The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1875-07-26

cent. upon its actual outlay. linen IL nas i's
500 600 to operate with. These people L
speak of figure out enormous prohts 10 the
bankers upon toe transaction.
Will you be good enough to explain the
actual practical operation OF national DauK
in getting into business. ana lis average
nroiits. for the benefit Of the uninitiated!
REPUBLICAN,.
COMMENTS OF THE GAZETTE.
The common way OF putting the national
hank question to the people by those who
seek TO make political captal against the
system i this: Capitalists unite ard or
y.urzn "A bank. They then buy the bonds,
4cp,Sit them with the United States Treas.
urrr. and get their circulation. The bonds
draw interest, and the banks loan the cir
culaling notes. upon which they get interest.
| Tncu the haGk is in receipt o! double inter-
st. TO make it strong they put it in this
way: "Tbc capital is 100000. This is
invested in bonds bearing six per cent. iu-
te:e>t ia gold, yielding equal to So
900 in currency. Upon the deposit
Of their bonds $4,000 in currency
| i issued. This is loaned at say ten
DER cent, being $4,000. 10 this way
the bank rc1Ilz"s 1G 9O1UO per cent. upon
its capital. ii the Government would order
the retirement Of the Da!iOnal bank notes
and issue greenbIcks instead, it would save
the interest on three hundred and hfty mil.
lions 0! bonds-Say twenty.one millions per
nnnIm." This is the loose way in which
the question is put AID largely understood,
~ indicated by the Ingenious reform CORE
,pondcrt.
But what are the facts? First, as to pro-.
tits: The Scmi-annuaI dividends OF the na-
toual baLk> from 1869 TO 1874, inclusive, on
capital and surplus. were as iollo~s: sep
| TENDER /. 1863, $50; March |, 1870, S4.2i !;
Sept, mbrr l, 1870. S4oS: March l, 1871,
Il "a: September l. 1871, a. Marcn J.,
1872, 81 1G; September l, 1872, S4.l7; March
| |. 1873, $421; september l, 1873, Si.c1;
liarcn |, 1872 80 Sd; March l, 1873, S4.C3. -
TIE average dividend upon surplus ard
rapi al is lille over eight per cent. per an
mum, and the average dividend upon capital
alone little over nlne per cent. Thus tue
fitulou, profits OF sixteen and twenty per
cent. turn out largely TO be the wind of the
RECKLESS demagogue who talks like Sam.
Cary, without any regard whatever 10 facts.
We suppose no reasonable person considers
nine per cent. an unre Sonab!e profit upon
bank capital. Private bankers would consl-
der it q very poor business that would not
are, OF course, great, and when men invest
their capital in the business they take this
into consideration.
2. Taxation. The banks pay, ia the first
place, Il Government tax on circulation, de-
posts, and capital. This amounted in ten
years 10 S57.712 G1G.06. as follows 1864,
S1G7 3lO45; 1865, Sl954 02960; 1866,
IS lG,735.sI; 1867, S5,S40,695 II; 1868,
s5,s17. 2CS.IS; 1869, S5,SS4SS 80; 1870
$3.50 47370; 1871, SG.l15154 Ga; 1872,
si,703 .91O67; 1878, s1,0v4, G4G.93; 1871,
=. uS3, $685..
In addition to this the national banks pay
State, county and municipal taxes upon their
capital and surplus. The ratio OF taxation
under this bead in 1873 was New York City,
go; But1',lo, Albany, and Troy, to 5 per
cent; Boston. 2.34; Baltimore, 9 SO; Gin
cinnati, 557; Chicago, 2.3t; st. LOUIS. 244 ;
Richmond, 207; st. Paul,3; Charleston,
$50; Memphis, $40.
In local taxation the duplicate represents
about onehalf the real value of the property,
taxed. Banks, however, are taxed on their
full capital and surplus. They thus pay
double taxes of private individuals, but We
will call the State and national taxes
equal 10 four and one-htif per cent. This l.
about what the national backs OF Cincinnati
pay without making any allowance for eX-
ccSSiye valuation.
The capitsl stock and surplus of the 20n4
national banks on the % OF October, 1874,
was as follows: CInilal stock, S493 IGj. III !;
surplus, S12S 9GS lO7; total laNaDl", S622 :
1921. THIS at 43 per cent. is S3l 1885,
GGl.U5.
1t Is thus seen that the national banks pay
an annual tex national, State, and munich
pal-Cf S31 1861 %. OF course portion
Of this capital would be reached by local
taxation If the banks were abolished, but
only very small portion. 1t iSwcll known
that private bankers pay very little tax,
while money is hardly reached at all. Take
Hamilton county for example With the eX-
c"p'iOn Of the national banks little money is
returned for taxation. United States bonds
and greenbacks are not taxable, but national
baDks cannot escape.
). The Banking Svstem. 1t is proposed
that the Government of the United States
Slull permanently engage in the business of
issuing paper money that Shall be legal
tender for all debts, except duties on im.
ports? If this is to be the policy, then a
strong argument might be used 10 favor of
having uniform greenbark currency but
| 20 one who desires a sound financial sy stem
| that shall not tllctuate with every blast of
the political wind can favor any such plan.
| GleenbackS were issued as war measure,
and as soon as practicable the Government
should return to gold and silver as the only
legal currency, leaving it to private capitalists
| 10 issue paper money, under national law,
which currency shall be convertible into
gold at the pleasure of the holder. This is
the only ground upon which specie pay.
menls can be resumed and maintained.
TO this end the national banking system was
established, and to this end it should be
maintained. Ii is the best blnkine system
We have ever had in this country. The cir.
culation is absolutely safe. There is no op-
portuDity under it for wildcat banking. II
has rooted out the State bank system, aud
secured 10 the people uniform and abso-
iutely safe currency. To abolish tue ma.
tional banks would be to open the Way for
the IT Establishment Of State banks. These
banks before the war cost the people, in va
rlous ways, one hundred millions q year.
They did not always see it, because the loss
was called premium On exchange or gold,
Instead of a Discount on the currency; but