The Cambria freeman. [volume] (Ebensburg, Pa.) 1867-1938, 1877-01-12

How BANK TAXES WEIGH UPON INDUS
TRY.-The following which has been fur
nished us for publication contains informar
tion entirely new and of more than ordinary
interest to- Our readers generally:
Banks, inordiuately ts xed, recoup from their
customers the sums to which this unskiIful
taxation subjects them. Their customers. in
they deal prices for their mefchandise en- hanc-
ca go, oy the discounts they pay at bank SO the
much as. excluding idlers and non -prodnctives
the actual Iaoorer is the only consumer who
last. II we're paid by siir, nth in the ts, instance
1t would be easier. But each intermediate
ane PROFIT in deaIing with il. So that il is
eventually paid by the producing class with
But this is no, the worst a Of il. These taye.
affect the rates paid for the use of money in
m snn m Ssw nrk e1y for ns p1n
To two per cent. of the capital for federal taxes
taxes-that is to say, over iive per centum in
the whole. Add the inevitable expenses of
banking. bookkeeping, rent, &c.' and it follows
that the total diSburScmentSi including taxes
before a doiier is earned Tor the stochhoider-
swell to n rate greater than what should be he
/ steady interest ON money employed in agriCuI-
turaI, manufact Lres and comtnerce.
1t was shown in an article which we printed
not long since, in respect to Il bnnk in New
York city with five million dollars capital and
loaned at about six per cent. per anntrin get
! revenue enough barely 10 pay expenses and
taxes. Inat Is TO the employ
OF its money at current rates of interest, the
bank makes nothing. The entire revenues
from from Una, auhrtsr are absorbed in expenses
with nothing left to be divided among the
stockholders.
lit is PLAN that the interest paid for money
used in productive industries enhances to that
extent the cost of production, and rhn commo-
dtie. created under that condition 20 into the
markets of the world weighted with that bur
! dca.
! In the present dull times in England money
] Is leaned on commercial bills at less thun per
| cent. per ahnum, Affairs are dull enough i'll
the United States, as every body knows, yet oar
manufacturers are paying certainly not less
than six per cent, per annuin for whatever
money is borrowed for use in their business.
If they are not paying SO much interest in the
aggregate rs formerly. ii is because they are
DONG much less business. But it ouIy concerns
our argument to show that III respect to what
business they are doing, they even now
paying rates of interest .wice rs high those
paid 10y English manufacturers.
Mr.. Sprngue used to say that for tho none y
invested III spindle the American spinner
paid $l.G0 unnuHl interest, while :he English
, spinner paid only so cents. The difference
-ecms not much. but II weighed the American
pr. duct to that extent.
Uni. recently, our cotton goods found no
/, sale abroa1-none to any Inentionable extent.
English goods filled ali the MAJ kets--poorer
goods than ours ind less stylish In plain cot
IONS, blehched aud unbjcuched, our fabrics had
the cvcIier thread ana we're OF honestcr make.
In prints. Americau desigrs and coors were
faircr and better, Yet England mad the mar
kets.
or current credits To do business with, our
manufacturers never dared to borrow money
markets. They paid six per cent, seven per
/ cent.. nine per cent per annun then one per
cent, and sometimes as high as one and-a-h If
per cent, par month, for credits with which
: To manufacture for the home trade. That
was fenced of FOR them against foreign cOmpe-
titiun 10y "A protective tHrif. Secure in that
market, they charged the consumer profit
enough to reimburse what they had paid as
interest.
II is only since the panic OF 1873 that our
manufacturers of cottons have ventured into
/ foreign markets. Success has been such as
justified the strongest nIanuf acturers. perha rs
those employing their town money mainly. to
! continue the trade.
The ,nurkcts which they sought and wcr,
| thus successful in. haye always been open to
, them. but they could enter them to no purpOSt.
with the cnst of their goo ds enhanced BY such
! disbursements rs Of interest at the rates they
manufacture. Taxed as the banks are, il is
! plain that they have TO get high rate of in
/ tcrest even To pay the taxes aud expenses
/ Then they have to get abOnt as much more IL
| earn " hat Stockholders have been led 20 regard
us fair return on capital. But both these
charges, taxes and expenses and dividends ia II
{ on such manufacturers as borrow money in
their business. Nearly al of them borrow. If
/ there be those who employ their own capital
excIuSEcE, thcy expect return Tor IL IKE
t that which those get who lend to their borrow
I ing competitors
What portion of the money used I'm manu-
! featuring il borrowed at bank and elSew here,
] IL is MOI easy to conjecture. But very much
! the larger part OF il no doubt is borrowed. The
/ annual value OF manu- facturcd products in the
! exceeded s4,:00000,o00. Assume that one-hu IL
: OF this amount be borrowed for the usual peri
I'D eiapsinR between purchase of raw material Is
( and consumption of The finished product, with
interest at rates prevailing at the census dat q,
/ the annual disbursement for interest would he
/ sS4 10000
Thus our Industries have been and still are
! loaded by prevailing methods of finance. These
{ II is hut reasonable TO ask our Legislators To
/ Investigate, and to mend them, IL they be found
! faulty and rcmediablc.
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