New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-04-24
NATIONAL BANK PROFITS.
BRYANs MISTAKEN STATEMENTS.
AT PRESENT INTEREST RATES AND BOND PRICES
THEY ARE SMALL

THEY ARE SMALL.
Washington, April o (SpecaO.-The opposiuoh oi
the Chicago Platform Democrats 10 Nationai oahhs
and the repeated denunciation by Whiiam jennings
BRYAN OF that feature Of the National Banking Ia"
which allows National banks to deposit with the
treasurer of the United States Government oonds
ard issue National bank notes up 10 20 per cent
os tho face value Of the bonds thus hypothecated.
and NJ the same time draw interest upon the united
States bonds deposited, has attracted general at
tention TO the question
For the last few weeks Controller Dawes Of the
Treasury Department has been besieged with anx-
ious Inquiries upon the subject. Mr. Rryan's DEC
Iaration has led the public TO believe that the Ma
tional banks under the present banking law. reap
exorbitant profits from their bonds invested n"
examination. however. reveals but small proh' io'
any OF the National banks. which Is an absolute
REPUTATION OF the declarations OF Mr. bryan anu
the Chicago Platform Democrats
That Il Is not n profitable business for the Ma
tional hanks 10 hypothecate Government bonds ana
issue currency against them up to 20 per cent vi
the face value OF bonds is clearly demonstrated
by the fact that the National banks OF the country
have at no time issued the maximum amount Oh
the National bank currency which they could issue
under the law.
The amount OF National bank currency when the
combined banks Of the country could take out un-
der the law (beng 90 per cent OF the captaI s'och
would be SS4el74.50o The net circulation OF the
National banks OF the country on April II was s1o'
l2l2e being about two-ffths OF the amount OF inc
circulation permitted by law; the difference whch
the National banks could legally issue, being $685.
1881.
In order that the subject may not be misunder-
stood II may interesting to know the exact proh'
10 the National banks on the United States ponos
hypothecated to secure currency issued against
them estimating the money invested as being
worth per cent per annum
,lotln hoCc-
cent bonds which are now quoted In the markets
AT eeik is forty-six -hundredths Of per cent
I,pon circulation based upon the per cent oonds
which are quoted in the markets at 10sfs. the pront
Is six hundred and thrty-nve thousandths OF per
cent which is the largest profit received upon any
The The profit on circulation based upon the per
cent bonds of 1901 the value of which In the mar
kets is 1885, is two hundred and seventy-sM-th
sandths of per cent. Aoras
The profit on circulation Of the per cent oonus
due in 1926 quoted in the markets at l2s%. Is one
hundred and twenty five thousandths OF per cen,
The profit on circulation based upon the per
cent bonds which are quoted In the markets al
49, is two hundred and eght-thousandths or
II would thus appear from the official figures that
Mr. Bryans howl against the greed ana aVarice oi
the National bankers exists only In his diseased
financial ina gination. -.
bly, in New-York City where there Is congestion
Of money which has been the case during the last
year the rate OF interest has been from roma no
the profits Of the National banks But In the IN
IN excess OF per cent there is not only no profit
10 the National banks but an actual loss.
When the preponderatng question or the satety
OF an Institution which is a public depository Is
considered the question of the small profit. II any,
OF n National bank sinks into oblivion Under the
National Banking law the banks are Inspected con-
stantly by the United States officials. Five times
year they compelled to report their condition
10 the Controller Of the Currency. which reports
are made public so that there Is no dispute at any
time as TO the exact standing Of an institution In
the event OF the failure Of National bank. the
stockholders are held under the law liable Tor me
o1,, 81 he NJ CfO
In other words. where National bank is incor-
porated with capital stock of $4,000 the stock
holders in the bank. in the event of the banks
failure are liable to assessment by the National
Government TO the amount Of the stock issued by
the bank The stakeholder. therefore, is not only
liza ole for the amount OF money he has invested
but in the event of the failure OF the bank TO an
assessment OF 100 per cent Of the stock held by HIM
II would thus appear that the camor being made
by Mr. Bryan and the Chicago Platform Demo
Gratis is based upon the same Insecure financial
reasoning were their claims in 1895 against the
gold standard and the same perversion of facts Is
resorted to.