The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1868-03-05
srmas $500 per- amman, in adyance.

manufactures pay from three to five per cent &.
al rdIOrena upon their fabrics Banks pay
one half per cent. upon their average deposits
and one half per cent. upon their capital, eyi-
| dantly rate rather under than above the
general imposition upon proftably employed
capital. Hf-.
But the argument is based upon the as
sumption that by ceasiDg to pay interest on
its paid bonds the general government will
lose revenue from taxation offs 100000 per
annum. This assumption will have no foun-
dation if in reforming the Internal Revenue
system, as is here proposed, all special tares
are swept away. 1t has become possible, and
expedient; TO give up this taxation at all
e'ents,and surrender the only plausible equiv =
a'eht Ion the sratuitous payment of such i'll
terest. s .....
Inc ehect OF taking from the banks the
power to emit THEN own bills of credit to cir
culate as money will be either to continue
the banks as banks of discount and deposit
performing substantially the same functions
as they now do or to drive the capitalemployed
in them into insurance, manufacturing, rail-
roads Or other stocks, or to leave such capital
invested in United States bonds.
1t is only IN the latter eontins sency, that
the United States would lose present source
oil revenue. But that contingency is not
likely to happen. Banking is almost as old
as commerce. Men and companies banked
upon coin and bills of exchange centuries be-
fore paper money was invented. Banking is
and has been profitable in the hands of men
and corporations, that never had the power
OF issuing their notes as money. Some of the
strongest and richest banks under the old sys-
TEN scarcely availed themselves of the right
they have to issue currency. To lend money
is one of the necessities of capital. The poor
man need not bOrroao, he may be patient and
earn but the rich mau must lend and get his
interest or he will starve to death. While it
is necessity Of accumulated capital to earn
interest, while men that have money can gain
confidence, and attract without paying inter-
est, deposits, by associating their means and
credit, there will be banks performing profit
ably to themselves and usefully to the COM
munity all the essential offices they now per-
form.
II the banks continue and special taxes are
maintained, they will be as now the subjects
of taxation. At least their deposits will be
taxable, and deposits contribute $6,5OO,OOO of
taxes, whereas capital contributes but $780,
900. If they go into liquidation and invest in
other business the capital so transferred will
yield greater tax than it does in banks If
they go into liquidation and hold their bonds,
the government gets an equivalent, as from
its other creditors, for the interest it pays, and
there is a demand for $500, 900 more
bonds to use as basis for the banking busi-
ness that private individuals or new compa-
nies will establish to fill the udcuun, and up
on that s3OO,OOO,OOO it will pay no interest.
The true cost of the national banks to the
United States supposing that a mode of COM
pelling State taxation has at length been
found, and supposing all the banks stood in
relation to the bank tax as the Maine banks
stand, should be stated thus:
Interest paid on capital stock, invested
in U. 5. bonds, gold at 81 10, S27. 800 900
Loss OF State tax of per cent, 100000
Total, an soo ooo
Less tax on capital 3per cent, 1900 900
totai per annum, S2S, SOC, 900
which is 81 per cent ON loan of 1891 100000 by the
banks to the Government
Mr.. Hulburd's extrayagant estimate that
the banks pay bonus of $5,5OO,OOO to the
government may be Offset by the following:
Interest paid by capital stock as above s27 800 900
Loss OF Dank tax, sHf ltr. Wiz 100000
loss OF state taxes on shares, 100000
Less ming reserves OF currency, which, NY
there were no banks, would be
5000 100000 instead OF $3.50 O00, 900, 37,oOOOOO
Total, SIS, 100000
Less taxes received on capital, 100000
s7s,sOO,OOO
GIFT.