Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1873-12-05
NUMBER D.
Interest on Deposits and orrtiacaiIon Of chers..

'"N''Nt U" b't">ttN aha trftlhfatlOH OF thffks.
The forthcoming report Of the Comptrol-
Ter of the Currency viii contain the follow
ing On the subject of interest On deposits
and certifcatiOr of checks The Difficult
ty has hecn that the proposed legislation by
Congress upon the subject would applv only
to the national hank The effect ai such
legislation would he t. bring state bank
and savings banks. organized bv aathariiv
of the different States. in direct competition
with the national hanks IN securing rhr as-
counts of correspondents and dealers. rh-
national banks will be ir>irous of retain
ing their business. and the more uu-..ru-
pulous woald not hesitate 10 eyade the law
by offering to make collections throughout
the country free pf charge. 81 buy anl sell
stocks without commissions. and O. re,li~-
count paper at low rates The proposed
action Of the clearing hOu-. in the city at
New York If adopted hy the clearing houses
of the principal cities Of the MON. w1uid
do more - prevent the payment Of inter
est on deposits than any congressional en-
actment. but the evils resulting from the
paymen; Of interest upon deposits are hy
no means confined - city banks. I; may
be safely said that this cuStom which pre-
walls in almost every city and village OF the
/ Union has done more than any other II
demOralize the business Of banking. State
banks. private bank and associations under
/ the rui-e Of savings banks. everywhere
offer rates Of interest uppa deposits. which
cannot safely he paid bl Iiio-e engaged ia
Legitimate business. National hanks de-
sirouS of retaining lae business Of their
dealers also make similar oirr> and the
result l. not only an increase Of the rste- q!
interest paid by bu-ine~- men. bat, a. a con-
sequence, Investments in secured lnan>
bringing an ultimate loss Of both upon the
shareholders Of the bank and the iepO~it0rS
The kind OF legislation needed j. that which
shall apply 10 all banks and bankers alike.
whether organized under the national eur
reney act o. otherwise
\ law prohibiting the payment Of interest
on deposits by the national banks will have
little effect unless followed by similar Legs
lation under authority of the different
States. and there Is little hope that such
legislation can be obtained. The national
currency act, which was passed during tine
war. provided ior tax Of One-half of Que
per cent upon AL deposits, and the >uh-e-
luent Internal Ieveuue legislation extended
banks alL individual bankers.
This was essentially a war tax aud should,
in my judgment, be repealed with other
similar revenue taxation. and | recommend,
ID legislation : proposed oa this subject.
that the llw be - amended a. 10 repeal this
tax . far as X applies @ jtBau- deposits.
and that an incrga ed rate # taxation be
imposed uniformly upon all depn-it~ which,
either directly OF Indirectly. are placed with
banks or bankers with the nHrr or expecta
tipn Of receiving interest
such legislation j risil.y enforced will
have the effect NOT only 90 reduce the rate
Of interest throughout the country. but
VIII at the same time prevent the iilegiti
mate organization 5i -lliug- hanks. the
organization Of which -hoa.d 'r allowed
only upon the condition ,ha, the savings Of
the people shall De- carefully JnI prudently
invested, and the interest arising theretrom,
after deducting reasonable expenses. dis
tributeI from time o. time % A. Iepo9itOr>
and % no other persons whatsoever The act
Of March 81. lo'9. aGthori .-~ the appoint
meat 1f "a receiver i!Iny JHIceT, clerk lragent
Of any uaj.oua. hank shall certify 81 check
drawn upon said bank ln.e-- the person or
company drawing SAID euets shall have on
deposit in said bank q the time said check
j. certified. an amount Jt money equal ;a
tie amount specified iu such cheek.
Receiver have Jrru appointed 10Y the
National Bank 1i the commonwealth 'i
New York and thr New Orleans Banking
A->0c5ljioH duriaE ;hr past year Tor viola
ti)n~ ot this ac5, and ii j. the intention Of
the comptroller hereafter o. rigitly en-
force this act whenever h- J. -aiI~hei %
~Hr.I EIAllfIHu.