The system of private or corporate banking is an example in point. Why
do individuals want a gold basis upon which to issue currency? To get
the privilege to levy interest on many times as much currency as they
have capital invested. A bank with an actual capital of $100,000 in gold
could issue $300,000 in currency, all which it could loan out together
with nearly all the deposits that it could secure, which, in some
instances, have been known to amount to ten times the capital. Why
should not a class of men, if the people are blind enough to let them do
it, speculate upon the credulity of the public through the idea that
they are rendering a public service? Why should they not desire to
“bank,” when by banking they can receive interest on $1,000,000, when
otherwise they could collect it upon $100,000 only? The same idea is the
inspiration of national banking, and of those who oppose a national
currency. The banks bought, say $100,000 of United States bonds from the
Government for $60,000. These bonds they deposited with the treasurer,
and the people were required to pay $6000 a year interest on them, while
the banks received from the Government $100,000 in national bank
currency with which they were set afloat. These notes were loaned to the
people, who again paid an interest on the same capital of $6000, or 20
per cent. per annum—$12,000 on $60,000; and yet the bank men have made
the people think that they are offering them great accommodations. “Oh,”
says the National Bank legislator, “we must get rid of these abominable,
depreciated, irredeemable greenbacks, and make room for more national
banknotes.” Do you know for what that legislation is bidding? He wants,
if he has not already got it,—from some national bank man in his
district, or else he has an interest in some bank. What is the security
of national bank notes? United States bonds deposited in the Treasury.
What is the security of the bonds? The public faith of the United
States. What is the security of the greenbacks? The public faith of the
United States. What difference in this respect, then, is there between
national bank notes and greenbacks? None. Then as a currency there is
this difference between the bank notes and greenbacks: If greenbacks
were to take the place of the bank notes, the bank men would not get 20
per cent. interest on their capital, and the privilege of receiving and
loaning the deposits of the people.
But look at it in another light. Suppose the security of the national
bank notes were their own capital instead of the bonds, who would not
prefer to trust the faith of the United States, rather than that of any
individual in these times of Credit Mobilers, Tweed and whiskey rings?
Then, again, why should individuals furnish the circulating medium of
the people, when the people can furnish it themselves and save the
expense? $1,000,000,000 is as small an amount of currency of all kinds
as will transact the business of the country properly. Why should not
the $60,000,000, which the people would have to pay the banks for
interest on this, be paid to the Government for greenbacks? And more!
Why should not all the interest that is now paid to individuals and
banks for private loans, be paid to the Government? It is estimated that
the average amount of private loans for the whole country is not less
than $5,000,000,000 upon which, at even 6 per cent. interest, the people
are taxed $300,000,000. Is there any valid reason why the Government
should not loan this money and receive this interest? Yes, for if it
did, the rich could not live in luxurious idleness, while the poor are
obliged to labour twice the natural time to subsist the world.