The weekly register. [volume] (Point Pleasant, Va. [W. Va.]) 1862-1909, 1878-03-06
From the Nebraska State Journal
Taxation OF Banks.


TFrom the Nebraska State Journal.
Taxation OF Banks.
1t is very fashionable in newspa-
per, legislative and congressional cir
cles, to cry out against the National
Banks in particular, and the State
Banks in general, for their supposed
oppression of the merchantile, man
ufacturingand agricultural interests
of the country. Everywhere the
Capitalists" as represented by our
banking institutions, are decried as
'Shylocks," because they charge such
large rates of interest to borrowers
1t is sedulously taught that the share.
holders of these banks are bloated
bondholders or something Of the sort,
who fatten upon the earnings of the
poor, and npon the advantages they
get over those whose business necces-
sites compel them to borrow money.
Few who raise these cries ever take
the trouble toinvestigate the grounds
of the complaints or to inquire how
the remedy for the things complain
ed of is to be brought out.
Now every business man knows
that the banks of the country are
indispensable for the transaction of
business, and that if they were wip-
ed out of existence a money famine
would supervene unparalleled in his
tory, Banks perform the Office to
the business community, that reser-
voirs do in climates that necessitate
irrigation for the development Of
the bearing capacity of the soil. To
them flow the little rivulets of un-
employed capital, from them are de-
rived the streams of borrowed capt.
tai that tide over the periods of stag
nation of business or the time that
intervenes between the labor Of pro-
duction and the sale of the products
of industry. The fact is lost sight
of however, by the newspapers and
politicians, that arraign these neces-
sary institutions for their supposed
rapacity, that the capital invested
in banks in the United States pay
to-day more taxes than are paid by
any other species of property in this
or any other country. Congress dur.
ing the civil war, was compelled to
legyitaxes on everything tangible,
in the way of capital and labor.
Everything was taxed that was man
ufactured for sale. Every business
transaction made matter of record
paid its stamp duty, Every income
was taxed that exceeded 81 ,0O0a year.
This drain upon the people was enor-
nous, amounting to over S300,OO0,-
900 n year in internal taxation alone,
besides the immense sums paid as
customs duty on imported articles.
When the war closed, however,
these extraordinary taxes were re.
mitted, until every industry was set
free, one after another, and the inter.
nal revenues reduced to about $780,
100000, and principally derived from
the manufacture of whiskey and to-
bacco. During this period of forced
leyies upon the industry Of the coun.
try, the banks were not overlooked.
A tax of one half per cent. was laid
upon the aggregate capital of the
banks, less the annual investment in
government bonds. A tax of one per
cent. was levied upon the deposits
a tax Of one per cent, was levied up
on the circulation Of the National
Banks. Never before in the history
of civilized nation was a tax levied
on bank deposits. In the most ex.
traordinary emergencies, no Euro
pcan country has ventured upon such
a gross oppression of business as this
And yet years after the extraordin
airy taxes imposed during the war
have been taken of, or greatly re.
duced in every other direction, the
taxes on whiskey and tobacco being
only twenty-five per cent. the origi-
nal figures, the tax on banking capital
and bank deposits remain just where
they were put in the period of the
greatest pressure for money to run
the government with. The banks
are asking the government now to re-
move these burdensome impositions,
especially the unprecedented tax on
deposits, and it is time that they
were heard,
Let us glance for moment at the
aggregate tax that banks pay under
the National and State Laws, and
see if we cannot find u sufficient rca-
son for the high rate of interest they
are forced to charge to borrowers.
In New York in "a, the taxes paid
on National Bank capital was 10
per cent, to the United States, and
30 to the State, or 4.8 per cent. In
rs, it was Al, in '76 4,9-an average
of AS per cent. for three years. In
Illinois the aggregate was 4 per cent.
in "a, AZ in rs, and Az in '7G-an
average of Il5 for the three years.
In Nebraska in "a, the United States
tax was 2 per cent, and the State tax
3.3 per cent, total, SO. In rs, the
aggregate was 45; in '76, 4.7-an
average tax Of about 8 per cent In
several other States the aggregate
wns nearly as high rs in New York