The Washington times., 1911-02-05

the country lost s191, ,4SS between the
/ 10th of November, 1910, and the 9TH of
| January, 1911, the dates upon which
comparisons are based, as shown by
the responses to the calls of the Comp
trolIer of the Currency.
There are a number of contributing
causes that make for just such condi-
| tions.. In the city of New York alone,
where $15S, 100000 loss occurred In the
deposits, the hundreds of corporations
] pay out about s225, ,O0O.0 900 in interest and
| dividend accounts on January l of each
year, the amount varying but the fig
ures representing the approximate dis
tribution at the beginning of 1911.
Checks go out on the evening OF De-
cember 81. January 1 was holiday,
also January q Many of these checks
were mailed to out-of-town investors,
although New York investors received
the greater part.
There was much uncertainty in the
market for securities at that time and
1t is but natural to suppose that much
of this money was placed in savings
banks and trust companies that it
might earn a little interest pending
reinvestment The natural shifting Of
funds between trust companies, savings
banks, and national banks is such an
important factor that no actual COM
PARSONS could be made without the
showing of all three classes of fiscal
institutions.
Deposits were larger during the pre-
holiday activity of November than in
the after-the-hoIiday dullness of jan
uary-the always quiet month, the dull
est save midsummer.
1t may seem rather strange, but 1t is
a fact that when business is decidedly
lively the apparent deposits in banks are
larger than in dull times. There is a
lively interchange of checks in periods
of trade activity, and checks almost in
variably count in deposits as double. A
check for $4,000 paid by this corporation
to that contractor is deposited in the
latter's bank. He is given credit for
the deposit, but the money standing
back of that check, the money that
honors II, is over in the other bank un-
til the next day at clearings-that Is, as
a rule The only way in which such
doubling would not show would be on
balances between banks.
On Friday of last week the clearings OF
the banks of New York We're SAC, $4,000,
balances SO 1852; of Baltimore, $6,5lS,-
600: balances, SSOS 999: Philadelphia. $32,-
O49, 900; Chicago, $55,0OO,0O0, and Boston,
SIS, ,000, 900 1t is easy to see how drop
in the daily clearings through let-up
in trade would cause an apparent loss
in individual deposits.
Another reason is readily found in the
fact that much Of the reinvestment IN
the first few days of January of this
year was in the bond market. and many
drew their funds from banks for the
purpose of participating in bond pur-
chases. Then deposits would shrink, and
the underwater of. the bonds, having
made a sale, would, certainly IN many
instances, pay off the loans to the bank,
thereby increasing the cash in banks
but not in the deposits, and theN state
ment showed a gain in cash OF SZUOVoVoo
and a reduction in loans of $4S,OOO.coO.
But there was yet another reason tnst TSl
passing of the Robin banks and the
smash of the Carnie Trust Company
brought some uneasiness and WITHDRAW,
al of deposits both on account OF tiInld
individuals and some who were not
timid
The sales of stocks on the New York
Exchange in January, 1911, were 1854 loS
shares; in January, 1910, A,116,5 544 shares.
The bond offerings, new issues IN
January, 1911, totaled Sl4i; +Oo,UN; she5' sg5
100000 a total of s2S2, ,0oo.Ooo- January,
1911, the bond sales increased 10 psC
cent over the December, 1910. sales
Cause enough for loss OF deposits.
Since January I over s100, 100000 has
been added to individual deposits In
New York banks.
Two of the larger industrial corpora
tions have established offices in New
York ,ity, where their obligations are
listed for the benefit of anyone interest
cd In this way commercial paper brok-
ers will be able to tell Just what the
aggregate Of the corporated borrowings
are, and whether paper In their posses,
sion Is genuine or not. The listing Will
also give date of paper, length of time
to run from making, and all other tnfor-
nation necessary.
This is a step in the right direction
the direction of financial publicity, and
in the line of policy desired by Comp
troller Murray.
Chicago, st. Paul, Minneapolis. Pitts
burg, ST. Louis, Philadelphia, and some
other cities have most rigid inspection
of bank conditions. The banks conduct
their ovf, examinations and the super
vision is much more elaborate and more
frequent than State or national bank
examinations.
Chicago did not take the bull by the
horns until it was obliged to put up
100000 to save disaster when the
St. Louis kept aloof until they had to
hand over 81, 100000. and agree to ad-
vance s, ,0O0. 900 more in connection with
the Missouri Lincoln Trust Company
suspension.
All of the fifty-eight banks and trust
companies doing business in Chicago are
under clearing house supervision: With
a bigh-grade $1,000 year examiner and
seven assistants, the clearing house has
determined to prevent wildcat financing.
The report of the head examiner shows
cash on hand; past due paper. bad
debts loans to bank directors, loans to
in which bank directors are
interested, and the character OF assets
the banks surplus, capt-
til. and undivided profits.
A copy of this report is handed to the
president of the bank and each director
Is notified that the report awaits his in
spection. Another copy is filed under
seal in the clearing house, but Is not
opened unless something wrong devel- |
obs in the bank thus carefully searched.
No director can claim ignorance as an
excuse. II rottenness develops, rehabili- |
tation follow quickly or closure before
further loss is sustained.
In st. Louis the examiners, before as |
sunling duties, are compelled to agree !
not to take office with any bank or
trust company within 800 miles of st. |
Louis for three years after leaving the
service. Thus the secrets OF the exami- |