Watertown republican. [volume] (Watertown, Wis.) 1860-1906, 1877-10-17

the silver dollar into general circulation
than the Pope's Bull had on the comet.
The Greenbackers are fond of saving
that gold is a coward" they would find
remonetized silver characterized by the
same pusillanimous traits in the pres
ence of irredeemable paper. The latter
will inevitably cause any money pos
sessng an intrinsic value to retreat be-
fore it.
THE NATIONAL BANKS.
1t Is alleged that the act authorizing
National Banks creates monopoly; that
Its provisions. in other respects, are I'M
just and oppresslve; and its Immediate
repeal Is demanded.
Nov, there can be no monopoly in q
business which is free for everybody to
engagein. A man orassociation of men
are just as much at liberty to establish a
Touring mill, printing office or a wool
en- factory. The charge of monopoly is
therefore false: Of course they must
possess some capital to engage in any
Of these enterprises. 1t is no more re-
quisite in one of them than any of them.
The charge of monopoly is therefore
sroundles
1t is sometimes asserted that these
banks gain all Of their circulation that
may be destroyed or lost. This was
true of the old State Banks, but not of
the National Banks The latter are re-
CURED to deposit Government bonds in
the U. S. Treasury, to secure all the notes
that are issued to them; and every bank
is required to return all tle notes it has
received, or " other good money to the
same amount" before it can recover the
securities it has deposited If bank
fails, the Government sells the bonds it
has deposited and redeems it's circula-
ton. Many banks have failed, but no
holder of national bank note has lost
a cent. The note of bank that has
failed is just as good as BEFORE since it
IS certain to be paid. So, too, hundreds
Of thousands of national bank notes
have been lost or destroyed, but the
government and the people have gained
thereby, not the banks. If PEOPLE
would read and understand the law au-
thorizing the banks before they crit
else it, such misconceptions would be
impossible.
DO THE BANKS GET DOUBLE INTEREST?
| Next it is said the banks get da,tbe IN
terest-lnterest on their bonds deposited
IN the United States Treasury, on which
their notes are based, and on their circu-
lation loaned to the people But out of
this double interest comes all the ex-
penses of conducting their business
taxes, rent, insurance, salaries of officers
and clerks, books stationery, postage,
ETC., besides losses on bad debts, legal
costs Of forced collections, foreclosures,
etc. When these items are deducted
from the double interest, the profits re-
manning a very small. Their average
net profits on their capital employed for
the whole country, as officially stated in
the last report Of the Comptroller of the
Currency, was only 81 per cent. Scores
Of national banks have within the past
year given up their charters and reor-
gained as private banks, because they
found the taxes levied upon them as
national banks too OnerOus. The fact
is that but for their business growing
out Of deposits, national banks would
be a poor investment; so much so that
many banking houses decline to avail
themselves of the provisions of the ma
tional banking law, and remain merely
banks for deposits and loans, thus escap-
ing the tax which the government levies
on the circulation of national banks.
The government has nothing to do with
the deposit business of national banks
except to tax it. We must, therefore,
in considering the profits of national
banks, discriminate between the advant-
ages they derive from privileges confer
red by the banking law and their profits
merely as banks of deposit.
BONDS HELD BY THE BANKS ARE TAXED.
Again, while bonds held merely as
bonds cannot be taxed, they are, the mo-
ment they become bank capital, subject
to national, state and municipal taxa
ton; so, were we to abolish national
banks and substitute greenbacks for
their circulation. we should wipe out
about three hundred and fifty Millions
of taxable property, substituting untax-
able property in its stead, for green
backs are no more subject to taxation
than bonds. If it be said that the peo-
pie lose the interest on the bonds
aow, the answer is they would lose the
taxes then, and the taxes, and other
public advantages of the banks fully
offset the interest now paid on the
bonds. But who is oppressed by the
National Bank system? Not the Gov
eminent, for it pays no more interest on
the bonds than it agreed to pay if they
were held by others than bankers 1t
issued the bonds for it's own benefit not
for that of the banks. Itwanted money,
and offered its securities to people who
would lend to it at a fixed rate of inter-
est. But banks were a necessity, and
if bankers loaned the Government all
their capital, how would their business
be carried on and the business wants of
the community bemet? The Government
however, said to them: If you will loan
your capital, you may use the bonds
given for that capital as the basis of a
circulation. and so continue your bust
ness, meet the wants of trade, and at
the same time, assist the Government
to save itself from the peril that threat
ems it. Thus the National Bank scheme,
IN the crisis Of the war, gayethe Govern
| II,