New-York tribune. [volume], October 03, 1922, Page 5, Image 5

About New-York tribune. [volume] (New York [N.Y.]) 1866-1924

Image provided by: Library of Congress, Washington, DC

                
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How a
and
TTTHETHER you will or not, you are concerned with the way your bank?
V V any bank?manages the money entrusted to* it by its depositors. If this
money is wisely and conservatively handled it is safe and at the same time it
is usefully employed. The readiest means you have of finding out what becomes
cf the funds deposited in a bank is by studying the statements published
periodically by the bank. Every dollar of assets and liabilities is set down there,
and if you know what the figures mean you can form a clear judgment of the
actual condition of the institution.
BECAUSE of the common complaint that bank statements are not easily
understood by the public, The Corn Exchange Bank began in 1916
to publish "A Bank Statement that any Man or Woman Can Understand."
Under the various items of the statement were printed brief explanations, in
plain language, of what these items mean. So popular has this form of bank
statement become that we have gone a step further and show in detail, in this
advertisement, how to determine the significance, in actual percentage figures,
of the various items in a bank statement.
S&
?s*
The Bank Otees
to Depositors,
Payable
on Demand'
When a bank accepts a de?
posit it agrees to repay the
money instantly when the
depositor asks for it. What
heavier obligation could be
laid upon a banker, what
requirement calculated to
make him more scrupulous?
ly careful of what he does with the money entrusted to him?
For deposits cannot lie idle in the vaults. They must be put
to work for the good of the community, in the shape of loans
to merchants and manufacturers, investment in bonds of
sound corporations, real estate mortgages and Government
loans. If banks refused to lend and invest, the wheels of in?
dustry would come to a full stop, and banks can only justify
their existence by lending and investing. And yet, if deposi?
tors ask for their money it must be forthcoming without a
moment's delay. How can a bank lend money and at the
same time have it available to pay depositors?
The answer lies in the bank's reserves of cash and of ?securi?
ties on which cash can immediately be raised, plus its other
assets and especially its surplus of assets over what it owes
to depositors. The Com Exchange Bank ewes to depositors
$195,339,103,41, which it lias agreed to rcrr.y o:i cl.??-.???nd.
For this
tose
[1] CASH
Not all the money whiuh c.-*.-r--,.C2 flood
Jr1iY?)QSe *nS through the tellers' windows of the
., fifty-three offices of The Com Exchange
W e llave Bank is loaned to borrowers or in?
vested in bonds. A substantial part of
it is held as a reserve to pay depositors who wish their checks
cashed. A part of this money is kept in the shape of
actual coin and banknotes in the tills, and another part is
deposited with the Federal Reserve Bank, where it can be
obtained on a moment's notice. The Federal Reserve Law
requires that banks in New York City, members of the
Federal Reserve System, shall keep funds on deposit at the
Reserve Bank to the extent of at least 13 per cent of the
amount which member banks owe to their own depositors on
demand. In addition, these member banks may keep on
hand whatever cash they think they need. The Com Ex?
change Bank has cash on hand, in the Reserve Bank and
in other depositories totaling $33,779,885.65, which ?3 17.29
per cent of the amount of our own deposits, against only
13 per cent actually required by law.
[2] CHECKS ON OTHER BANKS
A large part of the deposits received every day by The Com
Exchange Bank consists of checks drawn on other banks.
Thus, according to the statement printed on this page, we
have on hand $12,132,969.84 in the shape of checks, which
will be converted into cash as soon as they have passed
through the Clearing House or been otherwise collected.
This requires one day, so that at a day's notice our cash
reserve can be increased $12,132,969.84, bringing the total
up to 23.50 per cent of what we owe our depositors.
[3] U. S. GOVERNMENT SECURITIES
A part of the deposits of The Com Exchange Bank has been
invested in United States Government bonds and notes,
which rank among the safest investments in the world.
United States Government securities owned by this bank
are an additional insurance to our depositors. As shown by
the accompanying statement, The Com Exchange Bank
owns $70,284,784.76 of these securities, which are available
for loans at the Federal Reserve Bank or could be sold on
the market for cash. The use of these Government obliga?
tions for $70,284,784.76 would give us a total cash reserve
of $116,197,640.25, or 59.48 per cent of our deposits.
[4] LOANS TO INDIVIDUALS AND
CORPORATIONS
These are "demand loans," one of the most "liquid" forms
of credit known?that is, they are repayable on notice to
borrowers. Every loan is secured by marketable collateral
of a value substantially in excess of the amount loaned.
Should any part of this collateral decline in value, deposit
A Bank Statement that any Man or Woman can Understand
The Corn Exchange Bank
NEW-YORK
Statement of October 2, 1922
The Bank Owes to -?Depositors ..777.
A conservative banker always has this indebtedness in mind, and
he arzaoges his assets so as to be able to meet any request for
payment.
For this Purpose We Have :
$195,339,103.41
[1] Cash.
(Gold, Bank Notes and Specie) and with legal depositories re?
turnable on demand.
[2] Checks on Other Banks.
Payable in one day.
[3] U. S. Government Securities .7777
[4] Loans to Individuals and Corporations .
Payable when we ask for them, secured by collateral of greater
value than the loans. *
[5] Bonds.
Of railroads and other corporations, of first quality and easily
salable.
[6] Loans . . . 7 7 7 7 . . 7 7 ? ?
