The Democratic sentinel. [volume] (Cadiz, Ohio) 1852-1853, 1853-09-28
Bank Taxation.

BANK Iaxauon.
The Ohio State Democrat, Of a late date
publishes speech Of Judge Myres, the
Democratic candidate for Lieutenant Gov
ernor, which was delivered in the Senate of
Ohio, March 6, ls49, on resolution offer
ed by him to tax the property Of Banks as
other property IS taxed. From this speech
we take the following extract. II presents
the question Of Bank Taxation clearly and
torcibly so much so that We cannot conceive
how any disinterested man, after reading il
could favor the mode of Bank Taxation as
advocated by the leaders and organs of the
wing party. Read it, and then hand it to
your whig neighbor to read.
"In l848 the banks paid into the Treasu-
.ry $40, TIA 04 on their profits. If they
had been taxed like individuals upon the in
debtedness to them, upon which they drew.
interest, they would have paid $198, ,478 79
not including the SO, 900, 900 capital of the
Ohio Life and Trust Company loaned out
on bonds and mortgages, upon which tax
Of $50, 900 should have been paid. Had the
owners of these bank stocks, therefore, been
taxed upon what they drew interest on as
other money loaners were where the banks
are located, they would have paid tax Of
l58,479 &c; that is, they would have paid
l08,O05 72 more than they did pay. What
justice is there in relieving them from the
burden of one hundred and eight thousand
and odd dollars, and throwing it upon the
farming, mechanical and other interests OF
country? Indeed if perfect justice had been
done, the banks would have paid tax in
l848, as follows:
Whole amt OF Assets, of Ohio
banks, including Ohio Life and
Trust Company $2l, ,97S,926 Is
Deduct Real Estate, S290397 46
due other hanks, $50, l6S %
deposits, 4,lGO,j49 VI 5,440,927 &C
Balance of assets, $l9,537, $3.50 OF
Upon this balance, were it any kind of
property other than banks, individuals
would be obliged to pay taxes, who owned
it. The average Per centage paid upon
property where banks are located, was, for
l848, 8 27-l00 mills upon the dollar
Were bank property, therefore is taxed like
other property, the lax would have amounted
to 1851, III 25, instead Of $4O, ,77404, the
amount actually paid.
am aware 1t will be said by the friends
Of our banking law, that, IN my calculation
| have not deducted the notes of banks in
circulation. 1t is true, l have not. And
why should they be deducted? 1t is
said that andindividual who has debts which
he owes, and pay taxes upon the balance on
| ly. Why is this permitted? The reason
Is obvious; it is because he pays interest up
on what he owes; his capital, upon which
he derives his income, is less, by the amount
he owes, than it would be if he did not owe
it, Is this the case with banks? On The
contrary. is not the actual means upon
which they derive an income increased by
every note they issue? In fact these bank
notes are the actual capital upon which they
derive tkelr profits, and the more they issue
an keep in circulation, the greater their
profits. Let us illustrate; An individual
has one thousand dollars in specie; he loans
it TO a ne.ghbor and takes his note for one
thousand dollars, drawing six percent. inter-
est. His capital is one thousand dollars
and on it he is taxed. Now, here are three
individuals, who, together, have one thous-
and dollars in specie; these three the Legis-
lature Incorporates into bank, and author
ICES them, on paying in the one thousand
dollars in specie, to loan to their nelghbors
on six per cent, interest three thousand
dollars in bills; they do so and take their
neighbors' notes for three thousand dollars
drawing interest at six per cent. BY reason
Of this bank charter, this special privilege,
they derive yearly income from the one
thousand dollars in specie, three times as
great as the Individual with the same a
mount of money who has no such privil-
ege. In other words. by legislative enact
ment. this one thousand dollars of the incor-
polated individuals, for the purpose Of loan-
ing and draacing Interest MereO",is increased
in value to three thousand dollars, their
capital of one thousand dollars for the pur-
pose of being loaned, becomes capital of
three thousand dollars. And yetit is con-
tended that three Incorporated individuals
should pay no more tax than the one indi-
vldual, although by reason Of their incorpo-
rated privileges, they derive an annual in
come three times as great. The reason CIV
en- is because the three thousand dollars loan
ed out are an Indebtedness against the bank
and must be redeemed. True, but be it re-
membered also, that the law has put into
the hands of this bank three thousand dol
lars in notes, drawing intesest with which to
redeem this indebtedness, and until redsena-
ed, the bank notes are capital, upon it, there
fore, until Men, it should pay taxes upon
it, the same as taxes are paid upon any 9th
er capital. This view must be so ain to
candid minds, that it is unnecessary to ar
que it more at large.
Mr.. Speaker--.Why sould we show any
special favoritism to bankers? Are they a
more deserving class than your farmers, me-
chanics or manufacturers: Let us look at
this subject. Banking, asnow conducted in
thiscountry, is no longer mystery. Ever
business man knows how it is managed -
1t may be said that the statement make be-
low is not just in relation to some banks, as
they discount more foreign paper than
have mentioned, and some discount portion
of home paper. This may be true, but, on
the other hand, many banks do little busi-
ness except discounting eastern paper, du-
ring the season of navigation, only discount
drafts at 10 days on Buffalo, and 90 days
on New York, securing an exchange equal
to one per cent. every so days, and six per
oapf in advance + 49,