Evening star. [volume] (Washington, D.C.) 1854-1972, 1916-05-24
NATIONAL BANKS EARN
SMALLER NET RETURNS
This. Too. Despite the Rapidly In
cleasing Ratio of Deposits to
Capital Invested.
BY I. A. FLEMING.

A recent comparison of the book
values of stocks of banks listed on the
local stock exchange indicated that
the past year had not been very
profitable one in the banking business.
Further investigation along the same
line confirms that theory as existing
all over the country. Inability to Keep
deposits fully employed has been re-
sponsible for this state of analrs- Inc
federal reserve act at once turned loose
a food of reserves. without the exist
ence of an emergency for their use.
A recent report of the controller of
the currency shows that during the
last twenty years the resources OF ma :,
tional banks have increased four1ola
to s13.s3S,0e0,o00. In 1870 the invested
capital in national banks amounted TO
$4,000 600. with individual deposits OF
about s516.oo0.0Oo. nearly dollar for
dollar and net earnings on invested
capital were lis per cent.
Invested capital in the national
banks today totals about $1,000. o0o.o 600.
while the individual deposits are s3'o
per dollar of capital invested.
And yet in 1915 the earnings of the
national banks We're only rs per cent.
From 1870 to 1915. inclusive, the aver
age dividends of national banks were
So per cent. The ratio of net earnings
on capital and surplus was. in the same
years. ssh per cent
In Chicago the national banks made
Isl per cent in 1915; New York. IS:
Boston. IA: San Francisco. 5.43, and Los
Angeles. 6.S4 per cent
A large Chicago bank with s. of de-
posits to 81 of capital made : per cent
on capital Chicago banks are said to
have shown decreased earnings of 20 to
80 per cent. and fourteen did not earn
their dividends.
Washington national banks have not
been in anything like this plight. Not a
bank has failed to pay its dividends and
practically all earned their payments.
The average dividend rate of the ma
tionai banks of Washington is over s
per cent Over and above their dividends
they probably averaged during the year
1915 about to per cent.
There has not been the acute COMPETE
ton for loans here that there has been
among the bankers of large cities.
Local bankers have enjoyed larger de-
posts than ever before. but they have
held rates strongly and rather than shad :
per cent on the best collateral and ; l.
TO per cent on other loans they have
gone into the market and purchased high
grade bonds. paying near the minimum
rate mentioned. and have in this way
maintained good interest yield in the
face of an abundance of loanable funds.
On the Stock Exchange.
The demand for bonds today con-
tinued very satisfactory and in excess
of the offerings. American Graphic
phone IS. which were marketed here
at 90, have advanced to and crossed
par. sales of $1,000 being reported to-
day at 1O1. These bonds are callable
at par. but because of the late issue
of notes, which must be retired before
the bonds are called. investors have
taken the issue above par.
Potomac Consolidated IS were wanted
at I00I., with one sale at 1905. Rail-
way As steady at NOla.
In the stock trading was restricted
to odd lots. Washington Gas was the
feature with several sales at 1873. and
with IS freely bid and T6as asked.
brought s1I-.
An odd lot of Grtphophone preferred
changed ownership at 49,.
Condition of the Treasury.
The condition of the United States
Treasury yesterday was:
Net balance in general fund. $685.
sos.72s
Total receipts. s2.s3s,o27.
Total payments. s1.i52,72S.
The deficit this fiscal year is s54-
o45.s43 against a deficit of s10997s.-
SIl last wear exclusive of Panama