The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1879-01-02

tax 10 the capital stock OF banks was lower
than that Of the Federal impost up 10 1872,
yetslneet that year the reverse % true. AT
present the whole burden laid on these
institutions by the national and the State
governments combined.represents on an
ayeraee three aud third per cent Of their
joint capital. And. here It may be inter-
esting 10 note some Of the differences
In percentage corresponding to GEOGRAPHIC
iCal divisions.
II Is in the States Of New York and Ne.
braska that the banks arc most heavily
taxed, the ratio OF imposts to capital there
reaching four and six.tenths per cent.
Then come the yo-called Granger States,
where the rates vary from four and third
10 three and q third per cent, and next
New Jersey, where the ratio Of taxation
TO capital Is almost identical with the last
named figure. Distributing the country
into larger sections we find the percent.
age OF tax In banking capital largest in the
Middle and Western States, beingseverally
stated at three and six.tenths and three
and five-tenths per cent, while It only
reaches two and eight-tenths In New Eng.
land, and but two and seVen.tenths per
cent In the Southern States. Taking the
whole country together, the ratio Of State
imposts TO tho capital stock OF National
banks during the year 1877 was one and
nine.tenths per cent, In other words, the
sum levied Tor State purposes was about
one.third larger than that paid into the
Federal Treasury.
The remarkable inequalities In the rates
Of taxation laid on the banking capital in
different municipalities may be illustrated
by returns from some Of the principal
cities. For example, in New York City
the total sum drawn from the banks for
all fiscal purposes actually represents FIVE
per cent Of their united capital. In Gin.
CinnRti the ratio Is four and six.tenths per
cent, in Chicago five and eight-tenths per
cent, and In Albany II touches the sur.
prising figure OF six and two.tenths per
cent. Turning from ratios 10 aggregates,
we find that the banks OF New York City
alone paid In the shape Of taxes more than
three million dollars during the year 1877.
One effect Of these high rates Of taxation
may be discerned In the reduction OF CAPT.
tai and surplus by the New York City
banks. The total decrease which has oc-
Cured during the last five years, II we in.
clude both the National and Suite bank.
ing institutions In the municipality, falls
but little short Of thirty million dollars.
Al first sight this burden seems to be
serious enough, but II Is frequently alleg-
ed to be more than offset by the handsome
profits OF these establishments. We hear
good deal about certain privileges and
immunities, which on inquiry do not
prove TO be recognized by statute. There
Is widespread notion, for instance, that q
considerable portion Of each banks clrcu.
lating notes are lost or destroyed, and that
the disappearance OF this paper inures to
the brneft OF the issuer. The truth is,
that every banking company on liquila.
ton is obliged by law to leave a deposit In
the treasury to cover oil Its outstanding
issues, and there must the sum remain rn-
til the last dollar shall have been present
ed. Obviously it Is the national govern
ment, and not the private association,
which profits by the Misrepresentation Of
circulating notes, We may say, too, that
the popular belief greatly exaggerates the
quantity OF lost or unredeemed bills. Look
ing at the whole currency-some eleven
millions-issued by eighty.nine banks in
liquidation prior 10 1873, there now re-
mains outstanding only about three hun
bred thousand dollars, or less than three
per cent Of the amount issued.
The capital mistake, however, enter.
tanned upon this head, has to do with the
earnings attributed TO the banks. The fact
is that a considerable part Of these institu-
tons have for sometime been compelled to
entirely forego dividends. Thus in the
semi-annual period ending March !, 1873,
not less than three hundred and twenty.
eight passed their dividends, and by the
first oil last September the list had been
swollen 10 three hundred and tifty-seyen,
representing about eighteen per cont oil
the whole number. During the last three
years an average amount Of $45, 900, 600, or
about one-tenth OF the entire capital be-
longing to the national banks, has paid no
interest whatever to its owners.
These figures exhibit but partially the
shrinkage Of bank profits In late years:
OF those banks which have earned
something very many have been compel.
ed to reduce their dividends TO rates
which would scarcely in any other bust.
ness be considered a compensation for the
use OF capital. Since 1870 the ratio OF div.
blends to capital and surplus has recedcd
from S,S5 to 0.2l per cent, while the ratio
OF total net earnings has dwindled during
the same period from about eleven per
cent to five per cent. The latter fact dem.
onstrates how largely the dividends OF
late years have been drawn from the accu.
mutations Of former periods, and that
even the diminished return now received
by shareholders considerably exceeds the
actual current earnings Of the banks.