Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-12-03
THE CURRENCY QUESTION
Controller Eckles Favors a Non-Partisan
Commission to Consider It.
Points Discussed I'm the Annual Re-
pOrt-NatiOnal Banks and the
Governments Revenue.

The annual report of Mr.James H.Ecklns.
controller of the currency, shows that dar-
ing the past fiscal year but so banks were
organized, with capital stock of $685.
600. the smallest number chartered, as well
as the minimum amount of capital. in airy
one year since 1879. On October 81, 1894,
the total number of national banks in op-
Grafton was 1856, with an authorized zap
ital stock of s612. GIL 1865. represented BY
7,oS5,O76 shares of stock, owned by 2s7, S42
shareholders.
Reports of national banks show lrdivid-
ual deposits declined from 81, 76i, 45G,177 IN
December, 1892, to their lowest point, ST.
AL, Ia, $50, in October, 1893, and between
the last named date and October :, 1894.
steadily increased, and reached on the lat
ter date 81, rs, 41S,S19, or $36.OOO,OO0 less
than in>December, 1892, the highest point
rea lied during the two years named
The lawful money reserve or the banks,
which reached its lowest point on July II,
1898, when it was S2S9, 244, $50. steadily in
creased after that date until May 4, 1894,
when it amounted to $i52, los, pa. 1t then
decreased to $43S 1S1.97O on July Is. 1884,
and further to $4O2, s94. $50. on October 2,
1894, such decrease between May 4, 1894,
and October 2, 1894, being accounted for
by the increase In the item of loans and
discounts during the same period due to
the revival of business between the dates
and October 2, 1884,
In order to place banks upon a dividend
paying basis in communities where bank
ing is overdone, the controller suggests the
necessity which banks have found Of cur
failing expenses by either q reduction Of
the capital stock or consolidation Of
banking interests, which would also have
tendency to check reckless banking,
springing from an unwhOlesOme competi-
ton of rival concerns to obtain business
which could all be handled by one strong
bank.
The results of the present investigation
of the subject, the controller says, are in
the line of Il rmer conclusions as to the in
creasing Importance OF credit instruments
in payments and exchanges generally and
against the necessity of any additional pro-
visions for simply an increase in the vol
ume of money without taking into consid-
er ttion the other and more important ele-
nlehts which should characterize the cur
renCy circulation.
From the figures submitted the controller
argues that no better evidence Of the val,i-
able and generally diffused service rendered
to the public by banks can be adduced, and
no stronger reason could be advanced to
warrant the most careful and statesman
like consideration Of any measure affecting
them.
AS a source of revenue to the govern
ment, 1t Is also shown that the total tax
$1,SS5.SS7.I4, the taxes paid on deposits
amount to SEQ. $40, OCT. 16, and up to June 80
1894. the circulation of the banks had
yielded to the government q revenue of
SI5, S34. 997.17.
The controller also calls attention to the
service rendered the public by the national
banking system, giving as the four great
points of advantage and saving which have
been gained to the general public, first. the
saving in heavy discount on the bank cur
rency prevalent before the establishment
of the national bank system. Se-ond.
the saving in rates of interest on loans
and discount. Third, the saving in the
making of exchange. Fourth, the saving
to customers in charges for making collec-
lions.
The controller renews his recommended
lions of last year for amendments to exist
ing laws, with respect to issuing of circu-
lation to the par of bonds deposited I'M
less the method Of issuing circulation Is
changed.
The controller makes a suggestion for
the maintenance of a 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 3
per cent of the total of such outstanding
circulation, this fund to be held by the
government an agent only and for the
purpose of Immediately redeeming the notes
of insolvent banks.
1t is suggested that II Congress shall re-
peal the provisions of the present act re-
curing the national banks to make a de-
post of government bonds in order to Sc
cure circulating notes,a substitute there
right to issue the same against their as
sets, 1t incorporate therein and as a part
therefore that, as prerequisite to so doing,
the banks be compelled to deposit with the
treasurer of the United States legal ten
der issues or issues under the act of 1880
equal In amount to the difference between
the percentage of their capital stock Of is
sues granted against their assets and the
total of such capital stock.
AS against this deposit Of legal tenders
and treasury notes so made there should
be issued to the banks. dollar for dollar,
national bank notes. either of the same or
different design, as might be deemed best,
that thus the volume of the currency as it
Is now contributed to by the issues Of the
government should not be contracted so
long at least as the banks making such de-
posits are In existence.
1t is also suggested that as a necessary
element to the securing Of proper elasticity
of issue in our bank note currency section
0, act July II. 1892, regulating the retire.
ment and issuing of circulation to banks
within a fixed period Of time, should be re-
pealed, and also that an amendment should
be made to the law necessitating the banks
keeping in the office of the controller Of the
currency a sufficient amount Of bank notes
as will enable them to secure circulation at
once instead of after period Of delay, fire.
ouenlly of sufficient duration as to make
the issue unavailable to relieve the pressure
existing at the time Of ordering the same.
The controller says that suggestions have
been received from many eminent financial
sources that the whole question of a bank
ing and currency system ought to be re-
ferred by Congress. to a commission to be
created by law. appointed by the President,
and clothed with proper authority. On this
point he says:
"A commission non-partisan In its charac-
ter, composed of men of eminent abilities,
could unquestionably devise q currency
system sound in every part, and one which
would commend itself to every interest OF
the country. 1t could largely take the ques-
ton out of politics. and have 1t considered
simply in It's business aspects and upon
merit alone; but If the present Congress Is
to enact a law upon the subject, the ap
pointment Of a commission could avail
nothing. If, however, nothing more definite
can be accomplished the question of the
creation of such commission ought to be
considered and acted upon"
PROPERTY OF GOVERNMENT.