The National tribune., 1888-04-12
"scANpALoUs FINANcIERING.u

II
tional Bank Laws you will and that banks, instead
of getting 10 per cent more circulation than the |
bonds they deposit, they get 10 per cent. less, or
only 90 per cent Of the face value Of their bonds
thus leaving q bank, such you mention, only |
$500 O0o circulating currency.
You viii find that the bank has TO deposit with !
the Treasurer Of the United States per cent of lis
circulation a redemption fund, sI5.090-leaving !
it only SSJ5 coo to loan. You will end that the
bank viii have 10 pay tax TO the Government of
per cent on its circulation or So 600 year Sach
bank with Ss00O09 circulation would, if it bought
per cent. bonds, have to pay about 26 per cent.
premium OF S26G00 Those bonds would now
have about 20 years run, and the charter Of the
bank also runs 20 years; such bank would be
obliged to charge Off about $4,000 year, which
would have to come out of the per cent interest
And then, in addition to ali this, the same bank
has to reimburse the Treasury It's pro rata share Of
the expenses of the Treasury Department In as
sorting and destroying the worn and mutilated
notes and the express charges IN connection there
with, so that when ali this is paid, and also the
National Bank Examiners fees and the pubca-
ton Of the statements at least ave times year
viii find that balance of the 600 interest paid 1t
by the Government viii cut a very small figure as
interest on the 81, 200 coo such bank would have
to put up in cash in order to get SsJ5 900 TO loan.
l think all the banks lately organized have
bought the least amount OF bonds they allowed
to deposit In order TO obtain their charters hence
q bank organizing with $4,000 win buy only Sl2,-
500 in bonds and get only Sll go circulation, when
1t could, If it profitable you claim, invest
its whole capital in bonds and get all the circula
/ ton possible. The fact IS we would be glad to
surrender our circulation any time we can get our
/ bonds back and retain cur charters.
/ The only inducement for the organization Of
/ National Banks is the prestige they acquire by
reason of the confidence the public have in them,
based the facts Of the almost perfect security to
I their dePositors and customers Gov. Merrill
stated in mis- address at the Bankers Convention in
Chicago in 1885, that The average loss to depositors
/ in National Banks since their organization would
/ not exceed onetwentjeth OF one per cent.
Il is also fact not generally known that the
Government gets all the benefit of the bank notes
! lost or destroyed VghiIe in circulation.
Your war on bondholdeEs and capital may be In
tended 10 help the soldiers but seems to me that
in order 80 do any good, it should be waged on
the basis Of truth and fairness.
think those who responded to The call Of orr
Government for funds during the dark days of the
rebellion are entitled to some credit as they GER
teiuly were on our side and She friends Of Our cause
and If fortune favored them when victory was
ours, do not think it the manly spirit of q soldier
to envy them; al any rate. they have had their
benefit and pay, and nothing can now be- done 10
beat them Gus Of it.
served as private soldier in the Dist Iowa
shout three years, and draw Sc per month pen
sion on account Of wounds received in battle, and
il il necessary 10 relnquish my right 10 pen
sion forever in order TO get the protective feature
Of tariff policy removed, would gladly do so
st once q matter of business, believing that,
with the 20 per cent. of Of the commodities have
to buy, can save several times the amount of my
pension each year.
Appreciate your efforts on behalf Of the soldiers
very nlRch.-G. GULBRAEDsoE Albert Lea MINI.
ComTade GulbTandson, who is President Of
the First National Bank of Albert Lea, very
strangely misunderstands our editorial, and
this is the more strange because we felt sure
that we had made it so plain that no man
coald mistake it, even though he tried.
With what he says in regard to the ma
tionai banking system, and the method of
putting out circulation, we have no dis
! agreement whatever We believe in the
national banking system quite as earnestly
as he or any other man does, and never have
attacked it.
What we denounce is the practice Of the
Secretary Of the Treasury in loauing out the
cash in the Treasury to certain banks upon
their depositing United States bonds for
security. This policy was recently inaugu-
rated in response to a demand from Wall
Street that the idle money in the Treasury
be put into circulation, in order to prevent
a panic Comrade Gulbraudson viii per
ceiye that this has nothing at all to do with
the question he argues 50 deliberately.
According to the last report of The
Treasurer of>the United States, $81 231, Gar
of the cash in the Treasury has been thu.
loaned out to banks, without interest, and
which they have turned around and loaned
to their customers at a high rate Of interest
That is S61 ,221 .6Q7 Of the peoples mone3
has been furnished the banks to trade upor
and collect interest upon from the people
Let US reiterate for the benefit of sucf
readers as Comrade Gulbrandson that W,
are not abiding in any way to the circula
ton Of the banks or the bonds deposited {,
secure the same. We only speak of money
that has been taken out Of the Treasur,
vaults and loaned out to the banks, undo
the operations Of this new policy Of tn
Secretary, acting in Difference to the wishe
of Wall Street
What we have insisted upon IS that it /
scandalous to pay these banks interest o.
their bonds, and then lend them back with
out interest 10 per cent. more than the fac
value of the same in currency TO trade OF
!. We insist that the only honest common
sense policy is for the Secretary TO use tn
= money in the Treasury to buy their bond
outright, and so stop the interest upon then
., This, while reducing the indebtedness an
diminishing the quarterly payments Of in
terest, viii restore the money so paid out t
! the channels Of trade and accomplish vasd
ie more than the present policy can.
/ Comrade Gulbrandson is mistaken i
ie thinking that we have made any war on th