The Portland daily press., 1894-12-11
MR.. EcKELs ON BANKNoTEs.
He Offers Suggestions on Needed Change
in Our Banking System.

Washington, December 10.-Before the
banking and currency committee this after
noon, Comptroller Eckels sketched the
present aspect of the national banking
system, giving the number Of depositoIs,
total capital invested and in circulation
with other statistical information. He said :
Instruments that national banks should be
allowed to issue should be instruments of
complete credit and should be received with
entire confidence by everybody. When it is
contemplated to change the existing bank
ing laws 1t should be done without a rapidi-
ty that would make the change TOO
radical. No change could be made without
a thorough remem brance of the fact that
the deposit principle was the principal one
in this country, itEwas not m ost important
in other countries. That principle of the
national banking system which provided for
the redemption of national bank notes was
the cause of the continual depletion of the
gold reserve. The faith of the people in the
ability of the government to take care OF
the promises of the national banks to pay,
is being continually shaken, and their faith
would continue to waver as long as we be.
lieved we could legislate in money matters
for the benefit of the people of the United
0GdI0S AlOu6s VIC arc OUukc0 " e0ho AAuO
consideration the currency system of the
other countries. Undoubtedly the manly
thing for the United States to have done
would have been to recall for cancellation
these promises of the government to
guarantee the payment of these national
bank notes.
Mr.. Eckles believed that the banks should
be compelled to deposit with the United
States treasury legal tender notes received
in exchange. dollar for dollar not subject
to taxation. The banks should also be made
responsible, not the government, for the
redemption of these notes in gold coin. al
though the government would have to re-
deem them ultimately. Unless there was
sufficient profit in circulation, the bank
would not take out circulation to that ex-
tent, and the already large volume of
national bank circulation would be reduced.
Elasticity in money, Mr.. Eckles maintained,
depended on two things, the demands of
trade, and whether currency could be con-
verted Immediately and not ultimately, into
full legal tender. He believed that making
50 per cent of assets of national banks full
legal tender, convertible Immediately on
demand. would furnish sufficient
elasticity. A requirement that banks should
deposit so per cent of their capital stock
with the United States treasurer in green
backs in exchange for the same amount of
legal tender notes, would put $340,0o0.0O0 in
circulation, taking the place of that amount
now outstanding from the treasury.
Mr.. Eckels said he believed that the gov
ernment should not extend help to banks.
except in SO far as to give the people conf-
dence that there was something stronger
than the banks, themselves behind them.
No system of reserves could stand up
against general demand of depositoTs for
payment of their deposits in coin. as pre-
vailed in 1898. Any scheme devised to in
crease the volume of currency should in
cIude state bank issues. neither they are
safe he would not attempt to say, but this
the committee could determine. The COM
mittee adjourned until 10 a. m. tomorrow.