The Portland daily press., 1882-04-18
Mr.. LADDs' MISTAKE.
The Error He Makes about National
Banks.
Detroit Post.l

Detroit Post.l
Mr.. Ladd of Maine has been making speech
in Congress in opposition to the extension OIL
the national bank charters. The speech is os-
tentatiously packed with figures the most Oh
which have no more bearing. on the question
than the new comet has on the result OF o boy
game of marbles. But one point, to which he
inadvertently refers, is worthy of notice. lie
says the banks have made profit which ne
proceeds to state, and states incorrectly, and
then he adds: "It is well known to every IN
telligent man in the land that in the operation
of the law but 10 per cent. of the capital en-
ployed is furnished by individuals and 80 per
cent. by the government" and he leaves II 70
be inferred that the profits of the banks are
made off the $50 per cent" which he falsely
asserts is given them1by the government.
What Mr.. Ladd asserts is well known to ev-
cry intelligent person is not known to any IN
teligent person. Nor Isl fact. Farther the
circulation of the banks has been to the banks
but Of trifling consequence as source Oh pron.'
OF this two banks In New York city furnish
q striking illustration. The Chemical Nation-
al bank has capital OF $3oo,oOO. II nas no 2
circulation and never had any, therefore IL
never had any 80 per cent. or any other per
cent of capital furnished to it by the govern
ment Yet the net profits of this bank have
been 49, 562 900, and its shares, which orlglnai-
ly cosi 800, are selling at 900.
The Merchants Exchange National IN the
same city has capital of 100000, 1T has
$731 100 circulation, its net profits are SET
down at $lS7 800, and its shares are selling OF
$780, or $40 below par.
Why are the shares of one bank which has
no circulation, and never had any. selling at
$40 for every 81 invested, while the shares. OF
the other bank, with nearly three-quarters OF
million of circulation, are selling at so cents on
the dollar? If the profit lies in the circulation,
as Mr.. Ladd would have the people believe,
the Chemical National ought to make nothing,
while the Merchants Exchange should show
large profits. But, as seen, this is not the fact,
and the reason is obvious to every person who
knows anything about finances and who will
examine the facts. These are the facts:
The Chemical National with only $780, 900
has ,220 on deposit, and It's outstanding
loans on March II were $13, 945, 800
And here it should be said that neither the
government nor the national banking system
has anything to do with the amount OF these
deposits or loans They have not been IN
creased one cent by any law of the land. They
would exist if there had never been national
banking law and they will not be affected In
the slightest degree by the repeal OF Inc DanK-
ing law.
The Merchants Exchange National, which,
as already stated, has ST. 100000 capital, has
only So, 245, 600 deposits and loans amounting
to only 81. 14S 200. Thus the Chemical, with
less than one-third the capital of the Mer-
chants', has more than five times as much de-
posits, and loans more than three times as
much money. And 1t is on the amount OF
these deposits, no part of which are made by
United States officers, and no part OF which
belong to the United States, and the loans
which are made out of these deposits, that the
Chemical bank has made such enormous profit,
while the other bank, with smaller deposit
list and the aid of large circulation, has not
made the average current rate of interest on
the capital invested. The eoncusio from this
is certain-it is deposits and loans, and not
circulation. which make profit for the banks