State Bank Tax Repeal

The bilí unconditionally repealing the 10 per cent. tax on the issues of state banks has suffered defeat in the house by a majority of 70. The defeat of the bill was not unexpected by its advocates, but the large majority against it was a surprise. This tax was laid early in the war, when the government in order to float its bonds found it necessary to créate a banking system based on the deposit of United States securities. The tax was placed for the purpose of driving these issues of state banks out of circulation. The strongest objection to the national bank system has always been in the south. This objection is probably owing to the fact that most of the banks of issue are in the north, there being but 721 out of a total of 3,796, located in the south. The cause of this unequal distribution is that there is much more capital available in the north for banking purposes than in the south. The south has desired, therefore, to supply its lack of banking facilities by using state bonds and other as good securities as banking capital on which circulating notes could be based. The last national democratie convention declared in favor of the repeal of the 10 per cent. tax on state bank issues and the bill recently defeated was prepared in response thereto. lts defeat is due probably more to the present complicated condition of financial aftairs and the desire to let well enough aune than to any inherent weakness in the bill. The repeal of the purchase clause of the Sherman act, the failure cf the seigniorage bill and the defeat last Wednesday of the bill to repeal the tax on the state bank issues, indicate pretty strongly the temper of the present congress and administration upon financial questions. While they stand ready to wipe from the statute books the makeshift legislation of the preceding regime, they can be depended upon to pass no financial legislation which will in any way shock the national credit. All this indicates that the financial fog through which the country has been passing is gradually clearing. Notwithstanding these facts it cannot be honestly claimed by the enemies of the present administration that it is opposed to bimetalism, or in favor of gold monometalism, for the law repealing the purchase clause of the Shermon act contains these significant words: "And it is hereby declared to be the policy of the United States to continue the use of both gold and siver as Standard money, and to coin both gold and silver into money of equal intrinsic and exchangeable value, such equality to be secured through international agreement, or by such safeguards of legislation as will ensure the maintenance of the parity in value of the coins of the two metáis, and the equal power of every dollar at all times in the markets and in the payment of debts. And it is hereby f urther declared that the efforts of the government should be directed to the establishment of such a safe system of bimetallism as will maintain at all times the equal power of every dollar coined or issued by the United States, in the markets and in the payment of debts." This utterance, be it remembered, is not a part of a political platform but a portion of a law. It indicates that the democratie party is in favor of the free coinage of silver on any basis that will maintain the parity of the gold dollar and the silver dollar or secure their concurrent circulation.