274 



ECUADOE. 



It seems somewhat incredible, in the face of 

 such circumstances, that President Moreno at- 

 tempted to borrow $5,000,000 in February 

 last. Something still more incredible is the 

 ostensible profit of the Banco del Ecuador, ap- 

 parently substantiated by the balance-sheet of 

 that institution, which we here transcribe : 



ASSETS. 



Cash, in gold and silver coin $494,939 82 



Debts in accounts- current 566,414 77 



Bills receivable 493.255 38 



Inventory 60.826 43 



Government of Ecuador 247,589 90 



Shareholders 300,000 00 



Loans to the Government 631,341 70 



Government, for tithes 69,027 21 



Con version of coins 309,173 41 



Branch Bank at Quito 263,946 02 



Branch Bank at Cuenca 239,515 96 



Shares in the " Banco Hipotecario " 1,700 00 



Yaguachi Railway 7,130 61 



Sundries 459.252 90 



$4,134,114 11 

 LIABILITIES, ETC. 



Capital $1.000,00000 



Notes in circulation 2,040,773 00 



Credit in accounts-current 187,882 99 



Deposits on demand 31,108 19 



Interest on transactions not at maturity 5,446 84 



Credits 576,527 54 



Deposits on time 42,408 61 



Profit and loss 124,45620 



Sundries 125,510 84 



$4,134,114-11 



This profit of $124,456.20 (in Eucadorian 

 money*) the directors of the bank proposed to 

 apply as follows : 



Public works, as per contract with the Gov- 

 ernment $10,000 00 



For account of inventory 9,436 20 



Dividend of 15 per cent, on $700,000 effective 

 capital 105,000 00 



$124,456 20 



At a cursory glance, the condition of the in- 

 stitution looks favorable ; but a careful analy- 

 sis of the various items of the balance-sheet 

 shows that all is not gold that glitters. 



The item, "interest on transactions not at 

 maturity," $5,446.84, is either due or not due 

 the bank ; if due, it should go into the profit- 

 ancl-loss sheet ; and, if not due, it should not 

 figure at all, unless it be for display. 



The item $309,173.41, under the title "con- 

 version of coins," which figures as a debt to 

 the bank, loses its virtue by the explanation, 

 that the government of Sefior Moreno, desirous 

 to withdraw from circulation a quantity of de- 

 preciated coin, directed the bank to effect the 

 redemption, which was done at the current 

 nominal rates of the coins ; but which coins, 

 when realized as old metal, left a net loss of 

 $309,173.41. This deficit, or loss, if bearable 

 by the Government, should be incorporated in 

 the account of the Government, else it will be 

 understood that the Government is not re- 

 sponsible for its liquidation. It ought, there- 

 fore, to be treated as a profit-and-loss item, 

 and, viewed thus, the statement would stand 

 as follows: 



* The peso of Ecuador is equivalent to 71 cents. 



Conversion of coins $309,173 41 



Less the putative profit in the account 124,456 20 



Less in reality $184,717 21 



The nominal capital of the bank is displayed ,-, 

 as $1,000,000 00 



But the amount owed by the chief share- 

 holders (socios) 300,000 00 



The effective capital is really but $700,000 00 



On which the 15 per cent, dividend is com- 

 puted. On the bngis of this capital the 

 uank contracts liabilities thus: 



pu 



ba 



Notes in circulation $2,040,773 00 



Credits (foreign) 576,527 54 



Credits in accounts, etc 187.882 99 



Sundries 125,510 84 



Total $3,930,694 37 



more than quadruple the amount of the capital. 



The Yaguachi Railway is indebted to the 

 amount of $7,130.61, and the enterprise, being 

 a Government one, the indebtedness should 

 be classed as a Government debt. 



According to one of the Guayaquil journals, 

 a loan or credit for 80,000 had been furnished 

 the Government for this railway, on the re- 

 sponsibility of the bank. This sum does not 

 appear in the foregoing balance-sheet, but may 

 in part be hidden in the item sundries. If, 

 however, it be nowhere in the statement, it is 

 more than likely that, in the present state of 

 depletion of Senor Garcia Moreno's treasury, 

 it may be set down as an additional liability 

 of the bank. 



Among the following assets of the bank, some 

 are justly regarded as of doubtful solidity : 



The Government of Encaclor. . . .$247,589 90 



Loans to the Government 631.341 70 



The Government, for tithes 59,027 21 



Conversion of coins 309,173 41 



Branch Bank of Quito 263,946 02 



" " Cuenca 239,515 96 



Yaguachi Eailway 7,130 61 



Sundries 459,252 90 $%216,977 71 



Which, deducted from the gross assets 4,134,114 11 



Leaves $1,917,186 40 



To meet the following liabilities : 



Notes in circulation $2,040,773 00 



Accounts-current 18T,882 99 



Deposits on demand 31,108 19 



Credits 576,527 54 



Deposits on time 42,408 51 



Sundries 125,51084 3,004,21107 



Deficit ; $1,087,074 07 



The accounts above stated as due by the 

 Quito and Cuenca branches of the bank may 

 possibly be available, unless the operations of 

 those branches wifrh Senor Moreno's govern- 

 ment have been proportionately extensive with 

 those of the present bank at Guayaquil. 



Of the assets enumerated in the preceding 

 statement, the Government owes no less than 

 $945,089.42, or nearly one-third more than 

 the entire capital of the institution. 



No words could be given that would throw 

 more light upon the present financial situation 

 of the Eucadorian Republic than the hurried 

 sketch here drawn of the chief, if not the only, 

 public institution in the country. 



The injurious effects of the unfortunate state 

 of the finances were so visibly felt in commer- 

 cial circles, that the mercantile community of 



