TIIE MORXIXG OREGOXIAX, WEDNESDAY, JANUARY 1, 10OS.
PORTLAND BANKS STAND THE TEST
City Now More Firmly Than Ever Entrenched as Financial Center of Pa
cific Northwest Metropolis Leads in Resumption of Specie Payments
a
FROM the time that local business and
commerce In the great Oregon coun
try first necessitated the establish
ment of banks, Portland has stood as
the financial center of the Pacific N'orth
' west and this distinction is more firmly
fixed on the city today than It ever was
before. In banking, as In all else, it is
the test of fire that counts; during the
recent National panic, every bank in . the
city was tested to the utmost, and they
were not found wanting. Two institutions
with small capital that had introduced
questionable methods into a city known
throughout the country for its conserva
tism, were driven to the wall, but the
banks that are known at home and
abroad for their high standing, emerged
stronger than ever before and more firmly
fixed in the confidence of the public.
Portland banks were the first in any
large city of the United States to resume
specie payments. Here is a fact that
speaks volumes. It tells of large reserves
and careful banking methods; of restored
public confidence and the ability of the
banks to meet every demand made of
them. "When the history is written of
the most acute disturbance that ever
threatened the banking world, it will be
told to the credit of Portland that this
city was among the first to return to a
normal basis.
The story of the panic of 1907, so far'as
it involved the Northwest, is too fresh
in the minds of all to need any review.
At a season when vast sums of money
were needed to move the largest crops
of all kinds Oregon and the Northwest
have ever known, came the news that the
great reserve cities of the country had
suspended payment and would no longer
take care of their correspondents. Un
able to collect their demand deposits In
the Kast, Portland banks could no more
continue to advance unlimited sums for
the great crop movements than a stream
of water can continue to flow, after its
supply is shut off. Legal holidays were
therefore declared until arrangements
could be made to replenish the supply of
coin.
While the holidays were in force the
banks could have refused all payments,
but this was far from thfclr actual course.
With all collections from the East at an
BANK CLEARINGS FOR PAST
. SIX YEARS.
Rapid expansion in the volume
' of Portland's business is reflect
ed In the clearings of local
bunks, which are gaining heavily
each year. During the past year
thR per cent of gain was large
and for many weeks consecutive
ly Bradstreet's reports showed
that Portland led all other
American cities in this particu
lar. The following table gives
the bank clearings during the
past six years:
1002 J1M.320. 103.09 I
1!I(I3 17.-i.596.622.53 i
1904 1K,.151,4t9.92
1905 22S. 4.12.71 2.69
l!to 2X1.170.796.26
1 yol 353,851,629.80
December, 1907, estimated. f
absolute standstill, the record made by
the banks was most creditable. At no
time were depositors refused money, al
though a limit was placed on the amount
that eacli might withdraw. To meet
more fully the demand for a circulating
medium, clearing-house currency was
issued.
As in all other cities of any size, clearing-house,
loan certificates were issued
BANKS OF STATE EXHIBIT
.
Oregon Has 141 Institutions Not Under National
Estimated at $60,000,000 New Law Will Tend to
ACCORDING to the latest available
official reports there were 141 state
and private banks In Oregon, with
an aggregate captital stock of approxi
mately $6,000,000, individual deposits
amounting to $40,000,000 and loans and
discounts of $25,000,000. Statistics in the
office of the State Bank Examiner are
incomplete, for the reason that the new
banking law does not compel reports from
banks until May 25, 1908. and in the mean
time many of the banks have refused to
make reports. Tho figures hero given
are estimates based upon the reports of
105 banks which complied with the request
of the Bank Examiner for voluntary in
formation at the time the National banks
reported last August. These 105 banks
reported resources aggregating $J8,345,
908.00. State Bank Examiner Steel Is of the
opinion that these banks are fairly rep
resentative of all the state and private
banks, and at the same rate, the re
sources of all the state and private banks
amount to over $51,000,000.
