The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1876-08-12
Taxation on Circulation Of State Banks.
SPEECH
or
HON. CHARLES B. ROBERTS,
or MARYLAND,
In the House of Representatives,
Saturday, July 20, 1876.


The House having under considcratio
the bill (H. r., 3,727, to reduce the ia
ON the circulation of State Banks to Il
amount equal to that paid by Nation'
Banks,
Mr.. RoBERTs said, Mr.. Speaker, a
th9ugh | may not now reasonably hope I
see any action taken ut the present scssio
npon the bill II. Il. No. 3727) which
Introduced on the 18th of june last 70
hc purpose Of reducing the tax on tn
Circulation of State banks to an amour
equal TO that paid by national banks,
hall yet be entirely content if | succee,
b calling the attention of the House ant
pf the country to the importance of a sub
jeet which, in my opinion, has not re
oeivcd the attention to which it is entitled
eithcr as an abstract question of right o.
IS question out of which would result
great good to the people OF this country
II treated Independently Of partisan con
siderations aud with view to multiplying
the means by which the country may hope
to escape from its present distressed con
dition. | do not therefore propose at this
thee an extended argument upon this sub
ject, but shall eonGne myself to brici
slatement of my views upon the leading
questions which it presents, and which are
First. Is not the imposition of tax oil
10 per cent. on State bank circulation
while the national banks pay bat pei
cent, most unjust discrimination, and
pfnctically destruction of certain of the
reserved rights of the several States of the
Onion, which can neither be safely com.
mcnd d nor successfully defended, cspec,
ialiy in time of peace and
Secondly Does not sound policy dictate
the propriety of relieving the State banks
of ibis burden and enabling them to stand
10 al respects upon an equal footing with
the national banks?
Grcat credit is unqucstionably due, and
almost universally conceded, to the master.
mind that conceived and carried into sue
ccssful operation the present system OF
governmental finances, which was made to
snbserve the immediate wants and exigcn
eies of the war, even though he was at
tinies compelled to apply the doubtful
principle that "the end justifes the means,
aud even though he clearly foresaw that
the dawn of peace would lift the veil which
but dimly concealed the impoverished
condition and the financial distress of the
whole country. As parts Of that system
came the present national banking asso,
CATIONS, which were the national outgrowth
Of the embarrassments necessarily accom-.
panying the recent conflict, and in this
respect not unlike the Bank of Venice
The FIRST establishment of the kind in Eu-
rope, which was founded in III; and like
ealso the Bank of England, established in
1864, both of which owed their existence
10 the burdens of war and the nee ssity OF
The governments providing the necessary
means 10 meet the same; and in each in
siance they became to their respective
eovernments what the heart is to the ami.
nal organism, supplying the vitalizing
power by which their preservation was ST.
cured.
TO q proper comprehension Of the char.
ncter of the tax by which the State banks
ceased to exist and the national banks
grew into successful operation, it will be
necessary to present brief history of the
legislation relating to the subject.
On tic 25th of February, 1868, the act
&utborizing national banking associations
vaspassed, by which tax Of 2 per cent
annually was imposed on the circulation
Of the associations authorized by it, and
BY the act of March 3, 1868, tax of
per cent. annually was imposed on the cir.
lions 70 their capital, and of per cent. on
thooxcess, and tho tax national associations
tuIation of State banks in certain proper.
uIls reduced to the same rates. BY the
net Of June 3, 1864, which was substituted
for the act of February %, 1868, the rate
of tax on the circulation of the associa.
lions was continued and applied to the
whole amount of it, and the shares of their
stockholders were also subjected to taxa
ton By the States. Then followed quick
" the act of June 30, 1864, by which the
tax on The circulation of the State banks
was continued at the same annual rate Of
per cont, to be paid in monthly Install
ments Of !. of per ceut., with monthly
reports FROM each State bank of the extent
Of It's circuation. The object which the
government had in view became now
clearly manifest, which was to keep itself
Informed as to the extent and character Of
the paper money in circulation with view
70 iis ultimate regulation by act of Con-
Nress. Indeed, Congress had SO early as
July III 1862, passed an act prohibiting
the issue and circulation Of notes under
q BY any person or corporation.
The next step taken by the Government
was bold effort to obtain the absolute
control Of the whole currency of the coun.
try, and nj the same time to compel the
State banks to withdraw their circulation
and organic under the national system,
andthcreby become the purchasers throug.
necessity of Government bonds. This was
accomplishing by the act of March 3, 1866
With was amendatory of the previous ih-
tetualreyenue acts, and contained the
provision
That every national banking association,
I State bank, or State banking association shall
pay lax of 10 per cent. on the amount oi
the notes Of any State bank or State bankin,
4 association paid out by them after the lst day
Of July, 1865.
This provision was re-enacted on the
18th day or July, 1866, with much more
Y extended application Of its terms, and be-
\ came, Is u was intended it should be, the
} leath-blow to the entire State banking in
terests Of the country, by which the Gov
erumont found itself master of tho curren.
q cy, with i ready market for its bonds.
However deiensible the action Of the
0pvcrnment may be considered at time
n whom y was hcdged in by difficulties not
" easily <irmounted, and Notwithstanding
y tho fact that the Supreme Court has giver
Is sanction to the constitutionality of the
@ ncS By which this tax was imposed, 1t will
yet be quustioned by all fair.miuded citi
OI tcns Wheihcr the Federal Government il
y .tlptlvd with the authority requisite to th'
{, ,siwpasi'iVu Of ii tax for the proiessed an,
!. ayowed purposc Of crushing out of exist
rnte hans or any other corporation char