The Ottawa free trader., 1875-07-31

Il
garphs, makes las plain as the nose on q
mans iaCe" a subject about which one con
stantly sees great deal of nonsense in papers
of certain class:
The Chicago organ Of the national banks
propOunds the question how the abolition OF
those institutions can save any interest to the
government. The bonds ii says, will bear
the same interest in the hands of private in.
dividuals, or in the hands of the banks, as
they do when deposited in the treasury to Sc.
cure bank circulation The question is an
old one, and the fallaCy of the answer has
been exposed some hundreds of times. Still
another exposure may not be out of place.
The abolition of banks would save no inter
est, but the abolition of their circulation
might The abolition of the circulation of
the banks would save the interest on the
amount of bonds which an equal amount of
grecnbaCks would purchase, less the taxes
which the banks pay on their circulation.
This is as true as any proposition IN mathe-
mates. The amount of national bank notes,
we will suppose, is $3j0,000000. If these
notes were withdrawn, an equal amount of
greenbaCks could be issued without neces
sarily dcpreCiating them at all, and these
CreenbaCks would buy, in round numbers,
rstes, and there would be q saving of some
Sl7,760,0OO annually a. long as the green.
backs should remain outstanding less S3,-
100000 tax on circulation that is, there would
be a net saving of more than fourteen mill.
ions. This is as certain as the proposition
that two and two make four"
Another point in reference 10 the national
banks about which there is a great deal of
uttered in the papers already refer
red TO, is their supposed enormous profits
from the bills they get in return for the bonds
they deposit with the L. 5. Treasurer. The
common way of putting it Is, that bank
with say $lOOO capital deposits that amount
Of bonds with the treasurer, on which il |
lraws per cent. interest, and IN addition gets
800 900 in bills from the government, which
It loans at 10 per cent, realizing 1G per cent
IN its capital, and so on.
DO those who are in the habit of putting |
he case in this way, rccolcCt that in addi- |
ion to the 100000 IN bonds the bank depos-
Is with the treasurer 1t also deposits about
$4,000 with him as redemption fund.-" and
HuSt ht'p IL iCsNlNc VI SIcSHDaChS III us /
,aults to take care Of its circulation? The .
whole amount of dead capital the bank must /
lold in reserve on account of its 100000 pa
Der 1t gets from the government is about |
$4,000. Now suppose, instead of using
hcsc 100000 bills the bank gets from the
government to bank upon, the bank placed !
hcse $4,000 In It's vaults and used that sum
IS its active capital? How much less would
he bank be likely to make than in the pres
mt way? The truth is the banks find so lit
le profit III taking this "loan without inter
ST from the government that many Of them
re returning their paper and taking up their
onds, and all of them would as soon do so as
ot, We state this to show that the PROPOSE.
ion to withdraw the national bank circula-
ion entirely and issue our entire paper circu.
atom directly from the national treasury is
ne to which the national banks are not as
ioently opposed as many people imagine
I least from motives of selflnterest.