The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1894-12-11
PRICE FIVE CENTS.
g of a future issue of notes

for the privilege of future issue of notes
against its assets.
Now unless there was sufficient profit
10 circulation banks would not take il out.
1t was plain business matter. The com-
plant under the present system was that
there was no profit In circulation. About
S2O7,O00000 in national bank circulation
was outstanding. Certainly under the
proposed system there would be a consid-
erable prof; in the present circulation aud
In times of demand the profit by taking out
notes against assets would materially in
crease. AS to the question of elasticity, it
was governed by two ihings-the demand
and the Immediate cODvertibility of the
notes. TO the extent OF 90 per cent of the
notes the currency would be elastic This
plan would relieve the treasury of $780,
600. 600 of greanbacks and furnish an elias
tic currency for the people and a profit.
able currency for the bank.
He argued the inherent right OF the
Government to make issues of legal ten
der, but questioned its expedieney. As to
the safety of the notes. history would re-
peat itself. 1t was safe to say not a note
would nave suffered loss if Government
bonds had not been deposited in the treas
land pretends to have been enacted to
make the note-holder of the Bank of
England secure. yet as matter of fact, it
was an act to limit the circulation. The
e15,000.00O of uncovered notes of the
bank Chat is those which had not e1
of gold behind them) were just as secure
as those covered by gold. The act OF 1874
which ATTEMPTED to fix the amount OF un-
years later to give the Bank of England
authority to issue above the amount fixed
by the Pool act The notes Issued by the
Bank of England un-coveredlhave always
been as good as others. The best asset
OF any bank or other financial institution
was redeemable paper. This was ap-
parent during the panic last year when
bonds were hard to dispose of, while con-
vertible paper was accepta BILE anywhere.
The bank assets and credit behind the un-
covered notes 10 be issued under the pro-
posed system for this country would make
them entirely safe.
Mr. Eckels said In conclusion that while
Secretary Carlisle and he agreed as to the
general principles they differed somewhat
as to methods. The members of the COM
mittee then propounded their interroga-
IOIiOo' Al IOpIy W MI DOuuSO0s EcK6lS
said that, in mis- opinion, the dangers Of
State bank circulation were over-esti-
mated. It should be remembered that
thirteen States by law prohibited
such issues. In reply to Brosius, as to
whether, with the large amount of money
in circulation outstanding. there was any
urgent necessity for a change OF the sys-
tenn, Eckels replied in the negative as far
as the necessity for greater abundance of
money was concerned, but EN- phatically in
the affirmative when it came to the Deces-
sity of putting the new system on proper
footing and relieving the treasury of its
present embarrassmeDts.
In reply to johnson, Eckels said he
would make the bank-notes receivable for
public duties to the extent that they rep
resented legal tender. 80 per cent, and
that the Government should not tender it's
credit 10 the banks except in so far as by
| its regulations il gave the people conf
| dence that the notes and their redemption
we're the subject of Government super
vision. It was fact that no bank could
meet its demand obligations il they were
all presen ted at one time. Over 90 per
cent of business was done oD credit not
cash. The question as to whether the
banks should hold hard and fast line of
reserve was one for argument. II was
possible to judge of the future by the
events of 1893 The strange thing to him
was that there were not more failures last
year than In any other ye ar. He said the
Comptroller should have discretion about
| throwing bank into the hands of a re-
ceiVer after its reserves had fallen below
a fixed limit.