from a tax on bonds deposited with the United States Treasurer, and also receives interest upon them. At the same time the bank lends and uses its circulating notes at a profit. In other words, the bank receives interest on the bonds deposited with the Government, and may issue the par value of the bonds in national bank notes which cost the bank but a trifle for the paper and engraving, and which it lends and uses as any other currency, thus making double interest on the same capital. A national bank desiring to go into liquidation is required by law to deposit with the United States Treasurer six months before such liquidation, an amount of lawful money equal to its outstanding circulation. A sufficient amount of the money thus deposited must remain in the Treasury until the last outstanding note shall have been presented for payment. The Government derives the benefit of lost or destroyed notes. 708. 1. In a town of 4739 inhabitants it is desired to organize a national bank. How many persons are necessary for organization and what amount of capital is required? 2. A city having a population of 51209, wishes to have a new national bank. What must be the amount of capital necessary to organize the bank, and what will be the par value of a share of the stock? 3. A national bank having a paid up capital of $300,000 desires to issue circulating notes. What is the least amount of registered bonds that it can deposit as security for such notes? What amount of notes will it receive? 4. A bank deposited $375000 in bonds with the Government. How much is its redemption fund? 5. What is the annual tax paid by a bank having an average circulation of $287654? 6. A national bank in Philadelphia had deposits amounting to $675420. What was its reserve fund? 7. A certain national bank had a capital of $750000, but by poor management it lost $180000. The loss was made up by assessment of the stockholders. What was the rate of assessment? 8. Mr. B. owned 25 shares of stock in the bank referred to in the last problem. How much did he have to pay? 9. A national bank with a capital of $825000 earned $37500 net profits in 6 months. The surplus fund was 15% of the capital. What amount was carried to this fund, and how much will remain of the profits after declaring a semi-annual dividend of 3% ? SAVINGS BANKS. 709. A Savings Bank is an institution which receives deposits of money for safe keeping, and allows interest to depositors. A savings bank supplies each of its depositors with a bank book in which are entered the sums as deposited or withdrawn. At certain regular periods the interest at a fixed rate is computed on all sums that have been on interest for the required term. This interest, if not withdrawn, is placed to the credit of the depositor and draws interest the same as deposits. 710. An Interest Term is the period of time for which interest is regularly declared on deposits. 1. The interest term is usually 6 months, commencing Jan. 1 and July 1; but with some banks it is only three months, commencing Jan. 1, Apr. 1, July 1, and Oct. 1. 2. Some banks allow interest on money which has been on deposit during an entire quarter previous to interest day, while others allow interest on sums which have been deposited on or before the first of any month from the beginning of the month to the end of the interest term. No interest is allowed on sums withdrawn before interest day. 711. Savings banks are conducted in accordance with the laws of the state in which they are located. Some states place a limit to the size of deposits, fix the rate of interest which the banks must allow, and in other ways direct or control their management. 712. Interest is not usually allowed by savings banks on money deposited or withdrawn during an interest term. Hence, interest calculations are generally made according to the following: RULE.-Compute the interest at the end of the interest term on the smallest balance on deposit at any time during the term. To find the interest for more than one term, consider the interest at the end of each term as a deposit on the first day of the next term. In the following problems, unless otherwise stated, deposits draw interest at 4% per annum, and the interest terms are 3 months, beginning Jan. 1, Apr. 1, July 1, and Oct. 1. EXAMPLES. 713. 1. On Feb. 5, Mr. J. deposited $200 in a savings bank. How much interest will be placed to his credit on July 1? Suggestion. The deposit begins to draw interest April 1. 4% per annum is 1% per quarter. 2. A person is credited with the following deposits: Jan. 1, 1899, $150; Apr. 1, 1899, $180; and July 20, 1899, $300. What was the amount to his credit Jan. 1, 1900? 3. On Mar. 1, 1897, Mr. A. C. Wilson deposited $130; Oct. 15, 1897, $100; Jan. 21, 1898, $160; and June 15, 1898, $40. What will be his credit in bank Jan. 1, 1899? 4. Mr. S. made the following deposits in a savings bank during the year 1899: Jan. 1, $100; Feb. 10, $50; Mar. 17, $40; July 20, $75; Sept. 1, $60; Nov. 5, $85; and Dec. 1, $30. How much was due the depositor Jan. 1, 1900, the interest term being 6 months and computing interest at 4% from the first day of each calendar month? 