Though there has been no state .regu
lation of state banks, tho small number
of failures in the recent financial flurry
indicates that these institutions have
been, in general, conducted in accord
ance with safe and legitimate policies.
While the new banking law is far from
being stringent In its requirements, and
could not retard in any way the invest
ment of capital in legitimate banking
enterprises, it provides a system of re
ports and inspection which will eliminate
nearly all speculative features in man
agement. It was the plan of the Iiegis
lature which passed the law that the act
should be amended from time to time as
found desirable, until the state law shall
provide, a system practically the same as
that of the National banking act, so far
as regulation of business is concerned.
The new law applies to all persons,
firms or corporations engaged In a bank
ing business, except National banks, and
requires a capital stock varying in
amount according to the population of
the town in which located. In a town ot
1000 inhabitants, or less, the capital must
be not les sthan $10,000. In a town of
1000 to 2000 inhabitants, the capital must
be not less than $10,000. In a town of
2000 to 5000 inhabitants, the capital must
be jao.000. In towns of over 5000 Inhabi
tants, the capital must be $50,000. At
least 50 per cent of the capital must be
paid In before the bank can be authon
ised to begin business.
Each director must be the owner of un
incumbered shares to .the amount of at
least $5t. Directors - must meet at least
once la tbreo months, examine the loans.
PORTLAND'S BANK CLEARINGS FOR TWO YEARS
SHOW A STEADY AND HEALTHY INCREASE
Portland bank clearings for 1907 show an increase of 22 per cent
over those of 1906. The total clearings during the past year were
$353,851,629.80, as compared with $281,170,796.26 for 1906. The gain was $72,
6S0.83&54. That this gain has been steady for many years is shown
by the following totals: 1905, 1228,102,712.69; 1900, J106,91S.027.48; 1S95, 58,
842.284.51. In the totals for the past year the figures for December are
estimated. For many weeks during the year Portland led all cities of
the country in the percentage of gain. Had It not been for the National
financial stringency and the enforced holidays during November and a
portion of December the aggregate would have been much larger, A
comparison for the past two years follows:
1907. 1906. Increase.
January 2g.I10.S4S.00 $ 2O.08B.O81.03 I 8.024.788.97
February 24.014.883,00 17.045.8S7.13 6,069.043.87
March 32.927,600.43 .22.381.401.11 10.546.208.32
April 32.1 10,628.36 10. 405.289.il 12,705,339.45 5
May 32,692.506.98 22.06O.277.94 10.6S2.229.O4
June 31.974,003.71 21,506.184.08 10.468.719.63
July 32,034.828.37 22.6t44.636.9l 9,390.191.46
August 30,4.(8.488.69 22.381.906.03 7.916.582.6U
.September 30.172.440.01 25.098.S09.86 5.073.931.15
October 36.963.239.06 20.642.671.26 7,322.367.80
November 20,548,909.06 20.657.353.9O 9.10S.644.S4
December 21,7SO,333.93 29,040.447.90 7.200.111.97
Totals $353,851,629.80 $281,170,790.26 $72,6S0,S33.54
Estimated.
Decrease.
for the accommodation of the banks In
their dealings with each other, marking
the first time in the history of local
banking when daily balances were not
paid In actual coin at the close of busi
ness. Of these loan certificates, however,
only $1,000,000 were Issued, which is a
small amount in comparison wiu
the volume of local banking business.
Nothing better shows how completely
normal conditions have been, restored
than the fact that $690,000 of these cer
tificates had been retired up to December
26. Of the balance, $225,000 was Issued to
the suspended Merchants' National Bank
and cannot be retired until this bank
resumes business. This leaves only $85,
000 of loan certificates still in use by the
Portland banks.
Local banks also issued $1,150,000 of
clearing-house certificates for general
circulation. These were in the. nature of
asset currency, based on grain or other
commodities actually stored in warehouse
or in shipment. These certificates were
not payable until February 1, but never
theless the banks are redeeming them
with gold as fast as they are presented.
