Warren sheaf. [volume] (Warren, Marshall County, Minn.) 1880-current, 1897-12-09
E 2, / IS RBP ORI NJ D h.
Interesting Informa ton Concerns
Ing Natlonal Banks. NJ

ing Natlonal Banks. MI
ComptrolleF o1s the Currency Tells III
the Growth Of the system. ana =
Argaes e Lengith IN Favor OF
Bank Note Circulation.
II Washington. Dec. e-The annual report
OF James H. Eckels. comptroller Of the
currency, for the year ended October 81.
1897. opens with brief review OF the his
tory Of the legislation which constitutes
the present national bank act and invites
the attention Of congress to amendments
"a the law recommended In former reports
without specifically repeating them. IN
aAOnSthe subject Of bank note circulation
the comptroller says: i"It is noticeable that
IN all the changes which have been wrought
IN the national currency act from ITS incep-
tlon 70 the present time the feature subject
to criticism. but which was intended should
constitute the principal benefit to be con-
1erred. mas remained comparatively un-
changed. namely, the note-issuing func-
ton. Whatever justification there was in
the first instance for restricting the issu-
Ing OF notes against the bonds of the gov
eminent. deposited with the treasurer Of
the United States to 80 per cent of the
par value thereof. long since ceased. In
the report Of every comptroller of the cur
rency during the past 20 years the wisdom
$of changing the existing law SO that the
banks. and through them the communi-
ties In which located, might have the ad-
ditional benefit Of an added loanable CAPT.
tai has been urged. Despite all this the
slaWsstill remains without amendment. Not
only should the bank act be amended in
this Esparttcular, but congro S. should SEE
5riously consider such change In the meth
Cd of bank3n note issues as will enable the
banks of the country, to more adequately
meet the demands Of trade and commerce.
IN all sections OF the country. The bust
ness Of banking, like every other form Of
Investment, must be made attractive to
capital II It is placed upon footing
different from other undertakings, embar-
raised through unnecessary restrictions
and deprived of proper sources of oft,
the result cannot beaotherwise han that
investable capital will seek other means Of
employment, and to such an extent deprive
the people Of the benefits Of the agency
most requisite to commercial activity
1T is considered by every great CONNER
cial government except the United States
to be the sole province Of banks to issue
the paper which circulates as currency
The belief In bank note currency as being
better and safer than government paper
currency prevailed unQuestioned in this
country until. under the apparent ext
gencies of the war. the government under
took to issue paper currency. Even der
such circumstances the promise was al
ways given. however, that it should be re-
tired at the earliest practicable moment
and the admission freely made that 1t was
neither wise measure nor safe form of
currency. Between the competition of the
government note issues on the enc hand
and the unnecessary restrictions imposed
by law upon the other, together with the
increasing price Of bonds required to be
deposited as security. the note-issuing
function OF the banks has been permitted
to become merely an incident to the con-
duct of the national banking ASSOCIATIONS
or the country -s .g.4s
1t has been seriously suggested more
than once that the bank note issues be done
away with and all paper be issued by the
government instead. The danger of such
course Is not to be overestimated. ne
experience OF every government has been
that governmental currency paper Is a
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 COW
eminent has been more than once put in
jeopardy through it and the business in
terests Of the country subjected to unnec-
essary loss and confusion.
i THE argument that the government, bet
ter than the banks. can provide for the re-
stand the test of q careful analysis The
government has no means for caring for
its demand liabilities except through bor-
rowing and through the levying of taxes.
Upon the other hand. the banks have assets
which can be promptly converted into cash
to meet their outstanding notes when pre-
sented. Their ability to command gold has
always been beyond that Of the govern.
ment, for In each financial exigency which
has confronted the government the banks
have furnished to 1t the amounts neces-
sary to maintain its solvency. It is i'm
possible to believe that with q system Of
bank note issues based in part upon se-
curities and in part upon bank assets the
country cannot be provided with q sound,
safe and elastic bank note issue. always
commensurate with and responsive to the
demands Of trade. q ~ .,a. -
The total number Of national banks or
ganized since the system was put into op-
GRAFTON in 1863 IS shown to have been 5.O95
On October 81 last there were In active op-
GRAFTON 3.617. having an authorized capital
Of $3.50. $780, 95. The total outstanding cir
culation of the banks then in operation was
1929 199, $780, OF which 500, 1914 .555 was secured
by bonds OF the United States and the bal
ance by lawful money deposited with the
treasurer Of the United. States. The total
circulation outstanding Of all national
banks on October 81 last was $3.50 1871 nos. OF
which amount $1.55S. 800 was secured by
bonds held for account Of insolvent and
liquidating banks and $26.2O5325 by lawful
money deposited for their account and by
active banks reducing circulation. The net
decrease In the amount Of circulation se-
cured by bonds during the year was $12.-
1884 and the gross decrease In the total
circulation was 4.851.29Q. During the year
$A banks were organized with an aggre-
gate capital stock Of $6. 100000 During the
ton. There was paid to creditors Of in
solvent banks during the year $1s.169. 7S1 in
dividends. 49, -
S$s The magnitude Of this unequaled rec
ord" the report says. will more forci-
bly, illustrated II considered in the light Of
what has been accomplished heretofore In
the way OF dividend payments to the cred
itors Of insolvent institutions. In 1893 there