The San Francisco call., 1899-12-10
ABOUT NATIONAL BANKS.

connected with finance and economics, than the rea-
ton of banks to business and to the people This
misunderstanding especially affects national banks,
which are regarded by many as the especial beneh-
Charles OF Federal favor.
The Willows Promoter an excellent newspaper OF
influence in the Sacramento Valley, in commenting
upon The Calls exposition OF the financial reform
legislation before Congress- says:
BY whom the measures desirable outside OF
Wall street and the United States bondholders?
For the benefit of such OF readers may not
know will state briefly the provisions OF the ma
tiona banking law as it will be after the proposed
legislation: Any FIVE persons holding aggregate OF
900 worth OF United States bonds may incorporate
a national bank. BY depositing their bonds with the
Comptroller of Currency the United States issues
$4,000 in bank notes TO the bankers This is free
gilt by the Government to the bondholders. who did
not even have to pay for printing the paper money
This money they loan at interest. buy real estate
invest as they please, for it is absolutely their own.
Thus they draw interest on their bonds, and then
draw another interest the paper money issued in
lieu OF them
The legislation agreed upon will make free gift
OF about SIoooooooo to Wall street for the oooo,
GOO OF Government bonds will get up TO par OF the
bonds instead of but 5000 100000, as they do now.
why not donate something to struggling business
men direct? Why should the Government pile up
cash in the money-lcnders hands that he may impose
burden on the producer in the form OF interest?
Even If the Promoter stands alone it will raise
its voice the side OF the people and denounce the
outrageous scheme agreed upon
Hoping that this means open mind on the part
OF the Promoter, and desire spread information,
we invite its attention to the subject OF organizing
bank with $4,000 in bonds deposited security for
its circulation.
The stockholders OF such 4 bank must first buy and
deposit with the treasury $4,000 in registered bonds
OF the United States. Under the proposed law they
will receive $4,000 in national bank bills which
stute the loan fund upon which the bank goes into
business The registered bonds of the United States
by to-day's quotations bear average premium OF
"a per cent Therefore the stockholders pay
SeS 500 for these $4,000 in bonds. The average in
terest on registered bonds is 81 per cent The
law puts an annual tax OF one-tenth OF per
on the capital of the bank and an internal revenue
tax annually OF $50 There is also internal revenue
tax on all drafts and bills of exchange issued by the
bank. the OF which depends. OF course upon the
volume OF that line OF business transacted In add-
ton 10 this the Federal law permits the State taxation
OF the capital OF national banks at the rate
other moneys and solvent credits Let say that in
this State such local taxation averages s. in the SIoo
which is probably trhe below the real average. We
may now estimate the returns 10 a Dank oil S25,oO0
capital in registered bonds ANY FIVE persons hold
ing an aggregate OF $4,000 worth OF United States
bonds may incorporate national bank" and their
account will stand this way:
Premium $500
Total investment s2s5
They receive $4,000 in bills, the par value OF their
bonds. and proceed to loan it The profit account
and expense will stand
Annual interest Observation-Disclosures. $500
Annual interest nbonds.............-........ S75
Tax one-tenth of per cent............. SS.3
Tax on internal revenue. ................. 800
Local 5DOO
Net S2,797