The San Francisco call., 1903-12-08
THE CONTROLLERS REPORT.

TINE annual report OF Mr.. Ridgeey Comptroller of
the Currency, is of interest far outside banking
L circles. The season of moving crops is now ad-
vanced into its last stages and business have
noticed that its work has been accomplished without the
usual disturbance of currency conditions For
the first time in many the Secretary of the
Treasury been called take any extraordinary
to prevent strngency, and perhaps
panic, in order the crops to market without
imperling other business
The is probably found in the Comptrollers re-
1t shows that durngsthe past year the number of
national banks increased by AL, with increase of
$Io6 oo53 in This is due the liberal pro-
visions of the amended law permitting banks organize
with less of individual capital But this does not
tell the whole story. 1t is completed by the farther
showing that national bank currency in September
reached the highest point in its history, being then
$42I 49, or S. per of the maximum that might
have been issued This shows possible currency from
that of about eight hundred millions and we
warranted in believing that the issued sufced
for the currency needs of the country would have
been increased.
The Treasury omttng its usual extraordinary aid,
adopted the policy of encouraging the organization of
banks and inducing their issues But
il is also pointed that activity the organization of
banks caused such demand for bonds as the basis
of their circulation advance the premium and be-
ginning late in September, there palpabe move
ment in the other direction by the deposit currency
higher premium
This is the defect of the system 1t is exactly the
defect that such propositions are embodied in
the Shafroth bill which we have already noticed. 1t
makes the volume of currency depend, not upon the
needs of the country but upon the premium on bonds
The Shafroth proposition, its main feature is not
new since proposed long ago to issue bond as
security for bank circulation. fixed such rate of
interest would hold at par but prevent premium
With such bond deposited to circulation the
banks would have to look for profit upon the of
their maximum amount of currency and the fuctu
ating premium upon their bonds.
The Comptroller admits the necessity for greater
hexlbity in our currency, and renews his recommends
ton that it be met by permitting the banks to emit
currency above the by their bonds that
is to say upon other valid This system has the
advantage of having been tried by long experience in
the Scotch and Canadian banks If kept under stern
official supervision and within proper limitations, it
would solve the problem in particular in which it is
solved by the favorable conditions that cased
the moving of this seasons crops
Seed time has its currency needs well as harvest
but we hear less of them They press hard upon the
planter however in the rate of interest he has to paw
remote from the money That decreases his
profits and IS the means of multiplying mortgages If
proper asset currency permitted he would be
able make such economical use of his credit on short
loans TO avoid the mortgage which once placed is
apt to stay for long time and to become in hard times
the sad means OF losing his Congress and the
hnanciers need to learn that the grower crops and
live stock is part of the whole business body He is
business and has exactly the same right of access
the loan fund of the country the manufacturer the
merchant and any other class of business men,
The Comptrollers report shows that loans and dis
counts reached their highest the experience of the
banks in the first half of September when they amounted
to S348I ,446772. At the time the deposits were
$38635I2II2 and the was $85o762 1884, In the
financial history of the country never before
had banking system that exhibited much essential
service to the people, with little loss and risk 1t
shows expert and honest management of the loan fund
and if. with equal safety the element of hexibtv is
added to it. securing equal distribution and cheap
ness IN the of individual credit the system would be
as perfect as banking facilities be made
1t is for congratuation that the speculative
fluctuations in securities with all the loss by shrinkage
that has occurred since midsummer have had no percent
bic effect the soundness of the banks This is due
official supervision and proper business caution which
have joined to cause the banks margin all loans on
collateral so widely that the enormous shrinkaee
that has overtaken good collateral and bad has not i'm
paired that kind of security
By emphatic decree of the highest British tribunal
barred from practcing as attorneys in English