Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1878-04-23

posts amounted 10 an average of $4,000, Il
per cent per annsm would be 500, making fol
the two $40, dues annually the government
would receive from the bank. Beside the bank
must keep per ceat. of its circulation on deposit
at Washington in greenbacks to redeem its own
bills that NAV fall into the hands of the Treasury
at Washington ID. c. In addition to this govern
ment tax the bank stock pays town, county and
State tax, where owned, and being mat
ter OF record it is always open to the and
never escapes such taxation. The bonds original
y deposite as a basis Of the national bank circu-
lation have G per cent semi annually gold interest,
and when gold was at premium of 30 OF 40 per
cent a large surplus was accumulated, and the
stock Of these banks rose to a high figure.
The government has now changed the six per
cent. bonds and Obliged the banks to deposit
per cent bond instead, and we venture the asser-
tion that for the past two or three years, the ma
tional banks have not paid so much upon the in
vestment, as the same amount has yielded in Il
aority of the business industries of the country.
One point these x eonbackers forget. The bank
notes furnished by the government for national
bank, are not money until they receive that func-
ton from the particular bank for which they are
made, by being signed by the cashier and pres
ident, when they become the promissory notes
Of said bank. are its circulation and not money
of the general government, the only connection
the government having With them being their
guarantee, for which they hold $780, 600 for every
Slj, 900 50 guaranteed.
Co., a Lat, l., call tn ,ul
the old State banking system IN vogue before the
war, and see how much more profitable that system
was to the bankers, and how inferior it was to the
interest of the people. Under the national sys-
tenn with capitol of $50 000 but $4,000 can be
Put IN circulation, and per cent. of that TO wit
", 2j0 mnst be tied up at Wash ington, in green
backs, to redeem It's circulation at that point. So
that in our estimate we made Sii 900 for circus-
ton probably too large for $4,000 bank. The
national bank if 1t loaned Si4 900 at per cent ,
would receive therefor 81 GAO. Add per ceat.
interest its $50, 900 capital bonds, $500 gold,
to which add per cent premium, average on gold
ior past two years, 5000, AID you would have
$3.50, from which deduct the government tax oil
800 and you have SiG5O left.
Under the old Stale system a bank with $50 900
capital could run It's circulation up 10 Sl2j 900,
which at six per cent, yielded s. 300 from which
no government tax was due. SO that the old sys-
TEN leaves IN favor of the banks Annually on
capital stock Of $4,000, 81, $50. We have not
time to carry out the details of the two systems,
and we do not deem it al all necessary to do So
Every one who was doing any business before the
war, recoects the frequent failures among the
old State banks, the immense amount of counter
teits and especially what limited circulation
their bills had, Maine money being ut discount
even in New York, and New York money at
discount in Maine. The present system WAS new
er equaed in the world ior safety and for conyen-
fence.
In closing, let me remark, very few stop to
think. how many business frns aud individuals
Any unfayoi able legislation, any blow struck al
the banks, must in the end fail upon these de.
pressed firms and Individuals, for if the banks are
wound up, OF hampered, those who owe them must
follow. whereby letting the system alone, these
debtors would succeed, under the improved busl.
ness sure to follow resumption and the settling
down to a stable fixed, and honest financial basis.
Upon the question of the government issuing the
circulating medium for the whole country, and
the oft cited good times from 1861 To 1870 we pur-
pose to write again, as this has already become
too extended. H.
April 20 1878.