The Somerset press. [volume] (Somerset, Ohio) 1873-1977, 1882-03-02

70 81. I6e. .U-,5J3. II we add these two items, We
find they have invested 81 ,649 ia, ,S56. on which
they pay an annual tax of n little over $4,000
OOO, which is less than two-thirds of one per
cent.
He should go still further than this for the
Comptroller tells US that:
nder the law requiring the National Banks
to carry to surplus before declaring dividends
a certain proportion of their earnings. the M
tOnal Banks of the country have accumulated
a fund in addition TO their capital, which now
amounts to $l2e,l40.6 .6lS. This surplus Is not
infrnged upon, except in cases OF extraOrdi-
nary losses, such as cannot be paid from the
current earnings of the banks, and consequent
ly forms with the capital the working fund of
the banks
If this surplus is part of the working fund
should it not also be taxed as much as any
property in the Nation? If we add the surplus
TO the capital. the circulating notes and the de-
posits, it makes fund of S2,U3I ,06S,327 in the
hands of these bankers. on which they pay an
annual tax of a little over Sl5,000.000. which IS
less than the half of one per cent on the funds
in their hands.
And yet the Comptroller, the Secretary of the
Treasury, the President and Congress are at
tempting to relieve them from part of the
tax they are now paying. A part of the Comp
troller's report is devoted to defense of the
National Banking system to an extension of
their charters, and to relieving them from tax
ation- What other class of the community pay
so small q tax in proportion to their means, or
make SO large profits as the bankers? We know
OF none, except II be some of the Leading rail-
road corporations.
Between the railroad and the bank corpora
the people is being absorbed at a rapid rate.
They levy contributions upon the currency
and trans sportation of the products of the coun-
try that absorb the largest share of the wealth
produced. and yet they are taxed the least.
But the efforts being made to remove the tax
from bank circulation and deposits is not be-
cause the banks feel the tax oppressive, but
because they want all restrictions to the in
crease of their currency removed. If the tax
was removed from their circulation they could
double the volume of their notes and suffer no
loss, even if the money lies idle in their safes
But, with tax of three-and-a-half or four
per cent, as stated by the Comptroller, it is not
profitable to increase their circulation, unless
they find active use for their money. 1t is the
power to initiate and contract the volume of
currency free from taxes they care the most
for. The bankers, many of them, make more
money outside of their banks, than they do in
Of currency, and thus regulating the prices of
property, of which they take due advantage.
But the profits inside is far greater than the
officers of the banks or Comptroller Knox
The Comptroller informs US that the surplus
now accumulated under a law requiring "a
aside as surplus is sl2s, ,l40,6l8. And what is
that certain portion as defined by the law
that is TO be thus used? Let the act itself
state.
Section 33 of the act organizing the National
Banks, reads as follows:
And be it further enacted that the Direct
ors of any association may, semi-annually,
each year declare a dividend of so much of
the net profits of the association as they shall
judge expedient: but each association shall,
before the declaration of dividend, carry
one-tenth part of its net profits of the preced-
ing half year to the surplus fund until the
same shall amount to twenty per centum of its
\ Now, if SIPS, ,14O,61s is ten per cent. of their
net profits, the entire profits would be ten
annual % i average Of sf5e.ooSooo for for eight Eighteen en-
years for their capital, we find they have made
about sixteen per cent ON their entire capital
according to their own showing. But they
aside q
per cent of their capital stock from one-tenth
of their earnings, which is an evidence that
$128, LAG, ,6lS is far less than onetenth of their
net earnings.
The annual reports prepared for the public
by the banks, giving statement of their div
idends, ETC., are, many of them, cooked up for
the occasion.
The facts cannot be denied that the bankers
are, as a class, the richest men in the Nation,
and are only exceeded in their enormous wealth
by few railroad managers.
