The morning news. [volume] (Savannah, Ga.) 1887-1900, 1897-12-06
BANK CURRENCY THE BEST.
ECKELS TAKES THIS STAND IN HIS
ANNUAL REPORT.


cy Than the GOvernment-Statis-
ties on the National Banks.
washington, Dec. 5.-The annual report
of James H. Eckels, controller of the cur
rency, for the year ended Oct 81, 1897, opens
with a brief review of the history of the
legislation which constitutes the present
national bank act, and invites the atten-
ton of congress to amendments to the
law recommended in former reports with
out specifically repeating them.
on the subject of bank note circulation,
the controller says: at is noticeable that
in all the changes which have been
wrought IN the national currency act from
its inception to the present time the feat
ure subject to criticism, but which was in
tended should constitute the principal ben
eft to be conferred, has remained compar-
auvely unchanged, namely, the note is
suing function Whatever justification
there was in the first instance for restrict
ing the issuing of notes against the bonds
Of the government, deposited with the
treasury of the United States to 80 per
cent. of the par value thereof has long
ceased.
I'm the report of every controller of the
currency during the past twenty years the
wisdom of changing the existing laws 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 Not only should the
hap he
but congress should. seriously consider such
q change in the method of bank note is
sues as will enable the banks of the coun-
try 10 more adequately meet the demands
OF trade and commerce in all sections of
the country. The business of banking,
like every form of investment, must be
made attractive to capital. If it is placed
upon footing different from other under
takings, embarrassed through unnecessary
restrictions and deprived of proper sources
of profit, the result cannot be otherwise
than that investable capital will seek other
means of employment, and to such extent
deprive the people of the benefits of the
agency most requisite to commercial ac-
tivity.
1T is considered by every great CONNER
cial government, except the United States,
to be the sole province of the banks 20
issue the PAPER which circulates as cur
Iency. The belief in a bank note currency
as being better and safer than govern
ment paper currency prevailed unques-
toned in this country until under the APP
parent eXigencies of the war, the gov
eminent undertook to issue paper cur
Tency. Even under such circumstances,
the promise was always given, however,
that 1t 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 one hand and
the unnecessary restrictions imposed by
law upon the other, together with the in
creasing prices of bonds required to be de-
posted as security, the note issuing func-
ton of the banks has been permitted to
become merely an incident of the con-
duct of the national banking associations
of the country. 1t has been seriously sug-
Bested more than once that the bank note
issue be done away with and all paper
be issued by the government instead. The
danger of such a course is not to be over
estimated. The experience of every gov.
eminent has been that governmental cur
rency paper is a source of weakness and
danger In the United States, where there
has been the nearest approach to sue
cess, with the volume of the 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 coun-
try subjected to unnecessary loss and con-
fusion.
THE argument that the government bet
ter than the banks, can provide redemp-
ton of paper note issues will not stand the
test of a careful analysis. The govern
ment has no means for caring for it's de-
inand liabilities except through borrowing
md 1Jertn fnea1 Of
other hand the banks have assets which
can be promptly converted into cash to
meet their outstanding notes when pre-
sented Their ability to command gold
has always been beyond that of the govern
ment, for in each financial eXigency which
has confronted the government the banks
have furnished to 1t the amounts neces-
sary to maintain its solvency. 1t is i'm
possible to believe that with a system of
bank note issues based in part upon Sc
curities, and in part upon bank 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 Scotland, and the
Bank of Ireland, 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 Reichsbank or
twenty-five years issued bank note paper
against assets which has maintained its
value and has been so controlled as to sue
cessfully meet the commercial needs of the
empire"
The controller calls attention to the
method of the organization of this bank
and publishes some interesting statistics
in connection Herewith.
The total number of national banks or
ganized since the system was put into OPP
Grafton in 1886. is shown to have been $685.
On Oct. 81, last, there were in active OPP
Grafton 3,617, having an authorized capt.
tai of $3.50, 230, 295. The total circulation of
the banks then in operation was 1929 1884,
$50, of which 1902 1874, 555 was secured by
bonds of the United States and the bal
anee by lawful money deposited with the
treasurer of the United States. The total
circulation outstanding of all national
banks on Oct. 81 was $3.50, 131, COS, of which
amount $1,55S. 800 was secured by bonds
held for the account of insolvent and liq-
uidating banks, and S26, 05,325 by lawful
money deposited for their account and by
country banks reducing circulation. The
tha Of .fv LAT ian