The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1876-02-26

RELATIVE Prices OF SEcURTTlEs.T
The price Of government bonds and good
railroad bonds have lately run up.to very
high prices. For instance, the 5 per cents.
otthe government lately touched 100, and
the sizes Of the Baltimore 4 Ohio Rail.
,oad lO7. Even the fourth mortgages OF
theC. Il +. road are worth 1924. These
are high prices indeed for such securities,
se mean securities paying SO small an in
,erest, when we think Of the fact that the
bonds OF new roads, even where they are
well nnderlaid by stock subscriptions,
cannot he sold for better than seventy
five cents on the dollar for six per cents.
This wide discrimination shows how
suspicious and timid capital has become.
There is also another fact that
shows ii quite as much. We mean
the quotations for bank shares in
New York, as given 10 the papers OF that
city. The quotations for the shares of a
bank should be in proportion to its sur
p!u'. A bank that is paying dividend
Of Sor 10 per cent per annum, and that
has a considerable surplus, ought Zone
would think 10 be worth quite as much
as a government bond that onlypays half
as much interest. But this is not the case.
For instance, the Fourth National Bank
of New York has s5,OOO,OOO capital, and
usurplus fund OF s0S5oOO. This should
make its stock worth one hundred and
eleven per cent. But it does not sell
iOr that much, but on the contrary is
quoted at ninety.one and half; thus
showing an anticipated ahrinkage in its
assets, in case II was wound mp, Of 20 per
cent. In other words, discount OF over,
million dollars between the real and
apparent value OF the stock is sscemingly
made in the public mind. And this is
not the only case OF the kind in New
York. There are many such. The
American Exchange Bank is an other
case in point. It has also a capital OF
$5,OOO,OOO, and a sarplus OF 81, ,495, 900,
and s292OOO undivided profits. It's
stock should therefore quote as high as
1870, but l154 is all that is bid. Besides
these two banks, thus discounted in the
quotations for their stock, We might
mention such others as the Bank Of New
York, the Importers & Traders, the Met
'opOIitan National, the. Bank of Com
merce, the Bank Of the Republic, &C., &c.
As showing how much the "grand con-
Sdence" Of the public has to do with these
quotations, and with all quotations, we
may mention that there are banks in New
York whose stocks quote above the NOM
iaaI value Of their capital and surplus,
az, for instance, the Chemical Bank,
which has capital of only SSOO,00O, but
surplus of 100000, and undivided
profit. OF S2,2s20OO. These figures would
make its stock worth, say, Sl,loo per
share, but we observe that 81 600 is bid.
The National City Bank is another case
oI"gFundconEidence." 1t has capital OF
100000, a surplus of 100000, and
undivided profits Of s5s5,OO. It's stock
should, apparently, be worth only S26s,
but $500 Is bid. -
Ono reason, no doubt, why the public
d'scount.hc nominal value OF bank stocks,
"that the banks are suspectedot carry
ing suspended paper OF long standing
mat they shonld have, and will eventually
have to, charge up to profit and loss. The
public arc prone to draw their own infer
enee', at times, as to the extent and char.
as'Gr OF such assets, and inasmuch as
there have been many failures in New
ioFs 1t il naturally to be inferred that
The banks must be carrying good load
oI suspended paper. One of the Ney
York banks (the Tenth National) has
recently charged up itslOssCs and reduced
IT, capital one half. All the accounts