The gold leaf. [volume] (Henderson, N.C.) 1881-1911, 1892-09-15

: try to the admission, that we must re
E store to the States their right to regu
: late their domestic currency withou
t interference by the General Govern
S ment.
? The National Democratic party ha
declared emphatically for the repeal O
; this tax, and every indication point
, to this result. A brief review as t,
when the tax was imposed and tn,
reasons for imposing it will be inter
estlng and instructive. In delivering
the opinion of the Court in the case o
Veazie Bank VS.. Fenno, Wallace
533, decided in 1869, Chief Justice
Chase says: "On Feb. IS, 1863, the
Act authorizing National Banking as.
sociations was passed, in which for the
first time during many years Congress
recognized the expediency and duty
OF imposing tax upon currency, and
a tax of 2 per cent. was imposed on
the circulation of the National Banks. -
Some time after, March 3rd, 1868, a
tax of per cent. was imposed on the
circulation of State Banks. Says Judge
Chase, " The object of this tax was to
inform the proper authorities of the
exact amount of paper money in Cir
culatlon, with view to its regulation
by law
On July 18th, 1866, the present tax
on State Bank notes was passed in
these words: "Every National Bank
ing association, State Bank and State
Banking association, shall pay tax of
10 per cent. on the amount OF notes
of every person, State Bank or State
Banking association used for circula-
ton and passed out by them after the
Ist day of August, 1866"
The constitutionality of this Act
was affirmed in the above case, but
two Judges dissented, Nelson and
Davis. In his dissenting opinion
Judge Nelson says: "Since the adop-
ton of the Constitution down to the
present Act of Congress and the case
now before us, the question in Con-
gress and in the Courts has been, not
whether the State Banks were consti-
tutional institutions, but whether Con
gress has the power to establish Ma
tlonal Bank. This taxation of the
powers and faculties of the State gov
ernments, which are essential to their
sovereignty, and to the efficient and
independent management and admin
istration of their internal affairs, is for
the first time advanced as an attribute
of Federal authority. 1t finds no sup
port or countenance in the early his
tory of the government, or in the
opinion of the illustrious statesmen
who founded it. These statesmen
srcupulously abstained from any en-
croachment upon the reserved rights
of the States, and, within these limits,
sustained and supported them as SOW
ereign States. We say nothing as to
the purpose of this heavy tax. Its
purpose is scarcely concealed, namely,
to encourage the National Banks. 1t
is sufficient to add, that the burden of
the tax, while it has encouraged these
Banks, has proved fatal to those of the
States, and, if we are at liberty to
judge of the purpose of an act from
the consequences that have followed,
it is not, perhaps, going too far to say,
that these consequences were in
tended.
If other authority or evidence is
necessary to establish the fact that this
Act was passed in the interest of the
National Banks, we would refer to the
statement by the late Hon. John Jay
Knox, SO long Comptroller Of the Cur
rency. In his 1" History of Banking
in the United States" he says that this
Act was passed because it was feared
the circulating medium of the country
would become too expanded. Its effect
was at once to drive out of circulation
the State Bank notes that in 1868
amounted to 23S millions. This was
followed by the funding of the seven
thirty notes into fivetwenty bonds,
and the policy of contracting the cur
rency thus begun, was steadily pursued
until 1878, when it reached only
sI5.52 per capita.
Al the time of the adoption of the
Constitution, 1889, there were four
State Banks in existence and opera
ton, one each in the States of Penn
sylvania, New York, Massachusetts, and
1t will be noticed here that it was
not until IS months alter thewar closed
that this tax WAS imposed. Its con-
stitutlonality was defended on the
ground that it was tax to raise rev.
enue. To carry out this pretense,
the Tax Act was a clause in the Rcve-
nue. Act and not part Of the Ma
tional Banking Act. The tax was
placed SO high as to be prohibi,ory,
thereby violating its avowed purpose
to raise revenue, and it may we'll be
questioned whether the Supreme Court
as now constituted and under the
changed condition of things, would
divided Court in 1869, and Ie-aftirm
it to be constitutional.
Before leaving this part OF the sub
ject, l will anticipate a question, and
say that the reason why there is SO
little money invested in Banking in
this State, is because there is SO little |
profit in the business under present
conditions. There is no profit but
loss to the National Banks on their
circulation at the present price of
United States bonds; and the sparcity !
of deposits and limited commerce,
offers but restricted field for profit
10 Banks in North Carolina. If our !
Banks could obtain ten, twenty and |
thirty times their capital of other peo-
Dle'S money on deDOSit m lend OIIt nc |