The advocate. [volume] (Charleston, W. Va.) 1901-1913, 1907-12-05
MONEY N NUTSHELL |:
The story.of Banks and Of
Banking
HOW MONEY SECURED

1t is only at q time when credit is,
| or has been, under some strain that
l'tfle bank %depositor is concerned
about the security Of his deposits, and
then he naturally exaggerates the
risk, says Frank G. V. Carper in the
Washington Times. That risk, in the
| case Of deposit left with any nat
ional bank, is capable Of being COM
puted, and the records of nearly half
century prove that it is not only
inconsiderable but insignificant.
The national bank is chosen for
this computation not on the theory
tit Is any safer than the average trust
company or state bank, but for the
resaon that, as the national banks
| make their reports to one officer the
comptroller Of the currency at Wash
1ngtOn, instead Of to the banking sup
er1ntendents Of forty-siX states, their
statistics are more readily tabulated.
In general, any assertion that applies
to the safety Of deposits In the natios-
al banks is capable Of being applied
with approximately as much truth
to that Of deposits in the state bank
ing institutions. .
| To proceed, then. The depositor
In national bank has as security for
/ his deposit all the assets Of the insti-
tuition save the amount that may be
needed to redeem it's circulating
notes. Bank notes are made prior
lien upon the assets of the bank is
suing them, is addition to being Sc
cured by personal liability to share
| holders and by q deposit Of govern
ment bonds as collateral with the
federal treasury at Washington. AS
the notes circulate freely among the
people on equal terms with the notes
| issued by the government itself sur
! rounding them with a treble security
Is no more than decent protection
| OF the whole public.
The note circulation, however, is
comparatively q small liability COM
| pared with the total assets Of the nat
1onal banks. Their aggregate note
circulation cannot at any time exceed
their aggregate capital, which Is now
somewhat in excess Of 100000 900,
| with an aggregate note circulation
| somewhat In excess OF $600,000;000.
Their aggregate resources, or assets
| (Which include their banking houses
and furniture; the notes and stock
| and bonds, and other securities held
for loans and DISCOUNTS; their cash
| In values, etc. are, on the. other
| hand, considerably In excess Of So
| 100000. All Of this more than
| 100000 not required for the
payment Of the $500, 900, 900 Of cir
culating notes Is available for the
payment of debositors, the present
| moment cannot be exactly stated, but
was few months ago about $4,200,-
100000. AS only deliberate and wide.
spread rascaltty on the part Of bank
directors could so impair the assets
Of the banks as to make them fall
below the liabilities materially In
value, 1t need not be surprising to
| learn that the depositors in our nat
1onal banks are more secure OF
Tny cher country. They are
| only theoretically in Jeopardy is
times Of distrust, and to guard
| against disaster due to runs" the
government requires them to- retain
large cash reserves, as we have al
ready seen. This reserve, the mini!
mum OF which is }fSod at rs per com
Tin the larger cities, FL thrss TIMES