The Portland daily press., 1886-11-29

symptoms Of poisoning. The trouble was
traced to canned ham served to the men at
breakfast. No fear is entertained of fatal
results, but the men were sick enough to
cause some excitement about the yards.
Annual Report of the Comptroller
of the Currency.
VIM. i. Trenholm, Comptroller of the Cur
rency, concludes his annual report to Con-
national banking system: 'sThe problem
IN 1883 was how TO bring the banking capital
OF the country to the support of the treasury
and it cannot be doubted that the banks then
had 1t in their power to exact from the
government a concession far more valuable
than those granted them Even those moder-
ate concessions have long since lost all ele-
mentS OF monopoly, and the act of June 90
1874, actually took away $55, ,000, 900 of the
circulation, partly from banks organized
during the war in order to give the privilege
OF issuing that sum to banks in states that
were cut of by the war from access to the
national banking system, a measure entitled
to honorable consideration, because at thai
time those states were without sufficient
political lnfuen.e to exact a share in this
valuable privilege, and the then existing
banks were strong enough to have made a
successful resistance, had they been selfish
ly inclined. The last vestige Of monopoly
was swept away by the act of January IA,
throughout the United States, and supple
mented by the act of July 49, 1882 brought
its benefits within reach of even small com
munities. Under the sanction of these laws
the National banks have become numerous,
widely distributed, and intimately identified
with the varied industries by which our
entire population literally obtained their
daily bread, but during the same time the
rapid reduction Of the funded debt of the
government has been introduced into the
very basis of the system, an element of in
stability. which now hampers its extension,
lmpairs its usefulness, and even threatens
its continued existence, while there are still
great areas of our country in which the
natural resources are awaiting development
by just such means as these banks might be
made to supply. The present financial
prospects of the country. induce the expecta-
ton that the funded debt will be paid off as
fast as the bonds mature, and in consequence
question has arisen as to what changes
should be made in the National bank system
in order that it shall not suffer deterioration
or destruction upon the withdrawal of the
support on which it is based by the present
laws which require every bank be-
certain amount of United States bonds.
The payment of the per cent bonds, the
maturity in 1891 of Al per cent bonds.
amounting to S250,000000, and in 1907 of
per cent bonds, amounting to nearly $685.
100000, have combined to produce prospec-
as basis for their corporate existence, and
this is reflected in the advance of these bonds
to premium so high that every day their
enforced purchase becomes more and more
onerous. The banks now holdings per cent
bonds, and newly organized National Bank
ling Associations are forced into the market
as purchasers of 4 per cent or A per cent
bonds, and this constant demand, in connec-
tion with the prospective scarcity already re-
ferred to, sustains and tends still further
To elevate the prHmlum these b0Q0S AS
the time approaches for the payment of the
A per cent bonds, it is reasonable to expect
still greater demand for the per cents, and
it is question of serious Importance wheth-
er the banks can afford to hold or to buy 4
per cent bonds after 1891. 1t is not too early
now to consider what legislation may be
proper to remove this element of future un-
certainty from the National Banking system,
and looking to the possible consideration of
this subject by Congress, respectfully sub
NIT the following statement of the question
as it appears from the point of view officially
occupied by the Comptroller Of the 0urren-
ey Fundamental nostsilatess. m d.esrly@ine .s, ing
Whatever may be its form, must necessarily
be, first, that the banks promote the general
welfare of tho community, and second, that
the particular system established by law is the
best obtainable under the conditions pre-
vailing at the time and place; Three postu-
lates, therefore, underlie our National Bank
ing 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 of
all can it be questioned in this country
where besides 2,S6S National Banks now in
operation, we have our 5000 State banks,
savings banks, and private banks and bank
ers whose operations extend into the minut-
est ramiications of emplOments and res0urc-
es of our 10000 900 of population. The sec
ond postulate involves the question, whether
the present National Bank system should be
preserved and if so whether it is good
enough as it or whether it can be improved.
The national currency act OF February II,
1863 was controlled as to its purposes by the
paramount necessity of inducing banks and
other capitalists to become purchasers of
government bonds under conditions that
would give basis of solid status of the cur
rency then being paid out in immense vol
ume under pressure of military exigencies,
hence the consolidation Of these banks
into the National Banking system, adapted
to commercial and industrial needs, appears
only as subordinate incident in the general
scheme. As early, however, as the year
1864. it was perceived that the general wei
fare Of the people would be promoted by
giving greater cohesiveness and method to
the system regarded more especially in its
banking than its currency features, and
from that time 10 this the effort OF
legislation has been to subordinate the Issuing
of currency to the more important functions
performed by banks as institutions of dis
count and deposit. The effect of this legisla-
ti0n and its wisdom are exemplified in the
present 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 an almost universal sentiment
in favor of bestowing upon its preservation
immediate and careful attention, but 1t is
doubtful whether the banks would find suf-
icient inducement to remain in the system
without enjoying some privileges as to the
issue of currency, and it has been ques-
toned whether there is power under the con-
stitution for charter Of National Banks ex-
cept as instrumentalities for money circula-
ton. 1t follows, therefore. that any legls-
lation directed to the improvement and per-
manent establishment of National Banking
| system must include some provision for the
| maintenance of a National Bank circulation
| While ON the other hand 1T appears that
whatever opposition exists to National
| Banks attaches to them mainly as banks Of
| issue, and under our system of government
nothing can be regarded as permanently es-
tablished until it has obtained the support of
a well settled public opinion. Hence 1t is ev-
ident that the problem now to. be solved is
how to remodel the currency features of the
| National Bank system so as to obtain popu-
lar approval Of them. Objections to the
| present National Bank currency appear to
be comprised within three classes, namely:
IA general objection to paper money in
| any form.
IAN objection to national bank notes,
based upon the assumption that they take
the place of an equal amount of paper
money that might be issued directly upon
the credit of the government.
SAN objection that the currency deter
mined in volume by a definite percentage
upon deposited securities of high value can
never possess the flexibility and elasticity of
volume which are the chief commercial ad-
| vantages of a bank currency in any form.
Against these objections 1t is answered:
THAT the question as to having paper
money at all is not atpresent practical one,
because it is evident that our people will
have paper money in one form or another,
and that of all forms of paper money OF
which we have had any experience the pres
ent national bank currency is the least OBJ
jecti0nable even to those who think that all
such money should be avoided
2-That while the bank currency based on
government bonds and redeemable in green
backs may be considered as kind of govern
ment money on which banks are getting a
profit, yet without this privilege or some
other equivalent to it the National bank sys-
ten could never have been established, nor
CAN'T now be maintained, and that this is
the cheapest price at which the people or the
government could get any banking system sc
good in all respects and so valuable as this
has proved to be. Another argument is that
the government must pay interest upon it,
bonds whether these are had by banks OF
not. Hence profit to banks on these bonds
has been obtained without charge on the