Rocky Ford enterprise., 1894-12-06
.lK. ECKEL'S SCHEME.
eAvoRs THE NATIONAL BANKS.
He Would Give Them the Exclusive PrivI-
lege of Issuing All the Paper Currency,
Based on Deposits of Fifty Per Cent.
Of the Circulation.

lego of Issuing All the Paper Currency,
Based on Deposits Of Fifty Per Cent.
Of the Circulation.
Washington, Dec. 2.-The report of
Hon. James H. Eckels, comptroller of
currency, to be submitted to Congress
tomorrow, gives full Information In
regard to the organization, supervision
and liquidation of national banks for
the year ended Oct. 80, 1894. 1t shows
that during this period but fifty banks
were organized, with a capital stock Of
$5,285, 600, the smallest number char
tered, as well as the minimum amount
Of capital, in any one year since 1879.
OF these new banks, 27 are In the
Northern and Eastern states, 10 In the
Southern states and 13 In the Western
transmississippi division.
On Oct 81, 1894, the total number of
national banks In operation was 3,756,
with an authorized capital stock of
72,671 1856. represented by 7,955,976
shares of stock, owned by 1892
shareholders.
On Oct. 2, 1891, the date of their last
report Of condition, the total resources
Of the banks were $3,473,922,O5 of
which their loans and discounts
amounted to S2,OO7, 122, ,191, and money
Of all kinds in bank, $422 ,42s, 1872. OF
their liabilities. $1,72s,41s,s10 repre-
sented individual deposits, 1884, 121 ,OS2
surplus and undivided profits, and
S172 1881 ,97S circulating notes outstand-
ing. The total circulation of national
banks on Oct. 81, 1894, amounted to
$297 ,472, COB. net decrease during the
year Of $1,741 ,563, and gross de-
crease of S,614,SG4 In circulation Sc
cured by bonds.
During the year, 10 banks, with an
aggregate capital stock of S1O,475,OOO,
passed out Of the system by the volun-
tary liquidation; 81, including two
which failed In 1893, with n capital
stock of $2,T7O,GnO, became insolvent
and were placed in charge Of receivers.
The feature of the comptrOller's re-
port is his discussion Of the currency
question and the defects which are
said to exist in the note-issuing powers
vested in national banks. On this SUBJ
ject he says:
mo section of the law should be
disturbed which cannot be materially
Improved upon, and no amendment
will work out better results than fol-
low from the existing order Of things.
1t Is respectfully suggested that not
only as good but better results would
be attained II the present bank act
was amended by repeating each bank
as a prerequisite to entering the sys-
tenn and issuing bank note currency to
deposit government bonds. In lieu Of
such provision, should be substituted
one permitting the banks to issue cir
culatng notes against their assets to an
amount equal to at least so per cent
of their unimpa.red capital
The comptroller follows the sugges-
ton with the further one for the main
tenance of a safety fund to be provid-
Ing 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 as an
agent only and for the purpose of I'm
mediately redeeming the notes Of In
solvent banks. 1t Is Immediately to be
replenished out Of the assets Of the
banks on which it shall have first
and paramount lien and from asseess-
ment to the extent of double liability
on the shareholders. The comptroller
says:
"Whatever other changes, IL any, 1t
would be necessary to make In the
present system relative to current re-
demption of bank notes and the gov
ernment's position toward the same
and kindred matters, it is not neces-
sary to set forth. If the recommended
tons here made, together with that
which will follow, should receive con-
sideration at the hands of congress, Il
bill drawn after careful study and in
vestigation Of the whole subject would
necessarily embody all the details in
cident to a change from bond to 4
safety fund necessary as basis of
bank circulation"
The comptroller then cites such proof
and gives such statistics as seem to
him to make the plan suggested per-
fectly safe one to enter upon. He says:
"The changes thus outlined will, up
on Investigation, it is believed, prove
to be safe In affording complete secur-
ity to the nOteholder and give to the
business interests of the country bank
note issue responsive to their needs
Continuing, the comptroller says:
"The profit upon the issue of circuli-
tion to the banks by such change would
be so augmented that it is giving to
them a franchise for which 1t Is sug-
gested they should be called upon to
make proper return to the general gov
ernment. This return should not, how
ever, be of such a character as to de-
feat the ends sought in the privilege
given. The currency redemption Of the
legal tender issues and the treasury
issues under the act of 1890 and the
re-issuing instead of cancellation Of the
same, must always create distrust of
the governments credit abroad and at
home so long as the laws now upon
the statute book remain unchanged.
"The general government ought to be
wholly free from the direct issuing and
rendering of notes to pass as money
among the people. No government has
ever yet successfully engaged In so
doing, and the experience Of the gov
ernment of the United States has
proven no exception to the rule.
Suggestions have been received from
many eminent sources that the whole
question of banking and currency
system ought to be referred by CON
gress to a commission to be created by
law, appointed by the president, and
clothed with proper authority.
A commission, nOn-partisan In Its
character, composed of men Of emin-
ent abilities could unQuestionably de-
wise a currency system sound In every