Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-01-13
THE NATIONAL LEECHES.
A Question of Interest.

To the Union and American:
Some days since / noticed in the
Nashville Banner alengthy communica-
ton arguing that the people do not
lose anything by the Government in
terest paid to banks on their bonded
capital, and that the present is ''the
best banking system the country has
ever had" Neither you nor the Ban
ner have taken the trouble to expose
the sophistry of this bank logic; but
such views ought not to go unchal-
lenged in this community. The pith
of the argument put forth lies in this
statement:
1.-The banks do not buy their bonds
from the Government; not single new
bond is issued when a bank is organ
lied; not a dollar more of interest is
paid; but it is simply paid to the first,
second, third, or fourth national bank,
instead of to A, B or G, from whom the
banks purchased the bonds.''
Just so. But the business of the
country seemsto demand over 500, 900,
600, and would float this amount of
greenbacks. Suppose the bonds held
by the banks were bought in by issu-
ing the necessary greenbacks to replace
the national bank notes; then there
would be no interest to pay either to
the first, second or third national bank,
nor to A, B, or G.. We have a green
back system, but don't make full use
of it, and so are paying over twenty
millions of interest each year unneces-
sarily. That's the point. Let us have
what good there is in this greenback
system, or let us abolish it altogether.
Again this writer says:
1.-THE people pay no more interest to
the banks for the use Of national bank
notes than they would pay for a ike
amount Of legal tender notes"
Ingeniously put, but it means only
this: the banks charge a merchant the
same discount on 500, whether 1t be
passed over the counter In greenbacks
or in national notes. Men who go to
bank for accommodation expect to pay
the bank interest. But while the banks
are thus drawing 10 or II per cent in
terest from our people, they are also
drawing or per cent interest from
the Government onnational bank notes.
The people at last have to foot the
Government bills, and they object to
this double interest. Banks draw only
one interest on greenbacks-that paid
by the man who borrows money
out of bank. As to the present
being "the best system the coun-
try has ever had" the people are likely
to judge the tree by its fruits-a chronic
series Of fever and ague fits of plethora
and stringency, eliminating semi-occa-
sionally in Black Fridays and Jay
Cooke crashes, spreading panic, disas-
ter and starvation over the
land. 1t is certainly the best
system ever devised for the profit of
bankers, to the increase of taxation on
the masses. The uniformity of our
present currency, even IN its deprecia-
ton, has many commercial advantages,
but that uniformity is derived from its
greenback basis, resting on government
credit-nOt on the national banks.
The grievance of paying double interest
on these bank notes, might be readily
abolished, and the boasted national
bank system go on the same-that Is,
if banks were content with the ten per
cent now allowed by Tennessee law. In
Democratic times banks were content
with six per cent, and fourished, af-
fording merchants much greater facil-
tiles than now in the movement of goods
and produce. VIx.
1t is proper to state that the above
was handed in Saturday, but was un-
avoidably crowded out of our Sunday
issue-UNIoN AND AMERICAN.