The Helena independent. [volume] (Helena, Mont.) 1875-1943, 1894-12-03
GOVERNMENT MONEY.
Comptroller EekIes Says tho Government
Should not Issue Notes to Pass as
Money.
NEVER WAS SUCCESSFULLY DONE
Government Should Retire From the Bank
ing Business, for Which II Is Poorly
Equipped.

or the currency submitted to-day. gives
full Information In regard to the organi-
cation, supervision and liquidation Of
the national banks for the year ended
Oct II, 1884 IL shows that during this
period but fifty banks were organized
with n capital stock OF $5,2s5. 600, the
smallest number chartered, as well as
the minimum amount OF capital, in any
one year since 1879. OF these new
banks twehty-seven are In the northern
ana eastern states, ten In the south
ern states. and thirteen In the western
or transmississippi division. on Oct
Sl' 1884, the total number OF national
banks In operation was 1886. with an
authorized capital stock of S672, GIL ,3G5
During the year seventy-nlne banks,
with an aggregate capital stock OF slO,-
$4,000, passed out of the system by vol
untary liquidation; twenty-one, includ-
ing two which failed in 1898, with cap
ital stock Of $2.77O.OOO, became insolvent
and were placed In charge of receivers.
The feature of the oomptroller's re-
port is In his discussion OF the currency
question and the defects which are said
TO exist I'm the note-lssuing powers
vested In national banks. on this sub
Ject he says:
mo section OF the law should be dis
turbed which cannot be materially i'm
proved upon. and no amendment en-
grated unless such amendment will
work out better results than follow
from the existing order of things.
For the present law II must be con-
ceded IL has been successful in every
material feature except In the matter
of bank note issue, and here the fail
ure has been but a partial one. The
notes Issued by the banks under gov
ernmental supervision have been uni
form In appearance. and under any
and all circumstances for the full face
value which they purport to carry They
have possessed the first requisite of a
good bank note issue-immediate con-
variability In coin upon presentation.
1T Is probable there could be no
better plan for simply insuring the
note holder against loss than the pres
ent requirement OF a deposit of bonds TO
secure banks circulation. but II ia
certain. however that method devised
not less safe in this respect, and In ad-
hiAlNii Ah'ihNV UpEHAhNlilk Alihl MAlAh
essentialan now wholly wanting-elas-
ticlty of issue. The complaint, there
fore, made against the present sys-
tenn is that, lacking In elasticity OF is
sue IL fails to meet as fully as IL ought
the various wants of the countTy's
trade and commerce.
But serious as this fault and retard-
full as II is TO the business in this coun-
try, any attempt TO remedy 1t which
| should lose sight of or in any wise
make less certain the present unques-
| toned credit and convertibility of the
bank issues OF the country could not
be justified. II is the duty of the gov
Crnment To see that the currency which
circulates among the people shall al
ways be of the very highest character.
the soundness of which should never be
"A subject of inquiry.
For thirty years the American peo-
pie have had such bank currency and
having seen the value of II, both here
and abroad they will not be content
to have any innovation made unless
such new departure insures not only
equal but better results.
"It is respectfully suggested that not
only as good but better results would
be attained II the present bank act
were amended by repeating the provis-
ion thereof requiring each bank as a
prerequisite To entering the system and
issuing bank note currency, TO deposit
government bonds. In lieu OF such pro-
vision should be substituted one permit
| ting the banks to issue circulating
notes against their assets TO an amount
equal 10 at least 80 per cent. of their
unmpaired capital"
The comptroller follows the sugges-
| ton with the further recommendation
| for the maintenance OF safety fund TO
| be provided by graduated taxation upon
the outstanding circulation of the banks
until the same shall be equal to not less
| than per cent OF the total of such out
standing circulation. this fund TO be
| held by the government as agent only
and for the purpose of Immediately re-
| deeming the notes of insolvent banks,
| The comptroller says: Whatever
| other changes. II any, II would be neces-
sary 10 make in the present system rela-
| tive To the current redemption of bank
notes and the governments position
toward the same and kindred matters,
| IL is not necessary To set forth, II the
| recommendations here made together
with that which follow. should receive
| consideration at the hands Of congress,
| a bill drawn after careful study and In
vestigation OF the whole subject would
| necessarily embody all details incident
| to the change from bond TO safety
| fund. necessary as basis of bank cir
! culation."
| The comptroller then cites such proof
and gives such statistics as seem to him
| To make the plan suggested perfectly
I safe one 10 enter upon, Continuing, he
| saws: profit upon the issue OF circula-
ton TO banks by such change would be
so augmented that II IN giving to them
a franchise for which II Is suggested
they should be called upon To make
pnper return to the general govern
ment. This return should not. how
over. be of such a character as "a defeat
the ends sought in the privilege given
| Currency redemption OF legal tender ls-
sues and treasury issues, under the net
of 1890 and the rc-issuing instead of
| cancellation of the same, must always
create distrust OF the governments
credit abroad and nt home 10 long as
laws upon the statute books remain
unchanged,
"The general government ought 10 be
wholly free from the direct issuing and
redceming Of notes To pass hs money
| among the people No government has
ever vet successfully engaged IN 20 do
Ing. and the experience ot the goNC-1.
ment of the United States has pro- n
no exception TO the rule, The general
cost and loss cntallcd upon the govern.
ment and the period uf uncertainty Il
The governments credit and stability
of our monetary system have been NJ
great ~ To make the legal tender and
| treasury issues of 1890 one OF the cN'
traordinnry burdens placed on the pco.
pie.
"rhoac Issues ought tn be- redeemed
and cancelled and the government thus
enabled to retirc frum the banking bust.
| nnas "A business for which Il IL 80 poorly
equipped In the Night OF the present
condition OF the governments finances,