New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-12-04
THE NATIONAL BANKS.
CONTROLLER ECKELs's FIRST REPORT
TO CONGRESS.
THE NETWORK BANKS CoMMENDED-ANEND
MENr SUGGESTED TO THE NATIONAL

MENT SUGGESTED TO liit NHii'NN"
BANKING ACT.
Washington. Dec. S-The annual report Of James
IT Eckels. Controller OF the Currency, which VIII
be submitted directly Congress tomorrow" diners
from former reports in that no tables appear IN
the body of the text 1t shows 1886 National banks
TO have been in operation az the close Oh ''e IT,
mort year with a capital stock OF sGe55aSl2O repre-
sented by $4,000 shares. held by 9"'"oV SNARE
holders.
At the last report of their condition the tc'ai re-
sources OF the banks then in operation were 3D.
Ioa 563 ga &c The total amount OF circulation was
IN October 81 S209.3ll 1913. IA net increase durlhs
the wear of $50 Ss6..72 During the year III pahhs
were organized in thirty-two states ana lerr'o-
r,es with capital stock OF Sll2o"~. Nlthm 'he
same period ia banks suspended, WIN a cap'tai
s,oc, Of $50 100000 OF this number eishy-six win
can,,.I stock of ss2Oj 600 resumed AID siXty-iivc
with a capital stock Of SO.SS50oo. pa SEQ into the
hands. Of receivers At the close Of the year seven
remained in the charge of examiners penang re-
sumption. >-..,a,
Vpon the question Of resumption OF Natiohai
hanks during the year the Controller says:
with Il fun knowledge of the general soVchcy
Of these institutions and the causes which brought
about their SUSPENSION the policy was 'naugurate'i
Of giving all banks which under ordinary circum-
stances would not have closed and whose manage
ment had been honest. an opportunity 10 resume
business This policy was one which Se'n'e' -
commend itself to the ContfoIler ~ I'of'' ~ ~
SIZE under the circumstances, ana 1t Is pe'eNcu
the results have Iustlhed inc eNPe''' -
adoption.
.In no instance has bank been permitted to re-
ammo on money borrowed. or for which as an ASSOC
citation II has become liable Whenever those a'lN'
in the management OF the banks resumihs' cth''
ne executive officers or directors, have been dept
ors their Indebtedness has been Para or SecuiF"
and vyhenevcr Impairment OF capital stock mas
existed such impairment has been MADE boo'
either by voluntary or enforced assessment On '"'
shareholders. In number Of instances changes
have been made I'm the directory and onlcial CORPS
Of the bank The one general criticism however
IN be made upon the management of these banks
was the improper distribution OF their loans-a
circumstance which greatly retarded the conversion
of such loans into cash. thereby causing suspen-
sion"
The matter of Clearing House loan certificates is
discussed The Controller says:
AT n time when vast sums Of coin ana currency
were being Withdrawn from the banks to be
boarded. these loan certificates. by performing th'
functions OF the currency or coin usually required
for settling daily balances. released SO much cur
rency or coin To the legitimate and current demands
Of business and unqu"siionably placed 1t III The
power OF the banks in the cities named to extend
10 outside bank, the an needed on the one hand
and on the other literally extended. In no in
stance were these certificates designed TO- nor dd
they circulate as moncy. They were In du" Bills
and their sole function consisted in dischargng the
single obligation AT the Clearing Hous" An attempt
on tn, part Of any bank in any Of the associations
issuing these certificates 10 use them otherwise
would have incurred nne and other penalties pro-
vided In the rules govoruiug such associations.
Their issuance at 50 early date In the financial
derangeInen. Of tho country was most orportune
I'm not only preventing acute panic but IN tend
Ing 20 restore public confidence such action de-
monstratug that by mutual agreement the weak
lar - 81 he Ia would be- ar ttfpe-
itors and other creditors were concerned strong
as the strongest.
in inaugurating the issuing OF certificates So
promptly and in issuing them 10 so large an amount
the Clearing Hous- Association Of New-Nork. IN
partic uar rendered the county great service. and
the associated banks OF that citv are entitled o.
the credit which the public generally gccorda them
The following amendments to The Law are recon-
mended
% That every association way Issue crss,ns
notes equal 10 the par Nalu" OF IN" bonds lrl@s',l
- That H." s"in-hiinuaI duiy, on ,lI'uii'l"in ~
reduced as to equal onc-fourth OF per cent per
81 That the Con,rolicr Of the Cumcncy. Win
the approval Of the secretary of inc IfchtNI!' 10
md dirrr,ors an opportunity TO b. heard. leiv-
ing the vacancy 30 created u be hil"d IN tn'
81 That no cyccutlve officer u a bank or enployc
thereof h. permitted to borrow funds u euch bank
approyal by the Board Of directors.
80 That the assistant cashier. In IN, absence or
lnabIlity Of the cashier OF a National hank to
se S sn ne9g ID s a%f SaaE 10 '" III"
90 That tho law may De- amended hy appropfi,
n" g i'', eterr TO almnst9r The general oahs
required by the provisions Of the National Bank
"a That the bank examiners be required To- take
oath Of office before entering upon the diacharge
Of their duties. and To give POM IN Su3h amount
and with such suretics as he Controller Of the
Currency may require , - In, -,
approval OF the Secretary Of the Treasury. be- en-
to npo and '%S to b. pa % out Of
the rcimbursnblc funds. whosc duty 1t shall be to
visit, assist and supervise the various examiners
In their several districts IN orarr l" SECURE I'M
formity in method and create eiicl"ncy IN work
,g, That the Law be- so amended rs 10 provide that
the compensation of all bank examiners be- fixed
by the Controller Of the Currency win IN" approval
OF the Secretary Of the Treasury
Upon the subject Of currency legislation Is the
following:
"'rhe Controller has been urged 10 make some
specific recommendation with respect to a revision
~ the Law far AZ II pertains to the Issuing OF
currency. After careful consideration Of the
question the Controller Is Of the opinion that aside
from the amendments heretofore suggested. the
public good VIII be best subscrvcd At this time by
making no radical change in the provisions Of the
law as II now stands. The financial situation OF
the last months not the result OF either a
lack in the volume OF currency. Of which there IL
now q plethora. or a want OF elasticity In the pres
cnt svstc Of issuing H. but arose from the loss OF
confidence the part Of the people In the solvcncy
OF the dlstinctVely monetary institutions OF tho
sderation that At the very time the scarcity
rency for business purposes was at ~ heiEh, me
most rapidly. and the amount per capita was much
larger than IL any recent year
I'm view or the lact that thcfe ~ now very
gveat abundance Of unemployed currency In the
country. as Is shown by the daily money returns
from the commercial centres. 1t would seem that
whatever need appeared some months since for On.
larging TO any married extent the crculating me
gress Is afforded an opportunity OF giving To the