d to
(including deposits), nearly doubles every decade.

5. By imposing such a tax on the circulation of the State banks, as,
together with State or municipal taxes, would induce them to transfer
their capital to the new banks proposed by the Secretary.

6. To relieve the _new banks_ from all State or municipal taxation.

7. In lieu thereof, to impose a moderate Federal tax on all bank
circulation, as a bonus to be paid cheerfully by these banks for the
great privilege of furnishing ultimately the whole paper currency of the
country, and the other advantages secured by these bills.

This tax, as proposed by the Secretary, was one per cent. semi-annually,
which _in effect_ would have reduced the interest on our principal loans
from six to four per cent. per annum, so far as those loans were made
the basis of bank circulation. Congress, however, fixed this tax at
about one half, thus making the interest on such loans equivalent in
fact to five per cent. per annum, so far as such loans, at the option of
the holder, are made the basis of banking and of bank circulation. This
is a privilege which gives great additional value to these loans, for
the right to issue the bank paper circulation of the country free from
State or municipal taxes, is worth far more than one half per cent,
semi-annually, to be paid on such circulation. That this privilege is
worth more than the Federal tax, is proved by the fact, that many banks
are already being organized under this system, and by the further fact,
that more than $200,000,000 of legal tenders have already been funded in
this stock, and the process continues at the rate of from one to two
millions of dollars a day. It will be observed, that the holders of such
bonds can keep them, _if they please_, disconnected with all banks,
receiving the principal at maturity, as well as the semi-annual
interest, in gold, free from all taxes.

This system has been attended with complete success, and notwithstanding
the increase of our debt, the premium on gold, for our Federal currency,
fundable in this stock, has fallen from 73 per cent. in February last,
before the adoption of Mr. Chase's system, to 27 per cent. at present;
and before the 30th of June next, it is not doubted that this premium
must disappear. No loyal American doubts the complete suppression of the
rebellion before that date, in which event, our Federal currency will
rise at once to the par of gold. In the meantime, however,