Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1923-03-08

! their deposits. Since every deposit
or tries to keep a fafr-sized balance
in the bank. there Is always more
money on hand than is needed to pay
those who are drawing against their
deposits. The law requires that the
bank keep a certain percentage OF
the deposits In its vaults In actual
cash. This cash is called the banks
reserve. At the end of the hrst
month, let US say, the bank had In It's
safe. as reserve. about twenty thou
sand dollars. There should always
be enough cash held by the bank to
take care of the normal amounts OF
money needed by It's customers.
How Banks Earn Money
what does the bank do with it's
capital stock and with the balance OF
deposits In excess of the cash held as
its reserve? Part OF the money from
the sale of shares of capital stock, OF
course, had to be spent for the bank
building and It's equipment. which
cost about twenty thousand dollars
The balance of the capital stock
would be thirty thousand dollars
The balance Of the deposits In excess
of the reserve at the end of the 1rst
month was eighty thousand dollars
This was one hundred and ten thou
sand dollars in all 1t was invested
or loaned out at interest to business
people of good standing. who prom
i ised to repay the money to the bank
in thirty. sixty. or ninety days The
interest on these loans and invest
ments provides the earnings OF the
bank, out OF which salaries and other
expenses are paid This practice OF
loaning money Is called discounting.
or giving credit. Credit is what the
bank deals in. I. Just as the merchant,
buys and sells goods. so the banker
buys and sells money and credit.
1.-THE assets Of bank. just as in
the case of a store or other business,
are the property owned by the bank.
They are cash on hand. promissory
notes representing the money loaned
out at interest to borrowers, the bank
| building, and SO forth. In like man
ner the liabilities are what the bank
owes to others. to the stockholders,
to depositors and so forth. AS the
town grows and the business Of the
| community expands, the deposits OF
! the bank become larger and other
banks organize. No matter how large
our great city banks become, they are
/ all organized and conducted upon the
same principle and for the same pur.
pose as the bank In the small town.
Using Banks Helps Everybody
scarcely anywhere 10 there
financial transaction In which the
bank does not have direct or an
Indirect part either through the
stockholders, the management, or
the deposItors. Every success
| full business person makes use OF
the bank for Borrowing money,
| for the safekeeplng OF money and
valuabIes, and In other ways.
The wonderful strides our coun.
| try has made In the field of COM
merce can be accounted for
largely by the manner In which
the banks have been made use OF
! by the people. AS anyone eultl-
| Yates the habit Of saving, and
handles savings and az other
transactions through the bank, he
| Is being a real help to his COM
munity because the bank is the
reservoir into which flow the saw
Inus Of the people Of the com
munity to be used by the banker
In helping to develop the indus
try and life Of the community.
Tho bank helps the people to
succeed, and the community to
progress"