National Republican. (Washington City (D.C.)) 1872-1888, 1874-09-22

tax upon that circulation of one per cent,
or $500, and one half of one per cent. upon
its capital, or $500 more, and one half OF
] one per cent. upon its average deposits for
| each wear. which amount, of course, can
| not be definitely ascertained until the ex-
| piration of the year. Then a reserve of
fifteen for country banks to twenty-five per
cent. of the deposits for city banks must be
kept in legal tenders as fund for the pro-
lection of depositors. This may be loaned
on call, but must be in a condition to be
momentarily available. Ifthe deposit line
reaches three times the capital, or S3OOOOO
the reserve would amount to $45, 600 If To-
Gated in the country, or to SIS, 900 if in the
city. In either event. it can easily be seen
thai the circulation is by this time dwarfed
to very insignificant proportions
But this is not the end. We have not
yet alluded to the State taxes to which
these institutions are liable. These, of
course, vary in the different States. The
Comptroller of the Currency, in recent
letter. estimates the State taxes on national
banks, in round numbers, at $40, 900, 900
per annum, or about three per cent upon
the aggregate of $3.50, 100000.
We have already shown that the Gov
eminent tax, including interest on the re-
serves and premium on the bonds, amounts
to three per cent, and when we add the
cost and expenses of preparing and redeem
ing the circulation, the whole cost win not
fall short of six and quarter per cent. to
which national banks are liable before they
commence earning dividends upon their
capital or circulation. Speaking upon this
subject Comptroller Knox says that 'there
" is little doubt that the State taxation
" largely exceeds the amount of taxes COL
1" lected by the United States. There is
d" no doubt that the taxes derived from ma
1" tional banks is at much greater ratio
" than that obtained from any other species
" of capital. In many cases not only the
" capital, but the surplus of the bank is
" taxed, and in other cases bank shares
are taxed at the market rate. While
I" real estate and personal property, in
" almost all the States of the Union, are
g assessed at one third Cor even less) of
" their actual value, bank shares are, as a
rule, assessed at their full par value,
d" and in many instances at a still higher
rate"
These banks formerly paid a license and
those have been repealed, no account has
been taken of them in the foregoing calcu-
lations.
While seven millions of circulation have
been voluntarily redeemed by the sub
stitution of legal-tenders for bonds since
last July, less than five millions have been
applied for by the banks in those States
having less than their quota. A fair pro-
portion of the circulation withdrawn has
been by banks in the Southern and Western
States having less than their quota of cir
culation. These facts show that the out
cry which has been made against the ma
tional banks as monopolies and receivers
of double interest by the Democrats is en-
tirely without foundation. The door is
now, and has been for some months, wide
open for the advocates Of free banking and
those who think that they see in the bust
ness such immense profits, to take up cir
culation and establish banking institutions
under more favorable auspices, and subject
to less onerous charges than have hereto
fore existed. But the indisposition which
they have manifested to enter this rich
placer and enjoy proportion of the much
Wanted double gains to be realized from
operations in it shows their lack of faith in
their own assertions.