CONGRESS, UNITED STATES. 



171 



people. If this can be accomplished and 

 many of the best business-men and ablest 

 financiers in the country believe it can be- 

 there will be an annual saving to the people of 

 more than $14,000,000 in interest on the pub- 

 lic debt, to say nothing of the reduction which 

 would almost certainly take place in the com- 

 mercial rate of interest all over the country. 

 If anybody has a right to complain of the fund- 

 ing of the public debt at 3 per cent which I 

 deny it is certainly not the banks who want 

 to issue circulation upon the bonds, but the 

 widows and orphans and other beneficiaries 

 of trust estates whose entire income consists 

 of the interest received upon the securities in 

 which the principal is required to be invested. 



" When a private individual, not engaged in 

 the business of banking, purchases, either for 

 himself or as guardian, executor, or trustee, 3 

 per cent United States bonds to the amount of 

 $100,000, the whole annual income derived 

 from them is $3,000; but if a national bank 

 purchases the same amount and description of 

 bonds, and deposits them with the Treasurer 

 as a basis for its circulation, it receives the 

 same amount, $3,000, annually as interest on 

 the bonds, and besides the Government imme- 

 diately returns to it $90,000 of guaranteed 

 notes, of which $85,500 can be loaned out to 

 the people for its own exclusive benefit at 

 such rates of interest as it will command in the 

 market. It is thus enabled to receive out of 

 the public Treasury $3,000 annually as interest 

 on its bonds, and if the commercial rate of in- 

 terest be 6 per cent it receives an additional 

 $5,130 as interest on the $85,500 loaned out. 

 From this last amount, however, there should 

 be deducted the sum of $900, being the 1 per 

 cent tax on circulation, and $81, the estimated 

 average annual amount of redemption expenses, 

 so that the bank in fact receives the net sum 

 of $7,149 annually, as against $3.000 received 

 by the private individual on precisely the same 

 investment. 



"But, Mr. Speaker, let us inquire briefly 

 whether any injustice will be done to the na- 

 tional banks, or any hardship will be imposed 

 upon them, by the provision in the fifth section 

 that after July next none but the 3 per cent 

 bonds shall be receivable as security for circu- 

 lating notes and public deposits. And es- 

 pecially let us inquire whether on that account 

 their profits on circulation will be so dimin- 

 ished as to compel them, or even justify them, 

 in withdrawing their notes and contracting the 

 currency. If the funding contemplated by this 

 bill shall be successfully accomplished, there 

 will be hereafter no Government securities out- 

 standing except the four and a half per cents, 

 the four per cents, and the three per cents 

 which we now propose to authorize; and the 

 banks, if they issue circulation at all, must do 

 so upon one or the other of these classes of 

 bonds. It is susceptible of mathematical dem- 

 onstration that they can issue circulation 

 more profitably upon a 3 per cent bond at par 



than they can upon either a 4 per cent or a 

 4 per cent, even at the prices for which they 

 are at present selling in the money market ; 

 and it is conceded by every one, whose opinion 

 is at all worthy of consideration, that if a 3 

 per cent shall be issued and sold at par the 

 prices of the other two classes will advance to 

 such a figure as will make them yield to the in- 

 vestor about the same rate of interest on his 

 actual outlay. 



"During the last eleven years, from March 

 1, 1870, to September 1, 1880, including the 

 whole period of financial distress in this coun- 

 try, the average annual earnings of all the 

 national banks in the United States, number- 

 ing 1,481 at the beginning of that period and 

 2,072 at its close, amounted to 8-4 per cent 

 upon their entire capital and surplus. At the 

 date last mentioned their capital was $454,215,- 

 062, and their accumulated cash surplus was 

 $120,145.649. This surplus represents net ac- 

 cumulated gains over and above all taxes, ex- 

 penses, and dividends. During the same period 

 of eleven years they have declared dividends 

 to the amount of $479,448,181 ; that is, their 

 dividends alone have exceeded the whole 

 amount of their capital at the end of the period, 

 and in addition they have set apart since their 

 organization and now hold, as just stated, $120,- 

 145,649 as a surplus fund to be divided among 

 their stockholders whenever they see proper to 

 close up their business. 



" When we remember that these remarkable 

 results have been accomplished, notwithstand- 

 ing the general paralysis of business which 

 prevailed during five years of this period, we 

 can appreciate in some measure at least the 

 immense value of the franchise which the Gov- 

 ernment has conferred upon these institutions, 

 and in return for which it now asks them not 

 to make any substantial sacrifice, but simply 

 to assist it in the negotiation of a loan at 3 per 

 cent in order that the people who have pa- 

 tiently borne such heavy burdens in the past 

 may be relieved hereafter from an annual in- 

 terest charge of over $14,000,000. Sir, they 

 can not afford to reject this reasonable de- 

 mand, and he will be a most unwise and dan- 

 gerous friend of the national banking system 

 who by his vote or otherwise places the bene- 

 ficiaries of that system in an attitude of defiance 

 to the will of Congress and the people on this 

 subject." 



The Speaker : " The question recurs on or- 

 dering the main question on concurring in the 

 Senate amendment with the amendment of the 

 gentleman from Michigan." 



The main question was ordered. 



The question was taken ; and it was decided 

 in the negative yeas 117, nays 132, not voting 

 41. 



So the Senate amendment was not concurred 

 in with the amendment of Mr. Conger. 



The amendments of the Senate were then 

 concurred in, and the Speaker declared that 

 the bill had passed both Houses of Congress. 



