The Morristown gazette. [volume] (Morristown, Tenn.) 1867-1920, 1873-10-29
One of the Modes of Plumber
ing Lawfully.
From the weekly salem, oreeon,) Mercury.l


| Suppose some capitalists were tc
publish an advertisement in sub
stances like this: money to lend
and interest paid TO the borrower" ."
Do you not think that an advertise
ment like this would speedily bring
host of borrowers to the counting
room of the advertiser! We propose
to show that the Government and
people stand toward the National
Banks in just the attitude that this
supposed advertiser would occupy
/ towards his customers. The Coy
! money to the National Banks, and
pays them interest on the loan so
10 de. OF course there Is no such
/ foolish man as the one first supposed /;
! there can be found nobody on earth
so stupid, except our Government
1.-THE best Government on earth
''under Radical rule" True, it is
not every one who can obtain such
favor of the Government; it is con
fined to the faithful few, who enjoy
it at the expense Of the many. Let
us illustrate, s4f
Suppose A. B and c, without
money means of their own, have sonlo
political influence at Washington.
This influence answers them. instead
of money. They go to the Federal
Capital, get charter for a National
Bank, or what is the same thing.
leave TO establish one under the
National Banking Law. They pro-
pose to establ sh a National Bank,
let us suppose for the sake Of illustra-
tion at Utopia. Afer getting their
charter, they borrow hundred thous-
and dollars Of d. for three months,
perhaps. With the hundred thous-
and dollars so borrowed, they pur-
chase Government bonds of a like
amount, which they deposit with the
Treasurer ef the United States, under
this banking law. The Treasarer.
under this same law, issues to these
three individuals, ninety thousand
dollars in National Bank notes. And
now A, B and c, are a National
Bank, prepared to open business Z,
such, at Utopia. -
But Utopia is commercial point
Of considerable Importance a seaport.
and the Government collects CON
siderable revenues there. 1t is
necessary that the Government should
have place of deposit for these rev
enues. where they can be securely
kept. and where they can be drawn
upon as necessity dem ,nds. What
place so tit for this purpose as the
newly established National Bank!
Indeed, it is Une of the points in the
banking law, that these banks shall
keep the deposits of the Government.
The revenues collected, let US sup
pose, amount to two hundred and
fifty thousand dollars. The bank
must give some sort of security Il
the Government that the funds shall
be forth coming on call. Nothing ia
more easy. The bank has ninety
Thousand dollars in National Bank
notes, issued to it by the u. $.
Treasurer; and it takes fifty thousand
of these and buys that additional
amount Of Government bonds. These
bonds are, like the others, deposited
with the Treasurer, who. being thus
secured, authorizes the bank to take
and keep the deposits of Goyeln-
ment. e..... =-'
1t viii now be seen that the hank
has remaining forty thousand dollars
of the ninety thousand dollars in
national bank notes, which the
Treasurer issued to 1t. These forty
thousand dollars are the bank clear
capital. But it's Bankers, A, B ami
G, still owe d. the hundred Thousand
dollars they borrowed ofhim how is
this debt to be paid? Nothing
easier. OF the two hundred and hfiy
thousand dollars which the Govern
ment keeps up, regularly, on depos-
it, experience has shown that it is
safe for the bank to use one hundred
thousand. Indeed, the security is
given and the funds deposited with
the mutual understanding that the
bank may use them that the Gov
ernment will at no time distress its
pet. Accordingly, the bank takes
a hundred thousand dollars of tho
Government s money and pays OF
d, of whom that amount was orig
inally borrowed. Now how stands
the case? Let us express it in
figures. A. B. and c have nothirg
invested. but they draw;
Interest on $40, GOO currency on hand, which
loaned out at per cent per month per -.
Interest on $50 200 in U. s. bonds Deposited
with Treasurer, is Per year .............. 1000
Total interest to bank k....-......... sls,soo
The capital invested is represented by ..-.. COO
Such is the basis of National
Bank, with a supposed capital of
one hundred Thousand dollars. 1t
will be seen that the Government,
and people of the United States.
are actually paying this bank nine
thousand dollars per year ION its
hundred thousand dollars deposited
IN u. S. bonds) for furnishing the
country with an irredeemahle paper
currency of ninety Thousand dollars
while those who borrow of the bank
the Forty thousand dollars Of. cur
rency on hand, pay to 1t four thous-
and eight hundred more, compound
ed every ninety days Now by
multiplying this one bank by about
two thousand banks, and this han
dred thousand by four hundred mil
lions, you will find that the Govern
ment and people OF the Uaited
States are paying about 6fry mil
lions Of dollars per year, for the
wonderful privilege Of loanIng 70
these banks about four hundred
millions of National Bank notes.
based on the credit or the Govern
ment and people! Does history
furnish another such example, of
stupidity. nay, Of fraud, sanctioned
by law? Is il any wonder we have