Union County courier. [volume] (Elk Point, Union County, D.T. [S.D.]) 187?-1913, 1894-12-13
EcKELs ON BANK ISSUE.
He Discusses Currency and the Defects
and Limitations Of Present Syetcm.

He Discusses Currency and tho Defects
and Limitations Of Present Syetcm.
The report Of the Hon. james III.
Eckels, Comptroller Of the Currency, sub
mitted to Congress, gives full. information
IN regard to the organization, supervision,
and liquidation Of the national banks for
the year ended Oct. 81, 1884. 1t shows
that during this period but fifty banks
were organized. with a capital stock Of
$5,2S5,OO 0 the smallest number char
tered. as well as the minimum amount Of
capital, IN u one year since 1879. OF
these banks twenty-seven are in the
Northern and Eastern States, ten in the
Southern States, and thirteen i'm the West
crn or trans Mississippi division.
On Oct. 81. 1894. the total number Of
national banks in operation was 3,756.
with an authorized capital stock of $672,-
|611,3Gi. represented by 7,955,O7G shares
of stock owned by 2S7 .S92 shareholders.
On Oct. ?, 1894, the date of their last re-
pert Of condition, the total Of
the banks were $3,473, 3D., OIs,, of which
their loans and discounts amounted to ST.
0O7 IL. 191, and money OF all kinds in
bank, $422. 42S, 1872. OF their liabilities
81, 72S.41S,Sl0 represented individual de-
posits, 1884, 121 .OS2 surplus ana net un-
divided profits, and $172,3 31, 97S circulat-
ing notes outstanding. The total circula-
ton of national banks on Oct. 81. 1894,
amounted to 500. 472 COB, a net decrease
during the year Of 81. 741 1858 and a gross
decrease of $S,G14,SG4 in circulation Sc
cured by bends.
During the year seventy-nine banks,
with an aggregate capital stock of $10.-
~ nm ,naaa .,,t ~ ~. a.-,tx, L.. 49,
untary liquidation; MISUNDERSTANDING
two which failed in 1S93-with IA capital
stock Of 50, 100000. became insolvent and
were placed in charge of receivers.
The feature of the Comptroller's report
IL his discussion Of the currency question
and the defects which are said to exist in
the note-issuing powers vested in ma
tional banks. On this subject he says:
No section Of the law should be disturbed
which cannot be materially improved upon
amendment Will work out better results than
flow from the existing order Of things.
For the present law II must be conceded It
has been successful La every material feature,
excepting In the matter Of bank-note issues,
and here the failure has been n partial one.
The notes issued by the banks under govern
mental supervision have been uniform In APP
pearance and under any and all circum-
stances Of the full face value which they pur-
port to carry. They have possessed the hrst
ate convertibility into coin upon prcsenta-
tlon.
1t is probable that there could be no better
plan for simply i~nsnring the note holder
against loss than the present requirement Of
a deposit Of bonds to secure a banks circula-
fion, but 1t Ii equally certain. however. that
n method could be devised. not less safe in
this respect, and in addition thereto pos
sessing lint which liz essential and Is now
wholly wanting-ciasticity OF issue: The COM
system Is that. lacking In elasticy OF issue,
It fails to meet as fully az IL ought the vary
Ing wants OF the country's trade and com
merce. This defect must attach to every
against a deposit OF bonds. the market
value OF which 1uctuates while the percent
age OF issue. less than the value Of the bonds
granted the banks, remains unchanged.
But serious Ms Is this fault and rctardful
MS 1t Is to the business interests OF the coun-
try, any attempt to remedy 1t which should
lose sight of or In any wise make less certain
the present unquestioned credit and con-
yertlbility OF the bank issues Of the country
could not be justified. 1t Is a duty Of govern
ments to see that the currency which clrcu-
latc3 among the people shall always be OF
the very highest character. the soundness Of
which should never be a subject of inquiry.
hnd such n bank currency. and having seen
the value Of 1t 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 IL respectfully suggested that not only
az good but better results would be attained
II the present bank act were amended by re-
pealing the provision thereof requiring each
bank as a prerequisite to entering the sys-
tenn and issuing bank-note currency to de-
posit government bonds. In lieu OF such
provision should be substituted one permit
ting the banks to- issue circulating notes
against their assets to an amount equal to
ut least 80 per cent. of their uninipaired
capital.
The Comptroller follows this suggestion
with the further one for the maintenance
of n safety fund to be provided by grad
uated taxation upon h outstanding cir
culati0n Of the banks until the same shall
be equal to not less han 5 per cent. Of
the total of such outstanding circulation,
this fund to be held by the Government
as an agent only, and for the purpose Of
Immediately redeeming the notes of insol-
vent hanks. 1t is 10 be Immediately re-
plenished out Of the assets of the banks,
on which it shall be a first and paramount
lien, and from assessment to the extent
Of the double liability on the shareholders.