The Washington herald., 1921-08-10

the functions OF the bank and uses
them 10 his own profit; and Sthe
bank that succeeds is the bank Aat
assumes a helpful attitude towaN
business, adopts an aggressive poll
icy. has a broad vision, and extends
liberal yet sound credit 10 It's
clients
Types Of Banking Institstiens.
The banks Of this country divide
themselves into tive groups-baniIs
Of discount, often called commercial
or business banks: and savings In
stitutIons.
The former are the more COM
mon. c-d include the trust eompa-
Banks Of Discount.
'.Tbc work of the bank OF dis.
count may be divided into five
psrtments:
Il. The receipt OF money ana
checks may be drawn.
"2. The making Of loans.
"3. The discount OF negotiable In
strumeats, the most common beinE
promissory notes and drafts or bills
OF exchange.
-. The collection Of drafts, cou-
pons. promissory notes. and other
such instruments that are left with
il by customers"
savings Banks
The ayowed object Of savings
banks is to teach habits of thrift
and economy by encouraging the
man of small means to save, Civ
ing him a fair return upon his saw
ings. There are two classes of saw
ings banks: the mutual savings
banks and the stock savings. in
mutual savings banks there are no
stockholders. Mutual savings banks
are governed By a board OF trus-
tees as distinguished from the
| directors of other banks. In case
Of vacancy in the board OF a mutJril
savings bank the office is filled by
vote of the board. and the trustee
serves for life. unless removed by
operations of the law. There is no
annual election of directors as is
the case of banks Of discount
In the event of failure the trus-
tees Of a mutual savings bank cam
not be held liable unless they have
grossly transgressed the law. Their
for the benefit OF the depositors, to
make no investment not sanctioned
by the law, and to use due care
the same degree that a prudent.
conservative business man would
use in his own affairs.
when a stock savings bank is
organized those who are back of
the movement solicit subscriptions
to the capital stock. II is the stock
holders capital that forms the first
working fund of the bank. The
stock is usually sold at a premium.
The par OF the stock is usually 100.
The stockholders are the owners
of the bank. Profits accrue to them.
They elect the board of directors
and the board OF directors elect or
appoint the officers. II is the gen.
eral rule Of law that the stock
holder is liable TO an amount double
the par value Of his stock"
Circulation.
"a. Circulation is a privilege sc-
corded TO national banks to issue
their own bank notes. under the su-
pervision and regulations OF the
Treasury Department said notes
being secured by a deposit OF GER
tain L. S. bonds.
ANY national bank IS entitled to
maintain a circulation account
equivalent TO the full amount Of
its paid-in capital. Tax on circu-
lation is one-halt of / per cent per
annum on IS. and per cent on Is.
Trust Companies.
"A trust company is practically
III 20 ~
extent Of the functions Il may as
sumo. Trust comnanies do more or
less commercial bu insss Cri-in-
ally formed to act only in capaci-
ties connected with the admin sra
ton Of estates and trust funds.
trust companies have --aSrarlv eN-
tended their sphere OF usefulness.
rntI now their lines are so closely
inte-wOvcn wirh ~-'- C,'r,',erriRl
fsIri" that it woul' be practically
impossible to do without them.
National and state Ranks.
There l. no material difference
between national and state banks
, The { re perate und r char-ers
issued by the Comptroller Of the
Currency. to whom they are respnn-
sible as the supervising head. The
| latter are under the control OF the
various Sites. secure their char
tiers from the State authorities, and
/ are subject to the control Of a
| State official usually designated
| superintendent Of banks
National banks are subject 20
| the provisions Of the national bank
act (February IS. 1859. and are
therefore uniform in this respect,
while the State banks are subject TO
the banking laws of the various
States which diNar