Year: 1877

The movement among the bankers to have the
National banks relieved Of the onerous system of
taxation under which they are now struggling,
has become general throughout the country, every
National bank in existence being interested in its
success. There is popular notion that the Ma
tional banks are close monopolies of most profit
able kind, deriving an immense revenue from
their circulation and therefore fit subjects for ex
cessve taxation. The latest official reports at
hand show that seventy-one of the National banks
have closed their doors against business voluntar


lily, and for the sole reason that the capital en-
ployed in the business was not returning a fair
interest.


The losses Of the banks during the fiscal year
ending in September, 1876, were 500, 600, 600, or
about two per cent. of the amount of their loans
and another significant fact, apropos of the profit
on circulation, is that during the first ten months
of the same year S5l ,67S of their currency
was voluntarily surrendered. Taking into consd-
Grafton the banks of the whole country, the diy-
dends have averaged less than seven per cent, an
earning that is remarkably small when the amount
of capital invested is considered.


The present taxes are an incubus by which the
whole system OF national banking is seriously
threatened. The L nited States tax is levied on
crcu lation, capital and deposits, and amounts on
an average 10 IL per cent on capital and sur
plus, in some cases running as high as per cent.
The banks pay on money deposited with them,
whether 1t s IN or rot The State taxes vary
all the way from l-2 to per cent. on the capi-
tai, and average more than per cent, and the
great rregulaIlty of the tax in different parts of
the country renders their business particularly
hazardous. The relief they are entitled To is (D
taxation by the States and municipalities on the
same basis as other property, and (2) a release
from the excessive government taxation put on
them in war times which could only be sustained
in time of the hyeliest speculation. As it is now
the ratio for local taxation may be at one-third
the actual value of property, but the banks have
TO pay on their full showing, aud their statements
are SO complete that they can never avoid any
share OF it,


The National banks loan about thousand mil.
lions yearly, and the chief sgeRts for the ex-
change OF money according to the demands of
business; if they are SO taxed as to render their
business less profitable than if their capital were
otherwise invested, the ultimate effect will be to
increase the rates OF interest they charge, so that
the commercial business of the country is equally
Interested IN securing for them the fair treatment
they ask.


The movement for relief which has taken shape
in other Cities assumed form in this city at the
last meeting Of the Clearing House Association.
The following passage from the last report of the
Comptroller of the Treasury considered. "The
government is receiving a revenue from the banks
which is more than equal to all the taxes paid by
them before the war, while the States are also In-
creaslng the burdens which previously were as
great as could be borne. Within the past two
Jears, seventy-one banks, and since the organiza-
tiOn OF the system two hundred aud seven banks
have gone into voluntary liquidation, chiefly on
account ol ercessiCe tdrdi0H while during tue last
year fewer banks have been organized than in any
previous year sIce 1869 and unless some favora-
BILE legislation is obtained very considerable
number Of banks will retire from the system, to
engage in private banking. In previous reports
the Comptroller has called the ate ntion of Con
gress to the fact that the amount of tax to which
The National banks are subject (the average rate,


including State and National, being about thi ee
and one-half per centum per annum) is much
greater than that imposed any other capital in
the county. The tax ON deposits WAS essentially
war tax, and such impositlons having been long
since removed from every other similar interest,
the Comptroller is fully OF the opinion that justice
to all parties requires its removal from this one
also"


The bankers simI ly ask that they shall be taxed
at the same rates as other citizens and in the man
n.r that other citizens taxed. The business
men OF this city are in iull sympathy with the
bankers, as they understand that the subject is of
as vital interest to them to those directly inter-
es'ed. lIdtsbarg 1eiegrdph.