Kansas City daily journal., 1897-01-24

weeks. beginning May, 1893. 165 national
banks closed their doors Fifty of these
had TO have receivers appointed for them,
and the others were only allowed to re-
sumo under conditions imposed by the
comptroller Of the currency. At this time
the people lost confidence in the banks.
Thousands of men withdrew their money
and stored IL away in safe deposit boxes.
To-day business men are watching the
banks as they have never done before,
and the real condition of such institutions
is a matter of vital interest to all classes
of our people.
Financial Nerve of the United States.
The man who knows more about our
banks than any other is Mr.. James ii.
Eckels, the comptroller of the currency.
the United States. He has his feelers
reaching out to the banks of every town
and every city. Hundreds of millions of
capital and more than a thousand million
of dollars of deposits owe their safety
largely to his care. All the national banks
have TO report to him. and he has large
corps of bank examiners, or bank detect
ives. who are moving about over the Unit
ed States, and writing or telegraphing him
daily as to how our financial institutions
stand. He is in close touch with the great
est financiers of the country, and the least
change in our financial condition is al
most felt by him before it comes to pass.
Mr.. Eckels is n financial genius He has
one Of the ciearest and coolest heads that
has ever presided over millions in the treas
ury department. Still, he looks like a boy.
He does not appear TO be 90, though VEN
ture he has passed the 40 year mark some
time ago. He makes YOU think more of
an overworked college student than one of
the most responsible officials of our gov
ernment, and his pale. intellectual, smooth
shaven face shows the refinement of Il
scholar. rather than the gross beefiness of
the average overfed politician
The Question of a Panic.
The first question I asked Mr.. Eckels
wien | met him IN the treasury depart
ment to-day was that which begins this
letter. IL was as 10 whether we not
on the edge of a panic. Mr.. Eckels re-
81 think not. I don't see any occasion
which suggests that a panic is possible,
been number of bank failures since No
vember l. but. with the exception of tho
National Bank Of Illinois, in Chicago. the
national bank failures have been unim-
portant both as to capital and deposits.
The number of failures has also been
slight. At the close of the report year of
1896 we had 3.6T9 national banks. and since
thai date several new ones have been
ganized. OF this number only sixteen have
closed their doors within the past ten
weeks. This is a very small record as
compared with the first ten weeks of
What were the causes Of the failures?"
] asked.
The failures were In each instance
brought about by local conditions and local
causes. They resulted either from internal
had management or from the accumula-
tion of assets during a boom period. These
boom assets under the financial depression
which we have had during the past four
years have not been convertible into cash.
Ihey We're not good assets in other words.
and the same banks with the same char
acter of assets in the same management
would. / believe, have failed sooner or
later during d period of ordinary business
conditions 1t can be confidently argued
that the recent failures do not indicate
any such changed condition in the banking
world as to warrant any suggestion
of n panic. On the other hand. our returns
received under the last call. December IL,
leSb for n report OF the condition of the
banks shows them to be stronger in cash
reserves than the law requires. They show
that the amount of their deposits. as well
as the amounts of their loans and dis
counts has increased though of course
the increase of the last two items has NOT
been so large as might have been hoped
for
was expected. Mr.. Eckels?"
No. not in the way of loans and dis
counts. but the reason for this has been
the agitation of subjects both foreign and
oornestlc, which has made INVESTORS timd
ana those having money to lend doubtful
about loaning it. / believe that as soon as
these agitations are at an end we ought to
entet upon a condition of business affairs
which Will give employment to labor and
business TO all conducting the operations of
trade and commerce"
Oar National Banks.
How much money is there in the ma
tional banks to-day2"
According to the last report. made octo.
amount of deposits was 81 lq7, ,Sgl. .O59 -
Where are these hanks2"
They are scattered all over the Unlon''
largest capitalization are in tho Eastern
states. Here YOU have 1.5a9 national banks
with Il capital stock in round figures of
more than Si0l. 900 O0O In the Western
states there are l,aSS such banks with a
capital stock Of more than, Sl1o,eOOOoa
while in tho Southern states there are 55I
hanks with a capital Of more than Sl3S,OOo.>
rs the number of national banks in
No. do not think you could expect
that they would increase during such
period as We are now having. The burdens
Of financial losses fall unon the hanks and
don't think that banking institutions OF
any Kind havo been increasing within tho
last year or ON the other hand. there
hHs been falling of brought ahout hv
tho failure o. sCmo hanks the linuidatfon
Of others. and The fact that there have not
hecu many new banks orcarizcd. l i'm
a@luc that this * true rs - state banks as
well rs 10 national banks
What Is The biggest national bank OF the
'"rhc lar-"st national hank IN poin. Of
deposits is th" National city bank of New
stock are tho American Exchange bank ana
tho National Bank ~ Commerce OF New
lied at S5omCoo.' - ''.'''''-
How National nnnkS Make Money.
Tell me. Mr.. Eckcls. where do the ma
tiopal banks mako their money? They
make lot out OF Uncle sam, do they
'sThey did at first" rcrliod Mr.. FcEels
but not now. When the banks were first
organized there was large amount of
first the circulation feature Of tho hanks
predou!nated. Then the bonds Increased
IN Price. ana under the law which permits
but {" per cont OF the p1r value of the
bonds 10 he issucd 10 the banks in circu,
iatnr notes, tho profits Of the circulation
featuro vanished The most OF the money
made 10y tn" banks now comes from de-
posits and discounts This IS the feature
Of profit in banking In ENGLAND, Scotland.
ireland and tho United States. No. the
profits OF the national banks do not come
from the government.
What Uncle sam MnIscs.
Does Uncle Sam lose anything by the
national banks"
NO, indeed" replied Mr.. Eckels. as he
picked MP & paper OF figures and looked II
over. so far from losing by the national
banks. the government has made n great
deal out OF them. y careful estimate of
the amount Of profit 10 the government
shows that from the organization of the
first national bank up TO the end OF the
report year Of 1896 Uncle Sam has netted
SIS, ,439, ,2is.sS. This amount stands out in