The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1895-11-01

| notes to be called in and replaced by
| Understanding bank, notes. said
notes having no better security be.
hind them than the Treasury notes
did but the interest on the bonds was
payable in coin which was at high
premium then, and our paper cur
rency was accepted at par for bonds
purchased, so immense profits could
be made out of the transaction at that
time, even if it can't be done now.
For these laws in full see ''12
Statutes at Large 665 and 13 Statutes
at Large SO +" The main features of
the National Bank act are as follows:
Section provides that no association
shall be organized under this act with
a less capital than 800, 900; that banks
with capital of not less than $4,000
may, with the approval of fthe Secre-
tary or the treasury, be organized in
any place, the population of which
does not exceed 5000 inhabitants.
Section l6 provides "that every as
ISOLATION before it shall be authorized
to commence business, shall transfer
and deliver to the Treasurer of the
United States, and Z. S. registered
bonds bearing interest" Right here
[ want to call attention to the fact
that at this time the bonds were pay
able in lawful money of the U. S., but
the interest was payable in coin and
thereby a market was made for the
sale of gold and silver at great profit
by the holders thereof. For 30 years
our Congress has iegislated in favor of
the capitalist with very few eXcep-
tiOns.
Section 81 provides "that upon the
transfer and delivery of bonds to the
Treasurer, as provided in the forego-
ing section, the association making
the same shall be entitled to receive
from the Comptroller of the currency
circulating noteS}of different denOm-
nations in blank, equal in amount to
ninety per cent. of the amount of said
bonds, SO transferred and delivered"
Section Al provides that every as
ISOLATION shall pay tax to the United
States OF one per cent. per annum on
the average amount of its notes in
circulation" Redemption of the mu-
tilated notes and loss Of interest on
money deposited to secure redemp-
tion and incidental expenses bring
the cost of the currency received by a
national bank from the people at a
little less than 2 per cent. In other
words we loan money which we guar
antee to be good, sound, honest cur
rency to banks at 2 per cent.
and borrow it back at from
6 to "a per cent. when we might
just as well issue it to ourselves
directly without paying any interest
at all, and not withstanding this fool
ishness we assume to be good business
men. But we are told by bankers that
this kind of deal is not profitable to
them now, because they can get about
all the funds they can loan for moth
ing from depositors.
do not wish to be misunderstood
or have this audience think | can see
nothing good in our banking system.
Banks: are a necessity, and for making
our exchanges, discounts, collections,
ETC., are Indispensable; my point is
this: That they should not be al
lowed to issue or control the circulat-
ing medium. This sovereign power
should remain in the hands of the
people where it rightfully belongs;
the constitution authorizes it and the
supreme court sustains it and why the
American people will, in the face of
100 years experience, allow few men
such control over our finances that a
panic can be brought on any time, and
as matter of fact, is inevitable about
every ten years under the present con-
ditiOnS, is puzzle to me.
l will 60 further! [ believe that
when a man wants to borrow money
for legitimate purposes and can give
ample security, it is the duty of the
Noxy nrF1n inf hi hn l1n1 inf
to provide way for him to get it. l
have said that money should be issued
directly to the people; by this l mean
that it should be paid out for public
works, salaries. pensions, ETC., the
same as our Treasury notes Tor green
backs are now put into circulation,
thereby saving to the public an en-
OrmouS interest charge, for no money
goes over a bank counter without
drawing interest, unless the cashier
or some other official feels the need
of vacation.
The law allowing national banks tC
keep large amounts of money on de-
posit in banks of redemption located
in the money centers upon which they
draw low rate of interest, is often
times disastrous when Stringency
occurs, because it encourages Specula'
tion and being put out ON call loans ii
causes a panic any time the kings Of
finance call in their loans or refuse tC
extend the expected accommodations
The interior banks are allowed tC
count this money which they may
have in New York as part of theil
legal reserve of Is per cent. when, as
matter of fact it is beyond their con.
troll. This law is wholly in the inter
est of the banks and against that OF
the people generally.
The act of June 10th, 1874, provides
that the legal-tenders sometimes
called rag money! to the amount of
per cent of their circulation should be
kept in the U. S. treasury; it also
provides that when banks did not
wish to go into liquidation, but die
wish to sell their bonds at large pre-
MUM, they could by depositing legal
tender notes, or rag money, in the
treasury to the amount of their circu-
latiOn, lift their bonds and sell them
This was the means of locking up in
the treasury large amount of legal,
tender money, held by the treasury to
redeem national bank notes; which
the treasurer could do or not as the
secretary saw proper. This arrange
ment kept the bank notes out and the
legal-tender notes in. After the
bonds were sold, the people had 10
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