ot carry on all the business incident to banking
except this one of issuing bills to circulate as money. The largest
banking houses in the world did not exercise the privilege of
issuing bills. The strongest banks in the United States, such as
the Bank of Commerce of New York, had but little or no circulation,
while the weakest banks supported themselves and made profit by
issuing the largest quantity of bills authorized. The law then
existing taxed heavily the business of banking proper. All commercial
paper--checks, drafts, orders, bills of exchange, protests, bonds
--every instrument that was used in the ordinary process of banking
--was heavily taxed, while bank bills were not taxed at all. A
private banker doing business had to pay a license of $100, but a
bank of circulation was expressly exempted from the necessity of
procuring a license. The tax law, as it stood, had this significant
provision: "But not to include incorporated banks legally authorized
to issue notes as circulation." Every commercial instrument was
required to pay a stamp tax, but this did not attach to a bank
bill. Bank notes issued for circulation were expressly excepted.
The only tax levied upon banks of circulation was a tax of three
per cent. on the net income. This tax could be deducted from the
dividend of the stockholders. The discrimination in favor of banks
of circulation ran through all the tax laws, while other corporations,
such as railroad companies, insurance companies and the like, were
subject to heavy taxes.

The profits of banking were then very great. The average profits
of the banks of New York were twelve and one half per cent. per
annum. The burdens imposed upon the banks by their charters were
lessened by the suspension of specie payments. When the banks had
to keep in their vaults coin to the amount of one-third of their
circulation, and were liable to be called upon any day for the
redemption of their notes in gold and silver, they might claim
exemption from taxes on their circulating notes. But during the
suspension of coin payment there ws no such liability. Whether
right or wrong the banks suspended specie payments, and increased
their currency without paying either principal of it or interest,
or tax on it, though in direct violation of law in some states.

I referred in my speech to an interview which was sought by the
banks of our chief commercial cities with the Secretary of the
Treasury, to whi