Mr. BROSIUS. I can show my friend the figures as I have them of the payment of customs and of the settlements in gold, and it demonstrates clearly the point.

Mr. CALDERHEAD. I thought I was speaking from the figures myself. As a final question, I would ask you, Mr. Comptroller, would it not relieve the Treasury, would not the surest way to relieve the Treasury be, to resume the payment of balances in gold?

Mr. ECKELS. Provided the Treasury has gold.

Mr. FOWLER. Assuming that were done, that the Government should now begin to settle with the clearing house in gold, would that be any reassurance to the public that this question that is now under debatewhether we have a gold standard or a silver standard-would be settled? Mr. ECKELS. No; I think not. I can not conceive myself of why the people of the United States should raise any objection or find any fault with people who do the thing which the Government expects them to do, in demanding continually these gold redemptions even for hoarding or investing, as long as the Government keeps out the means of doing it, and thus declares it to be a good thing for the Government. There is nothing unpatriotic about it. It is a business proposition. The CHAIRMAN. Mr. Stallings or Mr. Hendrick, do you desire to ask any questions?

Mr. STALLINGS and Mr. HENDRICK. No, sir.

TWO KINDS OF REDEMPTION.

Mr. SPALDING. In paragraph 8 of Mr. Walker's argument he says:

Under the proposed bill not a dollar of currency notes of any kind will be redeemable at the United States Treasury. It will give, practically, final gold redemption at the national clearing house in New York, and redemption in legal-tender notes and silver at country banks.

Just above that he says that under the present law practically every dollar of the $1,000,000,000 in currency notes is redeemable in gold at the United States Treasury, and then he makes the statement I have just quoted. Would not that make two kinds of redemption? I am asking for information, because a bank that would pay silver in one place and gold in another place, it seems to me, would get in trouble. Mr. ECKELS. I think that is a question Mr. Walker ought to answer. The CHAIRMAN. While silver dollars are a legal tender and the bullion in them is of less commercial value than the gold in a gold dollar, there must be a wide discretion allowed banks in what they will redeem in, and the present law does not provide for any gold redemption anywhere, except in New York and San Francisco. The proposition is that the bankers would ordinarily refuse to redeem in gold anywhere, excepting when the necessities of a customer of the bank requires it, except in New York and San Francisco. They would redeem in gold to no greater extent than necessary to keep all kinds of money at a parity.

BANKS REALLY MAINTAIN PARITY OF METALS.

Mr. SPALDING. I wanted to know whether, under that bill, it would make gold in New York and silver in Kansas?

The CHAIRMAN. All kinds of money would be kept at a par in Kansas. Mr. SPALDING. At the present time the Government maintains the parity of the two metals.

The CHAIRMAN. Only nominally. The banks have really done it. Mr. SPALDING. The Government is obliged by law to maintain the

parity of the two metals.

I simply stand on a law. Under this bill you can get gold in New York but you can't get gold in Minnesota. The CHAIRMAN. You can't get it in Minnesota now.

Mr. SPALDING. Yes, you can.

The CHAIRMAN. No; you can only get it in New York, but as a matter of practice, you may-not as a matter of legal right.

Mr. SPALDING. Now, you are discriminating in favor of New York City. It seems to me that there is grave doubt about this being a bill that will give satisfaction, if the argument which you have made here in regard to the bill is true. You may be mistaken in regard to the bill. The CHAIRMAN. No; not at all.

Mr. SPALDING. That would make gold in New York, and in Kansas City, where there is an immense trade, all you could get would be silver. The CHAIRMAN. If there are no further questions on this bill, Mr. Cox's bill will come up now.

Mr. NEWLANDS. I wanted to ask a few questions of the Comptroller on this bill.

The CHAIRMAN. Perhaps we had better take a recess now. Thereupon, at 1.15 p. m. the committee adjourned until 1.45 p. m.

AFTER RECESS.

The committee reassembled at 1.45 p. m.

Mr. NEWLANDS. I have a few questions to ask Mr. Eckels:

Will this bill, called the "Walker bill," do away with the issue of the United States bonds for gold redemption?

Mr. ECKELS. Only in case of the success of Mr. Walker's plan to absorb as a security for bank-note issues the demand obligations of the Government, commonly known as greenbacks and Sherman notes. Mr. NEWLANDS. And Treasury notes also?

Mr. ECKELS. And Treasury notes; and then it would not do away with bonds if circumstances should arise whereby the silver coin should not maintain itself.

