The clarion. [volume] (Jackson, Miss.) 1883-1888, 1883-04-04
The CLARION.
NATIONAL BANKS.
A Vast System-Their Enormous
Profits.
GETTING RICH on THE INTEREST OF
WHAT THEY OWE.

respondent Of the CourieT-J Ournal:
Your correspondent asked a Senator
few questions to-day which were calculated
10 draw from him some of the most inter
esting and valuable facts which he had
collected relative to National Banks and
their business.
Senator, is the number Of National
Banks increasing rapidly, and is their bust
ness pro6tableY
81 say, yes, emphatically, to both
branches OF your question. Last year III
new banks were organized with a capital
of 5,767 800. Only nineteen banks
CLOSED out their business. They represent
ed a capital of Sl,S65,000I There was,
therefore, net increase in the amount OF
the capital of the National Banks last
year OF Sl3,9l2 800, and in the number OF
National Banks Of 1872. In three years
and ten months National Bank notes in
creased in amount $50, 1856, 673. | think
these figures show pretty clearly that
National Banks are very profitable institu-
tons"
''Have you any further proof Of the
profit which they yield?"
ooh, yes. Take the following figures
for instance: The capital OF the National
Banks Of this country in amount is $685.
l04,2l3. They have as gains and surplus
the sum of $l3l ,977 ,45l They have as
undivided profits the sum Of SCI ,180310
These sums amount to Sl93,l577 6l, or
over 81 per cent on their capital. They
have therefore total amount OF $780,
POI ,974, and that, too, after paying large
dividends and meeting large expenses,
taxes and losses"
"Are they making good profits now ?"
eyes for the half year ending Sept. /,
1882, they paid dividend of 4-l0 per
cent, or s $40 per cent annually.
Have you any additional figures on this
Point2"
eyes; the net earnings for the half-year
named were SGT, 237 ,635. OF this sum
there were divided as profits only $2,876,
553, leaving gains undivided $5,36l, 082.
This would increase the dividend over %
per cent, or over II per cent. on the capi-
tai. OF course you understand that this
is the average Of gains of. all National
Banke, including those which are misman-
aged The gains OF those which are we'll
managed must be enormous. What other
business can make such showing ?"
"Do you know how these gains are
made ?"
Zone OF the ways, and the principal way,
days, thus continually compromising the
Interest. The gain in oncylending this
way is simply astonishing. One dollar at
per cent, semiannual interest in twenty
years brings $500 at s per cent, $4.79.
The same sum mt 8 per cent. in fifty years
brings Sl9.70; ut s per cent. S50.47. The
sum OF $500 10000 at per cent. in fifty
years brings So 900, 600; at per cent,
$50, 239 800, 900.
care not the profits of the banks largely
made from their depcsitsW
YES the deposits with the National
Banks, are immense. On tho first of No
yember, 1882, the individual deposits
amounted to 1925, Az, $50, and the Uni
ted States, $S,Sl7,4n. The total deposits
were $l,13l ,293, 093. The loans at the
same time were 81 ,23S, 2S6,326. The ex-
cess of loans over capital was 1855, 1872
3l2, and the excess Of loans over capital
surplus and undivided profits was $685.
324, 55l. From this it will be seen that
the National Banks loan over $5j0,000,000
more than they have, including real estate,
United States bonds, and all other kind OF
assets.'
'Of course am to understand the de-
posts are a basis in the main, Of the
loans?"
eyes that is shown by the following
figures, Their capital is only $,4S3,l04, !.
2l3. Their capital, surplus, and undivid-
ed profits altogether amount to $676,061.-
974. The banks also have the following
property which it does not appear can be
loaned:
Real ate............".".....S 100000
United States certificates OF
deposit,...,,. .....v....,.,.. 100000
Due from United States treas
urer...,............ .....,...... 100000
Other reserves not named..... 2S,500000
u. s. bonds to secure circula-
tion.,.., ,".....,.".....,.. 357 100000
Other U. S. bonds............. 37,600,00C
Stocks and bonds..."..,..".... G6,500,00C
Making a total of.."..... S 562, 100000
"IIving assets to theamount Of S562 500.
coo not loanable, they have circulation
based on capital at 30 cents to the dollar
of bonds for circulation, 1921, 500 600
Deduct from this their unemployed means,
and il is shown that they have $40, 700
600 of capital which cannot be employed
IN loans. This would leave for capital