The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1898-06-30

Instruments and with the other 5 per cent
~ cash, the banker is expected to maintain
inc equilibrium of this mighty fabric. M az
Whlle the p-or remnant OF Bryanism in
trencbed in congress, neglec.s no opportunity
to weaken and unsettle the foundation upon
which it rests. Let US rejoice that so little i'm
mourn the degeneracy which a senator inn
plies in saying recently, "The vagaries of
n .ne = United States senate no longer interest
mert determined and perhaps d.shon. st az
parently incapable of forgetting error or
learning truth, must be reck5ned with, w,
ever, Tor their purpcS IS loan darkly threa ten-
Ing on the horizon. 1t is well to remember
that recurrence OF the conditions that pre-
vailed in ,s3 may produce the same results
been reached and it is altogether probable
that nothing but an abnormally favorable
trade balance and a~contraction of credit re-
suitlng from years of depression has saved
us from paric in the spring of '9S. These
views may seem pesSimistic, but that they
are credible enough to influence thoughtful
men, is sufficiently clear. Previous to 70
nearly every prosp ercus business man aspi Ell
TO be bank director. The position was con-
sicered most desirable snecure and few
men OF substance felt quite satisfied unless
they were able to crown their careers with
such honorable distinction. Nest man a-e
now willing to forego the honor in order to
escape the responsibility. The multiplying of
new banks, In order to create new officers
and directors, is no longer II vogue. Men
hesitate to associate themselves with enter
prises of this character-and wisely. El-
cesslye competition has been found to be
disastrous and the tendency is toward quail
tty OF banks rather than qualtitv 1t IS
recognized that the public is better served
by one strong bank. than dozen weak onss
This is long step in the right direction
There should be no more banks in any
community than can develop an earning pow
er far in excess of the requirements of a
reasonable dividend. Losses are inevitable
They may be relied upon to maintain a GER
tail average and in forecastfng the future
of any bank this item should be included
with expenses and taxes. In the long run
It Is equally sure OF course, it is difficult
to estimate what losses are likely to amount
to in any given case. Experience only can
determine accurately, and statistics of thi,
character are seldom published. Two in
servation, and l give them fer what they
are worth. The first is a bank that went
into voluntary liquidation in 1896, after
successful career. For period of ten years
prior to that date the losses showed a re-
&C ntage of ] 2-10 per cent per annum upon
the average discounts. The second is a Fl m
of brokers in Chicago, who published state
ment not long since to the effect that they
had handled in seven years. from 1890 to 1897
SIS, GOO coo of commercial p-per, and that the
loss amounted to IA per cent II reliable
statistics upon this point could be obtained
1t would be most interesting and in
structive. In the absence of better In
commercial bank to figure on an
average annual loss of at least IL per cent Of
Its discounts during the period CT its exist
ence. Roughly speaking, bank should not
be expected to divide over two-thirds of it's
net earnings; the balance will probably be re-
quired to keep its assets clean and alive
Every item among the invested resources of