The Washburn leader. [volume] (Washburn, McLean County, N.D.) 1890-1986, 1897-12-18

Province of the Banks - Governs
mcnt Paper C%urrcncy a source OF
Weakness.
Washington, Dec. 1.-THE annual report
of James H. Eckels, controller ofSthe
CURRENCY, for *ha year ended Oct. 81, 1897,
opens with a .irief review. of tile history
of the Legislation which constitutes the
pres en: natiopal' rank act, and invites the
atten ti;.t, of congress to. amendments to
the law recommended in former reports
without specifically repeating them. On
the subject of bank note circulation the
controller says:
at. Is no;iaeal%e-tl.a in all the changes
which .hav% been t1cHaht in the national
currency act t.cm it's Inception to the
present .t..1e. the feature subject to crit1-
cism, but Thici: c.:S irit.::ided should con-
stitute tie principal benefit to be con-
ferred, las remained comparatively I'M
changed, namely, the. note issuing func-
ton. Whatever justification there was in
the frs: instance for restricting the issu..
ing of notes against, the bonds of the
government, deposited with the treasurer
OF. the United States to 80 per cent of the
par value thereof, has lo-ax since ceased.
In the report of every controller of the
SuiielCy uuIlIlS me HaSl twenty years
the wisdom of changing the existing law
SO that the banks, and through them the
communities in which located might
have the additional benefit of the added
loanable capital, has ta.en urged. Despite
all this. the law still remains without
amendment. Not only should the bank
act be amended in this particular, but
congress should seriously consider such a
change in the method.of If:
Bank Note Issues
as will enable the banks of the country
to more adequately meet the demands
Of trade and in all sections
Of the country. The business of bank
must be made attractive to capital. If
it is placed upon a footing different from
other undertakings, embarrassed tnrctEn
unnecessary restrictions n deprived of
proper sources of profit, the re:I!t can
MT be otherwise than that capital for
investment viii ss.k other means of en-
ployH:ent, and to such nrexten deprive
the people of inc benefits OF the agency
most requisite TO c;aM activity. -,
1T is considered by every great. conn.,.
mercial government except the United
States to be the sole province Of the
banks to issue the paper which %circulates
as currency. TIE belief ina bank note
currency as being better and safer than
a government paper currency prevailed
unquestioned in this country until, under
the apparent cxigencies OF the war, the
government undertook to issue paper cur
rency. Even under such circumstances,
the promise was always given, however.
that it should be retired at the earliest
practicable moment and the admission
freely made that it was neither a wise
measure nor a safe form Of currency.
Between the competition of the govern
ment note issues on the oue hand and
the unnecessary restrictions imposed by
Ia Y,nnn tho nf1,or kaoakIa~ xr,st1, <hn
increasing price of bonds required to be
deposited as Security, the n1te-issaing
function of the banks has been permitted
to become merely an incii ant 10 the con-
duct of the national banking assccia-
lions of the country. 1t Gas been seri-
ously suggested more than once that the
bank note issues be doha away. with
and all paper be issued o.! the govern
ment instead. The =
Danger of such q Course
is not to be o~verestimated. The expe-'
rience of every government has been that
governmental currency paper is q 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 comparatively limited
in amount, the credit CT the government
has been more than once p.:t in jeopardy
through it n the business interests Of
the country subjected 10 unnecessary loss
and confusion.
1.-THE argument tina the government
better than the banks can provide for
the redemption Of paper note Issues will
not stand the test OF a carefu; analysis.
The government has no means for caring
for its demand liabilities, except through
borrowing n through the !evying of
taxes. Upon the other hand. the banks
have assets which can be promptly. con-
verified into cash to meet their outstanding.
notes when presented. Their ability to
command gold has always been beyond
that OF the government, for in each finan-
cial exigency which has confronted the
government the banks rave furnished
its solvency. 1t is impossible to believe
that with a system of bank note issues,
based in part upon securities, and
In part upon ebank assets, the
country cannot be provided. with
a sound, safe and elastic bank
note issue, always commensurate with
and responsive to the demands of trade.
The Bank of England, the Bank of Scot
land and the Bank of iceland have been
found to be ample in their resources to
provide the note issues for use in the
trade of the United Kingdom. The same
Is true of the Bank of France. The
Deutsche Reichsbsnk, or German ,Impe-
years issued a bank note paper against
assets which has maintained its value
and has been 50 controlled as to SUCCESS. |
fully meet the commercial needs Of the +
empire.
The controller calls attention to the
method of organization Of this bank, and !
publishes some interesting statistics in
Herewith. 2
The report contains the latest complied
statistics relative to the worlds none
tary systems and the stock of gold. all.
yer and ape currency. A very Interest.
irE feature of this statement is. the ner
capita amount of each kind of money in
the countries named. Tie per carita
averages in the principal countries of. the
world are as follows. United statai:.,
S2s.1O, United Kingdom, y$2O.65: France.
$3a.6s: Germany, $1s.05; .Austria-Hun.
gary, 1888, and Russia 1896. TheEcen.
troller renews his recommendation Of last
year, urging that national bank examin
ers be paid an annual salary instead 81
Mgr. schroeder's New job,
Berlin, Dec. 7.-Rt. Rev. Mgr. joseph
Schroeder, late professor Of doematic
theology at the Catholic University At
washington. has been annolntoi ~