the per cent bonds,
the maturity In 1891 OF the "a per cent.
bonds, amounting TO $3.50, 900, 600, and in
1907 of the per mt. bonds, amounting
to nearly S1Ss, 000,000 have combined 10
produce a prospective scarcity In securi-
ties ohtainaple TO the banks as a
basis for their corporate existence, and
this is reflected In the advance OF these
bonds to premium so high that every
day their iniorced purchase becomes
more and more enormous. Banks hold
ing per cent. bonds and newly organized
national bapktng associations are forced
into the market as purchasers of per
cent. or ID per cent. bonds and this con
stant demand In connection with the
prospective scarcity already referred to,
sustains and tends still further 70 elevate
the premium on these bonds
AS the time approaches for the
payment Of the "a per cent, bonds
IL is reasonable 10 expect
$ still greater demand for per cents,
and IL Is question of serious Importance
whether the banks can afford TO hold or
10 buy per cent, bonds after 1891 In
the present age oil business men try 20
anticipate future conditions and To pro
vide wen IN advance against foraseeu
contingencies, hence It Is 10 be expected
that the banks VIII not walt TIL the app
rroach OF 1881 10 shape their policy with
reference TO the continued holding
OF high-priced bonds, and for this
reason IL is not too early now to consider
what legislation may be proper TO remove
this element Of future uncertainty from
the national banking system, and look
Ing TO tie possible cousldeIation OF This
subject by congress, | respectfully sub
nit the following statement OF the ques-
tion as It appears from the point OF view
officially occupied by tbs comptroller OF
currency,
The fundamental postulateB underlying
every banking system established by
law, whatever may be its form,
must necessarily be: First, that the
banks promote the general welfare of the
community; and second, that the partic-
ular system established by law is the best
obtainable under conditions prevailing ut
the time and places. These postulates
therefore underlie all national-bank laws
The first postulate will not be questioned
since no people In modern times have ever
risen 20 civilization or maintained their
civilization without banks, and leRat ot
all can IL be questioned In this country,
whore, besides 1868 national banks now
In operation, we nave over 5000 state
banks, savings banks and private banks
and bankers, whose operations extend
into the minutest manifestations Of ein-
pigments and resources OF our 10000, 600
Of population. The second postulate in-
wolves the question whether the present
national bank system should be preserved,
aud II so, whether II is good enough as 1t
is, or whether it can be improved.
the national currency act OF February ~,
1868, WIS controlled as TO it's purposes
by the paramount necessity Of inducing
banks and other capitalists TO become
purchasers OF government bonds under
conditions tnai would give basis Of
solid value 70 the currency then being
paid out in immense volumes under
pressure OF military exigencies, hence the
consolidation Of these banks into q ma
tional banking system adapted to CONNER
cial and Industrial needs appears only as
a subordinate incident in the general |
scheme. As early, however, as the year |
1864 it was perceived that the general
welfare Of the PEOPLE would be promoted |
by giving greater cohesiyeness and method |
to The system regarded more especially 10 |
1t. banking than In its currency features,
and from that time to this the effort Of |
Legislation has been 10 subordinate the
issuing Of currency to the me re important |
functions performed by the bank institu-
lions OF discount and deposit. The e. |
feet Of this legislation and its
wisdom Is exempliaed In the pres
ent high credit and consequent |
wide commercial usefulness Of national
banks. II the system could be preserved |
purely as one Of deposit and discount /
there would probably arise most univer-
sal sentlmeutin favor OF hestowlng upon |
It's preservation immediate and careful |
attention, but Il Is doubtful whether the
banks would find sufficient inducement 70 |
remain In the system without enjoying |
some privileges as TO the Issue OF curren-
cy, and II has been questioned whether
there Is power under the constitution for /
III charter Of national banks except as to |
the instrumentality for money circulation.
II follows, therefore, that any legislation |
directed 70 the Improvement and perma- /
nent establishment OF & national banking I
system, must include some provision for |
the maintenance Of a national bank cir
nulatiOn, while on the other hand II APP
pears that whatever opposition exists 70 !
national banks attaches 70 them mainly as
banks Of issue, and under cur system OF
government nothing eau be regarded !
is permanently established until II has (
obtained the support Of well-settled pub.
lie opinion. Hence II is evident that the
problem now 70 be solved Is how 10 re-