That the banks would flood the country with
and and contraction % ton is Clearly indicated by state
ments made both by Comptroller Knox and by
United States Treasurer Gilfllan. Mr.. Knox,
on page 64 of his last report, says:
1.-The amount of circulation issued to Ma
tional Banks for the year ended November l,
1881, was $50, ,9I9 $50, including $50 issued
to banks organized during the year. The
amount retired during the year was S14,075,-
| 0l4, and the actual increase for the same pc
tai ON M November l. $500 .Tss- Which is the he
| largest amount outstanding at any one time. -
Since November1, 1881, about $4,000, 900 more
| have been added to the circulation of the
| banks. Now, if the banks will initiate their
currency Sl6,904, ,576 in one year, when they pay
a tax, as the Comptroller states, of four pei
| cent. on their circulation, what would they not
| do in the way of imitation. provided the tax
was taken off? We are not left in doubt as tc
what they would do, for United States Treas
urer Gilfillan, in the Financial Reports fol
1880, tells us just how the banks now manage
in this regard. He says:
" In January and February, 1875, a certain
/ har1tr rafif ifl oil lafin from ff
| s45, 600 by deposits of legal-tender notes. Be
| tween September 26, 1876, and May 26, 1877, ant
its circulation to $45O,OOO. Between August L
| and September 10, 1877 it again reduced it!
circulation to $45, 600. On September 10, 1877
nine days after completing the deposits fo
this reduction, it again began to take out addi
tional circulation, although S42,5 $50 of prior de
posits remained in the Treasury, and by th'
26th of that month its circulation had agair
been increased to $450, 900. July2 1878 it for thu
third time reduced its circulation to S45 000, ,ant
in August and September, 1879, again increase
it to $i50,000 at which it now remains. the bal
ance of its former legaltender deposit theI
in the Treasury being Sll2,615. From Januar,
13 1875 to the date of this report, S778275 of it
notes have been redeemed, of which only $40
700 were redeemed at the expense of the bank
although during more than one-third of tina
period it had outstanding and was deriving tn
benefit from the full amount of circulation
which its capital authorized. The only assess
ments which have been made on the bank TO
the expense of redeeming its notes were $24.
in 1875 and S4.39 in 1878. At one time ther
were in actual circulation 1885,, $50 of its note:
| although the highest amount ever borne on ii
| books was S450,000"
The Treasurer informs us that other bank
have been increasing and decreasing their Gil
culation in q similar manner. Now, in whs
situation does such q condition of currenc
, place the business of the country? we ask.
stable currency is one of the essential elt
ments of stability and prosperity to bushes
enterprises. A huctuating volume of curreI
: cy is one of the worst devices ever discovere
: to enable the manipulators of that currency I
? buGinaaS
. ducing classes of the country.
: In strong contrast to this fiuctuating ban
r currency stands the legaltender notes, th
volume of which has only changed under th
grinding force of laws enacted by banker
: especially for the purpose. Since May 3
} 1873, the volume OF Government currency hf
been invariable, and it will so remain unit
? some law is passed, either to increase or d
! crease that volume.
I | clause in the Resumption act, giving them til
power to increase their circulation to MOI
8 | thad five times its present volume, or to wit
) in ten per cent of the entire bonded debt, ar
!, under existing laws, also, they can retire Il
entire amount of their circulation at the
: pleasure. In February, 1881, in order to defe
: a bill passed by Congress, depriving them
the power to thus suddenly contract and e
t pand their circulation, they retired about $I'
i 100000 of their notes in a few days time. "
v all know the disastrous effects caused by tn
f act. Had not the Secretary of the Treasul
+ come to the rescue, and put legal tenders
= circulation by the millions in exchange f,
u bonds, widespread business disaster won
a have followed. The business interests of th
+ country must not be left at the mercy of me
d who would thus abuse the power placed
d their hands. These banks should be deprive
of the power they now hold over the volun
e of currency.
d The facts and figures here given are main
Q taken from the reports of the officers of Il
y Government, and, therefore, they cannot
+ ignored nor set aside by the members of Co
u gress. 1t will not do, either, for the prese
N legislators to reject them. The men now
l. Congress have it in their power to strangle th
l. monopoly that is sucking the life-blood out
the people. Many of these banks have nc
r, about outlived their legal chartered existen
q given to them by ignorant and corrupt legis
J. tors, and the verdict of the people is-letthe
T. die. This Congress should pass an act fOrev
E. prohibiting the organizing or rechartering
J. banks of issue. general law authorizi
banks of deposit and discount, by which t
O. money of the people shall be made secure,
t. desirable. But no bank should be allowed
n issue currency or to control its volume. w
N should the Government create money and gi
1t to rich bankers for nothing? The gleal-te
m der notes were issued in exchange for lab
ar1dr1 artx orx-a cot Gnv l,xrt