The Denison review. [volume] (Denison, Iowa) 1867-current, 1900-06-01


bonds and take out circulation to the full possible
Not only this but just thousands Kondie or to
cape Nome because they understand thing in money
making geatabe there would be similar rush get
to the national banking business No with capital would
be satisfied with ordinary of he could get or
binary rates plus the interest the government paws on its
bonds Yet instead of national bank circulation being $780,
100000, is but $3oooooooo Moreover under the
national banking act while banks privileged take
circulation to the amount of their capital they required
take out only oneourt thereof their charters The
reports to the comptroller of the currency show that
banks take out the minimum crculaton which they must
than the maximum which they may If national bank
circulation really brought double interest would not be
bank which would not take the maximum circulation
That they habitua do not practically demonstrates
thing is wrong with the double interest demonstrations
Why do not all banks become national to get some of
the circulation pie and why don't existing national banks
take out much circulation they may? On the
used basis for national bank circulation the
pays cent interest But Immediately part
this back by levyng tax of oneha Of per crcua
on thus making the net interest the banker per
cent Then the government requires that
shall be locked up redemption fund.- and that other ex
shall be paid which knocks off one-haf per cent
more But the remaining per profit the banks
is said, and this is handsome bonus. Not AS practi
cal proposition the banker finds he get per cent
bonds par. Now he pay premium about per
cent get 100000 of note circulation he give up
100000 ALLOW tor the PREMIUM and for sinking fund
retire it or when the bonds become due the holder will
paid only at for the and it appears that the remaining
per of theoretical circulation profit Disappeared
In the premium national bonds there an unxed quail
ity which always tends to become sufficient absorb the
profit national bank which remains after the tax
and expenses of the process paid Occasionally banks
may make money on circulation occasionally they loe but
the natural level that Of neither loss profit with the
bank getting the net return capital that would
if took circulation and loaned its money the first
instance, to its customers.
But profit must be somewhere Who what gets it? 1t is
divided between the and those who national
bonds before rise in premium If the government
always sold its bonds the British government does
which secured the highest market possible price
President Cleveland did when he assigned bonds to the
highest bidder the government would the entire cir
cuation profit. When bonds sold par when worth
than par done by President Mckinley with the
popular Spanish oan the first holders the bonds get
of the subsequent circulation profit In any event. however,
the government gets the principal share of the profit first
through the direct circulation and second through
reduction in interest rate because of the privileges bonds
The refunding operations of the last three months
have been highly successful and $3ooo 900 of the
national debt draws but per cent interest In London
British consos bearing per interest have been selling
below below par The best terms Germany and France get
ed States good at that Of Great Britain Germany and
France but hardly any better Nor there greater album
of interest obtained by the Untsd States bonds
the basis for currency circulation.
The lender to the government for the of his money
gets per plus the privilege of using the bonds GER
tain If he does wish take circulation himself
he knows he sell bank which does providing the
premium asked does above the profit point Getting
the onea of per direct and rate per
cent lower than other strong may reasonably
be said that selling the per cent bond par
makes u per profit of bank circu-
aton Allowing another cent for expenses
redemption fund.- and the appears why national
do take circulation up the of their capital
stock and why it that the double theory does not
work in practice
What Is Expected of Bryan.
is interesting the different things which different
people expect Mr. Bryan should he elected president
Agunaldo expects the withdrawal the American control
of the Philippines and the establishment Of himself as dictator