The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1867-12-30
The National Banks.
From the ~ Y. Tribune.

From the ". Y. Tribune
The World seems still to labor under the
impression that bungling lie often told will
answer as we'll 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 ulti
mately of the old State banks, with all their
heterogeneity, liability to forgery, and failure,
and perpetual discount. 1t, therefore, not
only renews the statement that by abolishing
the banks the entire SIS, 100000 of interest
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
SlS,000000 gold interest in greenbacks and
adding thereto the expense of collecting the
same from the taxpayers, it makes out that
the people pay the banks S26, l25, 900. 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 S23, l25, 900.
|. Now, suppose all these statements were
true, and that the national banks were for
these reasons abolished, and State banks sub
stituted therefor. Either the State banks
would have to be based on national bonds de-
posted with the State, or on State or city
bonds, or private bonds secured by mortgage
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 peoYle 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
''wild cat' description which prevailed in most
of the States prior to the establishment of the
present system, and whose failure at the COM
mencement of the Rebellion wholly deprived
the Southern and Western States of a cur
in rniO nd
millions in great loss and suffering. Banks,
whether State or national, can be founded on
no security so ample or well adapted to the
purpose as the national bonds. II founded on
these, the Government would pay them the
same amount in interest, whether they were
State or national. Hence the return to the
State system would not save dollar.
II. But the Controller of the Currency shows
in his report that the banks have paid in
taxes to the State and Federal Governments
$4,000, 900 per year, and that they loan to the
Government bonds deposited to secure their
circulation, as follows
Bonds bearing per cent. INTEREST,". $3.50. 600 900
Bonds bearing per cent. interest..... 90 700 900
Permanent reserve OF legal-tenders... l5O,0OOOO0
Total loan to the United states $3.50 900 $50
For which they receive $l9. 600, 900 in gold,
or say $25, 900, 600 in greenbacks, and refund
$l6,0 900 in taxes, leaving but 49, 900, 600
which the Government pays the banks for a
loan of s49O, OOO, 600, 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
$25,000,000 of interest in greenbaoks, were
they not invested in the banking business
without being compelled to pay dollar of
taxes. The banks therefore incur SIS, 900, 900
in taxes by using their bonds as a basis for
banking, which they would not incur If they
simply held their bonds as investments
Hence it is the banking system to which the
! $4,000, 900 taxes are to be credited, leav-
ing the result as above stated. Were the
national banks abolished, the same amount of
bonds would be 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 recurring the
national banks TO retire their notes from cir
culation and to accept greenbaoks in place of
the bonds they have deposited with Govern
ment, is simply impossible, since it involves