New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1867-12-28


The World seems still TO labor undcr the
impression that a bungling lie often told will
answer az well as the truth as a means Of
leading the Democratic party into a crusade
for the abolition of the National Banks and
the substitution at first Of the greenbacks and
ultimately of the old state Banks, with all
their hctcrogcneity, liability TO forgery, and
failure, and perpetual discounts. 1t, therefore,
not only renews the statement that by abol-
isLina tho hanLA iIa entir-s $is,oOoOoo or inter-
est now paid by the Government on the bonds
held by the National Banks as security would
be saved but, by estimating the value Of this
Sl80OO,0OO gold interest in greenbacks and
adding thereto the expense OF collecting the
same from tho tan poyoi7, 10 makes out that
the people pay the banks $2G,12j,OCO. 1t then
deducts only one per cent for taxes, being the
tax paid by the banks on their currency and
arrives at the conclusion that the annual
balance against the Government is S231250OO.
/. Now, suppose all these statements were true,
and that the National Banks were for these
reasons abolished, and State Banks substituted
therefor Either the State Banks would have
to be based on National Bonds deposited with
the State, or on State or City Bonds, or pr-
vate bonds secured by nor gage on real estate.
In the first case, the people would pay TO the
State Banks the same amount OF gold interest
they now pay to the National Banks. In the
second case, the people would pay still more,
because the interest on the State and individual
bonds would be higher, and the State Banks
would be of the same "wlld cat' description
which prevailed in most Of the States prior to
the establishment of the present system, and
whose failure at the commencement Of the Re
bellion wholly deprived the Southern and
Western States of n currency, and involved
thousands in ruin and millions in great loss
and suffering. Banks, whether State or Ma
tiOnal, can be founded on no security so ample
or well adapted 20 the purpose as the National
Bonds. If founded on these, the Government
would pay them the same amount i'm interest
whether they were State or National. Hence
the return to the State system would not save
q dollar.
H. But the Controller of the Currency shows
| in his report that the Banks have paid In
taxes to the State and Federal Governments
S1GOOO,0OO per year, and that they loan to the
Government bonds deposited to secure their
circulation, as follows:
Bonds bearing per cent interest ... 500 OO0O0O
Bonds bearing per cent intercst....... gOOOOO0O
Permanent reserve OF legal tenders. ljOOOOOO0
Total loan TO tho United States. ..... 100000
For which they receive $l0,O00,000 in gold,
| or say $25,000,0O0 in greenbacks, and refund
$1G,O00,0O0 in taxes, leaving but $4,000, 900
which the Government pays the banks for
loan of $4900O0,0O0 or only about two per
cent. The capital which the banks have loaned
the Government Is their own private capital,
and THE bonds which they received for the
capital so invested would remain their own,
on which they would still collect
the $25,O00,0O0 Of interest in greenbacks,
were they not invested in the bank
ing business, without being compelled
to pay dollar Of taxes. The banks therefore
incur S19,00OOOO of dollars in taxes by
using their bonds as a basis for banking which
they would not incur il they simply held their
bonds as investments. Hence it is the Banking
System to which the $19,OOO,OO0 taxes are to be
credited, leaving the result as above stated.
Were the National Banks abolished, the same
amount Of bonds would DO outstanding and
the same coin interest would be payable
thereon, without the counterbalancing taxes
ILL., The report Of the Senate Finance Com
mittee has fully shown that the only plan by
which the National currency could be CON
verted into greenbacks, viz, by requiring the
National Banks to retire their notes from cir
culation and TO accept greenbacks in place of
the bonds they have deposited with Govern
ment Is simply impossible since it involves