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FINANCIAL-LOCAL AND OTHERWISE BY I. A. FLEMING. method of securing accommodations Bank deposits, the money of the comtheir own banks. This, in a way munity in which banks are located, are reversal of the usual reason for the better safeguarded today than ever ance of paper. before. The United States government It certainly looks as if the day current stringency with crop-n and each of the forty-eight states has periods and overextended specu placed all financial institutions under movements had gone for all tim such supervision that decay is detected direct effect of the federal reserve and frequently nipped in the bud beWant Higher Rates. fore it has become sufficiently developed to involve the depositors; freForty-six western roads have a) quently before the stockholders' interfor an advance in passenger rat ests have been entirely absorbed. 2½ cents a mile in the western di The percentage of loss to depositors and 3 cents a mile in the sou of the national banking system in all district, territory west of Mi the years of its existence has been river and south of the Union I about 1 per cent, far below the actual road in Kansas. cost of insurance under any plans for Roads involved represent 120,000 the safety that have been devised. of track, and the proposed advan granted, in both state and interstate Prior to the enactment of the nawould mean $20,000,000 to $25,0 tional banking law paper money passed additional revenue. If only the inte current on the approval of the counrates are granted it will mean $12,0 terfeit detector, but a dollar in paper increase. at night might not be the value of one Special Examiner H. H. Thurtell cent the next day. State banking was interstate commerce commission is synonomous with the wild cat curholding hearings in Chicago. Co rency. Today state banks are considsioners of the different states inte ered on a parity with those protected will fight the advance to the end. by government supervision. ings will take two weeks. Railroad In the District all banks are under ished their evidence yesterday. the supervision of the government. Modern protection of deposits in St. Paul Will Pay Dividen many large cities also includes the private examinations by special examDirectors of the St. Paul railroad iners of the Clearing House Associagiven information to their friends tion. Neither personal friendship nor effect that the regular 2½ per cent political pull of even the strongest kind annual dividend will be paid. can in any way affect the private bank examiner. He has a responsibility back Crops in St. Paul territory are re of him that he must serve, and having unusually promising, the company located a tender spot he must observe surplus of over $40,000,000, and tl its progress toward recovery or requirements of bonds available for port it to the special committee of the clearing house, which will serve notice ings banks demands that they mu that unless the matter is quickly aton properties paying at least 5 per tended to expulsion from the privilege on stock-all tend to the maintena of the clearing house, if a member, or the regular dividend. from the privileges of clearing through For the fiscal year ended June 30, a member, either of which means elimthe company earned 6.33 per cent or ination from business will follow. mon stock, leaving a surplus of $1,04 Clearing house associations are allor 1.33 per cent. For the fiscal powerful in controlling banks. That ended June 30, 1915, the company e many of the leading associations have but 2½ per cent on its common stoc appointed high-grade expert examiners cording to best estimates. With is an evidence that they will not rest surplus from the previous fiscal solely on the controller of the currency of earnings, $1,047,310, it would be nor on the state superintendent sary to take but $1,367,000 from surplus to make the full divide banking. No bank of importance in a city can the common stock. The surplus close its doors, voluntarily or otherby the last statement was $40,86 wise, without endangering other fiscal institutions in a community. Bankers Financial Notes. would be unable to use deposits to any advantage if compelled to carry such a The B. F. Goodrich Company will large percentage on reserve as to be for the year ending December 31, able to stand independent, with unexabout $7,500,000 net, better than pected suspensions in the same city. cent on the common stock. Runs lead to more runs. Bankers can sleep better when assured of safety, Earnings of Lackawanna Steel and all safeguards tend to safety. pany for quarter ended June 30 will When the clearing house examiner better than any quarter since th gives the alarm the special committee quarter of 1913. Estimated f at once follows in an examination of a show net for the quarter, $250,0 bank's affairs, and if there is chance against a deficit of $565,759 to for rehabilitation a helping hand will March quarter. be extended by the association. If, howAlthough there has been some u ever, the affairs of the institution are ness in the general financial situ in such an unfortunate shape that the during the past week, the local m depositors' money is in danger. in the has not reflected a like sentiment event of enforced liquidation, with aspurchasing of bonds has been sets sufficient to care for deposits in a tionally good for this time of the careful liquidation, the clearing house and a strong demand continues f will assume the responsibility therefor and handle the liquidation. active issues. Washington secu have always been favorites with \ When the Chicago National Bank ington investors, and the present and two other institutions, all conshows no exception. trolled by John R. Walsh, were closed The recent sales of bonds, by government and Illinois authorithought, has been largely for ao ties, the Chicago clearing house guaroutside of this city, and this c anteed deposits and reassured owners be wondered at when it is taker of millions of dollars in the failed consideration that high-grade ra banks and solvent banks as well. The issues have been coming into the Walsh banks had 80 many millions on York market in large volume on hand that absolute protection alone ers' options of from twenty to could save disastrous results to other days These sales are for Eur banks, and the protection was deaccount and are preliminary to cidedly costly to the clearing house scriptions to the large British loa being made. An interesting banks. Immediately followed the action esmade by F. L Loree, chairman e tablishing an examiner for the clearcommittee to report on holding ing house. No loss to depositors has occurred since. American railroad securities al shows that from the registers o A few days ago another bank in Chicago was in trouble. The clearing companies, and from the incom house examiner detected it early, and certificates filed with the resp the association, after examination, companies, the foreign holding United States securities amount t guaranteed depositors and saved a disastrous failure with wide-reaching ef576,000,000. Naturally there has a considerable reduction. as fects. This helpful hand which associated have been large sales, due to sub banks now extend shows a decided imtions to foreign loans. It is n able that the old-time conservat provement in the personnel of the banking profession and a greater deper cent first mortgage railroad gree of human kindness. are selling in the New York m In the late 90's a bank failure or two from two to fifteen points below mal prices. in Chicago was sensed by the larger institutions beforehand, and in place of In the New York stock marke the helping hand, aid was refused and unfavorable character of the Ge efforts inaugurated to land deposits note was fully discounted. and, at from the falling banks, even on the had been digested, the market a eve of a failure. ed a much better undertone. They do things differently nowadays. legitimate conditions bearing or market seem to be rather on the Banking Less Profitable. structive side, and in a compara short time it is thought such il Banking is today less profitable in net tant factors as the crop reports, im returns than it was a few years ago. ment in business and war orders a Bankers then generally insisted on the have due weight. A large amount selling of Northern Pacific, St. full legal rate and found periods when Great Northern, Atchison, Louisvill full available funds would be employed Nashville, Baltimore and Ohio, Sou profitably. Pacific, Union Pacific, Reading and The release of millions of dollars of sylvania is directly traceable to don, and it is thought that it is abou reserves by the enactment of the federal for the time being, and that the p reserve law and the dullness in business nently held stocks are not likely in has caused a very heavy reduction thrown over by the English investo rates and subsequent loss of profits to cept in the event of greater nec bankers, which the general dullness in It is understood that the private or business has intensified through keeping vidual subscriber to the British loa large amounts of idle funds in banks. generally pay in full July 20, wh When high-grade six-months' paper can he will get the benefit of 4 1/2 per be placed at 3 per cent bank revenues discount to October 26, the date cannot compare favorably with those of last partial payment. The partial the fat years of 6 per cent and urgent dements are due August 3, 17, 31; Se mand for accommodations. City correber 14, 28, and October 12 and 26. spondents are loaded with country money on which they must pay 2 per cent, even at the time when crop moving is under DRY GOODS MARKET
