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Lawful reserve with Federal reserve bank or other reserve agents.


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Summary of Reports of Condition of 708 Private Banks in the
United States at the Close of Business, June 30, 1921.
From the Report of the Comptroller of the Currency for 1921,
pp. 149-150.

Loans and discounts:

On demand (secured by collateral other than real


On demand (not secured by collateral).


1,842, 000

On time (secured by collateral other than real estate).. 8, 924, 000

On time (not secured by collateral)..

Secured by farm land.......

Secured by other real estate..
Not classified...


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Investments (including premiums on bonds):

United States Government securities....

State, county, and municipal bonds..

Railroad bonds.....

Bonds of other public service corporations (including

street and interurban railway bonds). Other bonds, stocks, warrants, etc.....


Banking house (including furniture and fixtures).

Other real estate owned..

Due from banks...

$10, 774, 000

3, 219, 000

1,058, 000

12, 652, 000

Lawful reserve with Federal reserve bank or other reserve agents.

Checks and other cash items..

Exchanges for clearing house...

29, 361,000

$3,846,000 7, 174,000 16,878, 000 4, 719, 000 576,000 134,000

Cash on hand:

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Bills payable (including certificates of deposit representing money borrowed)..

Other liabilities...

Total liabilities......

133, 897, 000 109,000 1,863, 000



175, 306, 000


Suggested Readings on Chapter XIV.

Dewey, D. R.-State Banking before the Civil War.
Barnett, G. E.-State Banks and Trust Companies since the
Passage of the National Bank Act.

Questions and Problems on Chapter XIV.

I. Is it better to have the supervision of the bank in the hands of one man or in the hands of a commission of three or five?


Which method would probably get the best super



Election by State bankers' association?

b. Election by people of the whole State?


Selection by the legislature?

d. Selection by the governor?

3. How can the superintendent be sure that the report made to him is accurate?


Which is better in the case of a delinquent bank, from the standpoint of the banks and the public: court action or independent action by the superintendent?

5. Can you conceive of a violation of the law which a bank could afford to make even if it knew it would forfeit its $1,000 deposit?

6. The restriction of loans to 10 per cent of capital and surplus is equivalent to what per cent of the total investments of the bank?

7. Could a bank in Utica with a capital and surplus of $100,000:

a. Loan $15,000 to one firm on a promissory note? Loan $30,000 by discounting notes of a firm's customers?



Buy $50,000 of Illinois bonds?

d. Loan $10,00 on a straight note and $30,000 on a note secured by 40 shares of stock quoted at 86 per share?

8. Could a bank in Brooklyn with assets of $1,500,000 have $250,000 in real estate loans?

9. A house worth $10,000 has a first mortgage of $6,500 and a second mortgage of $2,000. Could a bank hold the first mortgage? The second mortgage?

IO. What dangers are involved in loans to directors, officers and employees?

Could the Corn Exchange Bank of New York establish a branch in Albany? In Buffalo? In Cleveland? In Chicago? A bank in the Bronx has $1,000,000 in demand de


posits. What is the smallest amount of reserve in its own vaults it might keep and obey the law.

13. A bank with $100,000 capital and a surplus of $16,000 makes $48,000 earnings. Can it declare a dividend of 20 per cent? 30 per cent? 35 per cent? 40 per cent? 45 per cent? 48 per cent?

14. How much must a bank with $150,000 capital appropriate to surplus if its earnings are $20,000?

15. I own $1,000 out of $100,000 of stock in a New York bank. The bank fails and, after all of its assets have been realized upon, owes $30,000. One-half of the stock is held by bankrupts. How much can I be forced to contribute?

16. What is the objection to more than one-fourth of the directors of a New York bank living in New Jersey suburban towns?

17. Why are directors required to own more than one share of stock?

18. Five men, A, B, C, D, and E, in Auburn, New York, propose to start a bank. If you were the superintendent of banking, what would you wish to know about the men and about Auburn before you would grant permission to start business?

19. Why is it necessary to have the capital fully paid in cash?

20. Why should banks be examined while coal companies. and farmers are not?

21. Why is the date of the bank reports uncertain? Why not specify the four dates in the law?

22. Would "public convenience and advantage" be promoted by having at least one bank office in every block on Broadway from the Battery to Dyckman Street?

23. Is the bank necessarily insolvent when the superintendent takes possession of it?


Could the superintendent take possession of a bank because it loaned on cuban sugar in 1920?

25. What is the minimum capitalization allowable for a bank in New York City? Nyack? Troy?

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