[Volume XXV
THE CHICAGO BANKER
24
Marshall & Ilsley Bank
Milwaukee, Wis.
ESTABLISHED 1847
Capital $500,000 Surplus $250,000
Oldest Bank in the Northwest Conservative Progressive
We take pleasure in placing our facilities at your disposal and should be pleased to have you write us if you are contemplating opening either an active or a reserve account in Milwaukee.
OFFICERS AND DIRECTORS
JAMES K. ILSLEY, President
JOHN CAMPBELL, Vice-President	HARRY J. PAINE, Asst. Cashier
JOHN H. PUELICHER, Cashier	G. A. REUSS, Mgr. South Side Branch
SAMUEL H. MARSHALL	J. H. TWEEDY, Jr.
ROBERT N. McMYNN	C. C. YAWKEY
GUSTAV REUSS
TIE© Audit Company off Illinois
1137 First National Bank Building, Chicago
Specialises lira Atadlitisagl aiadl System־־ atlslimgi Public Service Corporations
C. W. KNISELY, C. P. A.
President—Manager REFERENCES:
Leading Bond Houses dealing in Gas, Electric and Railway Securities
Sedgwick, president of the Leavitt and Johnson National, will be the president of the new corporation, while Fred E. Stewart will be in charge of the offices of the new concern.
There has been no attempt at incorporation as yet, although a considerable portion of the stock has been subscribed.
The new corporation will be separate and apart from the L. & J. Bank, although Mr. Sedgwick will retain his relations with the bank and its officers
Under the national banking laws a national bank may not carry on a real estate and loan business and at the same time do a commercial banking business. Since the organization of the L. & J. Bank, first as a private institution, it has always carried more or less of the real estate and loan business, and the Comptroller of the Currency has ordered the segregation of the two branches of the institution. It is this branch of the business that the new organization will take care of.
“High Interest Allowances”
New York, August 27.—New York bank officers are wondering how it is that out-of-town banks find it profitable to allow depositors 3 and 4 per cent interest on daily balances when the Wall Street market offers t,1/¿ and 3^4 per cent for five and six months’ loans. A New York banker, on returning from a visit to several of his out-of-town correspondents, said of the high interest allowances by banks of interior cities:
“I do not see how the banks of Buffalo and other interior cities can continue to pay 4 per cent for deposits in such a money market as we have to-day. It is possible that such institutions may find local borrowers who are willing to pay 6 per cent for their money, but the volume of such loans must be small or inadequate to employ all the money that banks willing to pay 4 per cent can secure. Some such institutions, I know, are trying to meet the situation by investing in bonds yielding between 4 and 5 per cent, but the recent advance in the bond market has carried most of the list to a level where a net 5 per cent return means that the buyer has assumed more or less risk which a bank ought not to think of after the experience of a year ago. The curse of buying deposits at an excessive interest basis is a weakness which bankers of all sections recognize, although very few have the courage to refuse business, even when it is offered at almost ruinous terms.”
to be paid in coin; interest on the public debt was paid in gold; and foreign payments were necessarily made in gold.—C. D. Hancock.
V
New York Stock Exchange Reform
New York, August 25.—The laxity of the governing body of the New York Stock Exchange has frequently been commented upon in various financial newspapers not given to sensationalism, but actuated by the very best motives. An indiscriminate attack upon the very necessary functions of the stock exchange was warded off last year with difficulty. Those who realize the delicacy of financial machinery and the deplorable consequences that might follow the throwing it out of gear had hoped that the governors would immediately begin to set their house in order, with a view to removing grounds for future criticism. Little or nothing, unfortunately, was done. The unlisted department is conducted on the same free and easy lines as before. There have been symptoms of highly questionable manipulation —in other words, “washing”—yet until yesterday no steps were taken, so far as is known, to terminate abuses. Saturday’s deplorable fracas cannot fail to bestir afresh hostility to the stock market. It is whispered that Governor Hughes, if re-elected, will carry his antigambling crusade into the stock market district. Well, the stock exchange’s blood must be upon its own head. It has refused to accept wise and well meant warnings. It is now on tlie defensive. Let it justify its inaction in the eyes of the public. Silence may be dignified, but in this instance it is fraught with danger. The old plea that the exchange is a private club cannot hold water in these days of enlightened public opinion on the vital importance of publicity.
V*
New Iowa Trust Company
Waterloo, la., August 26.—While all plans are not perfected the gentlemen of the west side who recently made tentative announcement that a loan and trust company would be organized have gone so far as to rent an office for the new financial institution. A room has been secured on the first floor of the Irving House, and the necessary alterations are being made to allow an entrance from Bridge Street.
It has not been determined what the amount of the capital stock will be, and neither can a personnel of the officers be given at this time. It is generally understood that J. E.
New Land Bank for Egypt
A scheme for yet another English land bank in Egypt is apparently on foot, for it is reported that a group of prominent London capitalists have in contemplation the formation of a mortgage bank in that country. The institution, it is stated, will be of considerable importance, the capital being $5,000,000, while extensive bond issues are also foreshadowed. The head office will be in London, but an influential local board will conduct the operations in Egypt. It is understood that the institution is intended to carry on a class of mortgage business which would not be undertaken by the existing Agricultural Bank of Egypt. The development of this ancient country during the last ten years has been of a remarkable nature, and it would seem that room still remains for further development.
V
Small Canadian Bank Failure
Another smali Canadian bank has had to suspend payment, in the shape of the Banque cle St. Hyacinthe, of St. Hyacinthe, Quebec. The institution was founded in 1874, but had quite a small business. Its deposits only just exceeded $1,000,000, while the note circulation amounted to about $260,000. It had branches at five other places, but no dividend was declared for the past year, so that it would seem to have been in trouble for some time past. No significance should be attached to these small Canadian failures, as the institutions affected had little to do with the general business of the Dominion.
Things No Banker Should Forget
The national banking system was established during a time of suspension of specie payments, when the United States legal tender notes had driven gold and silver from circulation. These legal tender notes, or greenbacks, formed the medium of exchange ; and all bank issues were based upon and redeemable in them. By 1868 the national banks had largely displaced the state banks, and their circulation had completely displaced the state bank circulation. The national bank notes, being redeemable in greenbacks, circulated at par with greenbacks, and followed them in their fluctuations up and down. The actual business standard was a depreciated paper, and the national bank notes were paper based on paper. Gold was still used, however, for three classes of payments. Duties on imports were required