Show RESERVE SYSTEMS SYSTEM'S I I DIVIDENDS R ANAL I E Ei i 1 Bankers Find Increased Payments Payments Payments Pay Pay- ments to Member Banks Would 1 Be Small Inducement i I J i Various proposals that member banks s in the Federal Reserve System should participate more largely in its net earnings through an nn increase inthe in inthe inthe the dividend rate above the present i fixed 6 G per cent would be a very j j small fi financial ancial inducement to them it is declared in a recent study of this I i subject by the Economic Policy Polley Commission Commission Com Com- mission of the American Bankers ers AsI As As- I I This Is shown the commission commis commis- r sion says by a theoretical forecast on the basis hasis of the past six years of ot additional ad I earnings that would be disI disbursed disbursed dis dis- dis- dis to member banks during the I next six years under two plans intro Intro- i t In bills the United States II Senate The bill provides that Federal Reserve Bank earnings after I present C G per cent dividends ivl en s to members mem mom hers bers and completion of of ofa a per cent surplus should all be distributed as 35 extra dividends to the stockholder banks the report says If It the earnings earnings earnings earn earn- ings of each F Federal Reserve bank were distributed among among- Its own members mem memo hers bers there would be no extra divIdends dividends divi divI- in tho the Boston New York Phila- Phila P Ua- Ua adelphia Cleveland Chicago and San Francisco districts during durin the next six years but the other six Federal Reserve Banks Danks would pay annual extras extras extras ex ex- tras at the following rates Richmond per c cent nt Atlanta per cent St. St Louis 3 50 per par cent Minneapolis 1 51 per cent ceni Kansas City p per percent percent r cent Dallas Danas per cent If It the earnings pooled and paid out to all members in ia all districts each er would receive recel an nn average average average aver aver- age annual extra dividend of ot 78 per cent Under this plan no franchise tax as now would be paid ai by the Federal Federal Fed Fed- eral Reserve Banks to the Federal Government Another Plan An Analyzed The Glass bill bIU would provide that after present 6 per cent dividends one half tho remainder should be paid to member banks as an extra divi dead with the residue going to surplus surplus sur sur- plus and Federal Government as franchise fran fran- chise tax tar The average annual extras to members would be as follows Booton Boston Boston Bos Boo ton District 2511 per er cent New York 48 per cent Philadelphia per vcr percent percent cent Cleveland per cent Richmond Richmond Rich Rich- mond per par cent Atlanta per percent percent percent cent Chicago per por cent St. St Louis per cent Minneapolis l per percent percent percent cent Kansas City per cent Dallas Dallas Dal Dal- la las per cent San Francisco per cent If It these extra funds furs were 1010 w rg l pooled d the result would be an extra average an dividend of or per cent for tor each member Under this plan the system would still sun pay a as now an annual franchise franchise fran fron chise tax amounting to on the average By r way of concrete instance the rep repol report rt gays a o member bank having capital and flunks f of therefore therefore there there- fore foro holding Federal R ink B k stock amounting to on w which itis It Itis is receiving under the present 6 G per cent dividend arrangement would with the addition of ot each 1 per ver cent to the dividend rate receive an additional addi income of ot 60 a year If It each member bank will figure figuro out for itself the tho dollar cents cents and gain it would enjoy we are confident it will be agreed that tho the gains are small as against the economic disadvantages which can bo ho 1 pointed out It con con- u S. wf r Kw r t f |