This action was entirely voluntary on the
part of the banks, and on December 26
only $590,400 of this paper was outstand-
, ing and the remainder Is being taken
I up just as rapidly as it is presented to
any member of the Clcaring-House Asso
ciation.
Throughout the financial flurry, Port
land banks took care of all payrolls for
firms and individuals. By doing so
money was kept in circulation and there
was no great stagnation of business.
The usual course was to supply half cash
and half clearing-house certificates to
employers for the meeting of payrolls.
In this way not a salaried man or woman
in the city suffered, for the asset cur
rency was at all times accepted at its
full face value by business houses.
It is to the .credit of Portland banks
that they were able to get money to meet
these claims when every city in the
country was zealously guarding its
money. At the worst stage of the panic
is was necessary in some cases for the
banks to pay a premium of 34 per cent
for gold. The usual rate of exchange
between Portland and New Tork Is 1-10
of 1 per cent, and yet the banks paid the
excess and are still paying a premium of
$1000 for every $100,000 secured. The banks
themselves have met, and .are meeting,
this premium and .have not charged de
positors or country correspondents , a
single cent of premium for gold.
Portland lifted the holiday lid Decem
ber 16 and began the payment of every
demand in full in gold. Evidence of the
complete confidence of the public in the
banks was the fact that there was not
the slightest departure from the ordinary
run of business. Those who wanted gold
got it. but even the day the lid was
securities, resources and liabilities of
every kind, make a record of the result
of the examination and each , director
must sign the record. This requirement
is expected to secure boards of "directors
who will direct."
State banks are prohibited from declar
ing dividends until at least 10 per cent
ot the net profits has been carried to - a
surplus fund, which fund must be main
tained at not less than 20 per cent of
the capital stock. Owners, officers or em
ployes of banks are forbidden to borrow
from the bank without the recorded ap
proval of a majority of the board of
directors, and if the board grants such
loans in an excessive manner or in a
manner incurring great risk, the directors
assenting to the loan are to be held lia
ble for any damages the bank may sus
tain. Loans to one person or firm must not
exceed 25 per cent of the capital and
surplus, but in the case of discount of
bills of exchange drawn against existing
values, discount of commercial and busi
ness paper, and loans made on real es
tate or personal property, bills of lading
and warehouse receipts representing ac
tual value, the amount of the loan Is
unlimited provided that (the loan does not
exceed 75 per cent of the value of com
mercial paper, warehouse receipts or per
sonal property nor 50 per cent of the
value of real estate.
Banks in towns of less than 50,000 inhab
itants must have on hand at all times
cash or deposits in approved banks not
less than 15 per cent of demand liabili
ties and 10 per cent of time deposits. In
cities of more than 50.000 inhabitants
banks must carry In cash or deposits in
HIGHER EDUCATION IN OREGON
OREGON. is fortunate in the posses
sion of excellent educational facil
ities. Among the pioneers who
opened up the rich Oregon country were
many well-educated men and women who
established elementary schools that were
soon followed by institutions of a higher
standard. These pioneer schools, from
small beginnings have developed into col
leges that compare favorably with, most
Eastern institutions. An adequate sys
tem of public schools, is also maintained.
The University of Oregon is located at
Eugene, with law and medical branches
in Portland. The enrollment of this in
stitution has increased rapidly, and its
curriculum Is of high standard. The Ore
gon Agricultural College . is located at
Corvallls and its attendance Is the largest
of any school in the state. Both Insti
tutions are supported by the state, and
able instructors are employed.
Pacific University, at Forest Grove, and
Willamette University, at Salem, are the
lifted there were no noticeable withdraw
als and deposits were heavy. .
