The San Francisco call., 1897-12-06
ECKBLS ON
NATIONAL
CURRENCY
Recommendations Made
in the Report of the
Comptroller.
BANK-NOTE CIRCULA-
TON.
Paper Money, He Says, Should
Not be Issued by the
Government.
IMPORTANT LEGISLATION is
REQUIRED.
Changes that Would Cause Greater
Elasticity and Aid Trade
and Commerce.
Paper Money, He Says, Should
Not be Issued by the
Govern ment.
IMPORTANT LEGISLATION is
REQUIRED.
Changes that Would Cause Greater
Elasticity and Aid Trade
and Commerce.
Special Dispatch to THE CALL
CALL OFFICE, RIGGS House,
WASHINGTON Dec. 3.

J
The annual report OF James H. Eckels,
Comptroller of the Currency, for the year
ended October 81 1897, opens with a brief
review of the history OF the legislation
which constitutes the present national
Sank act, and invites the attention of Con-
gress to amendments to the law recon-
mended in former reports without specific
ally repeating them. On the subject OF
bank-note circulation the Comptroller
says:
at is noticeable that in ell the chan ges
which have been wrought in the national
currency act from its inception to the
present time the feature subject to criti-
clsm, but which was intended should con-
stitute the principal benefit to be con-
ferred, has remained comparatively un-
charged namely, the note issuing funo-
ton. Whatever justification there was n
the first instance for restricting the issuing
OF notes against the bonds of the Govern
ment 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 twenty years the
wisdom of changing the existing law so
that the banks aud through them the
communities in which located, might
| have the additional benefit OF an added
Ioanable capital, has been advised, but
despite all this the law still remains with
out amendment.
Not only should the bank act sbe
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 to more
adequately meet the demands of trade
and commerce in all sections of the coun.
| try. The business of banking, like every
other form of Investment must be mad G
attractive to capital. If it is placed upon
4 footing different from other undertak-
| ings embarrassed through unnecessary
restrictions and deprived OF proper sources
OF profit. the result cannot be otherwise
| than that investable capital will seek
other means of employment, and to this
extent deprive the people of the Dement'S
of the agency most requisite to CONNER
ciaI activity.
1T is considered by every great CONNER
clal government, except the United
States, to be the sole province of the
banks to issue paper which circulates as
currency. The beilef in d bank note cur
! rency as being better and safer than a
government paper currency prevailed
until questioned in this country; until
under the apparent evidences of war the
Government undertook TO issue paper
| currency. Even under such circum.
| stances the promise was always given.
however, that it should be retired at the
earliest practicable moment and the ad-
mission freely made that it was neither
wise measure nor safe form of currencv.
between the com petition of the gov
eminent 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 is uing function of the
banks had been permitted to become
merely an incident to the conduct OF the
national banking associations of The coun-
try. 1t has been seriously suggested more
than once that the bank note issues be
done away with and ali paper be issued
by the government instead. The danger
of such a course is not to be over-esti.
mated. The experience of every govern
ment has been that governmental cur
rency paper is a source of weakness and
danger. In the United States where there
has been the nearest approach to success
with the volume of the Federal paper
com paratively limited in amount, the
credit of the Government has been more
than once put in jeopardy through it and
the business interests of the country sub
1ected to unnecessary loss and confusion.
"1he argument tnat the GOvernment
better than the banks, can provide for the
redemption OF paper note issues will
stand the test OF a careful analysis The
Government has no means for caring for
it's demand liza bilties except through bor-
rowing and through the levying of taxes.
Upon the other hand, the banks have as
sets which can be promptly converted
in TO cash to meet their outstanding notes
when presented. Their ability to COM
mand gold has always been beyond that
exigency which has confronted the Gov
ernment, the banks have furnish 10 it
the amounts necessary to maintain its
solvency. 1t is impossible to believe that
with a system OF bank note issues based
in part upon securities and in part upon
bank assets, the country cannot be pro-
vlded with the sound, safe and elastic
bank note issue, always commensurate
with and responsive 10 the demands of
trade. The Bank of England, the Bank
OF Scotland and the Bank os Ireland have
been found to be ample IN their resources
to provide the n ote issues for trade with
the United Kingdom.
"The same is true of the Bank of France
The Deutsche Reichs bank, or German i'm
perial bank has for more than twenty
two years issued bank-note paper against
assets which has maintained its value
and has been so controlled as TO success
fully meet The commercial need of the
empire"
The Comptroller calls attention to the
method of organization OF this bank and
publishes some interesting statistics in
connection Herewith.
The total number o; national banks or