The Anderson intelligencer. [volume] (Anderson Court House, S.C.) 1860-1914, 1890-05-01
National Banks-State Banks Refund.
Ing the State Debt.


Mr.. EDITOR: Following up the subject
of last week, allow me to add that it does
not pay the National Banks to issue cir
eulation. The U. S. bonds are so high,
and the tax on the circulation too great.
The income is about set.off for the tax
on circulation. The National Bank Of
Anderson has reduced it from $s45, 900 to
S11 800. For the reason it does not pay,
the National Bank of Darlington sur.
rendered it's charter and took State
charter. All the new banks are taking
State charters. The National Banks pay
the same State, County, and all other
taxes, paid by the State Banks. In addi-
tion to this, which the State Banks do
not pay, they pay U. S. tax. To this
extent they aid the taxpayers more than
do the State Banks. As stated in my
last, il has amounted to more than one
hundred millions of dollars. The United
States owed a large debt; this banking
system created demand tor the bonds !:
the interest was six per cent. It paid
the Banks we'll, and.aided the government
more. As bonds matured they we're
refunded first at FIVE per cent, then four,
then three. The United States paid the
same interest to the Banks which had to
be paid the person from whom the Banks
bought; but the U. S. could tax the
Banks, while they could not be taxed in
the hands of the individual. It could
reach the Banks by taxing the circula-
tion, and did it. This reduced the rate
of the interest: These statements are
made to meet the objections now being
urged against National Banks. It is
submitted to the judgment of your read
ers that they are of greater benefit to the
taxpayers than State Banks. They con-
tribute to pay part of the general
expenses of the government, which the
State Banks do not The State BsnEs
cannot issue circulation because of the
ten per cent tax. If this tax should be
abolished the State Banks would become
Banks of issue and circulation, and
supersede the National Banks. Here is
the place to make the attack. No better
illustration Of the workings of the Ma.
tional Banking system and its benefit
than the following illustration, in case
the ten per cent tax could be removed :
Substitute State for United States.
Make our State Banks banks of issue and
circulation. Use Registered State Bonds
as security to bill-holders. The stock
holders are liable for their redemption.
Deposit them with the State Treasurer.
Allow the Banks to issue bills-dollar for
dollar-of the amount of bonds so depos-
tied, not exceeding two thirds of its
capital stock. Tax the Banks two per
cent on the bills thus issued. This
would pay half the interest on the four
per cent bonds. The Bank would realize
the other half. At present the banking
capital of the State, with surplus, is
S7,50O,00O. This would require for the
bills, bonds s5,OO0,0OO. The State debt
would stand thus:
Interest on 100000, due 1928, A.
per cent............... ."..."S $4,000
Interest on S5,6oO,ooo, due 1889, 4
| per cent....... -........... ....... ,0OO
Annual interest. S242, ,000
Or. by p. c. tax on s5,OoO,0 600 bills. 100000
Amount to raise by other taxation. ..sl420OO
This would require only one mill
annual tax, which would be rendered
still lower by increased banking and our
increasing property. This is good for
the State, the Bank and the taxpayer.
For these reasons the writer would be
pleased to make the change. He is
connected with both institutions, and
equally interested in them. He is,
therefore, not personally interested as
between them, except so far as it affects
the public good. The interest in one
could be transferred to the other at
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