No. 12.
Mr. Tree to Mr. Bayard.

No. 54.]

Sir: The governor of the National Bank of Belgium has recently made his annual report to the shareholders, showing the transactions of the bank for the year ending 31st of December, 1885. This bank acts in a large measure as the cashier and financial agent of the Government. The state appoints the governor and the directors are elected by the shareholders. Its capital stock is represented by 50,000 shares of 1,000 francs each. The present actual market value of a share, however, owing to its great financial success, is quoted at 3,060 francs.

The report gives some interesting facts. The whole movement of the bank for the past year amounts to 16 milliards of francs. Its net profit for the first half year was 3,727,388 francs, and for the second half year 3,727,874 francs. A dividend of 108 francs a share has been paid to the shareholders, and 13 francs and 37 centimes on each share transferred to the reserve, which now amounts to 18,875,882 francs, all invested in Belgian state funds.

Under the law of the bank’s organization the state also receives certain benefits from its business. It is required to pay into the state treasury one-quarter of the profits exceeding 6 per cent. interest on the capital of the bank, also one-quarter of 1 per cent, on the average circulation of the bills exceeding 275,000,000. It is also required to loan the idle moneys of the Government on deposit, the bank being liable for any losses it may make by such loans, and the profits thereon, except a small percentage, going into the Government treasury.

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The report shows, therefore, that besides the net profit for the year to the shareholders of more than 12 per cent., the state has received out of the business the following substantial benefits:

One-quarter of the benefit exceeding the interest of 6 per cent. on the capital of the bank 1,113,815.38
From stamps on bills 173,189.43
Paid to the Government for services to the bank by Government employés in the provinces 175,000.00
Taxes paid by the bank 152,296.98
One-quarter per cent. on the average circulation of bills exceeding 275,000,000 francs 339,205.64
Interest on Government deposits realized 860,564.00

Thus the profits of the state for the year 1885 out of the business of the bank are something like $560,000.

In spite of the commercial crisis the total amount of discounts of bills on Belgium has slightly augmented, it being nearly 6,000,000 francs more than in 1884.

The average rate of discount has been 3.28 per cent., against 3.32 per cent, in 1884.

The governor concludes his report with some general observations on the subject of the renewal of the monetary convention of the Latin Union.

I have obtained two copies of the report through the courtesy of M. Jamar, the governor of the bank, which I have the honor to transmit to you, under separate cover, as printed matter, one of which I thought it was possible you might desire to send to the Secretary of the Treasury.

I have the honor, &c.,