Democratic Sentinel, Volume 1, Number 49, Rensselaer, Jasper County, 18 January 1878 — THE GREAT CHEMICAL BANK. [ARTICLE]

THE GREAT CHEMICAL BANK.

A Remarkable New York Institution— Annual Dividends of 100 Per Cent. The New York World, in chronicling the death of John Quentin Jones, President of the Chemical Bank, of that city, gives the following history of the soundest financial institution in the United States: In 1833 “The Chemical Manufacturing Company ” was incorporated by an act of the Legislature ‘ ‘ with banking privileges.” The manufacture of the chemicals was carried on in a building on Thirst-first street, near the North river—subsequently bought by the Hudson River Railroad Company and turned into a depot. The banking business was done in a building where the Park Bank now stands— 2lG Broadway. Mr. John Q. Jones was Superintendent of the chemical works, and John Mason was President of the “ Chemical Bank.” Mr. Mason died in 1839, and Isaac Jones, liis son-in-law, and cousin of John Q. Jones, succeeded him as President, he having been tlie cashier of the bank for several years. On the election of Isaac Jones to the Presidency, John Q. Jones succeeded him as cashier, and by them the affairs of the bank were managed until 1844, when a complete reorganization took place under the General Banking law passed that year. John Q. Jones was elected President of the bank. The capital stock was $300,000, divided into 3,000 shares of $10() each. Mr. Jones, on liis succession to the Presidency, was surrounded by a coterie of rich and influential men. and C. Y. S. Roosevelt, John David Wolfe, Robert McCokry, Peter Goelet, Robert Goelct, and Joseph Sampson became his associates in the management of the bank. These men held shares in the bank, and deposited their money in it. Among the depositors were the Lorillards, the Stuarts, and many of the leadiug New York merchants of that day, including the late Alexander T. Stewart, .who, however, could not be classed among the leading merchants at that time. Mr. Jones had a settled plan l'rom the first, ami stuck to it. It was to do business with a small capital stock, maintain a large -surplus and command the confidence of the punlic. Most of the shareholders were already rich, and it was agreed that the profits of the concern, instead of being paid out in dividends, Bhoald be used to extend its business. Thus for five years—from 1844 till 1849 —n0 dividends were paid out. At last the surplus became so large that Mr. Jones became embarrassed and asked the advice of some of his friends who were interested as to what ought to be done. By one of them lie was told that the safest place for him to put these large accumulated profits was in the pockets of the shareholders. A dividend was declared accordingly, and since 1849 dividends have been declared regularly. For many years past these dividends have amounted to 100 per cent, per annum. The system has been to pay a dividend of 15 per cent, every two months, which, in tlie year, would amount to 90 per cent.; but, just before Christmas, an extra dividend of 10 per cent, would be paid out, making up the full amount of 100 per cent, per annum. The present market value of the shares cannot be told for the reason that they are not on tlie market. The last that were sold brought $1,600 per share of SIOO. Although paying out these enormous dividends of 100 per cent, every year, the bank has a surplus of $3,000,000.

For many years the Chemical Bank has been regarded as one of the soundest financial corporations in the world. During the great panic of 1857 and the crisis of 1861 it was the only bank in this city that maintained a gold basis. In 1873 it could have done the same, but was forced to succumb owing to the great pressure made by the other banks. The business of the bank increased so rapidly that three years ago it became necessary to have an enlarged space for carrying it on. A building on Chambers street was leased and a connection made with the old building so as to form an L. The bank’s list of depositors, although, of course, greatly increased, has not changed in character. It includes a large proportion of the wealthy real-es-tate owners, retired merchants, etc.