The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1880-01-09
KIN.
BANK NOTES Oh NATIONAL BANKRUPTCY.

BANK NOTES Oh NATIONAL BANKRUPTCY.
No other banking system ever devised is as
good as the National system, in safety, in
cheapnesr, and in ability to meet local needs.
Free banking under State laws would tax the
West and South beyond endurance in cost OF
exchange, would make the people pay more
interest on the same capital employed, and
would be wholly unsafe. One other plan is
,eft-to get rid OF bank due-bis entirely, ana
to issue Government due-bis only. This
plain, but would it not be safe and cheap {?
The bonds held by the banks might be paid, it
Is thought. Interest on them might be stopped
and great cost saved
Ii we could have heavy rain every day, the
cost OF building water-works and laying water
pipes would be saved. Blu. maEy would then
be unable to get water where they need If. and
moreover, that plan would be bad for the crops
GreeDbseks will not always 20 where bank
circulation is found useful, and heavy rain OF
more greenbacks would prove fatal to Industry
and trade
To retire bank notes. it is proposed to issue
1880 100000 OF greenbacks. with which bonds
to that amount could be paid or bought and
cancelled. This cannot be done without bad
faith until 1888 when the first bank charters
expire. But if it could be done at ONCE, what
10 to be gained? BY getting rid of $3.50, 100000
OF four per cent. bonds, We should save in in
terest s13, 100000 yearly. But the banks have
paid for ten years taxes averaging S16,9O8, 181
yearly. What part Of the property invested in
bonds would be taxed, after the bonds had
been paid and the banks abolished? About
three quarters OF all personal property escapes
taxation entirely. According to the census Of
1870, out of s150OOOOO,O0O of personal prop
erty, only S4,OOOOOO 900 was assessed, or 90 per
cent. II as large q part OF the property now
owned by banks should fail to escape after abo-
htion Of the banks, the taxes on that property
would yield $4,734,OOO yearly, whereas the
banks new pay ZIG, 9OS,0O0 yearly. This would
involve loss OF S12, ia 600 each year in taxes.
against saving OF s13, 900 each year into
rest. The man who would save the trifling
difference, by giving up all the benefits OF the
safe local circulation OF 1000 bank, might as
we'll cart his wheat in his own wagon from Chi
cago to New York in order 10 save freight by
rail.
But the bank notes are now mai @ perfectly
safe by deposit, to protect them, OF SO in
United States Notes bonds for every 90 of bank
notes. So good are they that nobody cares,
when he takes bill, whether it is 3 n ote of the
Nation or Of any National bank, near or far.
II the banks arc to be abolished, and $3.50, OOO,-
900 more due-bis are TO be issued. Govern
ment must protect these itself. This it can
do only as IT protects its notes now out, by
holding enough specie to make sure that it can
pay on demand. 1t now holds S41 ia specie
against 800 in notes. To provide like re-
serve for $3.50, 1000, 900 more notes it must raise
s135, OOO, 900 in coin, and, if that Gum could be
borrowed ON four per cent. bonds, the cost
would be e5,412, 900 yearly in interest. Take
this from the interest saved by paying OF
bonds, and there ia left only S7,77S,OO0 q year
to be saved in interest, while 12,17d 900 year
would be lost in taxes. That would surely be
saving at the srigot and wasting al tho bung.
With nothing saved, the Treasury ould be in
instant danger, even before bill to wipe out
the banks could pass. For the banks now hold
about $110, 1000 in al-tendors, on which
gold can be drawn on demand. Let any man
judge for himself what he would do IL Inc had
loaned has money TO ne gboor, but found that
neith,or trying TO b.eaA 4m up in business or
tAl