Grant County herald. [volume] (Lancaster, Wis.) 1850-1968, 1880-12-23
Reply to Estate Banker.o

honest and industrious citizen par
ticipating in the profits.
But because IL to 16 per cent.
can be made on national bank iD-
vestment is no reason that a mer-
chant, if be is "stupid doll" should
quit measuring blue.jeans and cali
Goes aud turn himself - handling
back bills. There are men, it may
be in Lancaster, who can make
money rapidly 9! merchandising
who would fail as bankers. The
gentlemen now engaged in banking
in lancaster were formerly mer.
chants and it is supposable that
they haze better success than in
their former enge gements. There
could be another but this is q suffi-
cient answer to the ironical intre.
duotion 10 estate Bankers" letter
in another column, and we proceed
to other points.
The writer concludes that be.
cause private bankers do not at once
turn their houses into national
banks these cannot be as profitable
as the HERALD would make it APP
pear. The HERALD has never ap.
piled calculation to figure out the
net profits Of national banking, But
let Ne look little at figures CAREFUL
~ prepared By Bank Comptroller
Knox. His bias is wholly IN favor
OF / he present system of national
banks and any changes he recon-
mends are in favor of the bankers.
In making computation 10 show
how little the banks make be shows
that supposing bankers loaned their
circulation ct 8 per cent. and re-
caivcd 4 per cent. on their bonds, the
capital invested 10 national banks in
1879 would bring 1884, O94 more
than if loaned directly on CONNER.
cial paper. That is, all advantages
being taken, allowed by legitimate
transactions, the national banker
has, after counting all awbacks,
q l3 per cent profit that can Re
made no,other way. These figures,
we repeat, are given by the Comp
troller in an attempt to show that
"the advantage to be derived from
receiving and issuing circulating
notes is not great" Tho profit
upon circulation for 1880 the Secre-
tary of the Treasury estimates does
not exceed one and e half per cent.
Which is 10 say that national bank.
ers make 1.5 per cent moro than
can be made by other legitimate
banking.
II is true chat there are Two or
three thousand banking institutions
in the United States that have not
sought the advantages offered by
the national system, and why TIE
Secretary Of the Treasury reports
that the present circulation of the
national banks is S343, 949, 1913, ard
that individuals have deposited with
them 1878 OOO,O0 Their loans not
counting the deposited bonds,
amount to S1,O37 100000. Their
loans, by the help of deposits. are
more than three times their circula.
ton, and wo gather from the report
that these investments count to
them about s per cent. Allowing
the bankers SIT 600, 900 interest on
their deposited bonds and charging
thcm q rebate of four per cent. for
their depositors, the arithmetician
will find there arc $65, 040, 900 left as
the profit of the national banks. The
capitalize aohole capital Stock-is
$457 $50, $50. This is not 16 per
cent, but 1T is oyer IA per cent, aud
we must not be understood as inti-
mating that this is all they make.
Statistics show their item OF "sur-
plus and profits" after each annual
dividend to be over 335 per cent. of
tho capital.
What can BIO made by the nation.
al banks appears to be susceptible of
pretty close calculation. Our cor
respondents assumption that there
ls something that makes private and
State banking preferable to nation.
al banking, to those who are en-
gagged in the former, is unquestion-
ably correct But what is It? We
do not believe it is peril-not the
threatening "sword faunihilation."
One thing undoubtedly in many
places is the difficulty 10 starting.
Il takes at the very least something
over s. 5000. There are innumera-
BILE places shat will not give IA per
cent. interest on a $50, 600 bank
capital. Another reason may be
that while national banking is only
worth Ii per cent. the other may be
worth 20 or 30 per cent. While the
national banker may require $780,.
900 to start with, the private bank
81 can start on nothing, bat conf.
denoe, There is famous barker
who started on nothing and in a
few years lived in q 100000 resi-
dence, and the courts decided him
not crook I'd man either. We have
90 doubt be national banks are
safer institutions for the people
than private banks. We say this to