Iron County register., 1897-12-09
couNTRYs CURRENCY.

L
Annual Report of Comptroller James h.
Eckels - Needed Legislation Again
Urged-He Believes the Governments
should withdraw its Circulating Notes
and Relegate to the Banks the supply
ing OF Currency.
WASHINGTON, Dec. 5-The annual
report of James III. Eckels, comp
troller of the currency, for the year
ended October 81, 1897, opens with
brief review of the history of the Leg
islation which constitutes the present
national bank act, and invites the at
tention of congress to the amend
ments to the law recommended in for
mer reports without specifically repeat
ing them.
On the subject of bank note circuIa-
| ton, the comptroller says:
1T is noticeable that in all the
changes which have been wrought in
the national currency act from its in
ception to the present time, the feat
ltre subject to criticism, but which was
intended should constitute the princi-
| pal benefit to be conferred, has re-
mained comparatively unchanged,
namely, the note issuing function.
Whatever justification there was in
the first instance for restricting the
| issuing of notes against the bonds of
the government, deposited with the
| treasurer of the United States to 90
per cent. of the par value thereof
| long since ceased. In the report
of every comptroller of the cur
rency during the past 30 years the
| wisdom of changing the existing law
SO that the banks, and through them
| the communities in which they are To-
Gated, might have the additional BEN
eft of an added loanable capital has
been urged. Despite all this the law
still remains without amendment.
| Not only should the bank act be
amended in this particular, but con-
gress should seriously consider such a
| change in the method of bank note
issues as will enable the banks of the
| country to more adequately meet the
| demands of trade and commerce in all
sections of the country. The business
| of banking, like every other form of
| investment, must be made attractive
| to capital. II it is placed upon foot
| ing different from other undertakings,
embarrassed through unnecessary re-
strictions, 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 ex-
| tent deprive the people of the benefits
of the agency most requisite to COM
mercial activity. 1t is considered by
every great commercial government,
except the United States, to be the sole
province of the banks to issue paper
which circulates as currency. The be-
lief in q bank note currency as being
better and safer than u government
paper currency prevailed unques-
| toned in this country, until. under
the apparent exigencies of the war,
the government undertook to issue pa
per currency. Even under such cir
cumstances the promise was always
given, however, that it should be re-
tired at the earliest practicable mo-
ment, and the admission was freely
made that it was neither a wise meas
ure nor safe form of currency.
Between the competition of the
government note issues on the one
hand the unnecessary restrictions inn
posed by law upon the other, together
with the increasing price of bonds re-
quired to be deposited as security, the
note issuing function of the banks has
been permitted to become merely an
incident to the conduct of the national
banking associations of the country.
It has been seriously suggested more
than once that the bank issues be
done away with and all paper be is
sued by the government instead. The
danger of such course is not to be over
estimated. The experience of every
government has been that the govern
ta1 T1annr iS Snuroo of
weakness and danger. In the United
States where there has been the near
est approach to success with the vol
ume of the federal paper compara-
lively limitedsin amount, the credit of
the government has been more than
once put in jeopardy through it, and
the business interests of the country
subjected to unnecessary loss and con-
fusion.
THE argument that the government,
better than the banks, can provide for
the redemption of paper note issues,
will not stand the test of careful
analysis. The government has no
means for caring for its demand liza
bilities, except through borrowing and
through the levying of taxes. Upon
the other hand the banks have assets
which can be promptly converted into
cash to meet their outstanding notes
when presented. Their ability to COM
mand gold has always been beyond
that of the government, for in each
financial exigency which has con-
fronted the government the banks have
furnished to it the amour is necessary
to maintain its solvency. It is impossi-
BILE to believe that with a system of
bank note issues based in part upon
securities and in part upon bank as
sets, the country cannot be provided
with 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 Ire
land have been found to be ample in
their resources to provide the note is
sues for use in the trade of the United
Kingdom. The same is true of the
bank of France. The Deutsch Reichs-
bank or German Imperial bank has for
more than % years issued bank note
paper against assets which has main
tanned its value and has been so con-
trolled as to successfully meet the COM
mercia1 needs of the empire"
NOVELTIES IN THE STORES.