The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1897-12-06


of the currency for the year ended Oct.
81, 1897, opens with a brief review of
the history of the legislation which
constitutes the present national act
and invites the attention of congress
to amendments to the law recon-
mended in former reports, without
specifically repeating them.
On the subject of bank note circula-
ton, the comptroller says:
1T is noticeable that in all the
changes which have been wrought IN
the national currency act from it's in
ception to the present time, the Tea
ture subject to criticism, but which was
intended should constitute the princi-
pal benefit to be conferred, has re-
manned comparatively unchanged
numely the note issuing function
Whatever justification there was IN
the first instance for restricting the
issuing of notes against the bonds of
the government deposited with the
treasurer Of the United States to 80
per cent of the par value Thereon. long
since ceased. The report of every
COMPTROLLER of the currency during the
past 20 years, the wisdom OF changing
the existing law so that the banks,
and through them the communities IN
which they are located might have the
additional benefit of an added loanable
capital has been urged.
DESPITE all this the law still remains
without amendment.
THE BANKS HAMPERED.
Not only should the bank act be
amended in this particular, but con-
eress should seriously consider such
change III the method of bank notes IS
sues 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 business
of banking, like every other form OF
Investment, must be made attractive
to capital. If it is placed upon loot
ing different from other undertakings,
embarrassed through unnecessary
restrictions and deprived of proper
sources of profit, the result cannot be
otherwise than that inVeStible capital
viii seek other means of employment,
and to this extent deprive the people
of a. currency most requisite to COM
mercial activity
TT is considered by every great COM
mercial government, except the United
States. to be the sole province of the
banks to issue paper which c1rculateS
as currency.
1.-The belief in a bank note currency
as being better and safer than a gov
questioned in this cOuntry until, after
the apparent exigencies of the war, the
government undertook to issue paper
CURRENCY. Even under such circum-
stances the promise wGs always given,
however. that it should be retired at
the earliest practicable moment and
tie admission made that it was neither
a wise measure nor a safe form OF
CURRENCY.
RESTRICTIONS OF LAW.
"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
increasing prices of bonds required to
be deposited as security, the note is
suing function of the banks had 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 government instead. The danger
of such course is not to be over eSti-
| mated. The experience of every gov
/ ernmental currency paper is a source
| of weakness and danger. In the United
I States where there has been the near
! est approach to success with the vol
; ume of federal paper comparatively
| 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 con-
! fusion. The argument that the govern
| ment. better than the banks. can pro-
vide for the redemption of paper note
| issues, will stand the test Of a careful
analysis. The government has no
means for caring for its demand hens
/ except through borrowing and through
| the levying of taxes. Upon the other
hand, the banks have assets which can
| be promptly converted into cash to
meet the standing notes when pre-
sented.
GOVERNMENT INABILITY.
",rhe ability to command gold has al
| WAYS been beyond that of the govern
ment. the banks have furnished to it
! the amounts necessary to maintain its
solvency. 1t is important to believe
that with q system of bank note issues,
based in part upon securities and IN
mart upon bank assets, the country can
! be provided with the sound. safe and
| elastic bank note issue always COM
! noenst1rate with and responsive to the
| demands of trade. The Bank of Eng
land. the Bank of Scotland and the
Bank of ireland have been found to be
! ample in their resources to provide the
| United Kingdom. The same n true of
| the Bank of France. The Deutsche
Reichs bank, or German Imperial
bank. has for more than 20 years is
! sued bank note paper against assets,
which has maintained its value and
! been so controlled as to successfully
meet the commercial needs
The comptroller calls attention to the
method of organization of this bank
and publishes some interesting statis-
tics in connection Herewith.
NATIONAL BANKS
The total number of national banks
organized since the system was. put
| into operation in 1863 is shown to have
| been 5.O95. On Oct. 81 last there were
| in active operation 3,617, having an au-
I'thorized capital of $3.50, 2S0,295.
/ The total outstanding circulation of
the banks then in operation was 1929,
1873, $780, of which S2O2, 994,555 was Sc
~