Herald of the times. [volume] (Newport, R.I.) 1849-1856, 1849-02-08

cussed the nature Of the banking privileges,
and went into an extended examination Of the
relative facilities of the banks
1t is said by those who favor the:propos tion
to tax the banks, that the privileges confe rred
. upon them are worth more than is now paid
In order to ascertain whether this be so, let us
make calculal on based upon information
which is within the reach OF every member of
this House The bank capital Of this State,
to speak in round numbers is $ll ,000, ,000.--
Now the only privilege enjoyed by the banks
in the management Of this capital which IS
not common to all the people Of the State, Is
the privilege of issuing paper money to an
amount equal to thiscapltal. All other priyil-
eges enjoyed by them, such as rec living de-
posts, dscounting paper, &c, are privileges
which can be exercised by the individual or
corporation without legislative sanction. From
the returus made by the banks of this State in
October last, it appears that the circulation at
that time was So 100000 the interest on
which is $l38 900 Now deduct from the lat
ter sum the tax paid by the bank to the State
VIZ: So, 500, and the interest on the specie
which the banks are obliged to keep to meet
their circulation, viz: 600, 900 and the amount
left, viz 500, 500 will be the exact MEASURE
of the value OF the banking privilege in this
State. This sum, when divided among the
60 banks in this State, leaves to each bank a
bout $l45O with which to pay its expenses
an amount which, although it may cover the
expenses OF some of the smaller banks in the
country towns will not pay one half the cx-
penses of some Of the city banks, 1t must al
so be recollected that some Of the banks in
this State are now paying what is equivalent
TO 3-S of one per cent. tax while others arc
paying only Ia of per cent, the former hav-
ing paid to the State bonus of ? per cent up
on their whole capital, which is nearly equal
10 the annual payment of ls OF per cent
This tax when assessed upon the capital in
stead ofthe circulation is apportioncd without
any regard to the value of the privilege to eacl,
bank, and operates unfairly and unjustly. In
order TO illustrate this it is only necessary to
refer to the returns from the Merchants Bank
of Providence and tho Bank Of Kent.
These banks have about the same circula-
tien, viz: $4,000, that the privilege of is
suing paper money is worth about the same to
each bank, The former has capital Of $780,
600, and consequently pays tax Of $3.50 to
the State, (Which is more than the interest on
the amount of lis circulaton,) while the lat
ter, having a capital OF $4,000, pays 500
tax Thus it will be seen that one OF these
banks pays $3.50 and the other only 500 for
a privilege whi1h is Of equal volue TO each.
But it is said that the Massachusetts banks
pay much higher tax than the banks Of this
State. This is true, and they can well afford
TO do so, because the privilege is worth much
more IN that State than in this. The banks in
that State cln pay the State tax Of | per cent
and then derive more profit from the privilege
than the blnks of this State could realiz', if
they were not take at all The bank capita
OF Massachusetts, is in round numbers S32,
900 900, or nearly three mes the amount of
tic capital of Rhode Island Banks. The line
Of discounts in that State over the capital is
SEQ, 600, 900, and in this State 81 600 00O-I
The lntcres, on the former is 5 200 900, on
the latter S2i0.000. The whole bank tax in
Massachusetts, is in round nam'ers $500, 900.
which, when deducted from 81 200 600, the
interest on the discounts above the capi,al,
leaves to the banks in that State $3.50 900,
while the banks Of t is State have only S240-
600, where they should have $500 600 in or
der to afford them the same profit which is
obtained by the former. If the calculation
should be based upon the circulation alone, in
s'ead of the dcposits,and clrcuation. together,
the advantage would be still grea er in fvor
Of the Massachusetts banks
The last time we heard any thing about
bank tax prior to this, was when the State
Prison was built AT that time the question
was submitted to the people whether they were
willing to be taxed for Building that institution,
they replied by vote offs to that they would,
and he believed that if the question is now
submitted to them again, they would give a
greater vote in favor Of a tax than before in
proportion to the population.
Mr. II said that he deemed it an act OF bad
faith to impose an additional tax, when they
have already paid in Obtaining their charters
all that you asked II it is the intention to
make the banks pay the whole tax of the
State, let us pass that act at once; if not, let
us give them an opportunity TO come here and
show US that they are already taxed more than
their privileges are worth, and if the General
Assembly do not choose to do that, let US tax
the circulation and make these little banks
that are 90 willing to DO taxed pay their fair
proportion
Mr.. Whipple said that no man paid any
thing to the government Of Rhode Island un-
less he chose to. il man owns any bank
stock and does not wish to pay tax, he can
oo into the market and sell il If he chooses