The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1867-10-23

capital OF individuals who have thus united their means
In legitimate business-and matter who held these
government securities the interest would have 70 be
paid all the same The national banks just as much
entitled 10 the interest on the United States bonds they
have bought and paid for the farmer the me-
cnanic and the merchant, 70 the interest the bonds
II being plain then that the government coners no
SPECIAL privilege upon the banks by simply paving them
,n,srss. on the United state, bonds they hold DO;
and loss 10 government OF which hear complaint
Ny statement made above being necessarily admitted
will be claimed that national banks permitted 10
issue three hundred millions Of circulating notes. which
amount they loan TO their customers at an average In.
interest single investment Of three hundred mil
lions OF dollars Then follows the additional claim that
drsd millions Of circulation and with L buy up and cancel
equal amount Of United States bonds thus saving
the people the eighteen millions OF annual interest
This has plausible look and msleads many. By this
showing the banks stand charged with eighteen millions
Of annual interest derived from their circulating notes.
which amount II Il really be received and no equivalent
be rendered by the banks virtually gratuity spe-
cia privilege enjoyed by tho national banks. The In
I1' Ssh . % % conc
nec.ed exclusively with the circulation Of the banks
But reply the national banks do not receive any
thing ike eighteen millions OF interest on their three
hundred millions OF circulation. What they do receive
tho following facts, which are accessible to all, will
The very law which authorizes the national banks 70
issue circulating notes az all also requires and compsls
twenty per cent twenty per cent in cities and ar
teen per cont in the country or the Of that cir
q
dred millions Of circulation, lying idle in bank tho year
round, and the amount which the banks receive
interest 10 thus reduced 70 two hundred and forty mil
lions.
Again. the same law REQUIRES and compels the banks
70 keep reserve equal TO twenty per Gent Nwenty
i've per cent in cities and fifteen in tho country
OF the average amount Of their deposits, both
public and private and this reserve must be
the year as ssh 900 thus STA 900 Of the
non-interes bearing legal tender notes carried by
the banks during the past year, which is just on
ofc
government by the banks This deducted from the
$3.50 900 leaves only 1929 900 $500 900
OF circulation available to the banks the result Of
balaucesheet between themselves and the government
on this question Of circulation Six per cent interest
is the total OF profit which the banks can derive
from their circulation long the government has
legal tenders which wishes TO have carried without in
Some may object to my thus coupling the reserve rc-
CURED to be held for deposits with the for crcu
laou This objection might have some weight IL the
government were not itself proftng by the issue OF nom
interest bearing notes. large proportion or which
carried by the national banks with the very sup
piled to them by the gratuitous of their notes.
Thus this amount Of STA 900 900 is fair deduction
from the circulation which the banks are
But there still remains apparent profit of 0Oo
derived by the banks from their circulation What have
the banks to Offset TO this seeming subsidy
Fst-They paw to the National Treasury ono per cent
per annun one-haf OF one per cent semLannuayl on
the whole amount OF their circulation, say 900 ooo
OF one per cent per annum on the amount Of
their deposits which, as the deposits ast year averaged
Third They pay national tax their capital stock
over and above that invested in government bonds,
which tax last year amounted to s4oo, 600
The above three items required by section Al OF
the amended National Currency act.)
Fourh-rbey pay tax Of one-half Of one per cent
per annum on the net amount OF dividends and amount
carried to surplus fund, which for the past year
amounted to IS, 800 600
Ffh-They pay license tax Of two dollars on every
one thousand dollars of capital Tho aggregate OF
tona bank capital AZ last reported Is $424 000 and
the license tax on this is $94S, 900.
ID five guu u1ad ing "a
paid by the banks directly into the national treasury,
and they alone exceed the amount charged against the
banks Is profits on their circulation BY two millions
eight hundred and forty-three thousand dollars
t$2s
alton the banks paid during the past fiscal State
and local taxation, shown by returns 70 the Comp
roilers department. amounting 70 about eight millions
Thus have shown that in the items Of State and na-
onal taxation these national banks are annually paying
back 70 the people nearly eleven million dollars more
than they annually receive in the way Of interest
their circulation.
Tho public will notice that none OF these facts have
been referred by those who have Of late under
taken TO discredit the national banking system
81, Is true that the National Bank notes are all printed
pose Of securing uniformity and OF preventing over
issues but compensate for this have purpossly left
out Of the above hist many items which might otherwise
have added materially the aggregate paid by the banks
TO the government for tho privilege OF their existence.
One OF the most important OF these tcms which have
omitted is the gattuous service OF the banks In rcceiv
ing transmitting and discussing the government re-
year transferred 70 the Treasury from all parts tho
country the vast sum OF $685. 500 6S4 Sat least ninety
work not been performed BY the depository banks an
immense expenditure would have been entailed upon
the revenue department for additional clerk hire vaults
express charges &C. DC Besides the above there
10 the item OF revenue stamps consumed by the banks
consider these two items alone fully equal 10 the
cost Of engraving and printing the National Bank cur
rency.
For the purpose OF showing at glance the result Of
the above statements the following recapulaton is
m n
and the government the banks stand credited with the
folio wing -
six per cent interest on sll4,oooooo in
legal tenders held by the banks as a reserve
a-sir per cen. interest on $50 600 held - $500
as reserve for circulation ........... 100000
circulation NEUTRALITY-SUSPICIOUS.. 5000 900
4-one half Of one per cent per annam tax
on s57I 600 900 Of deposits ASSOC
amount Of capital OF national banks not
invested in government bonds. .......... 400, 900
o-one-haf Of one per cent per annum tax
fund Of banks during the past yesr..... $500, 600
Two dollars per thousand per annum
license tax $424 600 900 Of capitai..... S4s, 600
s-Amount Of State taxes paid by the
tional banks during the past year, as re-
ported TO the Treasury Department. 10000 900
Total. .s2s, saa 600
Of circulation furnished to The banks. 100000
49,
Balance ACKNOWLEDGEMENTS sos a., 600
This balance sheet between the banks and the people,
every item OF which based upon official data, SHOWS
that only Is the eighteen millions subsidyh swal-
lowed up by the very terms and stringent provisions of
the law but excess Of $40 S43 900 paid to
government by the banks for the privilege OF exist
eng This call taxation with vengeance. And, let the
people remember, that until this national system
adopted and took entire OF the
currency, revenue whatever derived by tho
nation from either the circulation or deposits Of the
banks, In return for their chartered privileges
To up the whole matter In word-tne American !
people by destroying the national banking system.
ttrnU fha han and utztttu ting
greenbacks therefor, would lose In net
alone paid TO the by the banks than they
would gain Ia the cancellation OF their Own interest
bearing bonds This statement OF the can be COM
pretended by all aud cannot be denied by any. And This
leaving whoilv out of view the far greater loss which
the people would sanef by the destruction OF the pre-