The Iowa plain dealer. [volume] (New Oregon, Howard County, Iowa) 1867-1895, 1882-11-02
PROFITS Of BANKING.
The Power u Expand and Contract the
Currency II fraNght With Evil.
IAd,lreas VI Peter Cooper. /

t'taes'sNta ~ viz l''oeNss ~ wv s'Na
try TINT absorb the largest share Vt the
wealth produced, and yet they are taxed
the least. Hut the efforts being made
to rcmoyc the tax from bank circulation
and deposits arc not because they want
restrictions to tho Increase Of their cur.
rcncy removed. II the tax was removed
from their circulation they could double
the volume of their notes and suffer ~
loss. even II tho money lay lille in Their
safes, but with tux of B, or rer
cent, as stated hv the Comptroller, il IL
not profitable IL increase their .ircnla
ton unless they can find active use for
their money, II is the power tn initiate
and contract tho volume If currency
free from taxes they care the must for,
The bankers, many vi them, make more
money outside of their hanks than they
10 inside. This il DOM by controlling
the volume of currency, AMI thus rrgn-
lating tho prices Of property, II which
They take due ADVANTAGE, hut the.
profits inside arr far greater than the
officers IL tho hunks or Comptroller
Knox would have the people think they
are.
The Comptroller informs us that the
surplus now accumulated under thu law
requiring N certain portion of their
earnings" IL he laid aside ~ a surplus
il Sis, itO,6is. And what i that yep
tain portion" AZ defined hy the law,
that Is to he thus used2 Let the act
itself state.
section NJ II the act organizing the
national hanks reads ~ follows,
".ina De II further enacted That the
Directors of any association may. semi.
annually, each YEAR. declare dividend
IL - much of the MT profit Of the aS>o.
citation rs they shall Judge cxrciient:
Int each association shall. before the
declaration III dividend, carry one.
tenth part Of its not profits of the prc.
ceaing half year to the surplus fund
until the same shall amount to ~ per
cent of its capital stock"
Now II Sl.S.liu,6lS il IN per cent,
Of their net profits, the entire
profits would he ten times that,
or St..Sl .lo6. lSn, Ii w allow an
annual average III Slan.nuu.uOa for
eighteen Years for their capital. w find
they have made about LII per cent, on
their entire capital according Ia their
own >hawinS. But they have laid aside
surplus II more than ~ per cent, If
their capital stock from onc.tenth Of
their earnings, which il an evidence that
SlaS,liu6lS il far less than on, tenth If
their net earnings,
The annual reports prepared for the
public by the hanks, giving a statement
VI their dividends. etc. are many If
them cooked up for tho occasion, The
facts cannot hc denied tina, the bankers
arr. ~ a class. the richest mon in tho
nation. and are only exceeded IN their
enormous wealth hs few railroad
managers, That the hanks would Hood
the country with their notes and resort
To extensive imitation and contraction l.
clearly indicated hr statements made
both by Comptroller Knox and by
United States Treasurer tiilnllaa, Mr.,
Knox, On page u If his las, report,
SAYS;
THE amount of circulation issued IL
national hanks for the year ending Nov,
l. 1851, was S3o.a1a,6au. including ~,
aas,aSu issued to hanks organized dur,
ing tho year. The amount retired dur.
ing the year vas Sll.u,a.ust, and the
actual increase for the same period was
therefore, Sl6,aoi,s1a, making the total
On Nov, |, Sia9taaa,s.as, which is th,
largest amount outstanding NJ any one
time.
Since Nov. |. 1851. about sa,ona,oN
more have been added To the eirenla,
tion III the hanks, Now, ii the hanks
will initiate their currency SlS,1oi ~,
IN one YEAR, when the, pay a tax, as tn,
Comptroller states, III 1 per cent, 81
their circulation. What would they no,
do in the way II imitation, provided iii,
tax was taken orr w arr no, left IN
doubt as IL what they would DO. IL,
United States Treasurer G,ltllan, IN
the financial reports for lS>a, tells IL
Just how the hanks nov manage in this
regard, He says:
In January and February, ls.a 4
certain bank retired it, circulation from
Ssa.S,lssu 10 Sia,,s,a hy deposits at legal
tender notes, Between Sept, III, iSsa
anti May ~, 1877, and before ,ha, IL,
resit Was exhausted. /, Increased it, cir,
eulation to Stsn,oou, Between Aay, II
and Sept, IL, 1877, il again reduced its
circulation t. Sta,uNu, TN Sept, II
lsss., nine days after completing the 10
pests for this deduction, /, AGAIN hega,
IL take out additional circulation, al
though Sts,asu Of prior deposits II
NAMED In the treasury, ami hv the a6tl
Of that month its circulation had again
heen Increased to Siso,uoN, July ~
1878, il for the third time reduced il,
circulation to Sta,nnn. AMI in .Augus,
and September. lS1a, again increased /,
oSiao.0o0. at which il now remains
the balance Of its former legal.tende
deposit then in the treasury being Slla.
6la, From Jan, Ii, 1915. IL tho dat,
Of this report, $11s.o7a Of its notes hav,
been redeemed. of which only stu, TN
We're redeemed at the expense II tn
bank, although during more than one
third Of that time it had outstandin,
and was deriving the benefit from tn
full amount al circulation which its CAP
ital authorized, The only assessment
which have been made ON the hank fo
the expense of reieeming its notes wer
$ai.lt in 1915 and Si39 in 1878. 4
one time there were in actual circulation
So, $50 of its notes. although the high
est amount ever borne on its books wa
$i5O.OO0.
The Treasurer informs us that othe
hanks have been increasing and Il,
creasing their circulation in a simila
manner Now in what situation doe
such condition Of currency place til
business of the country. NE ask 4 sts
BILE currency is one Of the essential ii,
ments Of stability and prosperity /
business, \ huctuating volume Of On,
rency is one of the worst devices ey.
discovered to enable the manipulate,
Of that currency to bankrupt bushes
men and defraud the producing classt
of the country.
In strong contrast 10 this fluctuatin
hank currency stands the legal-tenl.
notes, the volume Of which las onl
changed under the grinding force .
laws enacted by bankers especially Il
the purpose Since May 81, 1878, I'll