The Providence news. (Providence [R.I.]) 1891-1906, 1894-12-03
THE CURRENCY.
Important Topic in the Comp
troIler's Report.
Amendment Will Be Necessary to Re-
IIeve The Treasury Of Burdens.

full information In regard TO the organiza-
tion, supervision and liquidation Of the
national banks for the year ending Oct. 81,
1894
1t shows that during this period but 20
banks were organized, with capital stock
or g., 265, ,00o tie smallest number char.
tered, as well "a the minimum amount OF
capital in any one year since 1879. On
Oct 81, 1894, ths total number OF national
banks I'm operation WIS 875S, with an au-
thorlEed capital stock Of ssfssc7i. 800. rep
resented by 2. 900, 076 shares OF stock owned
by 267, I'D shareholders
On OCT. &, 1854. tho date Of their last re-
port Of condition. the total resources OF
the banks were s3,4'B, 9s2, o65, of which
their loans and discounts amountcd 10 ~
oo7, i22, 49, and money OF all kinds In
bank si22, ,42S, 1872. OF their liabilities el,-
S2s, 4ls. $40 represented individual deposits,
and 1854, l2i, ,OSx surplus and net undivided
profits, and si72, ,3Sl, ,9Ts circulating notes
outstanding The total circulation Of ma
tional banks on Oct. 81, 1894, amounted to
S207 Az, ,O08, net decrease during the year
OF 81. 74I, yG9 and gross decrease OF S.
6l4 S64 In circulation secured by bonds.
During the year, 20 banks, with an aQ-
RitSatp cabiOol Vi sitffo,o"i p<r,Sca cuo va
the system by voluntary liquidation, 81,
including two which failed In 1893, with
capital stock OF 81. 77o, 900, became insolvent
and wore placed In charge Of receivers
An Important Topic.
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-issulng powers vested In national
banks. On this subject he says: "No
section OF the law should be. distributed
which cannot he materially improved
upon, and no amendment engrafted unless
such amendment will work out better re-
suits than flow from the existing order OF
things. The present law, it must be con-
ceded, has been successful in every ma
terial feature excepting in tho matter Of
bank note issues. and here the failure has
been but partial enc.
"It is probable that there could be no
better plan for simply insuring the note
holder against loss than the present re-
quirement OF deposit of bonds TO secure
a banks circulation, but 10 Is equally GER
tain, however, that a method could be de-
vised, not less safe in this respect, and in
addition thersto possessing that which Is
essential and Ii now wholly wanting
elasticity.
THE complaint. therefore, made against
the present system Is that, lacking in
elasticity OF issue, it fails to meet as fully
rs 10 ought the varying wants CT tho coun-
try's trade and commerce. This defect
must attach to every scheme for currency
issued by the banks against q deposit Of
bonds, the market value of which huctu-
ates, while the percentage Of issue less
than the value Of the bonds granted the
banks rem aims unchanged.
1T is respectfully suggested that not
only as good, but better results would be
attained il the present bank act were
amended by repeating the provision
thereof requiring each bank, as prerequi-
bite TO entering the system and issuing
bank note currency, to deposit governments
bonds. In lieu of such provision should
be substituted one permitting the banks
to issue circulating notes against their
assets to an amount equal to at least 30
per cent OF their unimpaired capital"
The comptroller follows this suggestion
with the further one for the maintenance
OF safety fund Co be provided by graduated
taxation upon the outstanding circulation
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 tho government as an agent
only and for the purpose Of Immediately
redeeming the notes of insolvent banks.
1t is Immediately to be replenished ont Of
the assets Of the banks en- which 1t shall
have first and paramount lien, aud from
assessment to the extent of the double
liability on the shareholders.
The comptroller then cites such proof
and gives such statistics as seem TO him to
make tho plan suggested perfectly safe
one to enter upan. He says: The changes
thus outlined will, upon investigation, IL
is believed, prove Co be safe I'm affording
complete security 20 the note holder and
give TO the business interests of the ooun-
try bank note issue responsive 20 their
needs
THE profit upon the issue of circulation
70 the banks by suoh change would be 50
augmented that it is giving TO them n
franchise, for which it is suggested they
should be called upon 20 make proper re-
turns to the general government. This
return shouIs. ..-,, i.O~eyor, ,e OF such a
character as Ia defeat the ends sought I'm
the privilege given" Mr. Eckels contends
that ought 70 be wholly free from the di-
rect issuing and redeefning Of notes to
pass as money among the people.
The legal tendor issues, thc comptroller
thinks ought 90 be redeemed and can
celled, and the government mus be
enabled 10 retire from the banking bust.
ness, a business for which IL Is so poorly
equipped. I'm the light of the present
condition OF the governments finances, Z"
the comptroller continues, that which
ought 60 have been done when there was a
surplus In the treasury cannot now be un-
dertaken, and the same conditions must
continue Go weaken the country's credit
and plague the lines OF business, unless a
means is devised for removing these
issues from the channel Of current re-
Cemption until such time as the govern
mont finds itself In n position to do that
which ~ Grst was the intent of all--gradu-
ally redeem and cancel them.
1T Is suggested that ~ psees.sry Gle
mont TO the securing OF psopsr elasticity
81 Issue la our bsnk nots currency, section
., act July ~. 1902. regulating the retire
mcnt and Issuing of circulation 70 banks
within a aked portion OF time, should be
repealed, aad also that An ainendnsnt