5. The balance due a depositor Jan. 1, 1903, at a savings bank, was $300. On Jan. 15, he deposited $100; Feb. 20, deposited $60; April 1, deposited $75; May 21, withdrew $80; June 10, deposited $50; July 10, withdrew $60; Aug. 4, withdrew $100; Sept. 1, deposited $200; Sept. 25, deposited $90. What was the balance due the depositor Oct. 1, 1903, interest credited quarterly at 4% ? EXPLANATION.-Since the interest is credited quarterly it is added to the balance on the first of each quarter. As no interest is allowed on money deposited or withdrawn during the quarter, interest is computed on the smallest balance in the quarter (Art. 712). The smallest balance in the first quarter is $300; and its interest for 3 months at 4% is $3, which is added to the balance at the beginning of the second quarter. The smallest balance during the second quarter is $458, and its interest is $4 58, which is added to the balance at the beginning of the third quarter. The smallest balance during the third quarter is $352.58, and its interest $3.53, which is added to the balance ($642.58) on Oct. 1, making a credit balance of $646.11. 6. The following is a depositor's account upon the ledger of a savings bank: Apr. 1, 1898, $260; Apr. 1, 1898, deposit $200; May 6, deposit $50; May 27, withdrawal $60; June 10, deposit $36; July 14, deposit $70; July 30, withdrawal $75; Aug. 6, deposit $40; Sept. 2, deposit $100; Sept. 20, withdrawal $65. What was due the depositor Oct. 1, 1898, interest at 4%, credited quarterly? 7. On Oct. 1, 1895, a teacher deposited in a savings bank $40 ; on Nov. 5, he deposited $50; Dec. 10, deposited $75; Dec. 20, withdrew $30; Jan. 15, 1896, deposited $60; Feb. 5, withdrew $25; Mar. 12, deposited $45; Apr. 1, deposited $70; May 30, deposited $100. What was the balance to his credit July 1, 1896, interest at 4% credited quarterly? 8. A depositor had a balance of $534 to his credit at a savings bank on Jan. 1, 1898. Jan. 5, he deposited $250; Jan. 28, deposited $140; Feb. 10, withdrew $100; Feb. 28, deposited $300; Mar. 30, deposited $180; Apr. 12, withdrew $80; Apr. 26, deposited $200; May 10, deposited $120; June 1, deposited $75; June 20, deposited $240; July 1, deposited $250; Oct. 1, deposited $100; Nov. 1, deposited $175; Dec. 7, deposited $125. What was the amount of his credit on Jan. 1, 1899, interest at 4% on average monthly balances, and credited semi-annually? Suggestion. The average monthly balance for an interest term is equal to the sum of the smallest balances in each month of a term divided by the number of months in the interest term. 9. A person deposited in a savings bank Jan. 1, 1897, $250; Jan. 20, deposited $60; Feb. 5, deposited $10; Mar. 1, withdrew $50; Mar. 19, deposited $75; Apr. 1, withdrew $30; Apr. 12, deposited $80; May 30, deposited $100; June 5, withdrew $50; June 18, deposited $40. What was the balance due the depositor July 1, 1897, interest at 5% on average monthly balances? 10. Find the balance due James E. Aitkin at the end of the year, in a savings bank which allows 4% interest on average monthly balances, and credits the interest quarterly, his account showing the following entries: Jan. 1, 1900, credit balance $750; Jan. 20, deposit $136; Jan. 30, deposit $225; Feb. 10, withdrawal $75; Feb. 24, deposit $350; Mar. 1, deposit $275; Mar. 24, deposit $400; Mar. 31, withdrawal $35; Apr. 2, withdrawal $134; Apr. 14, deposit $580; May 5, deposit $205; May 23, deposit $117; May 31, withdrawal $600; June 4, deposit $65; June 16, deposit $320; June 30, deposit $156; July 7, deposit $237, July 21, withdrawal $710; Aug. 10, deposit $1200; Aug. 30, withdrawal $125; Sept. 1, withdrawal $75; Oct. 1, deposit $95; Oct. 31, deposit $550; Nov. 9, deposit $187; Dec. 6, withdrawal $215; Dec. 15, withdrawal, $163; Dec. 27, deposit $300. TAXES. 714. A Tax is a sum of money assessed on person or property required to be paid for the support of the government or for other public purposes. 715. A Property Tax is a tax assessed on the property of an individual. 1. Property is of two kinds; Real Estate and Personal Property. Real Estate is fixed property, as lands, buildings, etc. Personal Property is movable property, as horses, cattle, money, stocks, bonds, merchandise, etc, 2. Taxes are reckoned at a certain rate per cent. upon the assessed or stimated value of the property. 716. A Capitation or Poll Tax is a fixed sum assessed upon the person of every adult male citizen not exempt by law. 717. An Assessor is a public officer chosen to estimate the value of taxable property. An Assessment Roll is a list of the names of the taxable citizens, with the assessed valuation of each one's property, and the amount of his tax. 718. A Tax Collector is a public officer chosen to receive and collect the taxes of his collection district. 719. Property taxes may be computed according to the principles of percentage, the assessed value being the base and the tax the percentage. Property is usually assessed at less than its real or market value. EXAMPLES. 720. 1. What is the tax on property whose assessed valuation is $6500, if the rate of taxation is %? 2. What is the tax on property whose assessed valuation is $15400, if the rate of taxation is 7 mills on the dollar? 3. What is the tax on property whose assessed valuation is $8400, if the rate of taxation is $1.05 on $100? 4. If the rate of taxation is 72 cents on $100, what would be the tax on property assessed at $10500? |