The Union and journal. [volume] (Biddeford, Me.) 1858-1882, 1867-12-06
THE CURRENCY QUESTION.

THE CURRENCY QUESTION.
We give below that pan Of the Report
II the Comptroller Of the Currency, bear.
ng directly upon the question now before
he country and which is so Interesting TO
INK payers, even ut the risk Of being tedi
nus rs all Of these reports usually arc.
This, however, ut this time has unusual in
Icrrst. 1t il in fact reply to the attack
made recently in Congress upon the M!
lional banking system. II isa matter Of
TINT Mr.. llulbird entcriuins
views regarded rs sound by financial men,
but il will l'c observed that his reasoning
and figures are not altogether conclusive,
since no denies the alleged saving TO the
by the issue Of non.interest
bearing notes, by seeking to ofise, that saw
ing in crediting the hanks with all the taxes
paid ON business which must he carried
on and taxed in my event. while he also
credits them with leaning 10 the govern.
ment the reserve fund which they are now
obliged to keep, and which for their own
safety they would bc obliged to keep under
the old State hank system, or under any
other system. to meet their deposits:
TAXATION.
II has come TO he recognized principle In
oil legislation on the subject Of revenue, that
all taxes imposed upon the manufacture OF any
article, are ultimately paid by the consumer.
A tax upon any business il paid by the Gus
toner. II Is 80 with hanks. While they should
bear their full and fair share Of the burden Of
taxation, there Is point beyond which taxa
ton becomes oppressive.-greater than the prof-
Its Of legitimate business will justify. Under
the impression that they are realizing inorIin-
proportion to their supposed gains.
The federal taxation amounts TO an average
Of about two or two and q halt per cent. upon
the capital employed while by an express
provision In the act Of Congress, the shares are
taxable by State authority. This Is done upon
the par value OF the shares, ut rates ranging
from two to five per cent which, added to the
federal taxes, makes total tax Of from four to
seven per cent. upon the capital Ut national
banks.
Heretofore, the high premium upon the gold
received In payment Of interest on their bonds.
together with large deposits growing out OF
the abundance OF paper money, has enabled
them to pay this tax without reducing their
dividends below the point of q fair interest on
the capital invested. but II Is becoming more
and moro difficult for the banks to pay their
taxes and their expenses without reducing their
profits below the amount thas would be realized
upon an investment In government securities.
The natural effect Of this excessive taxation
will be an incentive to charge higher rates OF
interest In loaning their money; and In the
end, the business community will pay the tax
In the shape Of usury. There Is q very general
and commendablc disposition on the part Of ma
tiOnal banks to assume their fair share of neces-
sary taxation. They 40 not ask to be relieved
from that. nor that any exception should be
made in their favor. But the fact Is becoming
evident In several Of the States, that the TAX
imposed II In excess Of their abilitO to pay con-
sisiently with legitimate profits to their stock
holders,
This subject Is before tho public upon two
First. To deprive the national banks Of the
right TO issue notes for circulation N order that
'nc So'eihueh' noJ 'oSo0 "s WV" "o''' :" Wv"
place.
Second. To issue United States notes In pay
ment Of compound interest notes, seven-thirty
notes, and five-twenty bonds. as they mature
and become payable.
The advocates Of the aforementioned scheme
regard the first proposition as the preliminary
step to the accomplishment Of their own pur-
poses. and therefore unite In It's support.
The first proposition proposes to withdraw
the circulation OF national banks in order that
the government may occupy the whole field.
The three hundred millions VI bank notes are to
be replaced by three hundred millions OF Unit.
ed States notes.
The three hundred millions of United States
notes are to be used for the purchase Of United
States bonds, which are to be cancelled and
thus MISUNDERSTANDING notes are to be sub
stituted for interest-bearing bonds, whereby q
saving Is to be effected of the amount OF inter-
est that would otherwise be paid upon the bonds
DO cancelled.
II Is claimed that, by the payment Of inter
est on the bonds deposited BY national banks
with the Treasurer Of the United States rs Sc
curty for their circulating notes, the govern
ment pays to the banks bonus for issuing
three hundred millions Of currency, which II
might have without the bonus, by issuing Its
own notes.
This Is plausible proposition. Many Of Its
advocates are honest In the belief that, by act
Ing upon this theory, the government would
actually save eighteen millions per annum, and
they are entitled To fair hearing.
The national banks are authorized to issue
three hundred millions Of currency The same
amount Of legal tenders substituted for this
currency would purchase S277 SOC. 900 United
States bonds at los, which In les than the pres
ent market price. The interest on these bonds.
ut six per cent. would be SIG, $685. 900.
II the bonds could be purchased ut l0a. the
legal tenders would buy s2S5, 700. 900, the in
terest upon which would be Sl7,l42,0O0.
II the bonds could be bought at par, there
would be $500. 900 900, upon which the interest
would be SIS, 000, 900.
The national banks, however. for the year
1865. actually paid over SIG, OOO, 900 in taxes.
IS follows:
To the ..I,?"iol
Total..................."
II may not he improper here to state that, OF
The taxes paid by the banks, the amount re-
,eiyc,l by the federal government u furnished
By the books Of the Treasurer and Commission
r. of Internal Revenue, The amount paid Ia
the several States IL derived from specific re-
turns Of about fourteen hundred banks, the
" inimum rate In each State being calculated
for those banks which made no returns. The
aggregate State tax given is believed to be con.
,iderably below the actual amount paid.
As the revenues ut the general government
ire derived from taxation, the return Of any
'um by the banks To the State governments, In |
The way Of taxes, Is substantially n return Ia
he people who pay federal taxes, and Is prop |
,rly credited to the banks In any statement of
account between them and the government.
IL the bonds purchased by this new issue Of
egal tenders cost.
o., the interest on such bonds would be $lG.G6SG0
Amount saved. .................... Gis,6ii
II the bonds cost los. the amount saved