New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-09-18
Weekly Statement of Clear.
ing House Less Important
Since Inauguration of
Federal Reserve System
By Edgar D. Thornburgh


IN VERY Sunday morning the
H. metropolitan newspapers pub
-~~ lish, in more or less imposing
array, a statistical display which
generally is referred to in financial
circles as the "bank statement" To
give it its official designation, it is
"The Statement Of Members Of the
New York Clearing House Associa-
ton, from Reports as Required I'm
der Article III of the Constitution"
Sometimes this term is contracted to
1.-THE Clearing House Statement"
which nowadays distinguishes it
from the document issued by the
Federal Reserve Bank on Thursday
afternoons for publication the fol-
lowing morning, but more often it is
called simply the "Bank Statement"
This is the oldest, and prior to the
formation of the Federal Reserve
system was the most important, of
all banking reports issued in this
country. Since the advent of the
Federal Reserve it has been forced
back into relatively a minor posi-
ton, but it still is important enough
to vindicate the judgment Of editors
in giving it the prominence which it
is accorded and to justify close pc
rusal by those who would be in
formed on financial subjects.
The statement issued by the Clear
ing House Association is put out in
two parts, the average and the ac-
tual. The former is much the older
of the two, because for great many
years only the average condition was
reported AS it's name implies, this
statement shows the average condi-
ton of member banks for the entire
week. The actual statement gives
the precise situation at the close of
the week. In times of considerable
changes from day to day it is posi-
BILE by comparing the two exhibits
to determine with fair accuracy the
so-called drift of the situation"
For instance, if, say, loans are much
higher in the actual statement than
in the average, it is a fair surmise
that borrowings increase at the end
Of the week, for, in order to have the
total in the average statement less
than the total in the actual, the fig
ure early in the week must have
been considerably lower than the
actual figure at the end of the week !
in order to bring the average down.
Chief Items
The chief items which appear in
both of these statements are as fol- |
lows:
L. Loans, discounts, investments, etc.
2. Cash in own vaults; members of
Federal Reserve Bank.
3. Reserve in Federal Reserve Bank
OF member banks.
4. Reserve in own vaults; state banks
and trust companies.
5. Reserve in depositaries; state
banks and trust companies.
6. Net demand deposits.
Z. Time deposits.
8. United States deposits.
8. Total reserve.
TO- Excess reserve Con occasion
deficit).
vi these items the really impor-
tant ones are Nos. /, 6 and 10. The
others, in the light of the more re-
cent Federal Reserve Bank state
ments, have lost much of their for
mer value. AS matter of fact, the (
item excess reserve, or if it hap
pens to be deficit, has more senti-
mental than actual concern for the
banking fraternity, because deficit
IN legal reserves these days means
little more than that some bank or /
banks neglected to rediscount in
sufficient quantity with the central
institution.
1t may be well here to explain
just how legal reserves are arrived
at They are the "cover" against
deposits. Federal Reserve Bank
members here are required to keep
Is per cent reserve against demand I
deposits and 8 per cent reserve
against time deposits. State banks