[Volume XXVII
THE CHICAGO BANKER
40
Editorial Comment
new currency bill. The shipment of gold abroad always is a serious matter to any country unless it can be accounted for, and in a measure controlled. Bankers are quite serious over our foreign trade balances and one of the thoughtful ones showed these conditions to be about as follows. Imports of foreign merchandise since January ist have reached $576,000,000, which is $163,000,000 ahead of last year and nearly $70,-000,000 larger than the total for 1906, while exports, on the other hand, have totaled $413,000,-000, or $19,000,000 below 1908 and $12,000,000 under 1907. These figures explain in part this year’s phenomenal movements in international exchange. Rates for sterling are also being influenced by our very heavy indebtedness to Europe, and the high prices demanded for wheat and cotton may check European buying. But sterling may shortly reflect a tightening in money rates, buying of new American securities by Europeans and perhaps a continuance of the interest displayed in our standard stocks since Mr. Harriman’s death.
Western bankers were disturbed at the continued low rate for stock exchange funds in New York, in the face of arbitrary conditions. Many Eastern banks continue to loan at these killing figures in face of the fact that they are below the standard reserve requirements. “Orders from higher up,” as they say in the graft inquiry cases, only can account for the practice. When New York banks are below their reserves, to continue to loan at 2*4 to 2jT per cent with the big crop moving withdrawals in sight is not considered good banking practice.
Oliver C. Fuller
Oliver C. Fuller, chairman of the executive council of the trust company section, reported for that body. A great amount of business was done during the year, and this Mr. Fuller fully explained in detail. In concluding he said: “Your committee believes that the benefits of membership in the American Bankers Association and in this section are so great that no institution will refuse to join if its officers fully understand the scope and purposes of the association. Your committee feels that it cannot too strongly emphasize the advantages gained by the section through having employed a year ago an experienced and capable secretary to take charge of the office of the section in New York and devote his attention exclusively to the work of the section. The secretary has had active charge of practically all of the work mentioned in this report as having been accomplished during the year, and besides attending to the numerous details in connection therewith, has carried on a large part of the routine correspondence that has heretofore devolved upon the chairman of the executive committee. As stated by our president, Mr. Jackson, in his report to the executive council at Briarcliff, ‘the office of the secretary of the section is now a well equipped bureau working in harmony and in connection with the office of the general secretary of the association,’ and the wisdom of gathering together in one group all of the sections of the American Bankers Association, so that they may be in touch with
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Subscription $5.00—10 Cents a Copy of News Dealers HARRY WILKINSON, Editor and Publisher
LARGER PAID CIRCULATION IN THE MIDDLE WEST THAN ANY THREE OF ITS COMPETITORS COMBINED
Mr. Dawes is a recognized authority, skilled in statistics as in banking and his estimate of the growth of Chicago and the middle states, in the banking field, will be questioned by no one and valued by all.
Chicago Bank Deposits
It is appropriate that the Chicago national and state banks should be showing record breaking deposits at the time when the American Bankers Association was holding its record breaking annual convention. Total deposits in Chicago banks at the beginning of business September 2d were in excess of $810,000,000, the largest amount ever reported by the local financial institutions. Fourteen national banks, reporting their condition as at the close of business September ist, showed $402,800,000 deposits, and thirty-one state banks, reporting their condition as at the beginning of business September 2d, show $401,-297,000. Deposits in eight or nine outlying banks are in excess of $6.000,000 and raise the total for the city above $810,000,000. The amount now shown is nearly $5,500,000 larger than the total of June 24th, the last preceding high record.
While deposits in Chicago increased by the amount stated between June 24th and September 2d, the volume of loans shows a slight decrease. The small increase in the loans of the national banks was more than counterbalanced by a decrease in the state banks and trust companies. The state banks also increased their cash resources something more than $1,100,000, while the national banks decreased $2,800,000.
Both the increase in deposits and the decrease in loans were somewhat surprising at this period of the year. Reports of a strongly improved demand for money from nearby country sources, the advance in interest rates and the fact that New York exchange has been selling at a discount almost equal to the currency shipping point, indicated that the loans probably will be expanded considerably over those shown in June.
The even strength of the nationals, fifteen in number, with the thirty-five state banks, is remarkable, the $810,000,000 in deposits being almost equally divided between them.
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Our Foreign Commerce
All was not joy at the big convention this week. Many serious conferences were held, not on postal banks, central bank proposals or the
Growth of Chicago’s Banking Power
Visitors to the city this week had called forcibly to their attention the growth of Chicago as a banking center, by seeing the magnificent bank buildings and banking rooms, unequaled by any other in the world. Her banks have kept pace with the growth of the city. Of this there can can be no ¿doubt. Chicago’s magnificent commercial houses, new depots and mural development have long been the wonder of the reading and travelling world. Now that her banks are in their splendid new homes, and deposits are growing more rapidly than in any other center, the time was ripe for the entertainment of the great American Bankers Association, with a Chicago banker at the head.
At the proper time, too, Charles G. Dawes has called attention to the advances made by Chicago in the field of banking and finance. Mr. Dawes says that “the growth of the banking power of the middle west since 1890 is remarkable and does much to explain the increase in the banking power and prestige of the city of Chicago. There is a growing tendency on the part of country banks of this section to keep a larger proportion of their reserve balances with Chicago banks. The growth of the banking power of the city of Chicago has been accelerated not only by the growth in the banking power of the section surrounding it but in addition through the natural attraction which the greater banking power of Chicago creates for the keeping of a larger proportion of reserve deposits in this city, which is the natural reserve center of this section. I have been making an investigation as to this growth in banking power in the middle west as well as in the United States as a whole. The banking power is made up of the capital stock, surplus, undivided profits, individual deposits, and, in the case of national banks, the circulation outstanding and government deposits. For the United States as a whole this amounted in 1890 to $5,150,000,000, in 1900 to $10,685,000,000, and in 1908 to $17,642,000,000. As indicating the banking power of the middle west, I have included returns from the states of Ohio, Indiana, Illinois, Tennessee, Kentucky, Michigan, Wisconsin, Minnesota, North Dakota, South Dakota, Iowa, Kansas, Nebraska, Missouri, Oklahoma, and Arkansas—sixteen states—all of which lie wholly or in part within a circle with a radius of approximately 500 miles, with the city of Chicago as a center. These states have an area of a little less than one-third that of the United States, exclusive of Alaska and the island possessions. Their population, according to the census of 1900, forms about 42 per cent of the total of the United States. In 1890 the banking power of these states amounted to $1,429,319,000, or 27.75 Per cent °f the entire banking power of the United States. In 1900 it amounted to $2,278,-617,000, or 21.3 per cent of the total for the entire country. In 1908 the banking power of this section amounted to $4,988,244,000, being 28.52 per cent of that for the entire United States.”