APPENDIX. 577 



Bonds deposited $1,000,000 



Currency received 90,000 



Received by bank: — 



Interest on $90,000, six per cent $5,400 



Interest on bonds, four per cent 4,000 



$9,400 



Reductions:- 



Tax $900 00 



Cost of redemption 45 00 



Express charges 3 00 



Plates 7 50 



Agents' feee 7 00 



Sinking fund 418 56 



$1,381 06 



Net receipts $8,018 94 



Interest at six per cent on market value of bonds .... 7,702 50 



Profit by circulation, above what could have been made by 



loaning the cost of the bonds at six per cunt $316 44 



Or .246 per cent per annum. 



(Compare the rough statement figured out in the text, page 144.) 



Deposits in national banks, October 5, 1897 $1,869,000,000 



It should be evident that the profits of nati(;nal banks are mainly derived 



from loaning this vast amount of money deposited, rather than from the trivial 



pro"fit on circulation. 



Net earnings of national banks for a series of twenty-eight years, computed on 

 capital and surplus; — 



1870 11.8 percent 



From the above it will be noted that as the country grows richer and money 

 more abundant, the profits of banking decrease. With all the risk of loss, it 

 evidently pays best to lend money to poor people. Note the reduction in bank- 

 ing profits immediately following the panic years of 1873 and 1893. This was 

 partly due to losses from bad debts in those years, and partly because people 

 were restricting their business operations, and not borrowing money. 



It is also important to note the very large number of shareholders in national 



37 



