The Portland daily press., 1879-08-21
THE Honest TRUTH
National Bank Profits and Taxes


The Comptroller of the Currency has made
a statement which shows that the whole amount
of interest received by National banks upon
bonds deposited as security for circulation, was,
on July L. S16,912,7 ,736. If from this amount be
de Quoted 1Oper cent Isl ,G91 ,273), which is the
interest upon that portion of the bonds on
which the banks receive no circulation, and
also the per cent. tax upon circulation (S3,-
1SS,29S-total, S4,S79,545), there will remain
$12, ,033, ,172, which is the amount of interest
received by the banks upon 90 per cent. of the
bonds deposited as security for their circulat-
ing notes.
The National banks now hold about S20,-
100000 of 1O-40 bonds. If these are converted
into per cents, the net amount of interest
received by the banks on August l will be
S11, 1,776,2O7 If all of the bonds held by the
National banks are converted into per cents.
and the same deductions made as before, the
net amount of interest received by the Ma
tional banks upon the 90 per cent. of bonds
upon which circulation is issued will be So
564, ,S75.
If the present capital of the National banks
were loaned upon bonds and mortgages at s
per Ctuls, IL NOulu ylClu %-otoD-JVVi ihtCiOo0
annually The net income derived by the Ma
tional banks from United States bonds, if bear
ing interest at per cent. and from the loan of
the amount Of circulation issued upon these
bonds at per cent, amounts to $50, ,412, 61S,
which leaves difference of S6,520,5G7 as the
profit of National banks upon circulation,
based upon per cent bonds, which is equal to
1,74-100 per. cent. on the capital invested.
Under similar circumstances, the profit upon
circulation to the National banks, in places
where the rate of interest is 6 per cent. would
be about 2 per cent. more than if their entire
capital was directly loaned at per cent. upon
bonds and mortgages.
The Comptroller has made statement show
ing that the National banks now in existence
are entitled to receive upon their present capi-
tai, under Sec. 5, III of the Revised Statutes
$3.50, ,372, ,916 of circulating notes. The total
amount issued is 1913, Oh, ,346. The National
banks already organized and in operation are,
therefore, entitled to receive upon the deposit
of the necessary amount of United States
bonds, S76 1927 $40 of additional circulation.
In other words. they can increase their circu-
lation one-fifth if at any time they are in want
of the additional amount, or if any profit can
be made by an additional issue.
If the circulation enjoyed by National banks
were as profitable as some gentlemen are dis
posed to represent it, why do these banks
leave seventy-six millions of circulation un-
touched in the Treasury?
One other point. The net interest on the
bonds deposited in the Treasury by National
banks is already below twelve millions and
will very soon by the substitution of per
cents. be reduced to nine and a half millions
But the taxes paid by the National banks,
local and general, to the State and Federal
Government is more than sixteen millions of
dollars annually On this state of affairs will
the obliging Greenback orator please state to
his next audience just how much money the
people would make by substituting greenbacks
for National bank notes. In other words, does
our Greenback orator believe that the people
would make anything by saving nine and
half millions in interest and sacrificing sixteen
and a half millions in taxes? Would not the
saving be seven millions against the people?
Please eXplain.!!