New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1875-07-31
ANOTHER VIEW OF THE SCHEME.
PROFITS OF THE NATIONAL BANKS

PROFITS OF THE NATIONAL BANKS.
To the Editor OF The tribune
SIR: In commenting on my letter of last
week you ask what grounds does Pro Bono fnnnc"
assume 365 per cent bond would b" worm par I'D
coin or anything like it, and to state that is WIN
the greatest difficulty the Government sells It's per cent
bonds at par and ask what prospect there is OF getting
OAR for bonds bearing 36j per cent interest, spp0Sing
no time were nxcd for the repayment OF the principal
II has been proposed that am aware Oh ta' tn'
Government should issue any bonds without fixed time
for their payment, both principal ana interest ANA
such being the all tie currency Issued that Womb pc
redeem in them would bear no interest while IN cir
culaon and would remain circulation so long ~ the
bc,era could make As nrch the interest on the bonds
for more) out of IT, Consequently they would not he in
market unless there shOuld he plethora o currency
As 10 any difficulty OF selling pr cent bond at par
would respectfully call your attention u iiL IHi, MI
market reports of today, in which per cent In tea
States bonds ore quoted rs. currency, and COLL Is
quoted IS. ii appears that some VINO q" NOT iny
crstand the plan of the proposed iina'cal io,n ae
issue ia addition 10 the present aISt 'odmc oi ~.
money, viz. glconbacas, National htnh ho = e. .'o'
the plan Is 70 substitute Inc new American r"rc"
You spy he total paid TO The National han'1 on
nuds 900 CU ~ the nst report
tl,ie Was about ri00,o0jn0o III bcn> deposited, w'ri
at Icr cent. cnrrercy "a low av'I-' ~ ar.r rr"i.
ton o so BOMBS. aud tlOso hearing lower nets' are
10 fr fr,,, no oIuount sta ed Int even allowing that
Inc amount was Only SI>,9GO.O0J il il lh EIch ih"r
Han II sIouI he aid more than tac American people
will quietly subni, to have WIRING from them hlrA
loucca PEO EOAo PtBIICo.
Thjiadrlphja. July %, 1873
(Tbis CORRESPONDENT il not very successful in eX-
planning the mysteries OF 800 lie does not tel
when where, and in what SORT of none, his 3.01s
are to be paid. lie should bear III iIin that to sub
stiutc one sort of a debt for another IL not 10 T.
debt. lie does moi give tn" shadow of reason for
his assumption that $50 boad will be worth Iari
IL. bo uot fal ia ~ hefl 3.tiD
bonds are regarded by him as curoncy or not eur
rcncy.
The five pcr cent bonds which arc now quoted IL
115 in currency would be sold at par if they
changed for i14li in greenbacks. 500 i'll gold being
the equiv acnt of II 10 III gTecnbacks, and the BOMBS
now carrying nearly tlr,o months coin interest
which is equivalent to ~ % more. The bonds are
selling. therefore, at less than Il of per cent
above par.
From letter recently received from the Con
trollrr of the Currency il a?p'ars that the total
amount of bonds held by the Treasurer on June 80
1879, as security for the circulating notes oi
the National banks was $376,3lA5o0, of
which $239,3J9,4 400 bear interest at the rate
of five per cent in coin. Tl23.sO2,lO
at six per cent in coin and i3 900 al six per cent
in currency. The total interest paid 500 S3.27G
OF these bond, ten per cent are not represented by
bank notes, and Oh that part of their deposit the
banks can no more get double interest than can our
correspondent on his own iive-twcnteS. Deduct
ing therefore ten per cent from the interest IS
above stated we have left S1S 1GG,7iS as the
interest paid on that part of the bonds which tie
law permits to lie represented by bank notes. OF
these bank notes however. the law requires five
per cent to be left with tho Treasury a. Redemp-
ton Fund.- or FIVE per cent III gTcol,acks which
is the thing 30 far as the profits of the banks
are concerned. On this part Of their circulation the
banks do MOI, therefore, get double interest. De
Quoting five per cent from SIS, 1GG.7iS, we have
left ST. 25S,411, being the interest paid on that
part Of the bonds belonging 10 the bank, which is
represented by notes which the banks are al liberty
to lend. Finally. the banks pay tax of one per
cent per annnn on the amount OF their circnlaiion
which for the fiscal year Just ended will amount to
abont 1880, 900, which being deducted from
Sl725S,411 leaves $l3,90s,4l1. in Tound
numbers say $l4,OO0,O0O which includes every
dollar which the Government can honestly be said
to employ in sub.dzing the National banks. Our
calculation is a very partial TO the views Of the
enemies of the banks We have taken account
of the taxes on capital and deposits. bring last year
no less than $iGg, Ois the former and -, 200 9Gs
on tho latter There is also stamp :aX on bank
checks, and in addition TO all these imposions the
banks are heavily taxed by the State and local ai-
thoritcs paying thereto from -, 800 600 TO S1O,-
100000 year.
To put this matter in another light. still more
favorable TO the banks, let us suppose the Govern
ment 10 issue $3.50, 100000 III greenbacks aad to
compel the banks to withdraw their bonds and
retire their circulation. Tho $3.50. 100000. at
present prices, would buy 5000 100000 of five per
cent bonds, which would save TIE Government
81 800 900 in gold interest," less S5,3J0,O0 now
paid by the banks rs tax circulation, leaving a
saving of only 11,150,O00. This the Government
might bp said TO save, while giving the country a
currency of pure paper money, destitute Of any
connection whatever with the " wants of trade
the change producing, in all probab Ity, financial
commissions which would cost the people hundreds
Of millions, besides physical distrcs, Which cannot
be estimated in money We should get also a mass
OF paper money which 10 moral certainty never
would be paid at any thing like its face ylue.-Ed.l