The Athena press. [volume] (Athena, Umatilla County, Or.) 18??-1942, 1893-07-21

0 the profit account the average ex
pense, the net profit per year pc
100000 amounts to the enormou
sum of $31.25 over same amour
loaned at 6 per cent. In othe
. words, the bank would get 1912
per year for the labor of signin,
and caring and accounting 70
100000 in bills. Surely that i
not robber-like. With bonds bear
ing 4 per cent. interest there is ;
larger profit, but still not enough
to make it any object for the banks
to issue circulation, the premium
on such bonds nearly eating ur
the additional income. In states
where the rate of interest would
average higher than 6 per cent. il
would be done only at consider
able loss. | submit that if banks
can issue but 85t per cent. of the
par of bonds worth in the open
market premium of 10, II, Is
~, or no matter how much pei
cent. Tor par, with the low rate
which that implies) and then have
to pay a tax Of per cent. on that
issue, together with all the other
expenses and all the care and
labor it involves, it cannot be ex.
pected that they will issue great
amount.
Since 1874, while the capital Of
National banks has increased from
about 800 millions then to about
700 millions now, the circulation
has steadily decreased until from
near $50 millions then it has be-
come reduced to about 172 millions
now. Taking from this amount
the 20 millions, more or less, which
the Treasurer has absorbed into
its cash from the fund deposited
to retire circulation, there are left
in round numbers, about $50 mil
lions actually in circulation. The
banks of this state with over II
millions of capital, have q circula-
tion of less than 3! millions. Now,
upon a basis of 700 millions capi-
tai, under the present law the
banks can issue $50 millions (less
the per cent. redemption fund, q
net of 1884 millions) instead of
which they have issued only about
172 millions--a deficit, mark YOU,
from what it might be, of nearly
46O millions of dollars. / am of
the opinion that the trainers of
the law never meant that the
banks should actually be allowed
to employ but S24 per cent, of
their bonds, but rather the full 90
per cent; yet that is the effect Of
the law. So palpable an injustice
as this should be corrected by an
act enabling them to issue so per
cent. exclusive of the redemption
fund, even if nothing better is done.
In my humble judgment, however
that would be stopping far short
of the needs of the times and of
what, in reason and in fairness to
all concerned, ought to be done.
1t seems to me that the reasonable,
the fair, the business-like thing
to do is to amend the law so as to
allow the banks to issue bills to |
the full amount of par of their
bonds; for who wants better Sc |
curity for his money than an equal |
amount in United States bonds? |
Adopt this course, remove the
war tax ON circulation, and the |
banks of this country will speedily |
issue up to the full amount Of |
their bonds. Allow them, for the |
sake of the common good, to get a
reasonable compensation for their
services and in place of 172 mil
lions they will put 700 millions of
every life-blood into the channels |
Of trade, the stringency in the mar.
kets will be relieved and men of |
wealth and of energy will not be
forced to the wall, as of late, be-
cause of their inability to borrow
10 meet present demands, | cam
not conceive of any valid objection
10 this proposition. know of no
other wise way TO increase our sup.
ply Of money. The Government
cannot push money into circula-
tlon; It can only pay out such an
AMOUNT us its legitimate expenses
md appropriations require. But
here is a method by which more