Fayetteville observer. [volume] (Fayetteville, Tenn.) 1850-1966, 1858-03-11

dends received upon the Union
and Planters Bank stock, r.
mounting to. s........... STAG, 3l4 10
Which taken from the profits,
leaves as the result of the ope-
rations of the Bank Of Ten
nessee, for nineteen and half
years. net profit of. I, 358 ,s99 II
Table "a" shows the rate per cent
per annum, ranging from 3 65-100 to
10 per cent, which the Bank has
made upon her capital.
1t is proper, however, to remark,
that the calculations which produced
this result are based upon what is
termed ''actual capital" and not up
on the amount Of money actually paid
into the bank as capital. This table
shows that the 3actual capital" of the
bank has for severa! years been Auc-
tuating, being diminished by the fail
ure of their debtors, &C., and increas-
ed by the collection Of debts which
had been changed off as lost.
AS it seems to be the object Of
the House of Representatives to
ascertain to what extent the funds
of the State have been pro6tably
invested 10 the business Of banking,
and whether or not it would be good
policy for the State to borrow mou-
ey at six per cent per annnm, pay
able at New York semi-annually, to
increase her banking capital, / have
made an accurate calculation Of the
simple interest upon each item Of
the cash capital Of the Bank of Ten
nesses from the date it was paid in,
as shown by table B. up to the LIST
of January, 1858, excluding the
stock in the Union and Planters
Bank from this interest calculation,
and find that if the same funds had
been invested in State bonds. bear
ing an interest of six per cent pei
annum, it would have yielded a
profit Of $3,60o,l33,0
While the same funds
using in banking have
yielded, as shown above,
a net preft Of only $3,55S,699,7l
Showingthat at six per
cent the fund would
have yielded s25p,433,2e
more profit to the State than the
Bank has made upon it.
But & more important considera-
ton than that Of the amount o.
profit to be realized, will be found
in the fact that the investment il
State or Government securities il
much more safe, involving less, vast
ly less danger Of the loss Of the cap
Iital invested; and the profits, while
lit is larger, is sum fixed and Ger
tain, which the State can calculate
, and confidently rely upon, and th'
whole operation is simpleand easy o
comprehension and equally easy o
management, requiring a very small
proportion Of the time and atten
ton of the Comptroller or Treasure
for its entire management, withou
incurring the expense of keeping
up the'machinery Of banking estab
Ilishment and the risk. Of losing th'
|. original capital by failures, defalca
tioDs, insolyencies, &c, sc.
The statement Of the profits o
the Bank, as shown by table "a il
based on the superstition that tb'
S8,207,l87 50 ofthe presentmeanso
the bank Gas shown by the report o
the lst of January, 1858, consisting
of discounted notes, bills of ex
change, bills and notes in suit, Stat
bonds. real estate, specie, &c, &c.
. are Of par value and viii be realized
land just to extent that losses ar
sustained in collecting or converting
those means into money, will tn
: profits, as shown, be reduced.
On the Is. of January, 1858, tn,
bank had been in operation ninsteel
r and a half years, and the amount 0
: profits shown above, proves that she
has realized less than six per cen
per annnm upon the actual casl
, capital which she received. Witt
: this, as the result Of an experiment
3 Of nineteen and half gears in tn,
business Of banking, is it good poll
) cy for the State to borrow money
, paying an interest Of six per cen
per annum, semi.annually in New
York with exchange, say one pc,
lcent, to raise money to increase on
banking capital? If the bank ha!
q failed 80 realized six per cent upol
her capital heretofore, what assurance
have we that she will make it here
after?
| But one Of the most serious evil