The sun., 1897-12-06
BANKSANDT THE CURRENCY.
REPORT OF JAMES H. ECKELs, COMP
TR0LLEfs OF THE CURRENCY.

All tue Hhper CuTrency OF tno NouutrSs
WASHINGTON. Dec. 5.-The annual report of
James II. Eckels. Comptroller Of tho Currency,
for the year ended Oct 81, 1897, opens with
brief reviow Of the history OF the legislation
which constitutes the present National Bank
act. and invites the attention OF Congress to
amendments to the law recommended in former
reports without specifically, repeating thom.
On the subject Of bank note circulation the
Comptroller says:
1t Ia noticeable that in all the changes which
have been wrought in the National Currency
act from its inception to the present time. the
feature subject to criticism, but which was in
tended should constitute tho principal benefit
70 bo conferred, has remained comparatively
unchanged, namely, the uote-issuing function.
Whatever Justification there was In the arst In.
stance for restricting the issuing OF notes
against tho bonds of the Government deposited
with the Treasurer OF the United States, to 90
Per cent Of the par valueN thereof long since
ceased. In the report Of every Comptroller Of
the Currency during the past twenty years the
wisdom Of changing the existing law no tn {
the banks and through them the communities
In which located. might have tho additional
benefit of an added loanable capital, has
been urged. Despite all this tho law
still remains without amendment. Not only
should the Bank act be amended in this particu-
hhF, uuL SOnRTebS SnOulu seriously COnb1Oer buCn
change in the method OF bank-note Issues al
will enable the banks Of the country to moro
adequately meet the demands Of trade and COM
merco ip all sections Of the country. The busi-
mess Of bank king like every other form of invest
mant, must be made attractive to capital. II It
10 placed upon q footing different from other
undertaking. embarrassed through unneces-
sary restrictions. and deprived OF proper sources
Of profit, tho, result can not be otherwise than
that investable capital will seek other means Of
onnployment. and to such extent deprive the
people Of the benefits Of tho agehcy most req
uisite to commercial activity.
1T 10 considered by every great commercial
Government. except tho United States. to be
The sole province Of the banks to issue the paper
which circulates as currency. The belief in Q
bank-note currency as being better and safer
than q Government paper currency prevailed
unquestioned in this country until. under tho
apparent exiSencies Of the war, the Government
undertook to issue paper currency. Even un-
Ger such circumstances the promise was always
given, however. that It should be retired at tho
earliest practicable moment and tho admission
freely made that 1t was neither wise measure
nor safe form Of currency.
Between the competition OF tho Government
note issues on the one hand and the unneces-
eery restrietions imposed BY law upon the Other.
quired TO be deposited as security. the note
lssuing function OF the banks has been permit
Ted to become merely an Incident to the conduct
Of the national banking associations Of the
country. II hae been seriously suggested more
than once that the 9ank-note issIes 6e one away
instead. The danger OF such a course 10 not 10 be
overestimated. The experience Of every Gov
paper IL o source OF weakness and danger. In
the United States, whore there has been the
tie FsdePp paper 30 eo@psrstiVely n' li1iIed IN IN
amount, the credit OF the Government has been
hHn In t.
The argument that the Government, better
Of peper-note issues will not stand the test OF o
careful analysis. The Government has no means
through borrowing and through tho levying Of
taxes. Upon the other hand, the banks have
s TO De
ways been beyond that of the Government. for
the &c dovernment % he banks i have ave ed furnished
- 1t tho amounts necessary to main
' that %is system Of
issIea , based In part upon Ig securities and In IN
Srovided with sound sound, safe. anu elastic bank.
nOte issue. always commensurate with and re-
s9qnsiye 70 the demands % 3 OF trade: The Bank Bank
resources provide tho note for use in the
pf the Bank Of France. The Deutsche ReicbS-
bank, or German Imperial Bank, has for moro
Ssnss Which, has s RaSe
and has been 30 controlled as to successfully
meet the commercial psedS Of the empire"
was issued, on June 20, 1868. to the close Of the
SsOs ysaS Of III iso On Oct 81 last theFs
were In active operation 3,617 banks, having an
total outstanding circulation Of the banks then
IN operation was 1929, 1919, ,ssG, Of which $202.:
geA.65 was secured by bonds Of the United
RoSited with the Treasurer Of the United States.
The total circulation outstanding of all national
emOunt 81 ,55s, 500 was secured BY bonds held
Tor aeeount eco mt Of insolyent and iiquidating banks.
their account and by active banks reducing cir:
oplation. The net decrease in the amount OF
circulation SECURED BY bonds during the year
total circulation was "a, ,s5I ,292.
The 3,6l7 hanks In operation. are divided
led capital stock Of $3.50 2el .62o. in the New
ss,aes 9Ss with n 9bs an sap
ssssss Sth MiSsRa iSRa s.sfsa stosn
iSo Ga'n IN the %eestsrn %Sses1 ss States. and ~
gith capital stock Of si7. .4e5 900 in the Pacific
sstts, Ohio niinois % and Texas lead IN point Of
number Of active banks, Arranged according
70 capital stock. Massachusetts, 10 first. with
Sek327, 800; New York second, with $50. .i69,
$40; Pennsylvania third. with $75. 1893 $50 fol
lowed by Ohio, with $45, ,235, 967; Illinois. with
o97, 7,206.000, and Texas, with $40, ,9S6, 900.
During the year Just closedI44 hanks were or
ganized, located in 10 States and Territories
with an aggregate capital stock Of $4,42O,O 900
The number OF banks which left the system by
reason OF the expiration of their charters during
ne report year was 2, with capital stock o
banks were located In New York and Indiane
and were succeeded by new associations with
eeapital stock Of 800, 900 and circulation o
o2A76O The number OF banks which went int,
voluntary liquidation during the year was II
having capital stock OF So, ,659, 900 and circula
tion Of u. .729.0I0. A comparison with the repor
81 last year shows the number OF banks to hay,
decreased 62. with a decrease of capital stock o
Gil .090.5 800.
OF the q. .337, ia shares issued on July 8, 1897
e.t84. .037 are held by residents OF the States II
which tho banks are located, S73.077 by non
resldsnts. OF which u, ,729 are held by residents
OF foreign countries. The number owned b!
women 10 1,4ls,542.
The investments by residents in the New Eng
land and Eastern States IN the stock OF the ma
tional banks located in tine southern Stnte
amount TO S6,20I60O in tho Middle States
PS.87s, 200; in the Western States, S4.507, 300
In the Pactc States. VI, 1913 600. and In all thes