Mr. NEWLANDS. Do you think the obligation of the Government would exist to maintain a parity of silver coin with gold by redemption in gold?

Mr. ECKELS. Yes; I believe, however, if it was manifest that the policy of the Government was to retire the obligations of which I have spoken, there would not be the danger from a silver coin that there is now. As I stated the other day, I look upon this silver coin as credit currency to the extent of the difference between its face value and the intrinsic value of the metal in the coin, just as I do upon these other obligations. Although I do not think the riddance of these obligations would entirely do away with the necessity of the maintenance of a reserve, it would tend to do so to a very great extent. It certainly would render it less difficult and less expensive as well as less uncertain.

Mr. NEWLANDS. There might be a possibility of the necessity of the Government maintaining a considerable reserve fund in gold in order to redeem silver in gold; is that your position?

Mr. ECKELS. Yes; under certain circumstances.

Mr. NEWLANDS. Do you think that is a remote or near possibility. Mr. ECKELS. I do not think it a possibility that is very near, if there is not some legislation which increases the silver currency of the country. In connection with Mr. Walker's bill it might be stated that he makes a provision whereby there shall not be any paper currency in

circulation less than a $3 bill, his idea evidently being to have the silver dollar circulate, as it does not now circulate. I think he also provides that as a part of the reserves deposited against bank-note issues, which he terms greenbacks, there shall be a certain proportion of silver certificates, or there may be a part in coin. I do not think there is the danger from the silver that there is from the other obligations which the Government is maintaining.

Mr. NEWLANDS. Outside of the possibility of the necessity of maintaining a gold reserve for the gold redemption of silver, would there be, under this act, any necessity for the issue of bonds for gold-redemption purposes?

Mr. ECKELS. Not for currency redemption, and if the operation of his act is to shut up these legal tenders there probably would not have to be any other for permanent redemption. The tendency would be, if the people felt that the demand obligations of the Government were not being currently redeemed by the Government, to return to the payment of impost duties in gold. He specifies that as one of the provisions of his bill whereby, I take it, he expects to accumulate a fund of gold for the permanent redemption of these notes.

IMPRISONING THE CREDIT MONEY.

Mr. NEWLANDS. Do you think this bill would be effective in imprisoning all the credit money of the United States except the silver coin, which you characterize as credit money?

Mr. ECKELS. I would not want to pass an opinion upon this subject unless I felt certain that the anticipation of Mr. Walker would be fulfilled that the banks would be very eager to go into his proposed system. The matter turns on whether the banks would want to go into it, and it would not be effective unless the banks did go into it.

Mr. HILL. That is, unless the banks took hold of it quite universally. Mr. ECKELS. Yes.

Mr. NEWLANDS. Does this act in any way compel the banks to take advantage of the provision or carry out the provisions of this act?

BILL PERMISSIVE AND NOT MANDATORY.

Mr. ECKELS. It is voluntary with them. One section of the bill gives them the option of voting whether they shall reorganize under this proposed act or continue under the present one.

Mr. HILL. But they lose circulation if they do not reorganize.
Mr. FOWLER. But they don't have to go in?

Mr. ECKELS. No.

Mr. NEWLANDS. Would a national bank forfeit its charter under the provisions of this bill unless it went in?

Mr. ECKELS. No; I understand not.

Mr. NEWLANDS. Then I would ask if it is so persuasive in its features as to probably induce the banks to avail themselves of its provisions? Mr. ECKELS. That is a question which would have to be intelligently answered by the banks themselves. Mr. Walker's calculation is that there would be a very large per cent of profits over and above the per cent of profit accruing to the banks at present; but whether or not the banks would agree with him I can not say.

Mr. NEWLANDS. In your judgment would it be persuasive?

Mr. ECKELS. I could not say as to that. There are, as I have said, some very excellent features in the bill, but as to whether or not the

banks would be willing, under the inducement offered, to take the responsibility of these redemptions and run the risk of having a doubt in the minds of the public because of so radical a change, is a pretty hard question for me to answer.

Mr. NEWLANDS. Is there a risk in these redemptions?

REDEMPTIONS SAFELY TRANSFERRED TO BANKS.

Mr. ECKELS. I do not think, myself, there is any risk at all in transferring the redemptions to the banks, but my views may be very much more radical than the views of a great many other people, especially people who, in the general care of business matters, do not view the thing from the same standpoint that I view it from.

Mr. NEWLANDS. How could we ascertain whether or not the banks would be pursuaded to accept the provisions of this act?

