The morning call., 1892-11-26
SOUND CURRENCY.
The Report of Comptroller
Hepburn.
OPPOSED To STATE BANKS.
In a Crisis Their Notes Would Lose
All Debt-Paying Power, Becom-
ing Themselves a Debt.
Special TO TIE MORNING CALL

WASHINGTON. Nov. 25.-The forthcoming
report of Comptroller OF Currency Hepburn
shows that 163 banks. with an aggregate
capital of SIS, ,2S5, 600. were organized during
the year. Ffty-three went into voluntary
liquidation and seventeen became insOlvent.
Nearly so per cent OF the new banks are
located west Of the Mississippi River and 30
per cent In the Southern States.
The number Of banks in oper alton is 378s,
having an aggregate capital of S693, S6S, 645
surplus and undivided profits amounting TO
S340.624, 179; individual deposits Of S1,765,-
AZ, ,9S3; bank deposits reaching $3.50, 453. POP.
and total resources OF 3.510. .094 S97.
The circulation outstanding shows a net
increase for the year Of SO, 4S7, 226
The gold held by the banks. compared
with September %, 1891, shows an increase
Of 81. 994, 115; surplus and profits an in
crease Of S9,663, 020; individual deposits an
Increase of S177. 104. .902 and bank deposits
an increase of Sl00 05S, ,42S.
Over two-thrds Of the liabilities Of the
seventeen banks reported as having failed
belong to the Maverick Bank.
The Comptroller gives detailed informa-
ti0n Of clearinghouse transactions, and
shows how. by means of bookkeeping sub
Stitutes the use Of actual money is mini
mIzed, less than 10 per cent of the business
transactions being represented by money.
Tie Comptroller makes numerous recon-
mendatons, among them being one thar the
tax on national bank circulation be re-
pealed. The banks have already paid into
the Treasury So, go, 401 in taxes uron their
circulation. They should only be assessed
sufficient to defray the actual cost to the
Government Of providing the circulation.
Another recommendation is that the Gov
ernment issue bonds having twenty, thirty
and forty years 10 run, at a low rate Of
interest, with which 20 retire the present
bonded debt, which bonds may be used & a
basis TO secure the national bank circula-
tion. The Com ptroller shows that by ex-
changing ? per cent bond having the same
length of time to run, fer the per cent
bonds outstanding at the market value of
each on the 31st of October, 1882, the Gov
ernment could have saved S67. 161, SOL In
addition TO furnishing a permanent basis
for the bank circulation, it would prove
also great saving 10 taxpayers.
Still other recomme endations are that the
Comptroller of Currency, with the approval
of the Secretary of the Treasury. lie en-
powered to remove officers and directors of
national banks for violations of the law,
and that the law be so amended as to pro-
bibit F'e officers or employees OF a bank
borrowing its fund In any manner, except
upon application TO and approval by the
board Of directors.
In the chapter in regard to the circula-
tlon the Comptroller says; "Soiled paper
money is popularity believed to be a potent
means Of disseminating infectious and con-
tagious diseases. The Bank Of England
Tha
vdes for the redemption of United
States notes when they are so muiilated or
injured as TO be unfit for use, and says that
the accumulated filth and continuous use
uufts them for circulation and that they
should be redeemed. Send 10 the old and
let the people have new and clean money.
National bank-notes," says the Comp
trOlleT. "haye furnished a currency ade-
Quate 10 the wants Of the pubic-sound,
elastic and beyond criticism. This form of
currency should be continued as the money
of the future"
The Comptroller argues against State
bank notes, and says that Congress must,
under tie c0nstitu ion, provide money that
possesses full debt-paying power. BY
every consideration of sound business prin-
eiples il should provide all the money the
country requires. No public Interest can
be served by dividing this function with
forty-four States. Every period of fnan.
eial depression in the past has resulted In
the suspension OF specie payments, more or
less general, by the banks; that is, 1t has
resulted in the inability of the banks to re-
deem their notes. The same conditions
won d produce similar results in the future
II State bank notes were allowed to circu-
late. Their acceptance would not be volun-
tary, bat it would become a necessity. The
wealthy classes could provide themselves
with means of discrmi mating against the
notes Of weak banks, and if they found
themselves possessed OF any would proceed
to work them off upon their less fortunate
neighb0rs. That is the record OF the past,
and II would be the experience of the fu-
ture. The note Of a national bank that has
failed is as good as that of any bank in the
system. Against the restoration Of the
State bank circulation the people would
need, and would have a right 10 ask, the
protection Of the Government. A State
bank circulation loses It's money power in a
crisis, aud instead OF paying its debts it
comes forward itself to be paid.