This excellent condition of the banks is
not confined to local institutions, but ex
tends throughout the state. It Is a most
remarkable circumstance that since specie
payments were resumed hardly a single
call for cash has come from the country
banks. Two of the largest banks lit Port
land reported December 23 a total of only
$300,000 called for by country banks since
December 16, indicating that the institu
tions throughout the state are in the best
of condition. On the .contrary, some gold
has been returned from the interior
banks. Throughout the more serious
stages of the trouble the Portland banks
rendered valuable aid to their country
correspondents.
Deposits in the Portland banks are now
rapidly increasing. As an instance of
this the deposits of the First National
showed an increase of approximately
$600,000 between December S and Decem
ber 22, and every other bank in the city
reports gain. A portion of this doubtless
is the return to circulation of money
that was hoarded during the weeks of the
panic.
Without taking Into consideration the
banks that were closed, it is estimated
that there is now $45,000,000 or more on
deposit in Portland banks. Large amounts
of money are still owing from the East,
and as soon as the entire country returns
to a cash basis, as Portland has done,
this money will be available. In addition
to this it is estimated that at least $20,
000.000 will flow into the state during the
next three months in return for wheat
and other products, money for the ship
ment of which is being advanced by the
banks.
"Conditions will constantly Improve, as
they have been doing," said a leading
Portland banker a few days ago. "Ore
gon will soon be full of money, and there
will be little to remind us that there has
been any trouble. This state is produc
ing the commodities that the Nation has
to buy. and hard times here are an im
possibility." As indicative of the strength of the
Portland banks, a significant circum
stance that may be cited is the c n
nouncement of the First National Bank
that beginning today it will no longer
pay daily balances on deposits of other
banks. With deposits from banks,
amounting to many millions, this instance
shows the excellent condition of the In
stitution as there are very few banks in
the country that have abandoned the
custom of paying these balances, the only
other one known to the writer being the
Chemical National of New York.
A -change in the local banking situa
tion to take effect today is the absorption
of the Commercial Savings Bank by
George W.' Bates & Co. Business will
be carried on under the name of George
W. Bates & Co., Bankers.
STRENGTH
Act With Deposits
Increase Stability
approved' banks not less than 26 per cent
of demand liabilities and 10 per cent of
time deposits. In every case at least
one-third of the required reserve must be
in actual cash.
These provisions, together with those
for the examination of banks, filing of
reports and the appointment of receivers,
are the most Important features of the
new law for the regulation of state and
private banks In Oregon.
The condition of the state ana private
banks In Oregon at the time of the last
available report, August 22, is shown in
the following statement, which covers
105 banks reporting. To get th approx
imate figures for all the banks, the sev
eral items must be increased by one
third: RESOURCES. .
105
Items State banks.
Loans and discounts ......... .$19,461,846.65
Overdrafts' .' 984.284.73
Securities, bonds, etc 4,323,608.99
Banking- house, furniture and
fixtures ' ' 992,248.96
Other real estate owned 380,297.27
Due from banks and bankers., 9.35.322.21
Checks and other cash Hems.. 161.583.82
Exchange for clearing-house. . . "108.134.14
Cash on hand 2.698,581.32
Totals .'..$38,345,908.1)0
LIABILITIES.
105
Items State banks.
Capital stock $ 4.58S.201.SI
Surplus fund ................. 860.717.83
Undivided profits 723.861.96
Dividends unpaid 2,355.00
Due to banks and bankers.... 2,090,185.39
Individual deposits 29,074,133.71
Notes and bill re-discounted.. 31,360.39
Bills payable 75,000.00
Totals $38,345,008.09
oldest institutions of higher education in
the state. Pacific has the largest en
dowment of any Oregon college and a
commodious women's boarding-hall has
been added to its equipment during the
past year at a cost of more than $50,000.
Pacific is a non-denominational school,
but is controlled by Congregationalists.
Willamette Is a Methodist Institution.