Mr. ECKELS. I take it that it might be ascertained if in the first place this committee was pursuaded to report it, and in the second place if it could get through Congress.

Mr. NEWLANDS. Action of Congress then would have to precede any action by the banks themselves as to whether they would acquiesce in its provisions?

Mr. ECKELS. Yes; action by the committee would have to be first and then action by Congress, because I take it that every member of the committee would want to ascertain the view which those who are expected to go into this reorganized scheme held of it, and then it would have to be gotten through Congress, which would depend largely upon how much of the banking interests were back of it and how much public sentiment was back of it.

Mr. NEWLANDS. Then I take it that the individual members of this committee and the individual Members of Congress must push their own inquiries in their various districts, as to whether the provisions of this bill will be acceptable to the banks? You know of no way of an organized method by which the banks, in anticipation of our action, can indicate whether or not they will accept its provisions?

Mr. ECKELS. I do not know of any way of ascertaining how this bill would be viewed except in the way I have indicated.

PROVISIONS ADVOCATED BY CONVENTIONS.

Mr. NEWLANDS. In these national-bank conventions has there been any indication that the provisions of this bill would be acceptable to bankers?

Mr. ECKELS. The provision of the bill as to the issuing of notes against assets has been more than once advocated by conventions. That was the basis of the plan which is known as the Baltimore plan, which was presented by a convention of bankers; but as to the feature of the deposit of the greenbacks, that has never been passed upon by a convention. It was, however, embodied in the bill which was presented by the Secretary of the Treasury two years since.

Mr. NEWLANDS. To what extent, assuming that the provisions of this bill are accepted, not only by the national banks, but by the State banks of the country, and taking into consideration the present conditions only, and not future enlargement of bank capital, to what extent can currency be issued under this law?

Mr. ECKLES. That estimate you would have to make by taking the amount of the present banking capital and figuring the percentages CUR- -22

provided by Mr. Walker to be deposited, of Treasury issues—when I use that term I embody all the paper issues of the Treasury-and the gold and silver provided to be deposited by these banks. That is a mathematical calculation.

PRESENT BANKING CAPITAL OF THE UNITED STATES.

Mr. NEWLANDS. Do you know to-day what the total amount of bank capital in the United States is?

Mr. ECKELS. The total capital of all the banks, or at least of almost 10,000 banks of the country, as shown by the last report, was $1,049,371,724. That is on page 19 of my annual report. There are in addition to that a number of banks, about 3,000 more, most of them private banks, the capital of which I have not. Then there was a surplus, $698,948,536.

Mr. NEWLANDS. What are the limitations with reference to capital and reserves placed by this act upon the issues of bank currency?

Mr. ECKELS. That you will have to find by consulting the bill. I do not carry in mind the distinctive provisions of it.

Mr. NEWLANDS. The purpose of this is to get at what amount of bank currency can be issued.

Mr. ECKELS. You will find the proposition set forth on page 8, section 5.

Mr. NEWLANDS. You have never made an estimate of the total amount?

Mr. ECKELS. Of what would be absorbed? No.

THREE KINDS OF CURRENCY PROVIDED.

Mr. NEWLANDS. As I understand it, there are three kinds of bank currency provided for by this act; first, legal-tender notes, with greenbacks; the other reserve notes, and the other emergency notes. Is that correct?

Mr. ECKELS. Yes.

Mr. NEWLANDS. Under this act, leaving out the emergency notes for the present, which notes would be greater in amount, the legal-tender notes or the reserve notes?

Mr. ECKELS. That would depend on how much reserve is held by the banks, but I should judge that the amount of reserve notes would be larger than the amount of legal-tender notes.

GOVERNMENT AS A REDEMPTION AGENT.

Mr. NEWLANDS. Now, as to redemption, Mr. Eckels, do you understand that under this act redemption has to be made by the banks themselves, or by the Government as the agent of the bank?

Mr. ECKELS. I understand that the banks are to furnish the gold to the Government, together with whatever else is provided as a means of redemption, and that the Government itself, as it does now, acts only as an agent.

Mr. FOWLER. As it does for national-bank notes?

Mr. ECKELS. Yes; as it does for the national-bank notes.

Mr. HENDRICK. I would like to ask one question there. I understood you to say the other day that one of the chief sources of trouble now arises from the fact that the Government is constantly called upon to redeem these legal tenders, and that whenever that is the case the public are aware of that fact; that that very knowledge on the part of