Daily union and American. [volume] (Nashville, Tenn.) 1865-1866, 1866-11-07
VOLUME XXXIII
THE NATIONAL BANKING SYSTEM.

The condition Of the country at the pre-
sent time precludes, on the score of Pru-
dence and policy, the discussion of an
abrupt abolishment of a banking system,
which, though unstable and unreliable
because founded in error, is inwOven into
the business interests Of the people. The
following criticism Of the Chicago Times on
the national banking system is, however,
not out Of place:
These National banks have a circulation
Of some S300,000, 900, to obtain which they
have deposited a triie over that amount in
Government bonds with the Treasurer OF
the United States. Upon these bonds they
receive interest in gold, at the rate OF SIX
per cent. per annum, while they have the
use Of this immense circulation, equal to the
par value of their bonds, for nothing. This
circulation they lend to the people, and are
authorized to charge interest for 1t at the
rate of ten per cent. per annum, and tins SIX
per cent in gold, equal to nine per cent IN
currency. swelIs the total interest which
they receive to nineteen per cent. per annum,
upon their nominal capital. But their
bonds scarcely cost them more than nifty
cents on the dollar, in actual bona tIde money,
and hence their nominal capital Is about
twice as much as their actual capital, and
instead Of nineteen per cent, they actually
receive hirty-eigM per cent. upon their real
paid-in capital This is upon bonds and
circulation alone, and does not include the
immense Sums which they realize from the
buying and selling of exchange, the inn
mense profits accruing from the use Of the
heavy Government balances, which are left
with them from time TO time, neither the
enormous income derived from the use OF
their individual deposits, etc.
Now, when the Government returns to the
banks, in the shape of notes Of issue, all the
money they have invested in the bonds de-
posted, why should the Government allow
them, also, the interest upon these bonds? 1t
as an absolute and undeserved gratuity, paid
out Of the Federal Treasury, to associations
which have performed no service, and pro-
mise to perform no service, in return for II.
Now, the interest upon this S3OO,OOO,OOO IN
bonds amounts 10 SIS, 100000 per annum in
gold, or to S9,000000 every six months, for
the interest is payable sepi-annually. Nine
millions in gold every six months Is good
for the people to throw away, with their
enormous public debt and the grievOus taxa
tion whichispressing, like mountain OF lead,
upon their shoulders, especially whenit brings
them not one single advantage or benefit in
return. We are aware that where millions
are being wasted like water nine millions
seems a sum so small that our tax-rldden
people scarcely think it worth their while
to look after it. But this is not simply nine
millions. 1t is nine millions every six
months, as long as this pernicious system
shall have an existence. And beside
steady leak of nine millions every six
months, without cessation or intermission,
all the other acts of wasteful extravaganza
and misappropriation of the peoples money
during the war are dwarfed into insigniti-
canoe. 1t is n leak through which the
wealth Of universe might disappear.