New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1898-12-05

tai the depositor in the Eastern States will lose
AT a rate of nearly two and one-half times as
great: the depositor in the Southern States at
rate nearly three times as great the depositor In
| the Pacific States at a rate four times az great:
the depositor in the Middle States at a rate over
| four and one-haf times great. and the almost
| obl,terated depositor in the Western States at
rate over times as great
| The Controller then states that:
From the tables which we have given II Is evi,
banks OF from $4,000 to 10000 capital. and from
try. the greater amount of the cost Of this radical
experiment in currency must ne co,iected linus
upon those depositors least able TO endure loss must
| the heaviest losses fali
He further states:
Those locations where deposits are smallest, and
therefore where there would be the greatest IN
are those where the depostors would suffer the
lien of note-holders upon the assets OF insoivent
banks
gree the tendency of the money Of the country to
| flow to the great money centres, where TO fewer
pass the management and control of the savings
| and capital of the country u..,.,,-.
which acceerates the Capitalization OF capital IN
Who lend from the many who use money Will en-
courage the growth of commerce only IN me Lorin
In the bank.note issues Of foreign countries IN
! understood. enjoy preference over the deposit
holder sy TQqd Paa9 Ss n IN ae of Sss
great banks TO circulate. restricted by stringent
IA S aS eey ar these plans for the United states
is necessary. In one country only Canada are
Of nsOlysncy The % oa NTH o
| combined circulation of about SS.""Hn
The Controller states that he cannot accept as
| safe anv deductions drawn from the bank note
system Of these few central institutions of Eastern
| Canada which would tend 10 Justify the apphca-
ton of the laws governing that system to the 80"
| National banks Of this country.
SUMMARY OF THE SITUATION.
The Controller calls attention. summary Of
his views upon the proposed plans TO these PROPOSE
| tons:
| note system depending for security upon the com
mercia assets OF banks and sanctioned by eiG o
the deposit holding creditors and the no'e-hodins
Second-No system is inherently tar whic en- c az
ates a preference Of the note-holder over She ue n
post holder in the distribution Of the assets OF an
| insolvent bank. ...x,o. 90 -. s,c-
Trd Of the older counties to 'N We s arc
referred as tending 10 justify the experiment III
this country is the in case Of insolvency
of banks Of issue Canada with IT. ,h s sesi
sTsd N gann Of tanks m fh country furnishes
the only exception to nus rue ne preference under
any such system in this country to give securT1!
and credit to the no5es 6d not the banks upon
whom the great weight Of the guarantee or the
nG FfSA farer system would provide that when
receiver took charge OF an insoINenr PAN frd held
not first pay into the general REDEMPTION t . M" ,b
by the Government amount derived rom on an tre
Of TIE bank smoieTb iD pay 10 deposors but
he should pay into the fund that pro rata snare snare
OF o va ro TO- the note-hoders preferred
| creditors. but creditors in the same CLASS DC
The tax upon the solvent banks for the currency x
privilege should not. then be imlted 70 no. -
ISSUE or in any other amount but but , SnoH deoc it,
%saS sgif it shoGld i1 Prove to
Sixh-If under suc9 a S!s ,bn ,sx upon the SOL
ven hanks would be so large as to render me issue
of such currency unprohtapeo % Of the rad
i 6if"rence in the environment and condition OF
ca p1raiized and older systems OF Europe 1t "ouid
be demonstration Of the fact tha' u,ddf , se The
nrodts upon the circulation. the deposl'o'S "ou'"
| take the bulk of the losses. ,,s,r.,,on n, what
we believe to be the fact thai, under our
system at present organizea rg assets and
issued to the extent proposed in these plans can p
deposor 9E which cannot be justified upon any
| grounds Of public policy. ,oovered notes as
this proposed providing for preference ni ere
note-hodcrs over other creditors nctions Of Ma
| tionai banks to which the note-issung fuhc''on Is
secondary and subordinate. ,,,. ro,,cv and would
operate banking In the smaller nortjons
nd In he n,
Eehth~The Government of the United states n'far Is
NOT in such straits in connection with its pese"t
eur cIrrecy system. as compel it TO enter into o,s
plan OF currency changes by winch H. ~ n the
! extended and valuable currency privileges 70 1ir0
| National hanks OF the country in exchange for as
sistance from them in meet sva S in gold
Nnth-lf the present conditions oil govJl ih III
enflfhcG 4s befter for the Government the
representative Of all the people. ana uci az
circumstances connected with our banking sEsr ~,
to pay an asceraned and exact cost drec, rnan ~
endeavor 70 eyade it by sFaH of necessity must
reimburse themselves from the c9mmn bn nnn in
depositor class for any co1 d w adempon or main
tanning the credit % their notes
ELASTICITY IN BANK CURRENCY.
The Controller then discusses the question OF the
| elasticity needed in bank currency commenting
upon the great elasticity OF the chech anu u'di'
| circulation OF The country
| In this connection, and as embodying his recon-
mendations this branch Of his report ne says
While in this country. with its extended system In
OF banks and its great development, Ole, "i vi1 bank
and draft system some degree OF elasticity IN oa!'k
issues is desirable it Is not essentai una.
snoqd ne an m n, ne upon the depositor and
thus. by interfering with the check , ana u'"'' ''
The general principles and regulations under
which such elasticity might be obtained ar i,o
arguments We have ondeavorei to set forth As:
covering these general principles ana as con on
clusion from the views
Controller would make the following recoininehGhS
lions I'm regard 10 the present laws so'ei"''e ''N
issue % National bank notes ,, -
First-The existing banknote system haseo uPIl
deposit Of Government bonds as security shouio
moi now be abandoned ,,. .
second-For the purpose Of allowing eas ,h 70
hanknote issues TO protect the banks ana me com
r1,Initv i'm time Of panic. small amount OF IN
oa,nrod notes In addition the secured notes.
should be authorized by law under me following loving
limitations They should be subjected TO so heavy
q Tax that they could not be issued In normal times
for the purpose of profit; but would be avaiiapie
in times OF emergency. The should be so large
,non the solvent Issuing banks as 10 provide
fund which. in connection with the pro rata share
For Wedding and Holiday Gifts
SEuaaa sAV N m