The representative. [volume] (St. Paul, Minn.) 1893-1901, 1896-05-27
LIGHT TURNED ON.
FACTS CONCERNING NATIONAL
BANKS.
Their Origin, Growth. Uses, Abuses
and Power.
Their True Place in Our Political
Economy.
By A. E. BALL. of Minnesota.
Written for The Represe ia tive
CHAPTER

, Written for The Representatives.
~ CHAPTER l.
THE prOftableness of banking under
the American system is shown by the
fact that during the six months ending
Sept. 1, 1873, the national banks of the
United States paid in dividends upon a
capital stock of $4SS ,1OO,9 ,951, the sum. of
S24,823, 3,O29."-Chambers' Encyclopedia.
This is nearly per cent net profit for
per cent year. If the yearly increment
Of wealth of the decade of 1870 to 1880,
calculated in round numbers at $50, 0,OOO,-
100000 for the whole country, had been
the same, it would have in the latter year
reached the immense sum of $9O,OOO,-
100000, whereas it was only rising $44,-
900 600, 900.
The first question naturally asked
when this fact is brought to the mind
is, not one very difficult to solve, "On
what meat do these banks feed, that they
have grown so great?"
When we have sufficiently answered
this, the answer as to What effect do
they have on the body politic?" will be
much easier.
However honestly persons may differ
as to the utility of national banks, no
one can call them producing institu-
tions, or hardly dignity them as indus
trial.
The first certificate of authority to or
ganize a national bank was granted on
June 20, 1868, under the act, ito provide
naiOnal currency secured by a pledge
Of United States stocks, and to provide
for the circulation and redemption there
Of" approved February 25th, 1863, and
in less than third of century there
have been 5,023 such organized, of which
number, 3,715 were in existence Septem-
ber 2S, 1895, with an authorized capital OF
1864 ,136,915, and for twenty-six years
prior to October 81, 1895, made average
dividends on capital and surplus of 8.4
per cent. These figures are from the re-
port of the comptroller of the currency
of the United States.
1t is therefore impossible to tell
whether the actual sum earned is in ex-
cess or below that of 1873, until we find
out the amount of this surplus which is
in fact profit. earned as much as the divi
dend, and should be added to the divi-
dends as an actual profit.
Nor is this ALL The item, undivided
profits" must also be added, before we
can tell intelligently what per cent of
stock earns This fund of undivided
profits, was $90,439, ,92422. We find, also
the net earnings are nearly 25 per cent
In excess of dividends as follows:
The average annual dividends paid
amount to $44, ,42S,675 and the net earn
ings $54,S65,257." This is for the last
26 years.
All national banks are required to re-
port under the general heads, resources
and liabilities, their condition disclosed
under such heads arranged as follows:
Resources-Loans and discounts, over
drafts. bonds to secure circulation, bonds
to secure deposits, United States bonds on
hand premium on bonds, stocks, securi-
ties, ETC., banking house, etc., real estate,
ETC., due from National banks, due from
State banks, due from revenue acts,
cash items, clearing house exchange,
bills of other banks, fractional currency,
specie, legal tender notes, United States
certificates of deposit, per cent fund
with treasurer, due from United States
treasury.
Liabilities-Capital stock paid in, sur
plus fund, undivided profits, National
bank circulation, State bank circulation,
due to National banks, due to State
banks, dividends unpaid. undivided de-
posits, deposits of United States disburs-
ing officers, notes rediscounted, bills pay
able, other liabilities.
To the average reader very much of the
above is worse than Greek. for that he
would not try to read. while this mass
he can, but when through he will know
nothing about the value of it. And the
more it is studied, the more inexplicable
1t all appears.
The voter, however, has made up his
mind to know something about these na-
tional banks, and as the national mind is
now all at work upon the complicated
problem, it is most likely that what one
fails to find out another will.
call it a problem, because it is sup
posed solution is possible: but after all
1t appears more like puzzle of which we
have lost the key.
All this vast banking business has it's
bureau in the treasury department., the
chief officer of which is styled
THE COMPTROLLER OF THE CUR
RENCY.
This officer performs his duties under
the general direction of the secretary of
the treasury. He is appointed by the
president, however, on the secretary s
recommendation, and confirmed by the
senate, and holds his office for the term
of five years subject to removal by the
president. He has deputy, both of
whom can have no interest either direct
ly or indirectly in any association issu-
ing national currency under the laws of
iral devised by the first comptroller, and
powers to employ all necessary clerks, to
be appointed by the secretary of the
treasury The Office has a seal, the orig
inl devised by the first comptroller, and
continued in the Office since, with renew
ais.
The comptroller is obliged to make an
annual report at the commencement OF
each session Of congress. These reports