New-York tribune., 1878-11-21
mand will in all PROBABILITY be much less than under
former systems of unsecured currency


former systems of unsecured currency
TIE BANKS NOT so VERY PROFITABLE.
The surplus OF the National banks amounted on octo
Der nearly 81 900 900. part OF this sum repre-
sents the profits earued by former State banks previous
to their conversion into National organizations, ana
brought by them into the system. The greater portion
was however, accumulated by banks during the years
business prosperity Immediately succeeding the close
OF the war table given. showing that the maximum
surplus reached in 1878, when 1t was 1888 169O93
since which time 1t has been decreased to SllsI'ooSl'
The dmnuton been caused by charging to the sur
plus from time to me portions of the losses SUSTAINED
by the National banks such losses aggregatDg during
the last three years. S64119415. The losses in 1876
S19719O O27 in 1877, $19, 1888 5S8; in 1873, $24
466, 800; total 64,l19,415. The report continues:
Tue greater portion OF the losses mentioned has
been cancelled by charging 1t TO the account oI
current profits. in consequence OF which 35I Dahks'
in the last SIX months paid no dlydehds at All;
banks seni-anuuay passing dividends Oh account OT
had 2ss This number is equal to about one
seventh OF the whole number now In operation
The average amount OF capital upon whieh no dlvl-
dends nave been paid durug that time Is T413s3olo,
years. than One-tenh OF the total capital OF
the National banks has been without profit to the
The belief so widely entertained that the profits made
by the National banks excessive, Is in great part due
TO the exceptionally large dividends paid b. few banks
which are layOraby located and nave large surplus
and winch MAKE large returns TO Their shareholders on
the amount OF their nominal capital. The profits OF
these banks not to considerable extent derived
from tnelT alton. but from surplus and deposits
Many the ba1 ks making exceDtional dividend
nave much less amount OF circulation than those max
ing moderate dividends only, while few Of them have
no circulation whatever.
The total of United States collected from
the beginning Of the system to the present time is
ported follows: On circulation $39,775Sl7 35 on
deposits, $iO32s2 256 80; capital, $5929, ,4S0 49,
total, $SG,O3355l 40 Toe rate Of taxation upon the
banks in the City Of NewYork and in other cities has
l, tba
four wears and the annual taxes collected from these in
sttut Ous been greatly In excess OF the rate col
leeted up IN he capital OF Ctner CORPORATIONS, private
firms aud individuals, which cannot be accurately
determined ~ that OF the National banks flom the pub
lshcd statements.
The Controller the failures OF National
banks. aud gives table showing that the total amount
Of capital Of all the insOlvcnt National banks is $lG,
Olj,1O0; the amount Of claims proved $2339S,1O9;
and that Of dividends paid, Sl40l0,3l3 The estimated
losses are only $651j,423 Mr. Knox says
The average number of failures during each OF the past
fifteen years less than ye and the average an-
nuai loss less than $4,000.
The City Of Glasgow Bank, which recently falled IN
Scotland, had capital and surplus OF less tIan SSoOO
OOO and liabutcs OF mOIe than S5OOOOOOO IL loaned
to four debtors Of the bank more han upon
which there loss OF more than ~ OOOOoO lne de-
hcIenCy IN the assets Is nearly Sz6OOOOOO' whch IL
four great the losses 0f All the creditors OF
National banks wHICh have failed since the ORGANIZATION
The sy-rm The Bank superintendent OF the STATE OF
New York reports Liabilities or twenty-five savings
banks when have la ed ln Iht 9''e i9rlus Ie ~
TX anI hai years az rl2iSS,717, aud estimates the
than On,-tmrd ot thtir ehtlIc thdeoeun S. io tst'
mate, losses during the last three years az S34OO
600 whicn IN Uue-Ialf OF the cstm ted losses
to tn creditors OF al. tHr N!9na DdAhs IN to ChIea
.aeS from the beginning II the system un now. iue
ioS-es IIoH ''7''' o''n ~ i'' ~ i ~, ~, i,j,'J
under special charters under which neither state super
St7oM nor % I'lofi T,rf m - =! @ ~. ~ The tossDs
rom aud savings banks Of the country during
than DE ral loss rsuung all the failures which
have occurred Of NdtUud balkIuR assO.lIlons The
rnuay with great numncro National banks through
country Tor ts convenience ia making disbIse'
years Upon the circulating notes OF the National
DiHas there has hccu no loss Whatever.
TIE BONDs-INTrRFsT
one Of the chief o4ecGs in IN the organization OF
the National system not only t. furnish bank uotes
which were fe and convertible, but supply steady
market for and lnciitate the negotiation OF United
states bonds and Is doubt that the credit OF the
Government and its ability To borrow money at low
lt- bonds na,s for the National bank notes.
or he Umted atcs ponds held by he National banks
ON November sos and deposited with the Treasurer,
security Tor their circulating notes nearly three
fourths bore interest at ne rate oI per cent me
reduced until II now less than OneiOurh Of All the
bonds held while nearly OneiOurh O nc whole amount
bears interest at the rates OF 4is and per cent only
about oueh OF the entire issues or the latter classes
OF bonds ia now held by tie National banks. The
Government has stll outstanding more than 1908 O0O,
OF Ucr cent. and more tnau S7O3OOpOOO OF per
cent bonds. The reduction OF the interest on this
amount g. per would save the Government nearly
-2l 600 900 u,cIrst annually. The iundlng OF the
rcr ccut bonds per cents has made rapid progress
duru the year aud the banks have been Of great
service TO the Government In tins process
uf rclundlng by negotiating and absorbing
q very q. siderable part Of the new IL ucs.
should the Ma iUrul system continue there is doubt
thtt the present rapid reduction IN the burden Of in
IN continue also II tne National bank SvSt,m
10 be abolished aud m additional amOuDt Of United
states i to be Issued all hope or duCing tie rate
Of interest on the pdDc deOt must be abandoned
The larger portion OF the ana per cent EOldbear
ing bonds OF the United States Is payable the option
OF he Government, aud The remainder will be payable
in 1881 years hence. A. already stated, S2lOOO
600 early Dr saved TO the Government by iunl-
ing these bonds into per cents, while the amOunl
winch Is claimed be annually saved by the repeal
Of the National Bank Act ana the Issue OF S32OOOOOOO
of mCuuvcruhlc Treasury notes j. Sl3OOUOOO only.
with the issue OF tn, lafgc amount OF Cove nmcnt
notes, the unlmg or the public debt VIII be rem icrcd
impossible. ior the pledges Of the Government Will
then violated and 10, credit permanently ruled.
winch II the wiser cOu,5o-to continue the work Of
funiing the debt which has successfully progressed
during ne present year. thus saving the greater amount
Of interest named, while adding to the credit OF the
cOuutry; attempt by the repeal Of the National
Bank Act to the less amount, ana at the loss rs
well reputation and credit l. thcr, not danger that
by tat utToiuc.Ol OF real aud much &rcater evil
Success IN funding the National debt through The
operation OF 1000 ~ PRINCIPAL monetary Institutions
oi the country may be assured but the effects OF
issue OF "A large amount of irredecmabe Government
currency cannot be forrtold
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