The evening Argus. [volume] (Rock Island, Ill.) 1861-1871, 1868-08-29
The National Banks
For the Argus.

" TIC huAhON VI III Naf'S'N PNS'''N~ -
the Union Of August 25th entitled "The Ma
tonal Banks
Sir-You attempt to defend system Of
public plumber by citing as true the follow.
ing table:
Jay Cooke in making up the account between
the banks and government for the year 1856,
credits the banks with the following items
/. Six per cent. interest on $4,000
900 in legal tenders held by the
banks az a reserve for deposits. SO, S4VOOO
2. Six per cent. interest on S6O,OOO,-
600, held as reserve for circula-
Uop.,,................................. 100000
s3oo BOO. 600 600 roirculation.......... 100000
(. One half Of one per cent per an
mum tax on 1871 100000 Of dePos-
zo9otVVV
5. One half of one per cent. per an
| nun tax on amount Of capital OF
national banks, not invested IN
government bOnds............,........... 4uU,uOV
| g. One-half Of one per cent. per an
mum tax on dividends and amount
placed to surplus fund of banks du-
ring the past 3,5VV,OOV
| 7. Two dollars per thousand per an
| mum license tax on S424, 100000 of
o4oJVVV
| 8. Amount Of state taxes paid by the
national banks during the past
year, as reported to the Treasury
Department...,.............. o,VoV,VVV
Total...............................$2s,S43, O 900
| Deduct six per cent. interest on S3,OO
100000 of circulation furnished to
the 100000
Bhlalce ''..',.' '''''''''''''
The first two items are not paid to gov.
| eminent, but are based on the fact that the
law requires city banks to. keep reserve
equal to Is per cent, and the country banks
a reserve equal to 10 per cent. of their cir.
culation and deposits, and the tslsehood
that this reserve is kept in non interest bear.
ing government notes. If this we're true
| YOU might with some show of equity, claim
| that this reserve was in fact loan TO the
| government without interest. But the fact
is within your knowledge, aud within that OF
every mau who chooses to investigate, that
nv far the greater portion of the reserve
formerly kept by the National Banks, was
in compound interest and coupon notes,
and that a very considerable portion IS now
kept in compound interest notes and three
per cent. certificates. So that, instead OF
government having loan from the banks
without interest, it is actually paving an
enormous interest to the banks, on this very
reserve.
But this is not all The country banks
are authorized by law to keep three.ftths o.
their reserve at their place of redemption II
one of the large cities, so when interest
bearing legal tenders cannot be obtained
they keep but six per cent. of their circula
ton and deposits on hand, send the remain
der of the reserve to their city correspond
ent and receive interest on it. The city
bank keeps Is per cent. OF this deposit II
Understanding legal tender notes, and III
) vests the remainder in hve-twenty bonds
drawing interest on them from government
at the rate of six per cent. in gold so gov
eminent pays interest on almost the whole
, | of this reserve. And even if there we're NJ
INTEREST," bearing notes in existence 1t woult
pay six per cent. per annum in gold, or al
. most half the Is per cent. reserve.
The official statement of the cOmptrolIe
Of currency, made on the 25th day of July
A. y. 1863, shows that, with resources Il
e the amount of more than one thousand hv
f hundred millions, the banks held less thai
70 one hundred millions in non.nterest bear
;, ing legal tender notes 80 that the state
\ ments of credit to the banks are talsehoot
G and a delusion, and the amount should b
= charged to the banks instead Of credited 4
o to them!
e But suppose your whole assumption wer
n true, as stated Then the first item woult
u be q deceit, for the deposit business must b
/. done by some one If the National Bank
j. did not do it the brokers would and for thei
own safety they would be obliged to kee
this reserve, and the government would &c
the same advantage from them as from tn
r. banks.
/. The third item is specific tax on tn
circulation and is a proper item of credit.
= The fourth, sixth and seventh items ar
Common alike to bankers :and brokers'
q the banks did not pay then the broker
/. would; and think that no one but ma
tionsl banker can see the propriety Of sci
. ting up class of bankers to make none
i out of the people and pay them, every veal
b eighteen millions of gold in order that GOV
eminent may get five or six per cent
their profits in the shape Of taxation
: Would it not be cheaper for the people t
, pay the money directly to the government
5 instead of giving 90 or IS per cent oft t
a the bankers?
The fifth and eighth items are taxes O
capital. The democratic theory is that a
. capital should be taxed, whether in govern
| ment bonds or not If the bonds ar
wiped out, the greenbaoks substituted 70
the bank notes would be taxed BY the ger
eral government, and by the state so the
= these items are not proper credits to the syt
{ TEN. ra
There is then but one item, amounting t
three millions, which can be credited to thi
, system, and that is paid back to the ban
U L.. ca L. .nAnroaA r,aid On ikn rnaarrns