Mineral Point tribune. (Mineral Point, Wis.) 1869-1938, 1879-09-18
NATIONAL BANKS.
Are They an Expensive and Oppressive
Mcnopolys
The Policy Of Substituting Greenbacks
for National Bank Notes.
Speech Of Thomas N. Nichoi at
Green Bay, Wis.

The most important single financial issue be-
fore the country is the bank question. II we
are ever to have flood Of irredeemable or
''fat' currency, the first step toward 1t will be
the destruction Of the National Banks, and the
adoption Of the theory that the government
shall issue all the money. 1t Is not At all IN
likely that we may witness great political con-
test on this question before many years. The
Greenback party everywhere demands that the
banks be abolished and their notes substituted
with greenbscks, and large part OF the demo
cratic party is committed to the same doctrine.
The grounds Of this demand is that the banks
are dangerous and expensive monopoly. And
this is the question we are to examine tonight:
ARE NATIONAL BANKS AN EXPENSIVE MONOPOLY
A monopoly is some valuable privilege held
by one or a few persons with such conditions
that others can't enjoy it, and that offers no
chance for competition, But the National
Banking laT offers no special priplegoS. 1t Is
open and free to all there is not a person In
the country who has any capital large or small,
but that may have that capital invested in the
banking business if he 80 desires. Any num-
Der OF persons not less than five can organize
a new bank any where, by complying with the
law and compete with those already In exist
ence for Business profits. Any person can pur-
chase the stock OF any bank at its market val
ue. There is no element OF monopoly or special
privilege about National Banking. The law
from the first Disseminated against large lnstl-
tutions, to prevent them from monopolizing
the banking business in any community. Banks
with not more than half million dollars cap
ital could have circulation equal to w per
cent. of their capital. But If their capital was
from half a millien to million dollars they
could only get 80 per cent, from one to three
millions rs per cent. land if over three millions
only 60 per cent. And the law was so amended
July 18th, 1870 that no bank organized since
that time can get more than half million dol
lars Of circulating notes, thus utterly prevent
ing the combination Of large amounts OF capt.
tai in one institution The bank law not only
does not establish a monopoly but 1t makes
banking monopohes impossible.
ARE THE BANKS EXPENSIVE?
It ia charged that the banks are expensive on
account Of the interest on the bonds deposited
to secure their currency, and 1t is claimed that
this expense could be saved by the substitution
of greenbacks for bank notes. The persons
who make this charge and claim seem TO Tor
get that the government borrowed certain
amount OF money and issued bonds for 1t, and
that the interest on these bonds would have to
be paid il no National Banks had ever been or
paniized, Allowing bonds to be deposited to
secure bank currency does not increase either
the principal or the interest OF the pubic debt.
On the contrary it indirectly reduces both. II
adopted more greenbacks would have had to
be issued and that would have been an increase
of the public debt for greenbacks In the shape
OF United States notes are as much part OF
the debt as the bonds are and were so considered
at the time Of their issue. And to have in
creased their issue say $500, 600, 900 during the
war would have caused further depreciation !;
increasing prices and the cost OF living to the
disadvantage of the poor people and increasing
the cost Of all army supplies to the great dlsad-
vantage Of the government. The banking law
gave currency without increasing the govern
ment's obligations and thus strengthened the
public credit, and instead Of increasing the ex-
penses Of the government, the banking system
became at once source Of revenue on account
OF the taxes paid by the banks. For example /;
the Comptroller in his report for 1877 shows
that the banks paid to the national government
the previous year in taxes S7,076,0o7. The
same year they paid state, county and local
taxes amounting to $9,777 Sl9-a total OF $l6,-
777,8i9 The interest received on bonds by the
banks the same year, WAS 7,J87,9 72 So that
the interest received by the banks that year,
only exceeded the taxes paid by the banks by
the amount Of $50 153-or less than two cents
year for each person in the United States,
The banks don't appear to be 80 30 very expen-
sive after all.
DO NATIONAL BANKS MAKE DOUBLE INTEREST?
One of the popular charges against the banks
est on their bonds and on their currency. But
this double interest represents their gross in
come. and out OF il must be taken all expenses
and losses, incident to their business, before
we can know what the banks mdhe-taxes in
surance salaries, officers and clerks, incidental
expenses and Losses. The item Of losses alone
bad debts-ast year was over twenty-four
million dollars, and year before last it was over
nineteen million. The net profit OF the Ma
tional Banks last year only averaged five and
one-tenth per cent on the capital invested.
SOME ADVANTAGES OF THE BANKS.
They give an absolutely secured currency,
uniform in all parts Of the country. Compare
this with the currency Of the old state banks
poorly secured liable to 'break" any time
wouldn't pass away from home except at ruin
GUS discount-easily counterfeited, etc, etc.
Under that system tine people lost per cent.
of the average amount Of currency IN circula-
ton each year by the failure Of banks, for when
d bank ''broke" its currency WAS worthless.
This item alone amounted to about ten mil
lions Of dollars per year. Under the present
system there has never been dollar OF loss OF
this kind, and it also furnishes the best secu-
rity against counterfeiting that has ever been
devised.
SECURITY FOR DEPosIToRs.
The National Banks also furnish greater SO
curity to depositors than any other system ever
did The total loss that all creditors Of all the
national banks have sustained since the begin
ming Of the systemic years. only S6,415,-
423. The loss 10 the deposltors Of five state
banks that failed in the city Of Chicago during
the years 1877 and 1878 was 1888, 500 and
the loss to depositors Of savings banks in the
State Of New York during the last three years
was over $4,000, 900. So that the national
banks not only give COED currency but greater
protection to dep sitors than any other bank
ing system ever devised. Why is this? Be-
cause the law prevents the organization Of
banks without actual paid up cspitsl, and then
the Treasury department keeps such close
watch on the condition Of the national banks,
compelling them TO make quarterly reports, and
special reports whenever asked for. and making