The Anaconda standard. [volume] (Anaconda, Mont.) 1889-1970, 1897-12-06
NATIONAL BANKING ACT
Comptroller j. II. Eckle's Recon-
mends Some Amendments.
NOTE ISSUING FUNCTION
The Comptroller Takes this Ground That
1t Is Sources Of Weakness and Dam
ger for the GoVernment-Should
Be Controlled by the Banks.

Washington. Dec 5.-The annual re-
port of James II. Eckles. comptroller
Of the currency for the year ended oct
81. 1897. opens with a brief review OF
The history of the legislation which con-
stitutes the present natior al bank
ruptcy act and invites the attention Of
congress to amendments to the law
recommended in the former report
without specifically repeating them. On
the subject of bank notes circulation,
the comptroller says:
1T is noticeable that in all the
changes which have been wrought in
the national currency act from its In
ception to the present time the feat
nre subject TO criticism but which was
intended should constitute the princi-
pal benefit to be conferred, has re-
manned comparatively unchanged
namely. the note-issuing function.
Whatever justification there was in the
first instance for restricting the issu-
ing of notes against the bonds of the
government deposited with the treas
urer of the United States to 80 per
cent of the par value thereof long since
ceased. The report of every comptroller
of the currency during the past 20
years, the wisdom of changing the ex
listing laws so that the banks and
through them the communities in which
they are located, might have the add
tional benefit of an added loanable
capital has been urged
Despite all this the law still remains
without amendment. Not only should
the bank act be amended in this par
1icular. but congress should seriously
consider such a change in the method
of bank notes issues as will enable the
banks of the country to more adequate
1y meet the demands of trade and COM
at,.YF
The business of banking, like every
other form Of investment, must be
made attractive to capital. If it is
placed upon a footing different from
1he other undertakings, embarrassed
Through unnecessary restrictions and
deprived of proper sources of profit. the
result cannot be otherwise than that
investible capital Will seek other means
of employment and to this extent de-
priye the people of a currency most
requisite to commercial activity.
1t is considered by every great COM
mercial 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 proved
unquestioned in this country until
after the apparent eXigencies of the
war, the government undertook the is
Sut VI paper currency. Even n1lAGi
such circumstances the promise was
always given, however. that it should
be retired at the earliest practicable
moment and the admission may be that
1T was neither wise measure nor a
safe form of currency.
Between the competition of the gov
eminent issues on the one hand and the
unnecessary restrictions imposed by
law on the other. together with the in
creasing prices of bonds required to
be deposited as security. the note is
suing function of the banks had been
permitted TO become merely an Incl
dent TO the conduct of the national
banking associations of the country. Ii
has been seriously suggested more than
once that the bank note issues be done
away with, all paper to be issued by
The government instead. The danger
of such a course is not to be overesti-
mated, The experience of every gov
eminent has been that governmental
currency paper is a source of weak
ness and danger In the United States
where there has been the nearest APP
proach to success with the volume of
the federal paper comparatively limited
in amount. the credit of the government
has been more than once put in jeop-
ardy through it and the business inter.
ests Of the country subjected to un-
necessary loss and confusion. The ar,
Eument that the government, better
than the banks, cam provide for tht
redemption of paper note issues, vii
not stand the test of a careful analysis
The government has no means for car
ing for its demand liens except through
borrowing or by the levying of taxes
Upon the other hand. the banks hay,
assets which can be promptly con
verted into cash, to meet through tn,
standing notes, when presented
The ability to command gold has al.
ways been beyond that of the govern,
ment, for in each financial exigencS
which has confronted the government
the banks have furnished to il In,
amounts necessary to maintain ii,
solvency. II is impossible to believ.
that with system of bark note issues
based In part upon securities and il
part upon bank assets. the countr,
cannot be provided with the sound. SAT,
and elastic bank-note issue AWAY
commensurate with and responsive I,
the demands of trade. The Bank o
England. the Bank of Scotland and tn,