Buchanan County bulletin. [volume] (Independence, Iowa) 1869-1891, 1878-08-23

lions of dollars. On account of losses it has since
been reduced to one hundred and twenty one
millions, but is still large sum for the security
of depOsitors. Since 1870 the average ratio of
dividends to capital and surpl.ls Of the national
banks takenIas whole, has been 10 per cent
annually. In 1876 this ratio was 6.S7 per cent
It is ofsen stated that the national banks make
six per cent profit on their circulation alone and
that this sum. amounting to eighteen millions or
greenbacks were substituted for national bank
notes. But the r'iN sf7c pto oHfthtH "#-
PROFITS ON CIRCULATION
are much overestimated The Comptroller in his
remarks before q committee of the house last
February, entered into calculation showing
that in localities where interest seven per cent
the value Ofhe circulation is about three per cent
per annum, and where the rate Is ten per cent
the value of the circulation is about two per cent.
II the entire circulation Of the banks IL loaned
constantly the profits to them would be, as esti-
mated by the Comptroller about 1854 SIS, scarce
ly onehalf the sum usually thought tObe realized.
The facts that many Of the banks have voluntarily
though national banking Is free to all who are
ready to engage In 1t, few new banks are being
established furnish additional evidence that the
profits on circulation are not exorbitant And
these will be still further reduced as the bonds
held to secure circulation shall bear lower rate
Of interest: A portion Of these are now six per
cent still larger portion 1--WE per cent and others
four and a half and four per cent bonds When
all shall have been converted into four per cents
the profits circulaticn IN this western country
consideration as remarked by the Comptroller Is,
that the average rate of state taxation IL about
two per cent upon the capital of national banks,
owners Of the bonds should still continue to hold
them, the amount of state taxation saved 70 them
would nearly or ats III Ssns
heavily taxed According to the last report Of the
Comptroller the national banks paid In eleven
years, in state and national taxes, from 1855 TO
mating the takes 1871 and 1873 as equal those Of
1875 and 1876, they have paid total tax In thtr-
teen years Of $s21 ,S6O,5O. H82f wp4 s7stl 4
SHALL THE NATIONAL RANKS BE DESTkOYEDf
Some of the difficulties In the way Of and objec
lions to the destruction of national banks IN my
mind, are:
l. The system is good one, the people have
become familiar with its workings, and 1t has
deservedly secured large measure OF public
confidence 1t was intended for 2 permanent sys-
TEN, and each bank is authorized by law ITO have
succession for twenty years from its Organization"
and it is not improbable that some Of the banks
would claim, nor impossible that the courts mght
equivalent to those acquired under charter.
q To substitute legal tenders for national bank
notes would be to reverse the history and practice
Of the asS om tae adopon q sne com
backs, which were authorized as . temporary
expedient under the stress Of war, the permanent
ct the We e
decisions by the supreme court Is 70 the consl1tu-
tonality of the legal tender notes. The first made
in 1869 declared that they werl unconstitutlonal,
vacancy occurred on the bench, congress provided
toran additional justice the two places were filled,
and in 1870 the legal tender question was Eeopsned
backs are constitutional. Taking the two cases
together, there were nine voices against and eight
in favor Of the @ q Legal sarss
be considered as satisfactorily settled. And 1t
should be remembered that the question was not
as to the issue Of legal tenders generally, but
whether 7Vhen issued they were appropriate in
strumentalities for executing any OF the known
powers of congress. TO issue such notes In time
Of peace and under NO stress 9f
and one that has not yet been decided. II would
be a serious mistake to destroy the national bank
notes in the face of Il contingency OF this kind.
g. From the days of the revolution to the pres
ent and for nearly one hundred years prior to the
revolution, we have had banks of issue in this
country, and we shall continue to have them. II
the present national system shall be DESTROYED.
Measures are already pending to remove the tax
ON state bank issues, and when this is done there
will be nothing to prevent the revival OF the OLD
system. TO give elasticity to the volume Of paper
money in circulation, that 1t may respond to the
varying demands Of business, banks Of issue are
necessity. ,,,aa,.-,s b.. s,.- fs,-s..N
4. More now than ever before Goes money Iur-
nish the sinews of war. No nation can properly
exert its strength without financial organization
to depend upon In time Of trial. The issue OF
legal tender notes Is forced loan, and though
sometimes thought to be q necessity, IL most
costly and clumsy expedient, No leading nation
of Europe would now think Of resorting 70 it. To
obviate this some strong financial institution must
of the nation can be promptly and economically
brought to the support Of the government Eng
land has 1t In her great bank, which Tor nearly
two centuries has been the financial bulwark q
for three quarters Of q century has managed the
finances Of the nation, and in recent years with
such brflliancy as to extOf praises even from her
enemies And Bismarck, the consummate states
man of the present generation, has just organized
the he'll imperial bank Of ssImapy which ih WI no
land and France. In the United States the natio-
nal banking system will afford this organization OF
financial strength. Such q system In 1861, with
good management on the part Of the treasury de-
portion of the expenses Of the war. TO throw
away such system after 1t has proven Its value
would be an act Of supreme folly. h.-H 7.s4lslsep
s. 70 substitute greenbacks for national bank
notes would take our monetary system perma-
nently out OF the hands of business men and from
under the control of the laws of trade aud place
it in the hands of political parties to be annually
fought over in campaigns and in congress to
the infinite annoyance and damage of business,
and the chances Of corruption increased a thou
sand fold. Even now every business man breathes
freer when congress adjOurns. Put the issue of
to all material interests from legislation would be
greater than all other perils combined. "t
From these considerations and others that might
be named, am clearly OfOpiniOn that our nation
al banking system in its essential features ought
not to be disturbed It is not only better than
1,od boro h1f for