The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1876-07-21
GheGatelLige1ter
T,.o Profits OF Banking.

,ip;s All the other banks do business
Under the State system, and are not banks ;
ofis,ue. They are not liable to be called
on. AZ the National banks are, for a peri.
oJicsl statement Of their condition. anu
hence the public can mol keep the run .,
their business as they can Of Na'lo"A'
banks. Their profits are known O"ly ~
their directors and stockholders ~n'le
those Of the National banks are know" 10
all who read their periodical '''''N''"'
in the newspapers. -, ,;..;.;o
according to its statement o., oI Cun' oun ~,
I.-S h,J . surplus fund OF $4,000 and
1o,hsr & undivided profits" amounting
10 D's:s sss.sss 90. Since that time the
bnuE has paid out in dividends
solOOO-yiz: per cent in July last
and per cent in Jannary-and its last
.,a,ement,-Of June SOth, lS7G,-shows
that il now has a surplus fund OF $780,
oOO.nnd "other undivided proftsp amount-
ing to sls,7O7 OIL. In other words, the
surplus fund has been increased $4,000
during tho year, and the "other undivided
profits" decreased SlO,l75 G5 during the
same od,-Ieaving net gaia OF Sl41-
S2l S5, or u per cent on the capital Of
100000. To this profit add the s2l,ooo
Of dividends paid out, which would be
IL per cent more land the. result shows y
net profit for the years operations oil l94
per cent.
Ofcourse the earnings were not actual
ly 10! per cent on 100000. The
amount Of money employed was
the capital and the surplus fund
~ they stood June Both, 1875, Zone
wear ago. viz: S975, 900, but inasmuch rs
the bank has been paying 10 per cent an
nual dividends for years past, while accu.
milating its surplus fund, it may be
fairly said to have earned 10! per cent
las, year OH its capital. This large
amount Of profit was made by the joint
earnings of the money paid in originally
ss capital (S2O0,OOO) and the money de-
posted BY the patrons Of the bank. TIE
deposits on June 30, 1875, were a' fol-
lows:
Individual ,,,' sEuJV9t 10
Drtland certificates Of deposIt..".."...". M3l2 81
Time certificates OF dep IsIt ......,.,.. 41SEO ~
Total ........... ".......t,....""t"s97iO "
Could we know exactly the amount Of
interest paid by the bank on this deposit
We would know just what per cent its net
earnings bear to the whole amount
Of money employed. Apparently,
the bank had employed $780, y of de-
posits, and s275,OOO Of capital and sur
plus-or sum total Of S564,74G 72-ip
earning its net profit Of $S9,ooo during
the year. A profit Of $4,000 on S5G4,-
1862 would be little less than 7 per
cent, but assuming that the bank had the
use OF only one.hali its deposit free Of in
terest, 1t would have Sil9,S73 30 with
which to earn $4,000, or, in other words,
with which to earn 81 per cent,
Nine and quarter per cent on money,
clear OF all expenses, is certainly hand
some return these times on capital. No
man can safely lend capital privately
and make that net profit on it.
Adding taxes and all other expenses,
and It would be; In private hands; s;equiv-
alent to nearly one per cent per month";
We presume that banks generally do not
earn that amount OF net profit on the
means employed by them. They nearly
all make large profits on their capital
stock, for that is easily done on small
capital and good sized deposit, but they
do not always earn 9i per cent on their
available means. We observe that the
two National banks in Steuhenvllle show
earnings for the past year rs follows
The Jefferson National had, on the 3Oth
OF June, 1875, surplus OF $4,000 and
''other profits" amounting to $22,Alo 81
After paying out $4,000 in dividends
during the year, the statement oil June
80, 1876, shows the same surplus
OF $4,000 still on hand, bu, nj
impairment Of its other undivided profits
of S4,l66 GO-leaving its net earn
ings ($lO,sSs 3l) to represent about Il
per cent on its capital OF sl5o,00O. Add
ing to its capital iti surplus funa oi
S4O,6OO, ia former. undivided profits ol
S22Alo57, and It's deposit Of $92,6s9A5l
Ia sum total of s2G5,OOS OS), the earnings
would represent a profit OF only 4 per
cent and fraction. Or, supposing it to
have the use. Of only halfits deposits free
Of interest, the earnings would represent
less than per cent. In either case the
profit on the money employed y lesI
than government bonds would have
yielded.
The National Exchange Bank Of Steu
benville, according to its published ex
hibit on the SOth of June, 1875, had
surplus of SlO,el7 At, and after payinl
ont $4,000 in dividends during the yea
1t had on the 3Oth of June 1876, in til,
shape Of surplus and other profits, bal
ancc Of $1,000 IA, equivalent TO an earn
ing Of 10 ll.l2 per cent on its capital o
100000. Adding however 10 its capita
and its former surplus, adeposit Of 1927,
439 IS, and we have a total OF $2SS,S50.
o. as the means employed to earn th'
loll.l2 per cent referred to. Or, allow
ing that only half It's deposits were fret
Of interest, We have STAGES rs as th'
actual amount employed, which woult
make the earnings represent aboubGt pei
cent on the available means of the bank
We might refer to the earnings Of Other
banks in this vicinity, whose exhibits w'
have before US, to show the status OF theil