Oxford Democrat. [volume] (Paris, Me.) 1833-1933, 1878-05-21
From the Lewiston Journal
FdncU as. Facts.

1 'sse9 W.
"Instead of issuing greonbaots direct
to the people, free Of interest, the people
were Obliged last year TO hire about
5000, 0O0,0 900 of the banks to do business
with And by these rcbber laws thu peo-
pie we're compelled TO pay these bankers
over 500, 100000 interest upon mnney
that might be saved if issued by the gov
eminent directly to the people. Are the
people slaves that they sit quietly b. and
allow such robbery to 60 onf"-Green-
back Paper.
The above is an average statement OF
the exaggeration and misrepresentation
which is deceiving some people who have
little knowledge of the facts Observe in
the first place that national banks are
represented as loaning money at lOt per
cent. interest, when their average rate is
less than 7 per cent. Here is an exagger.
alton Of fifty per cent Observe next
that the impression is given that the
banks have 100000, 900 Of their own
notes TO loan when as a matter of fact the
whole amount Of them is only 1922 000,-
0Oj, only s250,000,000 of which is
loanable after deducting the reserves and
redemption fund which they are obliged
to keep on hand This reduces their re.
ceipts from loans Of their own notes to
81, 100000 a year, less than one-fflh
the amount stated in the paragraph We
have quoted. The balance Of their loans
is accumulated surplus and greenbacks
and funds entrusted TO them by depos-
itors.
Again, it will be seen that business men
pay precisely the same interest on green
backs, which compose more than half our
paper money, as on national bank notes
II there was not q national bank note in
existence, and all the paper outstanding
was greenbacks, it would not make the
interest paid by men who hire money now
single cent less than now. 1t is too bad
to impose on any one by representing
that if greenbacks should be substituted
for national bank notes, then the interest
paid on loans would be saved Govern
ment doesn't propose TO give any one
greeDbacks II government should issue
moro grcenbacks it would simply sell
them for an equivalent to persons who de-
sired to buy them TO use or loan. Nobody
could &c, one Of them any easier than he
can the national bank notes and green
backs now outstanding-S200, 600 900 Of
which are lying idle because no one hAv-
ing means or credit desires them.
but" says some one. IF government
should issue all instead of halt the paper
moury. aud sell it to those who desire it
to Use or loan, then the taxpayers would
reap the profit on the issue Of so much ad-
d.uoual currency First, two insupera-
be objections to this course arise-one
from the danger that 30 large govern
meat issue will not be maintained at par
by redemption; and another from the im-
possibility OF securing rise and fall OF
volume according to demands Of business
where the currency IL wholly dependent
on majority Of Congress two indis-
penssbe qualities ola safe paper currency,
both of which are supplied by free bank
ing Second, the Taxpayers will receive
larger profits by way Of taxes fiom banks
and shareholders in banks that are a.
lowed to issue their secured notes, than
would be saved BY having government it.
self issue the notes
If government issued greenbacks ex-
clusively instead Of any national bank
notes, it would save say u per cent. (the
rate at which it can hire money!, from
which must be deducted the expense OF
maintaining greenbacks at par by keep
ing gold reserve on hand,-which will
not be less than l and probably 2 per
cent Call it only per cent, and then
government will save three aud one-halfper
cent. Deducting the reserve and redemp'
ton fund, and banks can loan on the
average SIS on every 800 Of their cap.
ital, or in other words three-fourths Of
their capital. Setting aside the tax on
their deposits, banks pay taxes asfollows
To the national government | per cent.
on notes issued to them, which is squiva'
lent to I per cent. on loanabe circulation
Ia per cent
To Municipalities an average Of Il per
cent on capital, "a tax which would not
be paid if the bonds were not made the
basis of bank capital which is equivalent
to per cent. on the loanable circulation
3 per cent.
Total tax on loanable circulation, Il
per cent.
In other words, the substitution oil
greenbacks for national bank notes would
involve the tax payers in loss of the
difference between - per cent, saved and
45 per cent lost-a net loss OF three
fourths of one per cent, even on the as
sumption that it will cost only one pei
cent. TO redeem the notes
The following note from Hon. Hora'
ito King, of Washington, to the Portland
Transcript, explains itself:
boya Saap On ;,arn in vour excel lent