Omaha daily bee., 1898-11-30
VIEW OPPOSITION DEVELOPING.


The advance publication Of the views
Incorporated by Comptroller Of the Cur
rency Dawes In his forthcoming annual
report, pointing out the dangers and
defects of all the proposed currency
bills pending before congress, has nwak.
ened the friends of those measures to the
fact that they will encounter no little
opposition, not only In this congress, but
in the next. Comptroller Dawes Is said
to have drawn his conclusions from In
vestigations he has had made into the
conditions of failed national banks.
The cOmptroller's special objection to
the various plans for currency reform,
including the Baltimore plan, the Nc
Cleary bill, the recommendations of Sec
retary Gage and Of the Indianapolis con-
ference, Is to the provision common to
them all giving the noteholders a pre-.
ferred claim upon the assets ahead OF
the depOsitors and other creditors. 10
allow the banks to issue preferred notes
uncovered by bond security would prac-
tically deprive depositors and creditors
Of their just dues in case of liquidation
II the. assets averaged as they have In
banks that have failed within the past
few years. While the percentage of
dividends has varied greatly in different
parts of the country, the figures show
few cases in which failed bank would
have paid out on an unsecured note issue
of GO per cent of the capital. Comp
troller Dawes declares therefore that no
banking system can be considered in
herently fair which creates in the distri-
button of the assets of an insolvent bank
a preference of a noteholder over a de-
positor. ..t-
But 1t is this preference Of the note
pends the vitality of all the proposed
currency schemes which the 'reformers
are pushing in congress. Take away the
preferred claim Of the noteholder upon
the assets in ease Of insolvency ana the
value of the note issues would be seri-
ously impaired. Having no bonds be-
hind them as security for their payment
the notes would have to depend for cir
culation upon the credit Of the institu-
ton issuing them. Unless there were
some reserve fund to make good the
losses the notes of weak bank would
not pass with the same facility as the
notes of q strong bank and the stability
Of the whole system would be threat
ened.
1t Is intimated that the advocates of
the different currency measures may
modify them along lines suggested by
the criticism of Comptroller Dawes. But
this Is not the only point of attack. All
Of them contemplate retirement VI the
greenback in order to make room for the
new bank issues as their substitute and
the opposition to this feature is also sure
to be strong. The bills cannot well be
amended to obviate these objections
without defeating the very objects Of
the reformers.
If the United States is to issue bonds
in payment Of the price of the Philip
pines and to satisfy other claims grow
ing out Of the war with Spain, there will
be no dearth Of government securities to
serve as basis for national bank issues
under the present system and the ex.
--cuse for further changes will be re-
moved insofar as 1t rests upon the pros
pect Of exhausting the bonds available
for securing note issues. When these
new conditions are taken into consider.
alton 1t will develop in all probability
that none of the currency reform
schemes SO far DrorOSed offer the prac.
tical solution of the problem.