Kansas City daily journal., 1897-01-24

| which, instead OF having been source OF
profit, has been source of direct loss OF
hundreds of millions 10 the people.
DO the national banks make as much
now as they did in the past?'
1 No was the reply. For some time al
| ter their organization the percentage OF
| profit was large. During recent years the
| profit has steadily fallen; so that. taken
| throughout the period of twenty-seVsl
! years. for which the figures are TO be OBJ
| tanned, the average dividend on capital and
! surplus invested in national banks has been
! only Ga per cent. A considerable number
| OF the banks continue 20 add their diVl-
| dends to their surplus. Others have been
compelled 10 charge off losses sustained 10
their surplus, so that many, banks during
| the past few years have either paid small
| dividends or none at all
Are National Banks Safe.
How about the safety of national banks.
| Mr.. Eckels? Is ones money safe in them?"
AS to the safety of the national bank
| iEg system was the reply, the best test
| IS the statistics. These show that of the
| 5.C55 banks organized since the beginning
| of the system only l.32S have passed into
| that these. on the average, taking the
| closed and not closed. have paid in the
| ncighborhood of 10 per cent to their de-
| positors. When the banks now being liqui-
! dated have been closed this percentage will
| be even larger. The security of the note
holders in national banks is rs YOU know
| such that no note holder has ever lost any
| thing
Bank Officials and Bank Examiners.
How are the banks examiner"
The banks have TO send reports Of their
condition to the controller five times every
| year. and these reports are published. They
! are also examined by examiners appointed
| by the controller. The examiners report
| to the controller and Ii is their business to
| ascertain whether the capital stock of the
! bank is impaired. If it is impaired the con-
! troiler has TO levy an assessment upon the
| shareholders 10 make such impairment
good. The duty of the controller Is wholly
supcr'lsory. however, and II does not in
any way rGhcNe the ofhcers ana directors
| Of the bank from the duties placed upon
| them. The controller can suggest methods
of safety, hut it rests with the officers of
| the bank and the directors to accept these
suggestions or not. He can suggest meth
ods of bookkeeping and the duties which
directors should discharge. If the direct
ors and officers do their duty there is little
danger that bank will fail. but unless
they give attention to such duties 3G5 days
| in every year it is unfair to expect the SUI
perVising officers to accomplish the COM
plete safety of such banks in two or three
examinations year. believe that the
supervision of the controller has prevented
the failure of many banks. though il may
be that there are here and there cases
where facts have been overlooked which
might have prevented failures. [ think
that such instances however are much
less in number than the banks which have
controller
What Uncle sam Owes.
But will not the national banks stop
with the payment of our government debt
Mr.. Eckeis?'' asked
Not necessarily So" was the reply.
| when the government bonds are paid
some other note issuing device will he OBJ
tanned and substituted. Such n plan has
obtained in Canada and is the basis OF
what is known as the Baltimore plan, as
well as that suggested by Secretary Car
Isle two years ago to congress-.
What do we owe. anyhow, Mr.. Eckels:
debt?"
~ u can give you the figures to June 30.
BON Bonded debt Iat was Rs s7 SsF m s bearing
1T is enough" said I And what inter-
est do We pay upon it?''
Last year our interest account amount
ed TO more than S35, 900. .OOO''
Was not that a great deal?' / asked.
1T does seem large, but when you figure
paid on the whole averages only AZ per
cent This is much lower than the inter
est rates which prevail in the dealings of
private individuals or corporations.
Cleveland and the Bonds.
How about the bond issues, concerning
which Cleveland has been so much crit
icised?'
1.-The issuing of bonds by the present ad-
ministration was necessary from the fact
that it was essential to the maintenance
of the credit of the government that its de-
mand obligations known as greenbacks
and Sherman notes should be redeemed in
gold, in accordance with the enacted legs-
lation of congress. which declared it TO be
the policy of the government that the va
rious forms of money in circulation should
be kept at parity. Some of the money OBJ
tanned from the bonds was no doubt used
for meeting the deficiency made by lack of
revenue, but in the first instance the bonds
We're issued for the purpose stated, and
had ii not been for the law made for that
purpose they could not have been issued at
all. ! think the administration is entitled
to the very greatest credit for having
maintained the parity of gold and silver
and having prevented loss of national
and individual credit. The amount of in
terest charged is insignificant compared
with the loss that would have come to
every individual citizen il the government
had permitted itself to go on a silver basis
What the people will pay in taxes TO meet
this interest charge is Il trifie as to what
they would have had to pay if any other
policy had been pursued. Had these bonds
not been issued the governments obliga-
tions would have had to be redeemed in
silver. The law TO maintain the parity of
the metals would have been repudiated
I and our credit both national and individ-
ual, would have been lost Every foreign
investor would have withdrawn his money
from the United States and every lender of
foreign capital would have refused to send
money here.
30 Per Cent of Business ON Credit.
1T is said Mr.. Eckels that we have not
enough money in the country TO do the
business. Is that true?"
Il believe" replied the comptroller, that
the volume of currency in circulation at
the present time is of less Importance than
the quality of the currency. You will see
this when you consider the enormous
amount that credit has to do in the carry
ing on of our business to-day. The need of
actual money has grown less and less 1t
has been found on careful investigation
that the average use of credit instruments
in the business transactions of this coun-
try and others where banks of discount
and deposit prevail is over 90 per cent. The
use of cnecks. drafts and bills of exchange
in making transfers of money makes every
dollar in use an efficient dollar so that in
stead of supporting single transaction, it
supports many.
More Banks and More Faith.
What is needed" continued Mr. Eckels
lis an enlarged opportunity of obtaining
credit on the part of those who are en-
titled to it, This would come through the
establishment of banks of deposit and dis
count and the branches of such banks. 1t
is demonstrable that the whole surplus
loanabla capital of the world is always
available to the people of every country
where credit Is maintained and where in
Ncstments are offered which promise n fair
margin of profit. Modern methods of
banking and modern methods of Transport
tation make 1t immaterial whether the
volume OF money in the world is greater