The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1897-12-06

NATIONAL BANK ACT
Comptroller Of the Currency Sub.
mits His Annual Report.
NOTE ISSUING FUNCTION DISCUSSED.
Banks and Not the Government
Should Issue Paper Money.
BANKS CAN COMMAND GOLD.
Attention Directed to Mig Banks OF
BANKS CAN COMMAND GOLD.
Attention directed 10 Mig Banks Of
Europc--lnsoivcnt Bnnks Pnid
Good dividends This Year.

Washington, December 5.--1he snnuM
report OF james IL. Eckeis comptroller OF
the currency. for the year ending octoper
81, 1897 opens with brief review oil the
history OF the legislation which constitutes
the present National bank act and invitea
the attention of congress 10 amendments
TO the law recommended In former reports,
without specifically repeating them,
On the subject OF bank note circulation.
the comptroller says ut 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 feat re sub
Jcct to criticism, but which was intonued
should constitute tho principal benefit TO
be conferred. has remained comparatively
unchanged namely, the note Issuing rune
ton Whatever justification there was IN
tho first instance for restricting the issu-
ing of notes against the bonds OF the gov
crnmcnt. deposited with the treasurer Of
tho United states to % per cent OF the par
value thereof has lung ago ceased. In tue
report OF every comptroller OF the currency
during the past twenty years the WISDOM
OF changing the existing law so that the
banks, and through them the community III
which lcrated, might have the addtuonai
benefit OF IN added loanahle capltal mas
been urged Despite all this the law s,tii
remains without amendment Not only
should the bank Act be amended III tDls
particular but congress should seriously
consider such n change In the method OF
bank notes Issued as Will enable tho banks
OF the country TO more adequately meet tho
demands OF trade and commerce in all sec
| tons of tho country. The business OF nahk-
| ing like every other form oil Investment.
| must b. made attractive to capital. TX
| II is placed upon a footing different from
other undertakings, embarrassed through
unnecessary restrictions and deprived Of
proper source OF profit. the result can not
be otherwise than that unemployed capital
| Will seek other means OF employment ana
| TO such extent deprive the people OF Inc
| benefits most requisite to commercial ac-
tivity.
1T Is considered by every great COM
/ norcial government except the United
States to be tho sole province of
IN. han,ta 10 issuo tho paper cir
eulatos as currency. The belief In a bank
aate as being better than government
paper currency prevailed unques,Ssaed IN
this country until under the apparent ext
gencIts OF the wur the government under
took to issue paper currency Even under
such circumstances the promise was al
ways given however, that IL should be re-
. |
and the admission was freely made that IL
was neither n wise measure nor safe form
Of currency,
between tho competition of the govern
mcnt Issues the one hand and the I'M
necessary restrictions imposed by law upon
the other, together with the increasing
price of bonds required to be deposited MS
security the note issuing functions OF the
bank has been permitted TO be merely an
incident OF the conduct OF the National
Banking associations Of the country. IL
has been seriously suggested more than
once that the bank note issues be done
away with and all paper he issued by the
government instead. The danger Of such a
course is not to be overestmlted. The ex-
periepce of railway government has been
that governmental currency paper In a
source OF weakness and danger In tho
United States. Where there has been the
nearest approach to success with the vol
ure OF the Federal paper comparatively
limited in amount the credit Of the gov
eminent has been more than once put In
jeopardy through II and the business In
terosts OF the country subjected to unneces-
sary loss and confusion.
"The argument that the government, bet
ter than the banks. can provide for the
redemption of paper note issues will not
stand the test OF careful analysis. The gov
ernment has no means for caring for Its de-
mand liabilities except through BORROWINGS
, and through the levying u taxes. Upon The
other hand. the banks have assets which
cau be promptly converted into cash ia
meet pbeir outstanding notes when pre-
scented. Their ability to command gold has
always been beyond thar OF the govern
ment, for in each financial exlgency which
, has confronted the government the banks
! have furnished to II the amounts neces-
sary TO maintain It's solvency. II Is i'm
possible to believe that with system o.
bank note issues based in part upon Sc
curities and In part upon bank assets th'
country can not be provided with sound
safe and elastic bank note ISSUE always
commensurate with and responsive TO tn,
demands OF trade. The Bank OF England
the Bank OF Scotland and the Bank OF Ire
land have been found to be ample IN Their
resources to provide the note issues for us'