New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-02-11

number has increased to five, being as
follows:
London City and Midland. Sis 900, ooo
Lloyds ........,.,....... iOE,VV"'"V"
London County and West
minister ................. lsl,OOV,oVU
Barclay g. Co........... 10S,000,000
National Provincial. ...... lOl,OOO,0o0
Naturally, the possession of these
increased resources, coupled with the
general activity in trade, as a whole,
have enabled the banks to secure large
profits, and there is no doubt that the
gross profits made have very largely
exceeded those of any year previously.
But. in common with other trading
concerns, banking companies have had
10 meet increased expenses. Even so,
however, the net shown profits have IN
nearly every case also shown eNpan-
sion. A noteworthy exception 70 the
ease of the Irish banks, which have
found 1916 less profitable than 1910
doubtless partly owing to the disturbed
condition. of the country during
large mart Of the time. In the institu-
tions shown the net profits have risen
from 100000 in 1915 to about tlO'-
100000 in 1916. Moreover, there IS
little doubt that the banks as a whole
have taken advantage Of the increased
nrofits secured to make good to some
extent drafts that have been necessary
IN their hidden reserves for invest
ment depreciation purposes during re-
cent years, and consequently 1t IS most
nrobable that the actual net profits
secured are largely in excess OF the
figures shown, and had it not been for
the necessity to provide further large
sums for the purpose of writing down
securities TO present prices 1t would
have been possible for the banks to
have increased their dividends. BY
reason of this necessity, however. diyi-
dends have not been increased, but 1t
is satisfactory to note they have IN
every instance been maintained.
"The amounts written off for depre-
citation of securities have been excep'
tionally large--larger, indeed, than IN
any wear since the necessity OF setting
aside sums for this purpose has oc'
Cured, inesmuch as il was not until
1916 that the bulk of minimum prices
was removed from trustee securities.
From the s1O,5OO,OOO of net profits re-
ported by the institutions shown be-
low for 1916 no less than s4,200,000
was set aside for investment deprecis-
ton purposes. We may recall that up
10 1918 the disclosed amounts set aside
for depreciation Of investments from
1899 made up a total of practically
$4,000 000 During the last three
years a further sum OF about $4,000
600 has been written of, making a
total up TO date OF about f3O,O0O,OOO.
Il should be recalled, however. that
this does not indicate the whole OF the
amount actually set aside for this pur-
pose, some banks not publishing any
information on the subject at all, and,
of course, no information is available
as 10 the drafts on the inner reserves,
bankers preferring to keep the figures
secret. But we shall probably be not
far wrong in estimating that in add
ton to the s30,0OO,000 disclosed in the
accounts, a further s20,000,000 has been
utilized for the purpose, making up a
total of about f50,000,000 for this pur'
pose. Even this, however, is not the
whole of the story. as In 1898, when
the prices of gilt-edgcd securities were
so abnormally high, bankers invest
mcnts were valued at somewhere about
$50, 100000 less than their market
value, and they were able TO witness
decline OF that amount In tho prices OF
their securities before it became neees-
sary to allow for further depreciation.
Thus, altogether, we estimate that the
depreciation In the market value OF
securities held by British banks since
1898 has reached a minimum OF $780,
100000. IL will, Of course. be realized
that by devoting so enormous sum