The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1879-01-17

dividual holders of the notes. Another fixed
percentage of deposits must be kept in reserve
By the bank for the protection of depositors.
With these perfected arrangements and an iron
safe warranted to be burglar-proof Though as
to the possible giving away of the combination
to ianitor nothing is said in the law) the new
bank opens in Maine for business. The first
applicant, We will assume, is a lumberman
who has sold his logs for $4,000, payable iu
sixty days, the obligation of which payment Is
secured by the note Of the purchaser. The
lumberman who needs the cash Immediately
with which to pay his own debts and open new
enterprises. offers to sell the note to the new
bank, or rather to exchange it for the bills Of
the new bank. The offer is accepted on condi-
tion that the lumberman will indOrse the note
and pay the bank certain sun as 6 per cent.
interest for the sixty days which the note has
to run. Inc bank thereupOn pays out for the
$4,000, less interest, its new bills Just received
from Washington, and when the note natures
other bank bills are returned to the bank with
which its own may be retired. This Is a very
primitive and rural transaction which we have
described for as financial centre the bank in
stead Of paying Its bills over its counter to the
lumbermsn would inscribe q credit for the
sum in his favor on its books, against which he
would draw his checks, and it might bs that no
bank bills at all would be used in the whole
transaction Indeed, the affair might have
been arranged with private banker or a Maize
savings bank, and then the currency of neither
could have been employed. for neither Issues
any currency. But in the case Of the national
bank, why should IL not exact interest Of the
lumbermsn if it gives him symbol of coin i'm
medistely available as money in exchange for
the note of the purchaser of the lumber, which
was not Immediately available? And how are
the burdens OF "the people" increased by such
transaction?
Gov. Garcelon makes a solid answer when he
says that the nation pays per cent. interest
on the 100000 of bonds which the bank had
deposited IN Washington, while at the same
time fn Maine the bank NAV be receiving per
centum in addition on the SS5 800 of bank notes
which il received for the deposited bonds
That is no doubt true. But the price which the
bank pays is, first, national tax on its circu-
lation, deposits and capital, and Stats tax to
whatever amount the State of Maine sees fit to
intict on Its shares; and, secoudly, the bank
submits to a national official inquisition into
i's business and It's discount paper which no
Eogli-h bank would tolerate for day, and to
numberess restrictions and penalties. The
compensation, whatever IL may be worth, which
the nation receives is a bank currency of uni
form value fiom Maine to California, this cur
reCcy being convertible into greeDbacks and
these again into coin on demand steady
holding by the banks of about one-fifth of the
Government bonded debt, and also the holding
back from redemption, for the beue fit OF Mr.
Sherman's plan for redemption, of nearly one
fourth OF the national greeDbacks. If the bank
pays too litte and the nation receives too little
then, instead of violating the Constitution BY
Issuing more Government paper money to get
rid of double interest," why not eudesvor to
enact that the interest on the deposited bords
shall go not to the banks but into the public
Treasury?
But let Us look a little deeper into the
''doub'e or treble interest" which Governor
Garcelon intmates that D national bank in
Maine receives II gets 4 per cent. on its
bonds and per cent. on its discounts Our
Impression Is that any rate beyond per cent.
is nsurious IL exacted in Maine by an iDdivid-
ual. That would make Gum total of only 10
Der centum if all the bank notes were loaaed.
But what do the statistics ex xhibit as the actual
income Of national banking in Maine during
the fiscal year 1873? The State had seventy
two national banks In operation on this bssis:
Capital. l9, $50 900
Bonds In Washington at par.............. S,626 $50
Sucuiatihs hotes. esI99yz4
feuerai taxes... 1l3e55
State taxes. 24O, i42
percentage OF taxes. .3.3 per ct.
We have no means Of ascertaining the per-
centage OF Maine banking profits, bat if we
take all New England this willlbe the result:
Ratio Of divldeuds to capital ..........6 IS per Ct
Ratio OF dividends to capital and surplus. 55 per Ct
Ratio Of earnings to capital ana surplus ..53 per ct.
Surely that can scarcely be said to be- double
or treble or even simple interest. 10 England
it would be looked uD6n as a very paltry return
for banking, where ths ratios per cent. upon
the actually paid up capital were for last year