Mr. Gallatin observed that the gentleman from South Carolina had said they were about to select moneyed corporations as objects on which to lay a high duty. He had made a calculation to show that this was not the case, but that what was proposed was no more than just and reasonable, and that instead of the tax being one per cent. upon their capital, it was not more than one twentieth or one twenty-fifth part of one per cent.
He would state the facts, and beg gentlemen to correct him where he was mistaken. In the first place he would state the capital of all the banks of the United States at $20,000,000; the whole amount of bank notes at less than $8,000,000. He would divide these $8,000,000, one-half into notes under fifty dollars, and one-half above that sum as follows:
| $4,000,000 in notes under fifty dollars, which would give about eighty thousand notes, (for though they would be of different sizes they paid in the same proportion,) at thirty cents, | $24,000 |
| $2,000,000 of one hundred dollars and upwards, at fifty cents, | 10,000 |
| $2,000,000 of three hundred dollars and upwards, | 4,000 |
| ——— | |
| $38,000 | |
| Allow for mistakes, | 2,000 |
| ——— | |
| Which includes all the notes in circulation in the United States, | $40,000 |
As to the principle of taxation itself, that bank notes of fifty dollars should pay thirty cents when notes of individuals only pay ten cents, justice requires the difference, on the same principle that notes of sixty days had been charged with only two-fifths of the duty charged upon others.
Mr. G. stated the following account of a bank in Philadelphia, whose capital was $2,000,000, and to which Government owed nothing; which, he said, would apply to every other bank in the same circumstances, with little variation:
| To the original fund, | $2,000,000 |
| To deposits, about | 900,000 |
| To bank notes, | 600,000 |
| ————— | |
| Total debts, | $3,500,000 |
| ————— | |
| By notes discounted, | $3,000,000[20] |
| By cash in vault, | 500,000 |
| ————— | |
| Total credits, | $3,500,000 |
| ————— |
As banks were thus able to transact business to the amount of three millions of dollars, though their original fund was only two millions, he accounted for their sharing dividends of nine per cent. on their stock. It would be observed that the two millions capital were not touched for notes, and yet they were charged with selecting these bodies of men upon whom to lay a heavy tax.
Mr. G. concluded by saying he had no prejudice against banks. He knew they were liable to abuse, but, upon the whole, he believed them to be useful. He believed the scale he had formed was correct, but should withdraw it for the present, in order to give an opportunity of trying the principle.