The advocate., 1890-01-16
Report OF the Comptroller OF the Cur
remcy.

haustiVe and Ingenious plea TOT Lile con
tlnuunce Of the national banking system
ever made.
Nothing has been omitted. Every
point in its favor has been amplihed, and
many Of its bad features excused or de-
Tended upon the most plausible theory.
The usefulness OF the banks, the possibil-
tiles Of war, the fear Of bad national cred
II, their safety, honesty, and even patriot
ism, have all been called into argument
After all, stripped Of its deception and err
roneous deductions, this report means,
make banking more profitable and the
people can have more money II Is In
tended as government Endorsement OF
the National banking system, asking that
lts profits may be increased in order that
the system may be perpetuated. A few
points can only be taken up at this time.
He says the system was inaugerated for
the patriotic purpose Of furnishing a mar
ket for the bonds. The banking act was
passed in 1858 During that year lS4
banks began business with only $4,000
900 capital Not much patriotism shown
that year In 1854 the number increased
45S, with a capital Of $70,OOO,OOO. A
largo per cent Of these were chartered
during the latter part Of the year, when
the result Of the war was assured. Butin
1856, when the danger had passed and the
time for speculation had arrived, the pa
triotic spirit became 80 intense that l,Ol4
new banks we're chartered, with capital
Of more than $242,OOO,OOO. SO much for
their patriotism.
Again, he says the banks have dlmin-
ished the rates Of interest. That Is no
doubt true, since while .cheapening inter
cat all production has been cheapened
much greater in proportion. When cur
rency 10 plenty rates ofinterestare always
high, but when mOneyis scarce the rates
are apparently less. Herein lies the diff
Guilty, as an illustration will prove. Twen-
tyyears ago money loaned on farm mort
cages for 10 per cent. Men borrowed
then that they might better their condi-
tion. They could pay that rate and pro-
duce a surplus. Now they borrow be-
cause Of their neCescity, and the
per cent Of profit is less than the rate Of
interest. Why2 Because twenty years
ago 30 bushels of wheat would pay the
annual interest on $1,000 The rate of In
teTest has been lowered to 9 or per cent
and It now requires ti5 bushels Of wheat
TO pay the interest on the same amount.
The rate In figures is less, but the meas
urement has increased. II the rate of in
terest had decreased with the price Of Ia
Dor products since wheat sold for 80 bu.
It would now be less than 3 per cent. He
says the banks have been Improbable,
yet the records show that last year, with
a capital stock Of but $615,000,000, their
surplus and undivided profits amounted
10 $685. 100000. Forty-fve per cent ought
to be quite satisfactory during these hard
times. During the past twenty-five years
the banks have received:
Interest on circulation, COM
pounded at per cent .,. S2,0S1 ,s41 ,073
TnAnrnat ON honda nkA1k mar Cauh
estimated as above ...,..... 159,49O5s9
Interest on deposits at ~ perc't
estimated as aboue. e...,......2,3 2,3O7, ,247 ,058
Profits on bonds purchased. -. 4SA, ,1S0
Total. l...,.,..........,..5 $3.50, ,649,s92,
This is a conservative statement Of the