The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1894-12-03

Washington, Dec. 2.-The report Of
Hon. James H. Eckels, comptroller Of
the currency, submitted to Congress
today, gives full information in regard
to the organization, supervision and
liquidation of the national banks for
the year ending October 81, 1898. 1t
shows that during this period but fifty
banks were organized. with a capital
stock of s., 2S5, 900, the smallest number
chartered, as well as the minimum
amount of capital, in any one year
since 1879. OF these new banks twenty
seven are in the northern and eastern
states, ten in the southern states and
thirteen III the western and transmits
sissippi division.
On October 81 1894, the total number
of national banks in operation was s.
G56, with an authorized capital stock of
!. $672, 671, 1866, represented by 7,955,076
Sshares of stock, owned by 2S7.S92 share
Aplders.
TOn October 2, 1894, the date of their
last report of condition, the total re-
sources of the banks were So, Az, 922, 055,
of which their loans and discounts
amounted to s., 007, 122, 191, and money
their liabilities, SLIPS, 41S,S19 represen-
ted individual deposits; 1884, 121 0S2 sur
plus and net undivided profits, and
SIP, S31, 97S circulating notes outstand
ing. The total circulation Of national
banks on October 81, 1894 amounted TO
$207, Az, COS, a net decrease during the
year of 81, 741, 1858, and q gross decrease
of SS,614, S64 in circulation secured by
bonds.
n,,,.ir,e~ tho x,aar cavaDtvpina hanks
with an aggregate capital stock of
SO, 475, 000 passed out Of the system by
voluntary liquidation; twenty-One, in
eeluding two which failed in 1898, with
q capital stock of 900, became in
solvent and were placed in charge of
receivers.
The feature of the comptrolier'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 sub
1ect he says:
mo section of the law should be dis
t@lrbed which cannot be materially i'm
pEoved upon and no amendment en-
grated unless such amendment will
work out better results than follow
frkm the existing order of things.
tFrom the present law, it must be
conceded it has been successful in every
material feature excepting in the mat
ter Of bank note 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 a good
bank note issue-immediate converti-
bility in coin upon presentation.
ct is probable there could be no bet
ter plan for simply insuring the note
holder against loss than the present
requirement Of a deposit of bonds to
secure a banks circulation, but it is
equally certain, however, that a method
could be devised, not less safe i'm this
respect and in addition thereto, possess
sing that which is essential and is now
wholly wanting-elasticity of issue
The complaint, therefore, made against
.1he present system is that, lacking in
elasticity of issue, it fails to meet as
4 fully as it ought the varying wants of
the country's trade and commerce. This
defect must attach to every scheme for
a currency issued by the banks against
deposit of bonds, the market value
of which fiuctuates while the percent
age of issues, less than the value of the
bonds granted the banks, remain I'M
changed.
1T must also be wanting in such a
face of a pressing need, occasioned by
a light money market or other reasons,
in securing and depositing the bonds
required and taking out the circulation
thereon.
But serious as this fault and re-
tardful as it is to the business of this
country, any attempt to remedy it,
which should lose sight of or in any
, wise make less certain the present I'M
questioned credit and convertibility of
the bank issues of the country could
not be justified. 1t is a duty Of gov
ernments to see that the currency
which circulates among the people shall
always be of the very highest charac-
ter, the soundness of which should new
er be a subject of inquiry.
For thirty years, the American peo-
pie have had such a bank currency,
and, having seen the value of it, both
here and abroad, they will not be con-
tent to have any innovation made IN
less such new departure insures not
only equal but better results. 1t is re-
spectfuliy suggested that not only as
good but better results would be at
tanned 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 bank note currency to deposit
government bonds. In lieu Of such pro-
uniting the banks to issue circulating
notes against their assets TO an amount
equal to at least so per cent Of their
uninpaired capital"
The comptroller follows the sugges-
ton with the further one for the main
tenance OF safety fund to be provided
. by graduated taxation upon the out
standing circulation of the banks until
the same snail be equal to not less
than 5 per cent of the total of such out
standing circulation, this fund to be
held by the government as an agent
only and for the purpose of immedi-
ately redeeming the notes of insolvent
banks. II is Immediately to be replen-
ished out of the assets of the banks on
which it shall be first and paramount
liels and from assessment to the extent
of Double liability on the shareholders.
Tie comptroller says:
*WhafeVer other changes. If any, il
woLta Sbe necessary to make in the
present system relative to current re-
demption of nix notes and the gov
ernments position toward the same
and kindred M tiers, it is not neces-
sary TO set forth. IF the recommended
lions here made, together with that
which VIII follow, should receive con-
sjderation at the hands of Congress. a
bin drawn after careful study and in
vestigation Of the whole subject would
necessarily embody all the details in
c.dent TO a change from q bono TO a
safety fund necessary as a basis CT
bank circulation"
The comptroller then cites such
proof and gives such statistics as seem
10 him to- make The plan suggested a
Perfectly safe one to enter upon He
saws:
The changes thus outlined will, up
Son investigation. it is believed, prove
TO be safe in affording complete secu-
fifty to the noteholder and give to the