The Washington times., 1928-04-23
BANKS DISCUSS
BUSINESS
COSTS
BY RICHARD HATTON

Gar-reachlng interest, lnaL AS,
fact, a public question and no
merely matter for consideration
by bank officers and solemn board!
OF directors is increasingly appar
emit. Possibly this is in part due
20 the more intimate association
of bank patrons with officials o.
their banks resulting from tht
modern trend OF cooperation ans
understanding. Undoubtedly The
condition is partly due to the eff
forts or financial institutions tt
take the public into their conf
dence regarding the business Of
banking to q greater extent thar
formerly through constructive ad
vertising. No matter what the
cause, the public is beginning tc
understand and to appreciate some
what the services rendered by the
banks and to sense that this service
Is well worth the absurdly small
price asked for the accommoda.
ton.
So much news value is being &C
corded information regarding the
cost Of efficient banking that news
featuring bureaus are finding II
worth while to prepare data upon
the subject. AT the same time bank
ers' conventions and meetings are
listening to papers upon the prob
lem prepared by qualified experts.
POoIe's Chart Valuable
One Of the latest compilations on
the subject is by the FL. N. Stronck
Company, Of Chicago, while of even
more scientific value is the excellent
digest and chart presented recently
at q bankers conference in Rich.
n1ond by President John Poole. OF
the Federal-American National Bank.
Copies Of the Poole charts one GOV.
ering a six-year period and one a
detailed chart for each one OF the
six years, are now being distributed
to Washington banks.
In connection with the Poole an.
alysis the figures OF the Stronck
Company are of general interest as
showing how the earnings and ex.
penses of national banks in Wash.
ingfon. compare with averages in
other parts of the country. 1t is
based on reports Of national banks
70 the Comptroller OF the Currency
ana provides yard stick by which
each bank may measure its own
trends OF earnings and expenses
against the average for comparable
cities, sections, States, or the coun.
try as whole.
Figures for ID. C. Banks
Following are the ratio figures
covering the fiscal year 1927 for afl
national banks in Washington as
given by the StroncL Company.
Net additions to profits, IO.I7 per
cent OF capital and surplus; as com.
pared with 9.24 per cent sc all "a.
tional banks In the United States.
Interest on deposits, 27.6 per
cent or gross earnings; as COMPARED
with 1913 per cent for the United
Interest and discount on borrowed
money, IL per cent OF gross earn
ms: as compared with LIS per cent
for the United States.
Salaries and wages, 22.7 per cent
of gross earnings; as compared with
Is.6 per cent for the United States.
Taxes. 90 per cent of gross earn.
ings; as compared with 81 per cent
for the United States.
Other expenses, 81 per cent of
gross earnings: as compared with
LA per cent for the United States.
Net losses, 81 per cent Of gross
earnings; as compared with 3.7 per
cent for the United States.
Net additions to profits, 24.5 per
cent or gross earnings; as compa red
with 20.S per cent for the United
States.
Interest paid on deposits, 31.2 per
cent Of interest and discount re-
ceived; as compared with 80 per
cent for the United States.
For the year 1927 the annual re.
port or the American Tobacco Com
pany shows net profit of S23, 309, :
s89.16, or an increase of 500. 594 80.
Nineteen hundred and twenty-six
was, up to that time, the banner
year in profits.
The total earnings on the com
mon stock of the American Tobacco
Company $50 par value) were, in
1927, $10.29 per share as against
$3.50 in 1926. thus carrying, after
the payment of So per snare of
dividends. S4.472 ,964.S7 as an addi.
tional to surplus. The surplus at
the end of 1925 was $34 ,276.4O,
and this addition brings it I'D to
S39, 421, 241.27 at the end OF 1927.
The statement reflects a very
strong position in cash and quick as.
sets.
Insurance Gains
Sales of ordinary life insurance
during the first three months of 1928
show production per cent higher
than sales during the same period
last year. This tends to disprove
the statement which has often been
made that the year of the Presiden.
tial election is one of uncertainty and
of poor business conditions, which
would necessarily be reflected in
smaller life insurance sales. Com,
plete proof of the fallacy of this
statement is offered by the Life In
surance Research Bureau, which
has investigated past sales records
with interesting results. Over a 25
year period it was found that. while
the average yearly gain was 9 per
cent during election years sales in
creased IL per cent on the average
for United States life insurance com
panies.
Sales recorded during March by 81
companies reporting to the Research
Bureau are about 500, 900 ,00(
greater than the volume recorded II
February. This total of 1892 $50 ,00(
is approximately $1,000 900 less thar
business produced in March. 1927
which is the second highest month
on record. This months total ranks
fourth in volume of business pro
duced. Most sections record Sons
gains.