Oxford Democrat. [volume] (Paris, Me.) 1833-1933, 1879-08-12
THE NORWAY BANK.

stupidity the NeO Religion had assaulted
the banking system. 1t was declared in
that journal, that the bonds and circula-
ton, alone. earned nine per cent. This
we showed to be false, and proved that
the capital In bonds, and the circulation,
only paid 5.3 per cent. on the money in
vested. Now the Neg Religion cores
pendent and editor have taken our advice
and have secured figures from the bank.
These figures seem to surprise them more
than did the result of their guess-work.
We shall endeavor to reply to all ques
tons asked in this second article, and
then to show just what the bank has
done for the stockholders, and how it
has been done.
In the first place, we re-assert that the
government gives the bank nothing. The
bank buys the bills for its circulation, from
the government. The government does
not Qire the bank the use of these bills,
any more than Mr. Cummings, the stable
keeper at Norway, giyes the Neic Religion
correspondent the use of a horse, which
he has purchased from Mr.. c. and for
which he has paid full value in cash The
government no more giUeS the bank the
use of these. bills, than does the Ne'o
Religion job printing office givea physi-
clan the use of prescription blanks, which
have been printed for him in that office,
and for which he has paid. The latter
illustration is the better, as the filling out
and signing by the bank officials and by
the physician present parallel cases.
If our last article be read carefully, it
will be seen that we placed the iodHing
circulation of Norway Bank at 500, 900.
The ST.. 900 of circulation reported Jan.
/, 1879, is the amount of bank bills
which the bank had put in circulation.
To get the iodniRg circulation, or the cir
culation which earns anything, YOU de-
duct from the amount of bills issued, the
deposits made by the bank in city banks,
retired bills, and reserve fund. Or the
loaning circulation of the bank may be
ascertained in the following manner: De
duct the amount of deposits in the bank
from the amount of loans made by the
bank. The loan account is about $780,
600, at present, though it Is generally
lower The deposits are $50, 5SS, leav-
ing a loaning circulation of S66,4l7.
The discrepancy between these figures and
the 500, 900 which we gave last week, is
due to the fact that we enormously placed
the reserve fund at $4,000 in green
backs, instead Of at - per cent. of the
deposits.
The surplus and undivided profits are
accumulationS which have resulted from
the judicious management of this bank,
as it has met with very small losses. We
did not intimate that banking Is a poor
business, only that according to the tig-
urcs given in the Nc,c Religion, it did
not make living profit. If it were not
q good, paving business, no person would
invest in il. All we wish to show is that
it is no such grinding monopoly as we are
told it IS
The Norway Bank has kept its stock
above par by judicious management. In
the first place, instead Of declaring enor-
nous dividends in flush times, the man
ayers contented themselves with from
three to four per cent. semi-annually, and
laid by the balance for rainy days. As
before said, it has met with few losses.
The expenses of the bank have been
very small, situated as 1t is, in a country
village. The cashier should have ) 200
or 81 800 for his services instead of 5000,
and rent and legal expenses are far below
city prices Again It has kept the rate
of is loans up to eight per cent, which
rate we country people are willing to pay
to help home institutions, and to avoid
the trouble and expense of travelling TO
the city, where money is loaned at from
four to six der cent This management
has kept Norway Bank stock at par or
a little above, while the stock of most
National Banks has been steadily declin-
my for the last year. 1t Is we'll known
that bank stock of several banks in Lew
iston will not bring par. and that one Of
the Bangor banks has surrendered its cir
culation and Is closing up It's business.
Banks that are now declaring large div
idcnds and whose stock Is above par, have
a large reserve fund on which they bank,
and thus make large profits on the nom
inal capital
OF course business men pay for clerks,
Incidental expenses, &c, but they are
obliged to deduct this from the gross
earnings in order to ascertain their profits.
If the Neg Religion correspondent has a
business from which he can pay his run
ming expenses, and also eight per cent.
interest on his capital, he has a better
business than banking is at present, and
we advised him to give it his whole atten-
tion, instead of spending his time in crit
icizing his less fortunate neighbors through
the public press. He says he did not
attack the Norway Bank. He could not
attack the system without denouncing his
own local institution, for that is one of
the best managed, and hence most profit
able of all these banks
Now, having disposed of all these ques-
tons, we propose to show what the bank
has done for the stockholders, and how
it did it. Its 100000 in bonds pay
$4,000 per year. Its loans are now
100000, but have been much less.
S95, 900 would be a large average for the