Oxford Democrat. [volume] (Paris, Me.) 1833-1933, 1882-06-06

of these shares went to Mary who hat
found the small dividends very conven
lent for sundry uses at home.
John, who had learned his trade o.
Mary's father, had never meddled with
his wife's little fortune. His own bank
ing business had been transacted at the
savings bank.
WHAT THE Man LEARNED AT THE saw
INGs BANK.
The next forenoon, the Man with @
Pail kept thinking over the Squire
friendly suggestions. "Humph!" said
he, "of course it's easier to live when
you're forehanded; that's what I'm saw
ing money for; but what's that got to do
with the banking business: What did
the Squire mean about lending their cap
tai five times over: | know he was
wrong about the ESQ, 900 racket, and
believe he's wrong about this too.
mean to 90 and ask the Treasurer of the
savings bank.
So at noon the Man with Pail set
his pail down in a corner and slipped
away to the savings bank.
When the Treasurer heard Johns
question, he took up the Financial Chron-
icle and turned in a moment to state
ment like this:
Resources Millions. Liabilities Millions.
Loans, l,lss.7 Capital, Goo s
Bonds 4 stocks, i76.S Circulation, $3.50
Real estate, al Deposits. less
Cash. iOl.2 State banks, &c. '3s
?.iO;s s.iO7s
There" said the Treasurer, picking
up lead pencil and piece of white
paper. Those figures represent the
condition Of all the national banks, TAX
en- together, on the llth Of last April.
| take that report because il is the last.
Now, you see that the banks then had
COOS millions of capital, and that they
had invested Al millions in real estate,
that is, in the buildings in which they
carry on the business. Thatleaves 6l3.7
millions Of money to lend. The busi-
meas of the banks is to lend this money
John assented.
Now" said the Treasurer, "you see
that the banks had on the llth Of April
lO4s.s millions of dollars belonging to
depositors, liable to be called for at any
moment. They had on hand for such
calls 40l. 2 millions in cash, and 1853
millions invested in available stocks and
bonds, making S775 millions in the
form of cash, or bonds and stocks which
could be turned into cash
John assented again.
"Well, with these S77.5 millions on
hand, the remainder of the deposits, l7l.3
millions could be safely loaned for a short
time, couldn't they :"
John thought it probable.
but the customers of these banks in
April wanted 1927 millions of dollars,
to carry on the prosperous business OF
this grea: country. Now let us figure
up and'see where they got it. There
was first the cash capital; then what
was left Of the deposits; tken money
borrowed from other sources, chiefly from
savings banks; and all thi, was not
enough, and so the banks had to issue
their notes fer the balance. Here are
the items:
Cash capital. Gl3.I millions.
Deposits, lIl-3
Borrowed money. '3s
Circulating notes, o-o-'
Loans, Ilsa.7
$50 that the banks loaned not only
their capital but their credit in various
forms to the amount OF about nine-tenths
of their capital"
"The Squire said they got interest on
five times their capital"
"The Squire was wrong. On the
money borrowed from savings banks, the
national banks pay interest and on some
of their deposits, though that is not con-
sidered good banking. But this employ.
ment of the surplus cash Of the savings
banks, helps US pay dividend on your
savings"
Il know. But is it right for the
banks to earn money on more than their
capital: :"
SIS it right for anybody to do business
on credit: If you say yes, that answers
your question"
"How much do they earn in year
anyhow
"That depends upon the condition Of
trade. They earn more in good times
than in bad, like everybody else. In
1878 and 1879 they earned about S per
cent. on their capital; in 1880, nearly
8 per cent; and in 1881, 9 per cent. II
was poor business that did not pay