New-York tribune., 1878-02-02

THE COST OF THE NATIONAL BANKS.

THE COST OF THE NATIONAL BANhS.
TO the gditor OF The Trt6Wne
SIR: have been n reader of TIE TRIBUNE
for about twenty years II notmy Bible. but icy guide
in al; political questions. for think IL is sound and
think farmer cannot afford 10 do without 1t. am
farmer and comman man. and some NJ hat ignorant;
especially upon the great financial question now before
the country Worry many OF our honest, wcil-neauins,
and hard working citizens think In thi. wise,
and would ike your sincere and honest answer; We
paw interest National bank note currency, per
the deposits IN the Treasury OF ihe United states.
IL and again per cent over the counter az the bank
per month on All loans q Would II 9Pa n@ more es%n .n
then bark no;e.f Does not money cost too much
Are not paving ruinos interest IN the rd statesf
a. Does paraly business o all kudsi Those are
common questions rom eomVh . o,a, =" ", ~ % nv
begiu TO doubt and fear rs To tue honesty OF te g
isative guide. Honesty s thought to be Ne sIeeption'
sherBcood. Mich. Dec. T. 1877.
IAnswr-A knowledge of even the simplest prin-
ciples of banking woud prevent such questions from
having any effect. a. The United States had 10
borrow money to carry on its For those loans
it issued its bonds which il has TO pay interest
no matter who holds them II you hold them it pays
yon iterest. II man who wants 20 do banking
business holds them il pays him interest. Nothing
can relieve it from the duty Of paying the interest.
because that was the condition which 1t borrowed
the money.
(2J Your bank must have n certain amount Of cap
ital to hack the notes il issues. Without this cap
ital Won wond have no security for its notes. lt
was convenience to your Government To compel
the bank to invest this capital in the Government
loan and il was SD compelled. IL it were not, IL
might have nvcstedin other security, as your banks
always did before.
(3.) You could not issue greeubacks instead Of
bonds. because you have given your word m these
bonds 10 pay them in coin. When u man breaks his
| word m such matter send him 70 jail When
nation breaks its word, 1t dsgraces aud destroys
| itself.
a. In some parts of the United States le people
certainly do pay Ininous interest The rate OF inter-
est always depends The certainty the lender reels
| AZ TO the safety of his money iu the borrowers
hands IL borrower talks abort paying II ~ some
| other currency or about chcapenng the currency.
or about contriNng some way 20 avoid his Obliga-
| lions the lender considers such loan extra baZ-
arolis audf he loans AT all puts up the rate Of M
terest Interest is much II gier at the West than it
! is Mt the East because the Eastern capitalists who
lend money West thlnk there is greater risk about
| H. and are unwilling 20 furnish II without bigger
| pay. Men who always pay their debts promptly and
precisely, in accordance with tho bargain made az
the time Of the loan can borrow money here on cali
! ut per cent, and on even very long tmr NJ per
| cent. The TRIBUNE borrowed cfOoOOO TO use IN
putting ND a very expensive building. AMI u gets
| every dollar of il on long time al . per cent
| In your State You pay anywhtIc from 10
10 II the capitalist felt Just as sure about getting
| his money back III exact accordance WIN hls baT
gam In Michigan as he does in New-Iork. he would
| lend H. other things being equal, at as low rate:
| The greater the risk The higher the interest, aud
the present tone Of tine West on financial subjects IS
such as tends 90 keep up the rate OF interest Tor
! wears 10 come.--LG.t