The Emporia news. [volume] (Emporia, Kan.) 1859-1881, 1874-10-30
BANKS. BANKERS,
ssreennacl.. n,,,, rn.ation.

MIR. EDIToR:-With your permis-
ion propose to examine the finan-
ial plank in the so-ealled Reform par
y, and show that IL their ideas of
nance should be adopted it would be
ar worse than tic present system. 1t
s as follows:
Fifth. We demand the repeal of
he national banking laws, and that
he government shall issue legal ten
Ter currency direct from the treasury,
for government bonds, |
bearing the lowest rate of interest, and /
which currency shall be receivable |
both for public and private dues
1t is a conceded fact that govern
ment bonds are not taxable. Under |
our present system the currency Issued |
to the banks is taxable for all purpos-
es, and consequently currency based
upon those bonds becomes, for taxable
the same as an equal amount
in value Of personal property. We
have then, say, in round numbers,
three hundred millions OF taxable
property that We should not have III
this act should be repealed.
But what would be the result if the
act should be repealed and the bonds
thrown upon the market? As it now
is the government pays annually to
these banks for interst about twenty
millions in gold. Now, were this law
repealed would the government save
that interest? BY no means. The
bonds were Tot issued 10 the banks as
such, but were issued to meet tile cur
rent expenses Of the government in
suppressing the rebellion, and when
bankers wanted them they had TO 20
into the market and buy them.
1t Is well known fact that we hold
in the United States all the bonds we
have money to pay for, and were the
bonds now in the hands of bankers
thrown upon the market they could
not be held here, bat would be sent TO
Europe and sold, and instead OF re-
tanning the twenty millions of gold an
nually in our own country, It would
have to be sent to foreign countries TO
pay the interest now retained here.
But they tell us the government
would issue greenbacks in their stead
and that would remedy the evil.
There is popular opinion by those
not well .versed in financial matters,
that greenbacks, Us such, are taxable.
Such is not the case. They are as free
from it as government bonds, and can
not be taxed for State, county or mu-
nicipal purposes. Our own supreme
court has SO decided in the case OF
Mitchell VS.. Commissioners of Leaven-
worth. 9th Kas., page $40. See Act
of March 3, 1868, y u. S. statutes at
large, 100; Wal. %; 80 Ind. %.
Again, they propose that the gov
ernment shall issue large amount OF
greenbacks that can, 1T the option OF
the holder, be converted into govern
ment bonds. Then what would be the
inevitable result? We do not CEASE
paying interest on the bonds now is
sued, but the proposition is to increase
our bonded indebtedness, and Of cours,
we should have a greater amount o
interest to pay without receiving any
corresponding advantage.
Greenbacks are OF no greater val
ne than bank currency. The govern
ment is bound 10 redeem all bank note
not redeemed by the banks that issu
them, and consequently are of equa
value. 1t was for this purpose tn
banks were compelled to deposit wit
the government greater amount @
bonds than they receive of currency.
But how would the repeal of the lay
effect bankers? Bonds are now wort
rot less than $I.l5 on the dollar
Banks receive from the goyernmer
500 in currency for every $IO0 in bond
: If our national banks were closed u
; and the bonds sold, the bank wOul
! receive for its bonds nearly a thir
5 more than they hold in their currency
[ For instance, the First National ban
S of this city has 100000 OF bonds O
e deposit with the government for whic
, they have received S00,000in currene.
If the bank, as such, was closed, the
they could sell their bonds for at lea
$4,000. This would give the banl
as private institution, $4,000 MOI
of money than it now holds.
There would also be another adyan
, age to the bank: It would not have
pay taxes on 100000 that it now does
1t is true the bank would not get il
7 $4,000 interest on its bonds, but
= seems to me that the interest on I'll
$4,000 extra of circulation, and Ii
t deduction OF taxes, would be greater
4 For instance: The $4,000 extra Gil
e culation at 10 per cent would be $3.50
taxes on $4,000 at / per cent, s3,6Ot
making in all, $3.50. From this de
duct $4,000 now received on bond
, leaves balance in their favor of 81
i, $50. This amount would be decrease
not one half by difference betwee
currency and gold as interest.
Then so far as the banker is concern
ed he would be as well Off as befor,
while it would make large differenc
in taxes TO the county and State.
would make difference OF SI35,O00 c
taxable property in our county if thi
law should be repealed.
/, As to the government there can b
no approximate data given. AS it
now money could be had in New Yorl
on call loans, generally, for seyera
months past, at from two to three pc
cent. If much larger amount of cur
rency should be Issued the most if no
+ all OF the excess thrown upon the mar
ket would be funded, and the govern
ment would have to pay interest on ii
thereby greatly increasing our nationa
burdens.
There is another serious objection t
this policy. They desire and ask tina
greenbacks be received for both publ
and private dues.
The platform pretends to be in favo
OF the payment of all our nationa
debt. 1t greeubacks are to be takel
for public dues, including imports
which are public dues, then from wha
source can the government derive sui
ficient gold to pay the accruing inter
est on our bonded Indebtedness Their
would be no other way than for gov
eminent TO go into the market in com
petition with gold gamblers, and pay
whatever they might see fit to charge
and the natural effect of this would b
to increase the market value of golC
and completely unsettle all CONNER
cial values, and render the return to /;
specie basis almost, if not quite, impos,
sible.
But suppose the government should