The Leavenworth weekly times., 1878-10-10
seer. t.ry SAhuYZ and the National
kBanks>


No one will deny Secretary Schurz' state
men; in his Cincinnati speech that the na-
tional banking system is "the best and
safest We ever had;" even the more gues-
tionabIe statement that "business men de-
pusit their money as a general thing in na-
tional banks with greater sense of securi-
ty than they ever felt with regard to any
o;hsr banking system" may be passed over
in silence. Let both assertions be admitted.
We never had what could be called bank
ing system in this country before the pres
ent national banks were established, and
the Secretary's comparison of the present
system, therefore, is with no system at all.
Prior TO the war some of the States had no
banks, and the others had each its own
scheme uf banking. There was no gen.
eral system; some of the State banks
were very good, but the greater number
were worthless, and no man in the country
wishes TO see them restored. We speak of
banks OF issue; state banks of deposit still
exist, and do very useful service. Mr..
Schurz is fighting a shadow when he SAYS
You call it economy TO wipe out this safe
system and substitute for ii, as would in
evitabIy he the case, the old state banks,
with their wildcat and yellow-dog cur
rsncy, which robbed the people wholesale"
No sne proposes to do any such thing. 1t
is not desired to substitute for the national
bank currency the old wild cat and yellow
dog currency Of twenty years ago. The
currency proposed to be substituted for the
withdrawn national bank notes is green
backs-United States treasury notes-and
even Mr. Schurz cannot deny that they are
quite as good as the bank notes.
Mr.. Schurz quotes the comptroller of the
currency to prove that 'if the capi al nee
essary to purchase the S363, ,272 600 bonds
on which the national bank notes are Is
sued were loaned out by them at eight per
cent interest the annual income tberefrOm
would be S29, 9,060, S2S, and the difference be-
tween this sum aud the whole income from
their bonds and circulation which is 50 GA,
81, or the 65-lOO per cen:. on the capital
invested, 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 in
terest named If he means by this that
the banks make profit of only 65 100 OF
one per cent on their circulation, he makes
the banks take a great deal of trouble for
very small profit. A circulation that
yields only 65-l00 of one per cent.
profit is not worth issuing. The banks
make great deal more than that on their
notes otherwise they would not keep out
$50, 900, 900 of them. Their net profits last
year were 81 100 per cent. on their cspi-
tai and surplus. or about 6s per cent. on
their capital alone, which is a much larger
profit than any other interest in the coun-
try, agriculture, manufactures or railroads,
yielded the same year. Mr.. Schurz says if
national banking is as profitable az Dem
ocra,s attempt to show, ait is a wonder that
not more of you 60 into so profitable a
business" but it may be replied, if nation
al banking is so Improbable as he and the
comptroller of the currency make out, it is
a wonder that more banks do not 60 out OF
the business.