Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1903-08-14
BANKING PROFITS NOT uRReAsoNABrs.

BANKING PROFITS NOT UNREASONABLE.
A writer in a recent number of
Worlds Work calls attention TO the
fact that the apparently enormous divi-
bends paid by the banks in New York
are in reality no more than moderate
earnings upon the actual capital in
Ivested in the business. The Chemical
Bank, for instance, pays nominally $50
per cent per annum on its stock and the
Fifth Avenue Bank 100 per cent The
| Chemical, however has left in the
business during its long lifetime undi-
vided profits to many times the
amount of its capital. and its earnings
today are really only 6 per cent on the
whole amount of stockholders money
used in the business. This writer has
figured that all of the banks of the New
gate paid only 91a per cent dividends on
their stock during 1902 and that this
was less than AZ per cent on the total
amount invested in their business in
the way of undivided profits and capt
tai.
From bankers publication before
us we find the history CT the Chemical
Bank illustrative OF the New York situ-
alton as well as interesting. 1t was re-
| ,,;,y ;,, - pata iaf
President Theodore Roosavelts grand
father. Cornelius Van Schaick Roose-
Welt. and others as a free bank with a
ca pitalization of 100000. For the first
five years the stockholders left all of
their earnings in the business as sur
plus Sturdy Dutch conservatism has
always characterized Its management.
Keep strong. Keep strong" was the
speech that one old director delivered
in every directors meeting so long as
he lived. III the early fifties the coterie
Of Roosevelt, Goelet and others was de-
|scribed as worthy. wealthy citizens,
devoted to business, piet!, charity and
good works. all believing firmly in the
Christian religion, the ten command
ments. John Q. Jones and the Chemi-
cal Bank" Jones was Its first presi-
dent III 1865 the oharte' was renewed
IS a national bank. with The same CAPT.
talization of 100000. The banks de-
posts rose from 100000 in 1914 TO $780,
4S9.s30 In 1902. and in that year its
cash surplus reached s6.52i16s, which
lis used in the business today the same
as its original 100000 or capital. The
descendants of the founders still con-
troll Today w. Emlen Roosevelt is a
director as was his IA her, James A.
Roosevelt. and his grandfather, the
founder. Likewise Robert w. Goelet,
grandson of Peter Goelet, represents
the Goelet family as director.
AS the volume Of business grew in
the United States the business of New
York banks Increased by far greater
strides than even the growth of that
great city would indicate, increasing as
New York became the financial center
of this nation and almost of the world.
business in loans and deposits that can
be counted only in thousands. while
their original capitalization is still be-
ing computed in hundreds.
In recent years the tendency of mod
ern banking has been toward CONSOLE
cation. Especially has this been SO
since the consolidation of trusts, such
as the Standard Oil Company, and the
growth of insurance companies has
given control of vast sums of capital
into the hands of individuals. With
Rockefeller controlling one bank of
$25,0O0,000 capitalization, the insurance
companies another and perhaps j. p.
Morgan another, as Is now actually the
case, the possibility arises of making
the financing Of large deal completely
within the control of these few men
which might forever preclude the rise
of a competitor to interfere with their
respective monopolies; but, while the
fear exists, there is no evidence that
this thing has been done. In fact the
very marked disposition shown by the
country banks of the central west to
take care OF the business OF their re-
spective communities unaided by the
east has demonstrated very forcibly
that banking is free for all who care
to enter and can not possibly be cor
nered or controlled any more than can
the selling Of groceries at retail. The
probabilities are that bank profits will
always remain at a fair interest earn
ing, since the moment dividends rise
new capital will enter the business. AS
compared with the earnings of indus
trial enterprises operating with ficti-
tious capitalization the banking BUSH
ness appears very conservative indeed.
The Death Penalty.
little thing sometimes results in
death. Thus mere scratch insignifi-
cant cuts or puny boils have paid the
Foatb pepaltv It Ia w{aa m