The weekly democratic statesman. [volume] (Austin, Tex.) 1871-1883, 1878-09-26
a Bankers View OF the Question.
AUSTIN, Sept. 1s, 1878.

AUSTIN, Sept. 1s, 1878.
Editors Democratic Statesman:
In your issue of yesterday you have
an editorial on banks, and YOU refer
also TO a circular OF MIR. Buell., secre-
tary of the American Bankers Associa-
ton.
/ am member OF the American
Bankers Association, and, as such, au-
thorized to deny the existence of the
circular you quote from; it is simply a
fraud. Parties inimIcal to banks have
published 1t and used Mr.. Buell's name
without any authority whatever. No
such circular has ever been issued by
the American Bankers Association.
This matter set at rest, desire to
add further that facts will not bear
you out as to the profits national
bank makes out of the pockets of the
taxpayers. Is not the door wide open
to anyone having the money to start
national bankl IL it is so extraOrdI-
narily profitable why don't the GROWERS
and grumblee. %p+srks and bankers
g moi the;. lao5nbacks snd hecorna
blcated Oendholders, slimy vampt,.a.
etc, sueh as Kearney, Hamman q al
represent them to be7 7h1t is not dose
because they have st 4 4 the money.
unlsss ssI4~'flat money. and for the
- q reason that it will not pay.
take your illustration: A national
bank is started with 500, 900; ;
this money would first be in
vested in bonds, and as you
speak OF @ per cent. bonds, l follow
your lead. The cheapest 6s now on
the market are the 0s of 81, quoted at
10S IA, but call it 10S, which is low,
the 500, 600 would give the bank
$92, 500 in bonds, on which 1t would
receive 80 per cent. circulation, or in
our instance 1888 OF this amount
s per cent. must be deposited with the
Redemption Agency, in Washington,
which is $4166.65, leaving SIS, 166. 80
in the hands of the national banker,
but an additional IS per cent. of the
circulation must be kept by the ma
tionsl banker IN his vault as reserve.
so that he has actually but $85. .8G6 80
loanable capital out of his 500, 900
with which he started. ] do not con-
sider the taxes which national bank
pays the same as any other banker, but
l must deduct from the profits OF ma
tional banks any special taxes not paid
by private bankers, and the account
will stand thus:
IncomeG per cent from s91.5O2 L. s.
70 per cent interest per anpum on
t65, ,G66.35 circulation. obtaiRed by
virtue Cf being national bank -. 1879 %
sIs,tsz IS
Deduct per cent. special tsx on cir
culation. pro rata cost OF inspectorr,
clerk hire In Washington for sort
ing bills, exprees charges on mnti-
lated bills. etc. ON capital Of si01.-
600 per annum .-....--......-..... 1900 90
Leaving ............. 80. Si2,Isa 4s
ss the amount OF profit realized by the
national banker on his 500, 900 capital.
Had he taken. his 500, 900 and start
ed a private bank, he would have
realized, at l2 per cent. interest, $780,
600 profit from his capital, would not
have had 10 submit to inspections nor
hampered by laws which forbid TO loan
on real estate or on one name psper.
No, Sir! consider natioDal banks
9 blessing TO every community, for
they are point Of rally for every bus
iness man, for other bsnks and the
people generally, and it is high time
that the cry against banks be stopped.
Already DO the largest banks 10 the
country reduce their capital snd sur
render their circulation because it IL
no longer profitable but gives loss.
When the Bank Of Commerce, in New
V%~fr 81
900, 900 70 S., 0o0, 900, and the City
Bank, OF New York, gives up every
cent OF its circulation. it behooves US
to pause and ask for the reason Of
such extraordinary proceedings. II il
paid 90 well il would not be done.
The men at the head Of such insti-
tutions are the best fnanciers In the
country. Il has become fAshioBable
Of late 10 cry ou. against national
banks and bankers generally. am Of
the opinion that this crazy cry win
find its expression IN the abolition Of
the national bank, because nothing Is
more difficult 70 fight than iRnorance.
When We shalt hare come back 70
State banks and s.red dogn and wild |
catn paper money, then the Green
hackers VIII zee what they have done
for our country. Meanwhile, having
nothing 70 lose, the cry goes on Inst
iiy, and with Kesrney ssd Batter -
leaders, win lead us into Communism
md misery.
To me the times ahead look squally
enough, and It behooves every bank
and banker, under present conditions,
to trim sail and Be ready for any encr-
gencg. Respectfully.
FRAscIs B. ToRsrKR.