Evening star. [volume] (Washington, D.C.) 1854-1972, 1899-11-28
EessenjnR the Bank Tax.

The controller says:
N1ha controller, therefore. would recon-
mend legislation authorizing the issuance
of national bank note circulation to the par
Of the deposited United States bonds and
that the additional 10 per cent circulation
thus allowed the banks be subjected to A
tax at the rate Of or 3 per cent per an
mum for the time used which will tend to
prevent its unrestricted use under normal
conditions, and to save it for use at those
periods Of the year when crops are 10 be
moved, and In those periods of panic when
it Is most valuable 10th to the banks and
the business public as a means Of assisting
the general liquida ton Of credits With the
object Of securing an Increase ia the ,ras-
ent bank note circulation he would recon-
mend the reduction or adjustment of the
present tax Of l per cent per year ON the
circulation to 80 per cent Of the DEPOSITED
bCndS-tne amount of the reduction in the
tax on currency to be collected from the
necessary per cent of tax on the capftel
and surplus of national banks if requisite
to the public revenues.
ITO allow the banks to issue ltp 10 the
par OF The bonds. uHsubj ccted t. additional
tax ON the 10 per cent extra circulation,
will result in their Immediately taking nut
their j1ditiCnai Circnld; ion for the purpaSe
Of profit, business cledits Will De extended
and adjusted to correspond with such in
crease of the currency, and practically the
same iueiasticity viii characterize. our ba nk
note Issues then as Eow. With the advent
Of Il panic We would have no additional
means OF lesScu.ng the necessity Of a cali
uHon The business community to furnish
by the repayment Of loans. practically me
bulk of the deposits drawn by frightened
deDositcrs.
1T viii be seen from an examination Of
the calculations given hereinafter that ex-
aCtly the same rate Of profit could b. raaI-
lied by the banks upon circulation to on
per cent of the bonds deposited taxed al
four-ninths OF ! per cent per annun1, as
they could realize upon circulation to the
par of the bonds at the present tax OF i
per cent.
1t will also he seen that if the tax on
tn" 10 per cent of circulation should be en-
tirely abolished, or shifted to the franchise
of banks that the profit on circulation
would he much larger than could be real
lied upon circulation issued to the par of
the bonds subjected to the present tax
In the judgment of the controller these
tables show conclusivey that by modifica-
ton in forms of taxation the same relative
increase In general bank note circulation
with an emergency circulation in addition
can be obtained. while only an Increase
without any elasticity could be obtained
under any system of uniform taxation upon
par circulation.
For the purpose Of indicating that with
In the range of the possible modification
OF taxation on a circulation to 80 per cent
of the bonds, provision can be made for
an emergency circula ton of 10 per cent 10
the par of the bonds while amply encour-
aging the increase In general note circlIla-
ton desired, the controller SUNNI ARIES the
result Of calculations given more in detail
hereafter.
PROFIT in dollars upon circula zion against
a deposit of $4,000 government per cent
bonds, maturing in 1897. at present price
being the possible amount to BE- realized
under different rates of taxation in addi-
ton 10 u per cent on the capital invested
in bonds, with money worth per cent:
"On $4,000 circulation, being 90 per cent
Of Sfoh,N1 bonds, per cent tax on circula-
ton under present laws, S219.SS; on $780,
90 circulation TO par of bonds uniform l
per cent tax, NI9.SS; on S90,GO0 circulation
10 90 per cent of bonds, taxed four-nfnths
Of ! per cent, making possible an issue of
10000 emergency circulation. to be taxed
at the rate Of or per cent for the time
issued, $i10.SS; on 100000 circula ton to par
of bonds, uniform tax of three fourths of
l per cent, S1,o29.SS; on 100000 circulation
10 30 per cent of par of bonds, taxed one
sixth or | per cent, making possible an is
sue of S10,S0 emergency circulation to be
taxed at the rate Of or per cent for the
time issued s1.o29. IS; on 500 600 circulation
to par of bonds. uniform tax of three
hfths of per cent 81, 119SS; on 500, 600 cir
culation to DO per cent Of par of bonds
without taxation making possible an issue
OF Slo,tW emergency circulation to be
taxed at the rate of or per cent for the
time issued, S1,179.SS.
In the foregoing figures no profsis cal