Evening star., 1897-01-23
Our National Banks.

Our National Banks.
How much money is there in the ma
tional banks today?"
According to the last report made Oc-
tober g. the amount was s3i3 .36a. and
the amount OF deposits was 81 80, ,Sa1 ,uJa -
Where are these bankse"
They are scattered all over the Union
replied Mr.. Eckels. Those having the
largest capitalization are I'm the eastern
states. Here you find $50 national banks
with a capital stock I'm round figures of
more than $4o1.Oo0.W0. In the western
states there are 1,5S3 such banks with a
capital stock of more than s1lo,s0.oo
while In the southern states there are a5I
banks with a capital of more than sl3S 600
U0"
rs the number of national banks in
No l do not think YOU could expect
that they would increase during such
period as We are now having. The burdens
OF financial losses fall upon the banks. and
L don't think that banking institutions Of
any Kind have been increasing within, the
iaSt year or so. On the other hand. there
! has been falling off, brought about by
me Laiiure or some banks, the liquidation
OF others, and the fact that there have not
been many new banks organized I i'm
asi,e that TINS is true as to state banks as
well az to national banks
What is the biggest national hank of tha
United States?" u ''>
The largest national bank In point o,
deposits Is the National City Bank of New
York, while the largest i'm Dofnt of cani,al n
stock are the American Excha nge Rank and
the National Bank of Commerce of New
YORK city. Each of these banks is capital
lied at $5.0O0O00''
Tell me. Mr.. Eckes. where do the ma
tlonal banks make their money? They make
lot out of Uncle Sam. do they not?''
Ihey did at first, replied Mr.. Eckels
put not now. When the banks were first
organized there was a large amount of
profit in taking out circulation and at first
the circulation feature of the banks pre-
dominated Then the bonds increased in
price. and under the law which permits bur
10 per cent of the par value of the bonds
to be issued to the banks in circulatin
notes. the profits of the circula ton feature
vanished. The most of the morey made by
the banks now. comes from deposits and
discounts. This is the feature of profit in
banking in England, Scotland Ireland and
tfe United States. No. the profits of the
rational banks do not come from the gov
ernment."
Uncle Sam and National Banks.
Does Uncle Sam lose anything by the
national banks?"
NO. indeed replie! Mr.. Eckels. as he
picked up a paper of figures ard looked it
over. 80 far from losing by the nation;.I
banks. the government has made a gr,at
zeal out of them. A careful estimate of the
amount OF profit to the government shows
that from the organization of the first ma
tioiidl Ddilk up 10 the END OF the report
OF 1886 Uncle Sam has netted SlJ7 iSg 2iS. ~
1nlS amount stands out in startling con-
trast to the greenbaCk issue, which, instead
OF having been a source of profit has been
source of direct loss OF hundreds of mill
lions to the people"
Do the national banks make as much
now as they did in the past?''
NO. was the reply. For some time af-
ter their organization the percentage of
profit was large. During recent years the
rrofit has steadily fallen; so that. taken
throughout the period of twenty-seyen
years, for which the figures are to be OBJ
tanned. the average dividend on capital and
surplus Invested in national banks has been
only 6.4 per cent. A considerable number
OF the banks continue to add their dividends
to their surplus. Others have been COM
PEELED to chargS off losses sustained to their
surplus, SO that many banks durin. the
PAST few years have either paid small di,i-
dends or none at all
How about the safety of national banks
Mr. Eckels. Is ones money safe i'm them -
As to the safety of the national banking
SYSTEM was the reply. THE best test Is
the statistics. These show that of the
3.o5o banks organized since the beginning
OF the system only BIB have passed into
the hands of receivers as insolvent and
that these on the average. taking the
closed and not closed, have paid in the
neighborhCod of a. per cent to their de-
positors. When the banks now being liuui-
dated have been closed this percentage will
be even larger. The security OF the note
holders in national banks is as You know
such that no note holder has ever lost any
thing
officials and Examfners.
How are the banks eXaminedo'
The banks have to send reports of their
condition to the controller five times every
year, and these reports are published. They
are also examined by examiners appointed
by the controller. The examiners report
to the controller and it is their business
to ascertain whether the capital stock of
the bank is impaired II it is impaired the
controller has to levy an assessment upon
the shareholders to make such impair
ment good. The duty of the controller is
wholly supervisory, however, and it does
not In any way relieve the officers and di-
rectors of the bank from the duties placed
upon them The controller can suggest
methods of safety, but it rests with the
officers of the bank and the directors TO
accept these suggestions or not. lie can
suggest methods of bookkeeping and the
duties which directors should discharge. If
the directors and officers do their duty
there is little danger that bank will fail,
but unless they give attention to such
duties 800 days in every year it is unfair
to expect the supervising officers to ac-
complish the complete safety of such
banks in two or three examinations a
year. l believe that the supervision of the
controller has prevented the failure of
many banks. though it may be that there
are here and there cases where cacts have
been overlooked which might have pre-
vented failures. / think that such in
stances. however. are much less in num-
Der than the banks. which have been saved
through the supervision Of the controller"
But will not the national banks stop
with the payment of our government debt,
Mr.. Eckels?" l asked
Not necessarily So" was the reply
when the government bonds are paid
some other note-issuing device will be OBJ
tained and substituted. Such a plan tas
jS fhA hoSi &
what Is known as the Baltimore plan as
well as that suggested by Secretary Car
Isle two years ago to Congress"
What do We owe. anyhow, Mr.. Eckels?
What Is the amount of the government
debt?"
Il can give you the figures 10 June 80
1896. AT that time our in.erest-bcarinS
bonded debt was sSi1. .36: sg0.''
"It is enough said |. "And what in
terest do We pay upon it,