The Catholics have two colleges, sev
eral academies and numerous parochial
schools In Oregon. Columbia University
and Mount Angel College are their lead
ing institutions. The other denomina
tional advanced schools in the state are:
Albany College, at Albany, Presbyterian;
McMinnville College, at McMinnvllle,
Baptist; Philomath College, at Philo
math, Evangelical: Pacific College, at
New berg, Friend; and Dallas College, at
Dallas.
Portland Academy and Pendleton Acad
emy are well known among the prepara
tory schools, among which there are a
large number of private Institutions.
The state maintains normal schools at
Monmouth, Ashland, Drain and Weston.
iFirst National E
A. L. MILLS, President
J. W. NEWKIRK, Cashier
CITY REALTY AS INVESTMENT
Portland's Rap.id and Steady Growth, Due to Its
Strategic Position, Insures Profit on All Holdings
By C. K. Henry.
MANX years ago a prominent East
ern financier said that a young
man could make no better In
vestment than purchasing real estate
in or near a growing and progressive
city and then holding it. This asser
tion has been more than borne out by
facts within the past 15 or S) years.
One of our sales during the past
Summer was that of a piece. of prop
erty belonging to a family, who had
held It for many years. Through some
business settlements, the family came
fnto possession of some money, which
they hesitated to loan or to deposit in
banks. They managed to hold the
W. M. LADD
SAYINGS BANK
of Portland, Oregon
Capital and Surplus - - - $1,500,000
PAYS
NO INTEREST
ON ACCOUNTS
property through various vicissitudes
always promptly paying the taxes,
street improvements and other assess
ments. During the Summer the prop
erty was .sold by us, the sale netting
the owners a handsome profit on their
investment of many years ago. ' ;
The boundless resources of this ex
treme Northwestern country are1 "at
tracting people from all over the Unit
ed States,- who are coming here in
large numbers to make their homes.
They are further . attracted by our
wonderful climate and splendid Bull
Run water. The constant influx of
these people is bound to make Port
land property more - than hold -its own.
Those who intend to establish manu
G. E.
lapd a
BANKERS
PORTLAND, OREGON
Established 1859
Transact a General Banking Business
Savings Books Issued
INTEREST PAID ON
TIME DEPOSITS
W. C. ALVORD, Assistant Cashier .
B. F. STEVENS, 2d Asst. Cashier
factures must have factory sites; the
wholesalers must have buildings erect
ed for them, and the retailers must
have stores. Many of these people
have no desire to, or have not suffi
cient means of their own, and must re
sort to renting flats and apartment
houses, thus creating a demand for a
class of property that invariably brings
good rentals.
. It may, appear to many ultra -conservative
people that we may have al
ready too many buildings, but this is
not so; and the accommodations will
soon prove Inadequate as the number
of new arrivals continue to increase.
A prominent firm recently announced
its determination to move Into larger
quarters.' As soon as this fact became
known, the landlords and present ten
ants were- besieged by scores of firms,
who were anxious to obtain flie quar
ters about to -be vacated.
The development of our timber re
sources alone in the next 10 years
will be the means of increasing our
population several hundred thousand,
and bring into the country millions of
LADD
LTOK
DEPARTMEN
on Savings Deposits
dollars. Our mines have only been
scratched, yet even with present con
ditions, our annual output of gold is
counted in millions; yet virtually noth
ing is said about it. A prominent Port
lander said that one could take a map
of Portland, and especially of tlie "West
Side, and with eyes blindfolded, could
point to almost any piece of property
which, if purchased at present prices,
would make a safe Investment. An
Investment in Portland property is an
investment in something real, some
thing tangible. In a growing city like
Portland, it always has a value which
cannot be said of many so-called in
vestments dally offered to the public
ftt l&r6. ...
Portland is today one of the most
progressive cities in the United States.
Its geographical position is such hat
it stands almost unrivaled among the
cities of the world. It has tributary
it a territory embracing over 200,000
square miles a country of boundless
resources, which is destined to make
this city one of the leading cities of
the United States -
J. W. LADD
nn