Payable in less than three months on the average, lar?gely secured
by collateral.
[7] Bonds and Mortgages and Real Estate .
[8] Thirty Banking Houses . . . ? . ?
AH located in New York City.
Total to Meet**Indebtedness
[9] This Leaves a Surplus of.
Which becomes the property of the Stockholders after the debts
to the depositors are paid, and is a guarantee fund upon which we
solicit new deposits and retain those which have been lodged with
us for many years.
$33,779,885.65
12,132,969.84
70,284,784.76
16,145,012.95
24,355,716.73
49,246,246.40
4,346,023.00
4,700,617.75
$214,991,257.08
$19,652,153.67
Our listed resources, enumerated in this statement do not and can not include
those assets of friendliness and helpfulness which this bank has in the personnel
of its board of directors, its officers and employes. These are assets which pay
dividends to our patrons in service and satisfaction.
THE FIGURES OF OUR BANK STATEMENTS
ARE AUTHENTICATED AT LEAST SIX TIMES
The figures in the statements of The Corn Exchange Bank are verified by three outside, independent
agencies and by the authorities of the Bank itself:
1 and 2?Twice a year the State Bank Examiners, without previous notice to us, send in a
force of 57 men who count all the money and examine all the securities we possess.
3?At least once a year the New York Clearing House, of which this Bank is a member,
examines our condition without notice to us.
4?The New York Federal Reserve Bank also makes its own examination of our
accounts and assets without letting us know when to expect this scrutiny.
5?The Directors of The Corn Exchange Bank are required by law to examine and
verify the Bank's accounts at least once a year. This is done, no notice being given
in advance, by committees of clerks numbering 133 men, selected by the Directors.
6?Periodical examinations are made, without notice, by our own inspectors.
AU this is designed to check and verify every item which appears in our bank statements.
of additional collateral h immediately demanded of the
borrower in order to keep the loan sectire. The Corn Ex?
change Bank has loaned $16,145,012.95 in this way. If
these loans should be immediately repaid on demand, or
redeemed through sale of the collateral, our cash reserve
including items already described, would amount to
$132,342,653.20, which is 67.75 per cent of the amount we
owe to our depositors.
[5] BONDS
These are high-grade securities of railroads and other cor?
porations, which tan quickly be converted into cash by
sale. The cash realized from the sale of the $24,355,716-73
of these bonds now on hand would bring our total cashiup
to $156,698,269.93 or 80.21 per cent of our deposits.
[6] LOANS
The loans we have made to customers, largely-secured by
collateral and payable, on the average, in less than three
months, represent a part of the service we render to the
business community. The accompanying statement shows
$49,246,246.40 of such loans outstanding. Our customers
use the money we have advanced them to carry on their
business. These loans constitute an additional ?safeguard to
our depositors, for the reason that a large proportion of this
commercial paper can be immediately disposed of for cash
at the Federal Reserve Bank. That Bank, of which The
Corn Exchange Bank is a member, will lend us money against
the notes which our customers have given us, or will
purchase certain classes of their obligations outright from
us for cash.
We have already shown how, if necessary, 80.21 per cent of
the money required to pay our depositors could be realized.
In order to secure the remaining 19.79 per cent, thereby
covering our deposits dollar for dollar, it would only be
necessary to rediscount or sell to the Federal Reserve Bank
$38,640,733.48 out of the $49,246,246.40 commercial loans
which we hold. In other words, the funds would be provided
by disposing of 78.4 6 per cent of our customers' commercial
notes at the Federal Reserve Bank. This would leave a
balance of $10,605,512.92 of commercial paper still un?
touched, after providing for the payment of 103 per cent of
our obligations to depositors.
[7} BONDS AND MORTGAGES AND
REAL ESTATE
This item represents miscellaneous assets of The Corn Ex?
change Bank acquired in the course of its business dealings.
These assets are sound and, while not as easily marketable
as the items listed above, constitute an additional guarantee
of the bank's ability to meet demands upon it. The total on
hand, as shown in the annexed statement, is $4,346,023.00
which is less than 2.25 per cent of our depos"
[8] THIRTY BANKING HOIK
The item of $4,700,617.75 represen':;; The Corn Exchange
Bank's main building and twenty-nine of tb.5 fifty-two
premises occupied by blanches. It will be noted that this
investment in "plant" is extremely small, compared with
the amount owed to depositors. In other words, a very small
part of the bank's fund3 has been used for these permanent
investments in real estate. We have preferred to keep the
greater portion of our assets in a form immediately avail?
able to meet every possible demand upon us.
[9] THIS LEAVES A SURPLUS OF?
By carefully conserving its resources and increasing its sur?
plus out of its earnings, year by year, The Corn Exchange
Bank has accumulated a cap?al and surplus of $19,652,153
.67. In other words, the Bank has an excess of assets, de?
scribed above, totaling $19,652,153.67 over what it owes to
its depositors. The foregoing paragraphs have shown that,
with the exception of $4,346,023.00 invested in bonds and
mortgages and miscellaneous real estate, and $4,700,617.75
representing thirty banking houses owned, the vast
bulk of our assets, and hence the surplus of assets over de?
posits, is in a "liquid" form, quickly available to pay what?
ever demands are made upon The Corn Exchange Bank.
THE CORN EXCHANGE BAN
1 NEW YORK
$
The Corn Exchange Bank Supplies ^^ing and Trust Service.Through Its Fifty-Three Offices Located in greater Ne?, York