Omaha daily bee., 1902-12-01
WANTS MORE BANK NOTES
Comptroller of Currency Pleads for Asset
Currency.
WOULD PROTECT FINANCIAL SITUATION
Claims Banks would He safer and
Possibility of Biz Undertakings
Greater II Small Issues of I'm
covered Bills Were Allowed.


WASHINGTON. Nov. 3O.-The annual re-
port Of William B. Ridgely, comptroller Of
the currency. has been prepared for lrans-
mission to congress.
The report starts with a table giving a
detailed statement Of the resources and liza
bilities Of all the national banks Of the
United States. from which it appears that
on September Is. 1902, 1901 associations re-
ported, with aggregate resources Of S6,113,-
92s, 912.5O. The loans and discounts
amounted to SO, POS, 127, 4SO.69, or more than
so per cent OF the total resources OF the
banks. The items of surplus and undivided
profits amounted, respectively, to 1926, 393,-
1886 and $169, 216, 512.O3. The individual
deposits reached the highest point in the
existence Of the national banking system,
SO, 2O9, 273, S93.93. There was due to approved
reserve agents, other national banks, state
banks and bankers, trust companies and
savings banks, the sum of $1,000, 341, 233.39
From September 30. 1901, to September IS,
1902, there was an increase of $41S, 5s1, 617.54
In the aggregate resources of the reporting
banks, the principal items OF interest being
loans and discounts, 1921, 511, 562. 20; United
States bonds, $12, $780, $50; due from national
and other banks, lS35, 217, S72.29. There was
an increase in capital stock Of $50, 1873, 537;
in surplus and other profits of $65, O4S, 1851. 81;
and in the individual deposits of s271 $780,
66O,6 go.
Dealing with asset currency the report
says:
The most serious objection which has
been urged against the national bank cur
renCy is it's lack of elasticity. The first re-
quirement of any currency is safety and
been from the first issue practically per-
feet in this respect. They have been so Sc
cure, 1t Is not surprising there is a strong
feeling that this is the only kind of notes
which are perfectly secure.
There can be no denial of the fact, and
there is really none made, that the lack of
elasticity is a serious defect in our bank
notes. If this defect can be lessened with
out impairing the safety of the notes 1t
should be done, and done at once.
wants More Bank Notes.
II, in addition to the amount Of notes
they are now allowed to issue on bonds de-
posted in the treasury, the national banks
were allowed to issue an additional amount
of uncovered notes. beginning with 20 per
cent and gradually increasing to so per
cent, 1t would make the circulation more
eXpansible. A graduated tax on the amount
issued, Joined with ample provisions for
their redemption and return to the issuing
bank, would result In the necessary con-
traction when the circulation became re-
dundant and the notes not needed in bust
ness. The safety of the notes can be made
absolute by a reserve fund raised by a
Ii has been urged against a guarantee
fund that the strong banks would not take
out the notes and pay taxes for the benefit
of the weaker banks. But it is shown i'm
the table prepared In this office for the
chairman of the committee on banking and
currency that a tax of Oh per cent would
have been sufficient to pay the notes of all
failed national banks If the bonds had been
The safety Of the notes should be further
increased by provisions that only banks
with a minimum of unimpaired capital and
surplus could issue the uncovered notes.
The greatest demand for increased cur
rency comes, of course, when II Is required
for moving crops in the farming states. If
this can be supplied quickly and automat-
ically as required by the banks IN those
states, and If, after performing its duty, Il
is returned to the banks and retired, 1t Will
mark a great advance in the improvement
of our facilities for handling the vast and
rapidly growing business OF this country,
tional notes would be an element of great
strength to the banks and not OF weakness.
1t would enable the banks TO protect them
selves and their customers when protection
AS long as there is confidence and each
individual feels secure that he can get
what money he needs upon usual terms and
security there is no necessity for 1t. II our
matlcally elastic so that the banks can sup
ply more or less circulation as needed, so
safe and, reliable that 1t Is readily accepteo
will have a force at work which VIII
diminish the liability of a money panic,
The currency here outlined is what has
come to be called an emergency circulation.
IL would be better than this; It would be a
currency which would prevent many emer-
gencies from arising, or so diminish their
seriousness that they would pass unnotced.
When emergencies do arise IT would very
greatly add to our equipment and ability to
meet them.
IL is not claimed that this plan would
remedy all the defects in our currency sys-
TEN, but it is urged as a practical and sim
Pile method of improving the national pank
currency by giving it the much, needed
quality of elasticity without impalring It's
safety. II we wait until there is agree
ment on ali points before we make a change
i'm our currency laws, we will never make
IL we make such changes from time to
| time as study and investigation convince
us can be safely made and are advisable,
we are much more apt to arrive at a salts
factory law than If we wait until 1t can all
be reformed in one act.
TIL comptroller therefore calls the at
tention of congress to this subject, asks its
careful consideration and strongly recon-
mends the passage of an act embodying the
| main features here outlined
z-nr nuDNuACE TAI We On NM