Evening star. [volume] (Washington, D.C.) 1854-1972, 1893-09-29
THE STATE BANK TAX.
Mr.. Oates Argues in Favor of the Bill
He Introduced.

THE STATE BANK TAX.
Mr.. Oates Argues in Favor of the Bill
He Introduced.
The committee on banking and currency
of the House had hearing this morning en-
Mr.. Oates bill for the repeal of the 10 per
cent tax on state banks. Mr.. Oates bill
varies from others in that it simply "sus-
pends'' the tax as to all notes issued to
circulate as money, provided there shall
first be deposited with the state treasurer
or other safe depository an amount OF law
full money Of the United States, or the SOL
vent bonds Of par value Of the state or
municipalities. equal to the aggregate
amount of notes proposed to be issued,
which shall be held as security, and Pro-
vided also that the aggregate amount of
such state bank issues shall in no case ex-
coed IS per capita Of the population Of the
state.
Mr.. Oates Argument.
COL oates made an elaborate argument IN
favor OF his bill, which. he said, maintained
federal supervision, with a limitation OF
what had been declared by the courts to be
lawful federal tax. He was in favor OF
the absolute repeal Of the law, but there
were members honestly opposed to that. Land
A> "oaAo AdtAel nave TelleI tL1I De
denied it altogether. He would have no
objection to the deposit of the securities
with the Treasury Department of the Uni
ted States Mr.. Oates admitted that it
might extend somewhat the national bank
system of examination to these banks The
advantage to be derived was the develop
ment or local institutions in parts of the
country where national banks were not
numerous. thus afrording an easy and con-
slant local flow of money by preventing the
tendency 70 tod
centerS what money there was in the coun-
Try. MI Oates recognized the taxing power
OF the government but said that the state
Dank tax grew out of the exigencies of the
times when the act was passed.
Mr.. CObb's Suggestion.
Mr.. Cobb Of Alabama suggested that the
logical conclusion of Mr. Oates remarks
was that all the government had to do to
control state affairs was to tax whatever It
saw hit and subsequently to agree to relieve
the state of this burden provided it agreed
TO conditions that enabled the federal gov
eminent to prescribe it's own regulations.
Mr.. Oates replied that the power Of taxa
ton resting in Congress could not be de-
MED The constitution granted it, But
Congress could and must be trusted to not
exercise that power to the detriment of the
we'll being of the state
When asked If he favored the use of gold
ana silver Mr.. Oates replied with an en-
phatic affirmation that he did. Gold was
needed, however. only to maintain our
foreign transactions and keep up the credit
or our paper circulation. Without it the
paper promises Of the government would
not be worth the paper they were printed
on.
The Rate OF Interest.
Discussing the subject of the rate of in
terest to be permitted to the banks under
the law, Mr.. Oates said he objected to the
IL sertion in the bill of a requirement on
that subject. Let the state attend to
that: he said. ALREADY 1t has laws
against usury: and IL We cannot depend
upon the people to maintain a form of state
government the federal government is a
failure. and We had better begin to change
the form. and have a king or emperor to
rule over u.s.
history of the imposition of the tax upon
the circulation of state banks. The taxing
power In this direction had never been eX-
ercised by the federal government until
after the beginning of the war. More than
incidental to this was the inception and
growth Of the national bank system, for it
was 20 make circulation Of those banks de-
sirable that state bank circulation was
taxed. Mr.. Oates further gave the course
OF legislation respecting national banks I'D
to the present time. He charged tina
national banks largely contributed to bring
ing about the recent panic, as a part of
ence upon the financial affairs of the coun-
try and upon the national legislation.
VIII Benefit the Farmers.
In conclusion Mr.. Oates said: Remand
to the states the rights Of which they have
been robbed for the benefit of the national
banks and then the farmers and ,aboring
people can get money at the legal rate of
interest whenever they need 1t. This pro-
posed legislation invokes the hostility of
the great national banking institutions
because they regard Ii inimical to their
interests. Whosoever wants to worship at
the shrine Of the money power will obey
their behests. but friend of the people
believing that they will have more freed IN
and more money than national banks or
even free coinage of silver would ever give
them l will work and vote for the repeal
OF that 10 per cent tax until II is done or
cease to be a member of Congress,
In answer to a question from Mr.. Haugen
Mr.. Oates said that in his opinion no com
bination Of private banks anu bankers could
have the power under any conditions tha I
the national banks possess
Chairman Springer called the attention
or Mr.. Oates to the fact that the Limitation
In his bill restricting state banns to a cir
culalon OF 50 per capita Of popuiat ton would
add but 35O,0U,0OO to the currency Of the
country even II the largest possible amount
was issued, and asked il he (AIr. Oates
thought that was enough
Mr.. Oates said he had based that upon 4
calculation regarding his own state. and
thought 1t would be sufficient The Deo-
pie will get sufficient money some way" he
concluded.
The committee then adjourned until to-
morrow mornig, at which time Repral IN IA
tive McLaurin of South Carolina will ad
vocate favorable consdera ton of his bill TO
ada $l2o,VO,UUO OF treasury notes to the