Hot Springs weekly star. (Hot Springs, S.D.) 1892-1917, 1894-12-14
EcKELs ON BANK ISSUE.
He Discussesc Currency and the Defects
md Limitations of Present System.

ana Limitations of Present SYSTEM.
The report of the Hon. james III.
Eckcls. 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, is . 1t shows
that during this period bu fifty banks
We're organized. with n capital stock of
$5.2S5,OOO, the smallest number char
tered, as well as the minimum amount of
capital, in any II year since 1870. OF
these banks t%wenty-seven are in the
Northern and Eastern States, ten in the
Southern States, and thirteen in the West
ern or trans-Mississippi division.
On Oct. 81. 1894. the total number of
national banks in operation was 3,75G,
with an authorized capital stock of $672,-
G11,3Go, represented by 7,955,O76 shares
of stock owned by 2S7,S92 shareholders.
On Oct. =, 1884, the date of their last re-
port of condition, the total resources of
the banks We're S3,473,922,Oj5 of which
their loans and discounts amounted to ST.
OOI,122.191, and money of all kinds in
bank. 49, lbs 1872. OF their liabilities
81, 12S,41S,S19 represented individual de-
pcsits, $33334,121,OS2 surplus and net un-
divided profits, and $1I122,3331, 1913 circulate
ing notes outstanding. The total circula-
ton of national banks on Oct. 81, 1894,
amounted to S2O7,472, COB. n net decrease
during the year of S1,741,5G3 and a gross
decrease of $S,614,SG4 in circulation Sc
cured by bonds.
During the year s%eventy-nine banks,
with an aggregate capital stock of $1O,-
415,00o. passed out of the system by vol
untary liquidation; MISUNDERSTANDING
two which failed in 1S93-with IL capital
stock of 50, 100000. became ~insolvent and
We're placed in charge of receivers.
The feature of the Comptroller's report
is 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:
which cannot be materially improved upon
and no amendment engrafted unless such
amendment will work out better results than
flow from the existing order of things.
For the present law it must he conceded 1t
has been successful III every material feature,
excepting In the matter of bank-notc issues.
The notes issued by the banks under govern
mental supervision have been uniform in ap-
pearancc and under amy and all %circnni-
port to- carry. They have possessed the first
requisite of q good bank note issue-immedi-
ate convertibility into coin upon prcsenta-
ton.
1t is probable that there could be no better
plan for simply .insuring the note holder
against loss than the present requirement. of
a deposit of bonds to secure n bank'sc ircula.
tion. but 1t is equally certain, however, that
q method could be devised. not less safe in
seasing that which is essential and is now
wholly wanting-elasticity of issue. The COM
plant, therefore, n against the present
il falls to meet as fully as it ought the vary.
ing wants of the cOuntry's trade and COM
merce. This defect must attach to every
against slninsa a deposit Of bonds, the market %iias
value of which fiuctuates while the percent,
age Of issue, less than the value. of the bonds
But serious as is this fault and retariful
us 1t is to the business interests Of the coun-
try, any attempt to remedy 1t which should
the present unquestioned credit and con-
vertibility Of the bank issues Of the country
could not be justified. It is a duty Of govern
ments to see that the currency which circu-
lates among. the people shall always be Of
the very highest sts ehaT Eu the soundness Of
- Edr tb; snou, xaa meve Fl. oe am a saic,ect n e1 iInqS Sny:
had such a bank currency. and having seen
the value of 1t both here and abroad they will
not be content to have my innovation made
equal but better results.
1t Is respectfully suggested that not only
as good but better results would be attained
II the present bank net were. amended by re-
pealing the provision thereof requiring each
bank us q prerequisite to entering the sys-
TEN and issuing bank-nOt 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
at least 80 per cent. Of their unimpaired
The Comptroller follows this suggestion
with the further one for the maintenance
of a safety fund to be provided by grad
uated taxation upon the outstanding cir
culation of the banks until the same shall
be equal to not less than 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 redccming the notes of insol-
vent hanks. 1t is to be Immediately re-
plenished out of the assets of the banks,
on which it shall be n FIRST and paramount
lien. and from assessment to the extent
of the double liability on the shareholders.
Miss Della Shenk, n respectable young
Il vnnnA hoe ~orrA>~s.-1- As--------R