CONGRESS, U. 8. 



293 



limitation upon him whatever. If the old 

 United States Bank furnished well-grounded 

 apprehensions of its dangerous political tend- 

 ency as a political agency, permit me to ask 

 gentlemen to reflect for a moment on what you 

 have got here, with $300,000,000 of capital, with 

 three thousand banks subject to inspection, and 

 to be troubled, just as much as the head of the 

 Treasury Department pleases, if they do not 

 support his views ; or to receive favors by way 

 of being made depositories for the public dues ; 

 and the Secretary having the power to appoint 

 agents and clerks ad libitum. I do not wish to 

 enlarge upon this point at all, but I say this : if 

 a Secretary of the Treasury can be furnished 

 with these powers and chooses to use them, he 

 must be a very bungling politician if he cannot 

 make himself President any day. 



" Then, putting it in plain English, you pro- 

 pose to hire these people to go into these asso- 

 ciations, take these bonds, and deposit them. 

 They are to pay two per cent, on their circu- 

 lation, and you pay them six on their bonds. 

 I will call it four per cent. ; though it is more, 

 as the gentleman knows, because the two per 

 cent, they pay in currency, and the six per cent, 

 we pay in gold. The amount of it is this : we 

 say to them, ' If you will do this to the amount 

 of $300,000,000, and put out notes to the ex- 

 tent of ninety per cent, of the bonds, we will 

 pay you $12,000,000 in gold every year for 

 doing it.' You may talk about its being in the 

 form of bonds, but that does not alter it at all. 

 We are to enter into that arrangement with 

 them. If they take their money, buy these 

 bonds, put them on deposit, issue paper to the 

 extent of ninety per cent, of those bonds and 

 circulate it, and pay two per cent, on that cir- 

 culation, we pay them six on the bonds ; that 

 is, we pay them four per cent, on the bonds, if 

 they will do us this great service ! There is all 

 there is about it. You may discuss it as you 

 please, and use a great many financial expres- 

 sions and schemes ; but that is the English of 

 it ; that is the simple common sense of it. In- 

 stead of circulating that amount of our own 

 currency upon our own responsibility and pay- 

 ing nothing, we are to hire them to circulate 

 that amount of our currency, and pay them 

 $12,000,000 a year in gold fo? doing it ; and 

 we are to be responsible after all. That is all 

 there is of it. Yankee as I am, I am unable to 

 perceive how it is possible that that can be a 

 good trade for us, or how any shrewd man 

 would ever think of entering into an agree- 

 ment of that kind. 



" It is said, however, that it is a fair tax in 

 proportion to our other war taxes. Let us look 

 at this for a moment. My neighbor here has 

 $100,000 saved, we will say, and having retired 

 from business, he lives by loaning out that 

 money, and he realizes six per cent, a year on 

 it. How much do we tax him ? One hundred 

 and eighty dollars, three per cent, on what he 

 gets. I am going now upon the ground that 

 he has got $6,000 income in some other way. 



"We tax him three per cent, on his gain ; and 

 that is $180, although he has used $100,000. 

 Here are three other neighbors of mine I will 

 not include myself, because that would make 

 the supposition too improbable who have 

 $100,000, and they bank with it according to 

 the law of their State. What do they make ? 

 Perhaps they make eight per cent. If they do 

 make $8,000 on the $100,000, they have to 

 pay a tax of three per cent, on that now, and 

 it goes into the Treasury. But what is the 

 proposition here? The Government says to 

 them, " You have got $100,000 invested in 

 banking ; you will therefore probably have 

 about $150,000 of circulation ; we will tax you 

 on the $150,000 one per cent, every six months, 

 or two per cent, a year." How much will 

 that be ? Three thousand dollars. " For the 

 use of your $100,000 in banking you shall pay 

 $3,000 a year." The other man, for the use 

 of his $100,000, pays but $180 a year. Do 

 you call that fair and equal taxation? The one 

 pays $180, while the other, on the same 

 amount of capital, pays $3,000. It is perfect- 

 ly monstrous. 



"But, in the next place, I think it a mere 

 matter of figures and capable of mathematical 

 certainty about this problem of whether banks 

 will be set up in my part of the country under 

 this bill, even if the existing banks are all des- 

 troyed. To illustrate it, I will take the plain 

 case of a $100,000 bank, because that is the 

 ordinary size of a country bank in my part of 

 the country, and it is in round numbers, easy 

 of calculation. You are to take $100,000, go 

 and buy bonds with it, leave them there, and 

 take out $90,000 of circulating notes. As to 

 exchange, that is to be the same all over the 

 country, and that is to be no item in the profit 

 of a bank hereafter. 



" Now let us see how it will work. In the 

 first place, I believe I am borne out by ex- 

 amination of experienced men in saying that 

 you cannot operate a country bank, or any 

 bank of the amount of $100,000, with less 

 than $2,500 per year. Pay your cashier, open 

 your office, warm it, light it, take care of it, 

 pay your expresses, and do all your business, 

 and it cannot be done for less than $2,500, 

 and that is putting it very low. Now, a $100,- 

 000 bank, under this bill, will, in the first place, 

 get from the Government of the United States 

 $4,000 a year interest, after paying the tax. 

 We understand that. They lend the $90,000 

 which they receive and they get six per cent, 

 interest on that. That interest would amount 

 to $5,400. There is all they can make with- 

 out stealing. It is all that can be made. What 

 does it cost? It costs $2,500 to operate the 

 bank, the ordinary expenses, and they lose the 

 use of $22,500 for that year, because they are 

 to keep on hand twenty-five per cent, on their 

 circulation. They have kept that on hand, 

 and of course the use of it is lost. That is 

 over $1,300. That expense and loss makes 

 $3,800. The interest from the Government 



