The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1878-06-14
STATE BANKS.
The New York Press Supporting the
Proposition 10 Abolish the Ten Per
Gent Tax ON state Bank Circulation.

Gent Tax On state Bank Circulation.
The Washington correspondent of the New
York Daily Bulletin says that perhaps the
most important proposition in Congress re-
lating to our finances is that to repeal the 10
per cent tax on State bank circulation, and
that it comes backed by every Southern vote
In Congress, without exception and by reso-
buttons of several prominent boards of trade
and commercial bodies Of Southern cities, be-
| sides resolutions of bodies of citizens there.
The writer says that It's success as it stands
is involved in another proposition which Is to
abolish national bank circulation and make all
note issues government issues. This the
writer alleges would force national banks out
of existence, as such, and into anew existence,
as such,. under State law, with pledges for
security for circulation State bonds.
Going more fully into the matter, the same
writer says:
Yet it is important to tell you of the recent
developments in Congress whereby it is in
tended
1. That the government shall issue all the
paper to be used as money in the United
States, except
2. That the national bank system shall be
abolished SO far as circulation is concerned,
and that States may establish their own
banking systems, as they did before the war,
| The bill Of Senator Butler, Of South Caro-
lina to repeal the 10 per cent clause of the
national banking act, which imposes tax of
| 10 per cent on State banks, raises a very large
question. 1t should be remembered that the
| tax Is not in the currency act. Senator But
| ler's bill is supported by the entire South
and, under certain contingencies, would be
| supported by large portions of the West, and
| by many national banks of the North and
East. And therein only lies its danger or the
chances of its passage.
| The movement on foot in Congress to abol-
| ish national bank issues altogether and to
| issue greenbacks to an extent limited only by
their convertibility into 4 per cent bonds is
very strong. The issue of these notes cannot
ha
ton. The only possible limit would be by
constitutional amendment But the temper
of the majority of Congress is different from
| the temper of the three-fourths majority of
| States necessary to pass such an amendment.
The Eastern and Middle States and Pacific
coast would want the government note issue
| limited for the safety of legitimate business
and to prevent the evils of the past, while
some of the Western States would not listen
to an issue OF less than thousand millions
and some Of the Southern States would oppose
any limit at all. So there is no possibility OF
constitutional limitation of greenback issues
and the question must rest in the discretion
| of Congress. What then, is the prospect
| So sure as the question comes prominently
| forward, as it soon will, so sure will the
national banks-a formidable organization of
| 1000 corporations oppose exclusive issues by
| government. But III the national banks and
capitalists find that measure will succeed,
| they will all Join in to amend by removing the
| tax from State bank circulation. That done,
| the object of our Southern brethren, who want
| to bank on honored names and not on capital,
will be accomplished For all the national
banks, as measure of protection to their cir
culation, and to subserve their own interests
which is always the powerful lever in bust
ness-will demand State bank system. It
| is a welI-known fact that there are many
banks In New York and Massachusetts, to-day
that would gladly exchange the present for
| the old State bank system.
/ But this would be q very important step,