The morning news. [volume] (Savannah, Ga.) 1887-1900, 1896-12-13
Ecke1., Curreney scheme.

EckeIs' Currency scheme.
Is there any probability that the scheme
for reforming the currency, presented by
Controller Eckels in his annual report.
will be favorably received by the country
and congress? one great objection that
will be urged against 1t is that it Is only
a modification OF the national banking sys-
TEN, and against that system there is
great prejudice. But is the prejudice a
reasonable one? Can the national bank
ing system be so modified that 1t will over
come the currency evils of which the peo-
pie complain? MIR. Eckels thinks 1t can.
What is the chief evil complained Of? It
is that the tendency of the currency is to
collect in the principal money centers,
leaving the great part of the country with
out sufficient currency for legitimate busi-
ness purposes.
How does Mr. Eckels propose to over
come this evil? The suggestions contained
in his report are as follows: Permit ma
tional banks having a capital Of $4,000
to be organized in towns that have not less
than 1000 inhabitants; allow national
banks to establish branch banks in towns
having not less than 1000 inhabitants,
these branch banks to issue no notes. ex-
cept those of the parent banks; permit
the banks to issue notes to the amount
of the par value of the bonds to be de-
posted for the security of notes and re-
duce the tax on note issues to one-fourth
of per cent
Mr., Eckels. who has given this subject
a great deal of thought, believes if the
scheme he proposes were adopted there
would be no complaint about a lack of
currency for legitimate purposes in any
community.
There is one objection to this scheme.
viz: The high price of government bonds,
which are the basis of bank note issues.
Mr.. Eckels seems to have had this in
mind, because he favors calling in the
greenbacks and issuing a low interest
bearing bond in lieu of them. A bond
bearing per cent. interest, or perhaps
21s per cent, could be hoated at par, and
it could be used as the basis for bank
note issues. With bonds obtainable at
about par and the tax on bank note Is
sues reduced to one-fcurth of l per cent,
a bank could very well afford to issue
notes to an amount equal to the amount
of bonds deposited.
But what is to hinder flrst-class state.
county and city bonds from. being made
the basis of bank note issues? 1t is true
that the bonds of many towns and coun-
ties are not worth par, but the actual
value of these bonds could be determined
by the controller of the treasury, and
be might be clothed with authority to say
which of them could be used as a basis
for currency: and also the value which
should be placed upon them for currency
purposes. A close watch would have to
be kept upon them because their market
value is subject to considerable fuctua.
lions. When the price of them declined
additional bonds would have to be de-
posted.
If Mr.. Eckels should include state, coun-
ty and city bonds in his scheme the
chances are it would receive very thought
full consideration.
Another cause of hostility to national
banks is the belief that they are monopo,
lies and Cypress the people. This objec-
ton is not well founded. National banks
are not monopolies. There is no law to
hinder anybody from going into the bank
ing business. and national banks do not
Cypress the people. Last year their net
profits amounted to only about 5lA per
cent. on the capital invested in them. 1t
is true they are not permitted to loan
money on real estate, but then it must be
remembered that it is against sound bank
ing to lend money on that kind of prop
erty, because it cannot be quickly turned
into cash. A bank that loans largely on
real estate is pretty certain to fail If 1t
has an imperative demand for a large
amount of money.