Kansas City journal. [volume] (Kansas City, Mo.) 1897-1928, 1897-12-06

~ ment deposited with
the treasurer of the
United States to 80
James II. Eckles. per cent of the par
value thereof long since ceased. : In
the report of every comptroller of the cur
rency during the past twenty Years. the
wisdom of changing the existing law so
that the banks, and through them the
communities in which they arei located,
might have the additional benefit of an
added loanable capital, has been urged.
Despite all this. the law. still remains
without amendment.
banking Must He Made Profitable.
Not only should the bank act be
amended in this particular. but congress
should seriously consider such a change
, IN the method of bank note issues as will
enable the banks of the country 20 more
4. adequately meet the demands of trade and
commerce in all sections of the country.
= The business of banking. like every other
form of investment. must be made attrac-
tive TO capital. If it is placed upon a foot
ing different from other undertakings, en-
barrassed through unnecessary restric-
uons and deprived of proper sources Of
profit, the result cannot be otherwise than
that capital will seek other means of EN-
ployment, and TO this extent deprive the
people of the benefits of the agency most
requisite to commercial activity.
1t is considered by every great CONNER
ciai government except the United States
to be the sole province of the banks to issue
paper which circulates as currency. The
belief In bank note currency as being
better and safer than a government paper
currency prevailed upquestionably in this
country until, under the apparent exigen-
cies OF the war. the government undertook
10 issue paper currency. Even under such
circumstances, the promise was always
given. however. that it should be retired at
the earlies. practicable moment and the
admission freely made that it was neither a
wise measure nor safe form OF currency
Danger In Government Isxucs.
Between the competition of the govern
ment note issues on the one hand, and the
unnecessary restrictions imposed by law
on the other. together with the increasing
price of bonds required to be deposited as
security, the note-issuirg function of the
banks has been permitted TO become merely
an incident TO the conduct of the national
banking associations of the country 1t has
been seriously suggested more than. once
that the bank note issues be done away
with and all paper be issued by the govern
ment instead The danger OF such a course
is not to be overestimated
The experience of every government has
source of Weakness and danger In the
United States, where there has been the
nearest approach TO success. with the vol
ume of the federal paper comparatively
limited in amount. the credit of the govern
ment has been more than once put in jeop-
ardy through IL. and the business interests
of the country subjected to unnecessary
loss and confusion The argument that the
government. better than the hanks, can
rar.t d.. fr.r--
issues will not stand the test OF a careful
analysis.
Why Bank Issues Are Safer,
The government has 10 means for caring
for its demand liabilities except through
borrowing and through the Ieyyin; OF taxes.
Epol the other hand, the banks have as
sets which can lie promptly converted into
- cash TO meet their outstanding notes when
presented. Their ability TO command gold
has always been beyond that OF the govern
ment. for in each financial exgcncy which
has confronted the government the banks
have furnished 10 it the amounts neces-
saTy to maintain its soiyency.
1t is impossible 10 believe that. with A
system Of bank note issues. based In part
uron securities and in part upon bank as
sets, the country cannot be provided with
a sound, safe and elastic bank aotc issue
always commensurate with and responsive
TO the demands OF trade. The Bank of
England. The Bank OF Scotland and the
Bank of Ireland have been found 10 be
ample in their resources TO provide the
note ISSUES for use in the trade OF the
United Kingdom. The same is true of the
Bank of France. The Deutscfe reichsbank,
or German Imperial bank. has for more
than tweIi1y- years issued bank note
paper against assets, which iIas mil.rrafnei
its value and has been 80 controlled as
10 successfully meet the commercial needs
OF the empire
National Rank Statistics. rN-
The comptroller calls attention TO the
method OF organization Of this bank and
publishes some interesting statistics III
connection herewith.
The total number of national banks or
gauIzed since the system was put into op-
grafton. III iSsS, is shown to have been
5.G9J. ON October q. last, there were in
active operation 3tlI. having an authorized
capital of $3.50. 90, %. The total outstand-
ing circulation of the banks then i'll oper-
alton was s229. 1884, so. of which SeG2. yAi .5isi
was secured by bonds Of :he United States.
and the balance by lawful money deposited
with the treasurer of the lnited States.
The circulation outstanding of all NATIONAL
banks on October II last was $3.50 l3i 0s5, of
which amount sl,55s, 500 was. secured by
bonds held for account of insolvent and
1iquidating banks, and S2G205.525 by lawful
money deposited for their account and by
active banks reducing circulation. The
net decrease in the amount of circulation
secured by bonds during the year WAS
sl2.5s4.SSi. and the gross decrease jim the
total circulation was Si.S5l.2?2.
The 3Gl1 banks in operation are divided
geographically as follows: Five hundred
and cight-eigEt. with a authorized capital
OF Sli9.2Sl, ,62D in the New England states;
$50, with aggregate capital stock of
Slg5 .2I5 in the Eastern states: do with
capital stock of Sou 16l 800, in the South
ern states: l,0i6, with capital stock OF
$3.50. 369. y5l, in the Middle states: a5I. with a
capital stock of So. leo, in the Western
states. and ia with capital stock OF
81. 5000 In the Pacific states.
During the year forty-four banks were
organized, with AN aggregate capital stock
of s6,42aoe During the year seventy-ont
banks went into voluntary liquidation.
InsOIycnt Hank Dividends.
There was paid to creditors of insolven,
hanks during the wear Sla l6a 7sl in divi