The Kenosha telegraph. [volume] (Kenosha, Wis.) 1860-1888, 1878-10-24
banking system in this country ever stood


And now we are told that the national
banking system is unpopular, and must be
abolished. / do not hesitate to say, gentle.
men, it's not true that the national banks
are unpopular. Whence comes the cry
about their unpopularity will tell you.
Some political agitators, to make capital for
themselves and against their opponents, de-
nounced the national banks as a monopoly
oppressive to the people, and then multi
tude OF other politicians, as usual, bent be-
fore the breeze. That is all.
What is the test of the popularity of a
bank or banking system 1t is the conf
dence of the business community. Apply
this test. Is there single individual in
this broad land, who from the foundation of
the national banking system to this day
ever hesitatedla single moment to take a
national bank note at its face value, no mat
ter in what corner of the country the note
was issued? You know there is not. Is it
not true that business men deposit their
money as a general thing in national banks
with greater sense of security than they
ever felt with regard to any other banking
system? You know that it is So. 1t is an
indisputable fact, therefore, that the
national banking system enjoys the conf
dence of the business community in a
higher degree than any other ever did.
assert then that, general confidence being
the only true test, the national banking sys-
tenn is not only not unpopular, but it is the
most popular we have ever had, because it
is the safest and best we ever had. And
why is it the safest and best? Be.
cause under the national banking act, the
details of which have no time to go into,
the notes issued by national banks are SO
well secured by deposits of United States
bonds, that loss on the part of holder of
a national bank note is simply imp ossible
and because under the same national bank
ing act reserves SO ample are required and a
system of government supervisions is
enforced so strict and searching that the
specializing away Of the bank capital, or
dishonest tricks in bookkeeping or in MAX
ing dividends, or defrauding of depositors
of their funds by bank presidents and direc-
tors is next to impossible. Hence it is that
during fifteen years of their existence, in
Guiding five years of terrible crisis-and
/ repeat this fact, for it is important enough
national banks has been less than the loss of
depositors in state and savings banks alone
was in single year.
THE NATIONAL BANKS.
And now our Democratic agitators de-
mand that this banking system be abolished.
Indeed, if we are to abolish the safest bank
ing system we ever had, at moment when
confidence, and therefore, a safe banking
system, is more than ever needed, the rea.
sons must be very weighty. What are they ?
First, it is said that the national banks
enjoy privileges which are oppressive to
the people; that for every 500 in bonds
they deposit in The treasury they are per-
mitted to issue 800 in notes; that they draw
interest upon the bonds and then lend out
their notes and draw interest on them also,
which makes double interest; that thus they
fatten themselves and grow rich at the ex.
pense of the people, and that, therefore, it
would be more economical for the people if
the bank notes were withdrawn, greenbacks
issued in their stead, and the bonds on
which the bank notes had been issued be
bought up in the market with the green.
banks so issued, so as to save the interest on
the bonds. think / state the case fairly.
From this it would appear that the banks
must get immensely rich, and inasmuch as
national banking is now free. it is a wonder
that not more of you go into so profitable a
business, and a. greater wonder still that
about thirty millions of national bank cir
culation has within few years been with
drawn by the banks themselves. AS people
are not apt to lose good chance for making
money, there must be some trouble about
those immense profits which our Democratic
friends fail to state. 1t is always wholesome
to lock at official figures. have here a
statement made by the comptroller of cur
rency before congressional committee in
February last. 1t is somewhat dry reading
but we must exercise patience to get at the
truth.
On February Is last the par value Of the
United States bonds deposited in the treas
ury as security for national bank notes wa,
S346, 243, $50. Gold being then at two and
one-quarter per cent premium, their cur
rency value was 1868, 372,8 1854. The amount
of circulation issuable thereon was $311,
9,195; the gold interest on the bonds
ST., 290, OIL; the currency value of that in
terest at the time, $lS,147,279. But, says the
comptroller, as the banks are required to
pay annually into the treasury tax of one
per cent, or $3,116,192, there is left $l5,O31,
OS7 in currency as the net amount of inter
est received by them on the bonds
"Upon receiving circulation" says the
comptroller further, "the banks are re-
quired by the act of June 20, 1874, to place
an amount equal to five per cent. thereof
or $l5,580,960 with the treasurer of the
United States as redemption fund, leav
ing out of the $3l1, $40 1876 Of circulation
issuable upon their bonds, $296, 03S, 1856 avail
able for use-which amount if loaned al
eight per cent, will produce an income oil
1913, 683 ,059, and this income added to the
net interest on their bonds, gives $685. ia, 14t
as their whole income from bonds and cir
culation." "But," he says further, " ii the
capital itself which was necessary to pur
chase the bonds 1886, 272,8 54) were loaned
out by them at eight per cent, the
annual income therefrom would be $29, O6O
1928, and the difference between this
sum and the whole income from their
bonds and circulation, which is $9,644,317
or the 65-l00 per cent. on the capital in.
vested, represents the profits that the banks
would receive over and above what could
be obtained from the loan of the same
amount of capital at the rate of interest
named, provided that the whole amount OF
circulation received by the banks upon
their bonds, less the redemption fund
could be kept loaned out by them continual
ly throughout the year. In the above cal
culation no deduction is made for the costs
of the redemption of the bank circulation
which lessons by so much the profits on cir
culation. Those costs were for the fiscal
year ending June 80, 1877, 1857 ,O66. An.
other point that should be considered in
the above estimate of their circulation is
that the banks held their bonds at pre-
MUM which appears among their assets fol
large amount. It was on December 20
1877, the date of the last report of their con
dition, $685., $780," 4o 7a44 a
The comntrollar states further that IF the