Ellsworth American. [volume] (Ellsworth, Me.) 1855-current, 1867-12-13

ment would actually save eighteen millions
per annuin. and they are entitled 10 :, istii
hearing
Issue three hundred millions ol carrclty.
r'he same amount of legal tenders sl1>ti
tnled for this currency woald phFs.ta>.
81. .SJ0ou0 United States boai AZ Us.
which is less than the present m,trNct pr;'e.
The Interest on the~c bonds, ut six Per
cent. would be Sl6,j5s, Goa.
Ii the boadS could DC purchased at lO5.
the legal tenders would buy S4o5.s0J.0j9.
the interest upon which Woal- DC Si1 H.
600.
Ii the bonds could be bought at par,
there woalI be $50 100000, upol whic..i
lie interest wouid b. SIS 00o.00J.
The national banks. however, foi thu
year 1859. actually paid over sl5,19y,9J5
inraxes. as follows:
10 the ftderai government. SS,S.'-t5N
70 iie States, ''S''t'i
Total Si,5l3,5S9
Il NAV not be improper here 20 STATE I.iat,
ofthe taxes paid br the banks, he am piiit
received by the federal government is fur
nished by the hoo;s Of the Treasurer and
Commissioner OF Internal Reveh'tc. The
amount pail to the several States IS de-
rived from specific returns of about four
teen hundred banks. the H!iRimam rate III
each State beinr calculated from those
banks which made no returns. The aggre-
cate State tax g.yaa is believed 10 De coel-
sderabIy below the actual amount paid.
As the revenues OF the general govern
mcu. are derived from taXatioa the return
OF any sum by the banks to the State gov
ernment, in the way of taxes. is subStan-
TALLY a return to the people who pay fed
eral taxes, and is properly credited to the
banks in any statement OF accoAat Detwc II
them and the government.
Ii the bonds purchased by tniS new issue
of Legal tenders cost
Us the 1T. on such bonds would DO sls,G6s, a0J
Deduct taxes paid By The banks, l5,7i7.'St
Amount saved. G.S,ai4
If the bonds cost le5, the am 1unt saved
woull be = l22 Gil.
If the bonds could be bon sht 1T par. tie
amour. saved woH.d De S3.o99950.
United Sytte- six PEI cctt. bonds afc
nor worth ia the IN ark from eisl' TO fe.i
per ceAt premium: bn5 the probabilities
are t;lal Il thi- measure sh3uhl be Il l1ptrzi
rs the policy III Tie 4goFera,ntht. The Jesid,
coail b. 5)d -. II par. Il ~ = % as@a.li-
ed, thea that the SIgiIr w.. r. 81 al
u the n. ttsata.l- - e5tfe't. w: a3.dj),j3J-
This iS--~rfe sum total to be saved. ta,ter
the aspect Of the case most .av5fa5is 70 tde
adyoca;cs OF the p.r.to~rr cila~z,c.
Bat mis- is 10. all. The natioll banks
are compelled by law 10 II old censtali. Il IN
reserve Il certain percentage OF t.Icir err
cnint,on and deposits in United States ir-
gal tender notes. The al!oiaJ th"s neid
perm .nently in reserve j. never less tiian
one la i;lred and fifty millions, (ietnai.y
about $3.50 .00J.031, ) aHl Is e"atuitou,
loan 10 the government. lie b3uhS -ci
no interest Oh il. IL is 81 iaHeti Vi their
CAPITAL unproductive. Invested in uon-itl-
terest bearing notes of the government.
The case NAY uow DC stated thus =
The banks have loaned to the govern
nlent as follows:
For bonds deposited to secure their
circulation, bearing ~ peg cent. iat. $50 coo
Bearing dive per cent. interest !".oo0,oI
Permanent reserve OF legal tenders, l|',odp, 50
Total loan to the United states, 80 ,O0l,oJO
For which they receive:
fix per cent int est on s.i3,0co,oaa, si5,o1o3n0
Ave per cent interest Oh s.y0oO,Ve5, Si.3ev 1jJ
Total soaaasoo
Bat they refund II taxes, ln,9 V,bVS
Leaving, o.5oooJ0
whic, the banks actually pay as bonus u"
The government for the privilege OF c!.1a-
latin. their own uate>.
The fact should not he overlooked. In
til, connection. That Tie bank have drioS
ted S3i0 900 900 with thc Treasurer as Sc
.urity for their is>ues. NuW. the Cnitea
states could not possibly bay over tiret
hundred millions oil these bonds without
an actual addition of thirty or :orJy n.l-
lions of SrvenbacSs u The amoans it i
proposed 10 Issue in leu of three hundred
millions OF national bank notes. The re-
suit would be, either the government
would fail TO save 81 100000 or forty mil
lions of its bonds which it could no; pur-
chase. or it woald have to try the danger
Gus and unnecessary experiment OF as,ain
initiating the currency.
The ninety millions of five per cent
suppose the SIX PEI. cent bonds could be
bought IN At Iti. Though thy
W. u, los '''N''' $500 900
Il would take ss5,oJ0,clo
70 buy the bonds now held by the hanks.
Here is a direct imitation OF over so, CO.
900.
But the imitation would not stop hero
The withdrawal of circulation from the
banks would cause nine ont Of ten 10 wind
mp. not because the privilege of circulation
Is absolutely essential in order 10 do q
banking business, but because banking
associations would not submit 10 the re-
strictions and limitations imposed by the
act of Congress without the eonpenSory
privilege OF circulation. They would eli
iher reorganize under State LAWS, and thus
get rid OF federal control, Or they woult
do business as private bankers. In either
event, the entire amount of legal tender
now held in reserve would speedily be re-
leased and added to the volume of paper
nrfoat, which with the iilly millions slatct
above. would make an actual addition o
nearly twa hundred millions to the active
paper circulation OF the country.
The effect of his it would moi be dllieul
to forctell. bur it may be more appropriate
I've onsidefed hereafter.
At this point it Will not be out of place
TO consider some Of The consequences ina
would be likely 10 result irom the genera
closing of the banks OF the country.
Thai they would wind mp may be regard
ed as certainty, and the first step would bt
in the way of contraction. Discounts
would be suspended, accommodations
would cease. and merchants. Manufacture,
and other business men would be deprived
ofth CIR accustomed facilities. The banks
have over five hundred millions Invested
IN si,e actual business in the country. The
Withdrawal ola Comparatively small portioi
of sctiye capital from channels OF trade u
ALWAYS sensibly felt. la this ease TIE tenn
roarr withdraw al o. capital woa.d Dc upoi
n large scale. Nhlle the assets oi ia
hanks we're being eonve ted into cash n
or,le, TO be returned to the stockholders
business of every kind would be unsettled
trade would suffer and incaleaiabie INJURY
,vc,}d be done. A revolution OF fiilS Aiad
,null not be effected without serious dam
ama =, the county. There is no doubt
,,at tho aetuaf..s for banking iaciiti les