Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-12-06
ANENORMOUS GROWTH
Banking Power of the United
States.
OVER SIXTEEN BILLIONS
Greater Than That of the World Six
teen Years Ago.
CONTROLLER RIDGELY's REPORT
Increase in the Currency Circulation
Legislation Recommended for
District Institutions.
CONTROLLER RIDGELY's REPORT

| The annual report Of William B. Ridgley,
| controller of the currency, has been pre-
| pared for transmission to Congress The
report contains a table giving a detailed
| statement Of the resources and liabilities
Of all the national banks Of the United
! States.
1t appears from these reports that there
has been an increase in banks from No
vember 8. 1905, to September 4. 1905, from
$3.50 to 6,137, and that loans and discounts,
representing over SO per cent OF the banks
| aggregate resources, steadily increased
from s4,O16, 1856 4979 90 on November 9, 1905,
The aggregate resources were ss.O16 O21 ,O66
| on September 4. Over three-fourths of the
resources of the banks are in loans, bonds,
| securities, etc, and lawful money, the loans
| amounting to $429S, 9S3, 316; United States
bonds on deposit to secure circulation, 1924
| O36,9S0; government loans, $9T, III $50, and
| held In bank, s7,5SS, $50; other bonds and Sc
curities, SOL ,24O, 1855; specie $464, 437 go;
| legal tender notes, sl81, 575, 100. The paid
| In capital stock is shown to be $685.. O68, 1875;
surplus, $3.50, 245, 1874; other undivided profits,
$50, 569, S57; circulating notes outstanding,
s517, 964, 511 Individual deposits, 81, 1879, $685.,
80; United States deposits and deposits OF
United States disbursing officers, $1O7,-
| S31, S13
The amount Of loans and discounts on
September 4, 1906, was 81 29S 9S3,316, of
| which s1,O16, 793,343 were held by the 81
banks In the reserve cities of New York,
Chicago and st. Louis.
In the year ended March l. 1905, share
holders of national banks were paid divi-
dends to the amount of S0,S31 ,561 on $779.-
544, 247 capital, the average rate being 1O.4
per cent, the highest since 1870. Based on
capital and surplus the ratio was 6.S per
cent. The net earnings were s113. So, 49,
| or 9.5 per cent of the combined capital and
surplus. The average rate Of dividends
paid by national banks annually from 1870
to 1906, thirty-seven years, was S.42 per
cent. The aggregate net earnings Of the
banks during the period in question were
2,313, 1906. 556, from which dividends were
paid to the amount of 81, 7sO 712, IA, which
Is over three times the average annual
capital
Demand for Small Banks
Questions have been frequently raised as
to the demand for and successful opera
ton of national banks with the minimum
amount of capital ($25, 1000 authorized by
the act of March IA, 1900. The records
show that under authority of that act 2 062
associations have been chartered with cap
ital of less than $4,000, the average being
approximately $4,000, and that Of the num-
Der II, or less than 1 per cent, have
failed. OF the total number of failures
since March IA. 1900, namely, ~, less than
one-fourth were of the smaller class,
which would indicate that these banks are
as conServatively managed and that, as
far as the six years record shows, the
probability of failure is less than with
banks of larger capital.
Reliable authorities place the number OF
banks and bankers in the United States
and island possessions, exclusive of ma
tional banks, at 15,343. OF this number
reports pertaining to 1852 banks have
been received and tabulated being lilo
more than in 1eOR The TO
of these banks amount to $40 1863 1856, $40.
being an increase of approximately $773,
100000 over the previous year. The re-
turns include 1892 commercial banks 742
loan and trust companies, and 1919 savings
banks (of which 67S were of the mutual
class-that is, without capital stock and
500 private banks and bankers.
The capital stock Of the state banks Is
1921 ,s45 7O5; individual deposits, s., 741 464,-
129; surplus and undivided profits. $751;
114,s sos. The loans aggregate 81, 272 959. GA;
Investments in stocks, bonds and other Sc
curities $412, 9GS 1874 and total resources,
So, 677. O5O,317. The resources Of state banks
reporting in 1905 aggregate S. 1901 1878,
thus showing a gain in 1906 of $4S6, lbs, o3e.
The stock Of money in the United States
on June 80, 1906, amounted to s., O69 &C.,
600, of which 81, 1872 100000 was in coin On
Guiding bullion In the treasury and $9O7.-
600, 600 in United States notes and national
bank notes. The coin, bullion and paper
currency in the treasury assets amount
ed to $500, 200. 900, the remainder, So. IA 500,
OGO, being in circulation. The estimated
population of the country on that date was
81, 500, COO, giving an average circulation per
capita of S3242 against per capita of
S31. OS for 1905 and S21.10 in 1896.
The Banking Power.
The banking power of the United States
in 1906, as represented by capital surplus,
other profits deposits and circulation of
national and other reporting banks. to-
gether with estimated amount of funds of
this character in non-reporting banks. is
shown to be SIG Ago, 47O, 465.
From the latest and most reliable data
obtainable, the banking power of the
foreign countries is estimated at S2l 952,
500 U0.
Mulhall estimated the worlds banking
power in 1880 at S15,9s5, 100000, the United
States being credited with about one-third
of that amount Since that year the bank
ing power of the United States has in
creased to the extent of S11 ,312, 400 COO or
over 219 per cent; that of the foreign
countries S11,111 $4,000, or 1926 per cent,
and the combined banking power So, 429
800, 900. or 1903 per cent.
| District Banking Institutions.
The controller says:
In the annual report for 1905 attention
was called to the necessity for legislation
regulating banking in the District of Co.
lumbia, in order to secure to depositors in
| banks organized under authority of state
laws and doing business in the District the
| same measure of protection that is afforded
depositors in banks and trust COMPANIES Cr-
| ganized under federal laws.
| In line with this suggestion and the rec
| ommendat.on of the Commissioners of the
District of Columbia, an act was passed and
| approved June %, 1906, placing under the
! supervision of the controller of the cur
rency all savings banks, savings compa MES,
| trust companies, and other banking institu-
| tons organized under any act of Congress
| or by virtue of the laws of any OF the
| states, having an Office or banking house
In the District of Columbia for the receipt
OF deposits or savings.
| When the act of June %, 1906 went into
! effect there were fourteen institutions of
this class operating in the District of Co.
| lumba Six of these were incorporated
under the laws of Virginia, six under the