The Manitowoc tribune. [volume] (Manitowoc, Wis.) 1866-1878, 1877-01-11
HOW BANK TAXES WEIGH UPON
INDUSTRY.

TINS unSKliIul taXaUOn SUBJECTS tnein.
Their customers, in turn, draw from the
community with which they deal, prices
for their merchandise enhanced by the
discounts they pay at bank. So the tax
presently falls on the consumer, and in
asmuch as, he including idlers and non
productives, the actual laborer is the
only consumer who pays, this tax falls
entirely upon the laborer at last If it
were paid by him in the first instance, it
would be easier. But each intermediate
party silently adds to it enough to cover
risk and profit in dealing with it. So
that it is eventually paid by the produc-
ing class with two or three unnecessary
additions to it.
But this is not the worst of it. These
taxes affect the rates paid for the use of
money in all business enterprises. The
taxes upon banks, in New York city for
instance, amount to two per cent. of the
capital for federal taxes, and three and
tenth per cent. for LEGAL taxes-that
is to say, over five per centum in the
whole. Add the inevitable expenses Of
banking, bookkeeping, rent, &C., and it
follows that the total disbursements, in
Guiding taxes-before dollar is earned
for the stockholder-swell to rate
greater than what should be the steady
interest on money employed in agricul-
ture, manufactures and commerce.
I was shown in an article which we
printed not long since, IN respect to q
bank in New York city with five million
dollars capital and one million surplus,
that these have need to be loaned at
about six per cent. per annum to get
revenue enough barely to pay expenses
and taxes. That is to say, upon the
employment of It's money at current
ing. The entire revenues from that
quarter are absorbed in expenses, with
nothing left to be divided among the
stockholders.
It is plain that the interest paid for
money used in productive industries
enhances to that extent the cost of pro-
duction, and the commodities created
under that condition go into the markets
Of the world weighed with that burden.
In the present dull times in England
money is lending on commercial bills at
less than 2 per cent. per annum. Affairs
are dull enough in the United States, as
everybody knows, yet our manufactures
are paying certainly not less than 6 per
cent. per annum for whatever money is
borrowed for use in their business. IF
they are not paying so much interest III
the aggregate as formerly, 1t is because
they are doing much less business. But
it only concerns our argument to show
that in respect to what business they are
doing, they are even now paying rates
OF interest twice as high as those paid
by English manufacturers.
Mr.. Sprague used to say that for mon
ely invested in spindle the American
spinner paid SLIGO annual interest, while
the English spinner paid only 80 cents.
The difference seems not much, but it
-v-e;e5l,o Il ti-e -A.aerivrer- product 10 tIIitt
extent.
Until recently, our cotton goods
found no sale abroad-none to any men
tionable extent. English goods filled
all the markets-poorer goods than ours
and less stylish. In plain cottons,
bleached and unbleached, our fabrics
had the evener thread and were of hon
ester make. In prints, American de-
signs and colors were fairer aud better
Yet England had the markets.
At the high rates they had to pay for
capital or current credits to do business
with, our manufacturers never dared to
borrow money to make goods with which
to contest foreign markets. They paid
six per cent, nine per cent per annum:
then one per cent, and sometimes as
high as one-and-a-half per cent. per
month, for credits with which to manu-
facture for the home trade That was
fenced off for them against foreign COM
petition by a protective tariff. Secure
in that market, they charged the con-
sumner profit enough to REIN burse what
they had paid as interest.
It is only since the panic of 1873 that
our manufacturers of cottons have ven
tured into foreign markets. Success
has been such IS justified the strongest
manufacturers, perhaps those employing
their own money mainly, to continue
the trade.
The markets which they sought and
were thus successful in, have always
been open to them, but they could enter
them to no purpose with the cost Of
their goods enhanced by such disburse
ments as of interest at the rates they
have had to pay on the money used in
their manufacture. Taxed as the banks
are, it is plain that they have to get
high rate of interest even to pay the
taxes and expenses. Then they have to
get about as much more to earn what
stockholders have been led to regard as
a fair return on capital. But both these
charges, taxes and expenses aid divi-
dends, fall on such manufacturers as
borrow money in their business. Near
y all OF them borrow. Ii there be those
who employ their own capital exclusive
ly, they expect return for it Ike that
which those get who lend to their Dor
rowing competitors.
What portion of the money used in
Observation-Disclosures L. l,nrror-.ol IL IL - i