The weekly register. [volume] (Point Pleasant, Va. [W. Va.]) 1862-1909, 1891-06-24

The Richmond Dispotch replying
to an article upon double interest
in the Farmers AduOcate says:
Now as to double interest. Let
US see how thai is. The bonds
deposited in Washington are
deposited not in the interest of
the banker or capitalist, but in or
der to secure good currency for
the people and save the note hold
ers from the possibility of loss.
The bank would rather issue its
notes without furnishing any Sc
curity for their redemption, but
Uncle Sam, looking to the welfare
of his family, refuses to allow any
Treasury notes to be put in circu-
lation until the bank has deposited
in his pocket (the Treasury bonds
enough to make those notes good
from one end of the Union to the
other, The Government does not
issi1e Treasury notes to the banks.
or rather the notes issued to the
banks are issued to them because
Uncle Sam is afraid his people
might be the losers if the bank
were empowered to issue the notes
itself He sees to it that not too
many notes are put out. He does
this by keeping the bonds in his
pocket and counting out to each
bank all the notes that it will
be allowed to issue. All this, it
will be seen, is done on behalf of
the public and not in behalf of the
banks.
"This will appear clearly if we.
suppose that the present banking
system were abolished. Would the
banks or any other bondholders lose
their interest because the banks
were closed? Certainly not. AS we
have repeatedly said, the Govern
ment would have to pay annually
exactly the same amount of inter-
est it now pays. Where, then,
would be the double interest? Why
1t would be just where it is now
nowhere. 1t is true bank or d
man owning 100000 of Govern.
ment bonds could not get from the
Government notes to use in his
business or to lend out, but he
could deposit his bonds with a
banker or capitalist and borrow
upon them 80 per cent. of their
face value, just as he now depos-
its his bonds with Uncle Sam, and
oorrows upon them 80 per cent. of
their face value. So that the up-
shot of the matter would be that
the note holders would no longer
be able to call upon the United
States to become Responsible for
notes.
x = 4 x X
"And where, we ask again, would
be the double interest? The capt.
talists would as now invest 500. 600
in Government bonds and draw in.
terest upon them, and would also,
or could if he chose, hypothecate
those bonds with a bank, banker,
or capitalist. and borrow 90 per
cent of their face value, 4ssss
would call this drawing DO
interest. Yet it surely would
drawing double interest if the banl
draw double interest now
If the Dispatch man or any 9th
capitalists who owns a hundred
thousand dollars worth of Govern
ment bonds were to deposit the
bonds with a banker and borrow
80 per cent. of their face value, he
would have to pay the banker from
whom he borrowed, interest on the
sum loaned. Under the present
system the Government krnishes
without interest 80 per cent. OF
every 100000 in bonds deposited
for banking purposes. This is what
the Farmers AdUocate is driving at.
However we. agree with the Dis.
patch, that the present National
banking system is the best this
country has ever had, and we be-
lieve in holding on to it until the
Farmers AdvOcate or some one olee
proposes a better one.
Summer Excursion Tickets
To all nothern and eastern seaside