The record-union., 1894-12-03
ing Power.
Special to the RECORD-UNIoN.

hon. James Il. Eckels, Comptroller oi
the Currency, submitted to Congress to-
day, gives full information in regard TO
the organization, supervision and liquida-
ton of the national banks for the year
ended October 81, 1894. IL shows that
during this period but fifty banks were
organized. with capital stock OF $685.
600. the smallest number chartered, as
well as the minimum amount OF capital,
in any year since 1879. Of these new
banks twenty-seven are in the Northern
and Eastern States, ten in the Southern
States and thirteen in the Western or
transmississippi division.
On October 81. 1894, the total number OF
national banks in operation was 3,756.
with an authorized capital stock of S672, +,
671, ,365, represented by 1856, 076 shares OF
stock owned by 2S1, ,S92 shareholders. On
October =, 1891, the date OF the last report
OF the condition OF national banks, the
total resources Of the banks were S3,413,
81, ,055, of which their loans and discounts
amounted to S2,0U7, l22, 1911, and money OF
all kinds i'll bank S422, lbs, 1872. OF their
liabilities 81, T2S, AIS, $40 represented in
dividual deposits, 1884, l2l,062 surplus
and net undivided profits, and Sl72,33l,-
9lo circulating notes outstanding.
The total circulation Of national banks
on October 81, 1894, amounted to 500, ,i72,
6O3, a net decrease during the year of
Sl,74 ,063, and a gross decrease OF SS,6l4,-
S64 in circulation secured by bonds.
During the year seventy nine banks,
with all aggregate capital stock of SI0,-
475, 900, passed out of the system by vol
untary liquidation. Twenty-One, in
Guiding two which failed III 1898, with a
capital stock of S3,710,000, became in
solvent, and were placed III charge of re-
ceivers.
The feature OF the CompIroller's report
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 subject he says:
mo section of the law should be dis
turbed which cannot be materially Y i'm
proved upon, and no amendment en-
grated unless such amendment will
work better results than follow from the
existing order of things. From the pres
ent law it must be considered as success
full in every material feature, excepting
in the matter of banknOte issue, and here
the failure 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 Of the full face value
which they purport to carry. They have
possessed the first requisite Of good
banknote issue-immediate controverti-
bility into coin upon preSen tation.
1T is probable there could be no better
plan for securing the note holder against
loss than the present requirement of a
deposit of bonds TO secure a banks circu-
lation, but it is equally certain, however,
that a method could be devised not less
safe in this respect-an addition thereto
possessing that which1is essential and is
now wholly wanting, elasticity of issue.
The complaints, therefore, made against
the present system is that, having in
elasticity of issue, it fails to meet as fully
as it ought the varying wants Of the
country's trade and commerce. This de-
feet must attach to every scheme for a
currency issued by the banks against i
deposit of bonds, the market value OF
which iuctuates while the percentage OF
issues, less than the value OF the bonds
granted the banks, remain unchanged.
1t must also be wanting in such method
because of the delay in the face of press
ing need, occasioned by tight money
market or other reasons, in securing and
depositing the bonds required and taking
out the circulation thereon.
"But serious as is this fault, and re-
tardful as it is to the business interests
of the country, any attempt to remedy it
which should lose sight OF or in any wise
make less certain the present unuues-
bank issues of the country, could not be
justified. 1t is a duty of Governments to
see that the currency which circulates
among the people shall always be of the
very highest character, the soundnesS of
which should never be subject for in
jury. For thirty years the American
people have had such bank currency,
and having seen the value of it 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 if the present Bank Act were
amended by repeating the provision
| thereof requiring each bank, as a pre-
requisite to entering the system and is
! suing banknote currency, to deposit Gov
| ernment bonds. In lieu of such pro-
vision there should be substituted one
| permitting the banks to issue circulating
notes on their assets 10 an amount equal
at least to 90 per cent. OF their unimpaired
capital"
! The Comptroller follows the sugges-
| tions with the further one of the main
| tenance of safety fund, to be provided
! by graduated legislation upon the out
! standing circulation of the banks until il
! shall be equal to not less than per cent.
| of the total of such outstanding circula-
| llOIl, IlO IIlOn6y W 10 u0lC III JEuSL Dy the
! Government. 1t is Immediately TO be re-
| plenlshed out of the assets, on which il
shall have first and permanent lien, and
! from assessment TO the extent of the
double liability on the shareholders.
The Comptroller says: whatever
other changes, if any, it would be neces-
sary to make III the present system rela-
| tive to current redemption of bank notes
and the Governments position toward
! the same and kindred matters, it is not
necessary to set FORTH II the recon-
mendations here made, together with
that which will follow, should receive
| consideration at the hands of Congress.
d bill drawn after a careful study and in
! vestigation OF the whole subject would
necessarily embody all the details Incl
| dent TO change from bond to a safety
fund necessary as basis of bank circuIa-
tion."
The Comptroller then cites such proof
and gives such statistics as seem to him
to make the plan suggested a perfectly
safe one to enter on. He says: "The
change thus outlined will, upon inyesti.
CATION. it is believed, prove to be safe in
atfording complete security to the note.
holder and to the business interests O
the country bank note issue responsive
TO their needs"
Continuing, the Controller says: "Tht
profit upon the issue of circulation to the
| banks by such change would be so aug
mented that:it is giving to them a fran
chise for which it is suggested they shoulC
be called upon to make proper return [,