Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-05
BANK STATEMENTS
IN DETAIL URGED
Movement Is Started to Re-
quire More Complete Evil
dence of Condition.
BY C. B. UPHAM.

Proposal has been advanced and given
some discussion in banking circles, espe-
cially among officials charged with the
duty Of bank supervision, that greater
detail be required in the published
statements made by banks from time to
time, in response to the calls" that are
made by the controller Of the currency
and the State bank supervisors.
A glance at the statements of condi-
ton that are now appearing showing
the position Of banks as Of June 30, will
indicate the impossibility Of the ordi-
nary bank depositor getting anything
ness or solvency Of his bank
The depositor cannot tell. for in
stance, what the securities in the In
vestment portfolio are, their classifica-
ton or maturity. He has no way Of
telling whether the loans are good, or
for how long q period they run. He
does not know whether the reserves"
are real reserves against unknown con-
ti1gencies. or actually write-offs Of
losses. Even a hidden capital IMPAIR
ment would not be discoverable to him.
Other Reports.
The balance sheet Of a mercantile or
manufacturing corporation usually con-
tsinS considerably more information
than does a bank statement. Many
concerns, such as public utilities, are
required by law to submit more detailed
information. Investment trusts in some
cases make public their entire lists OF
investment holdings. Insurance COM
panies must do so in their annual
statements filed with the States in
which they do business.
Discussion Of banking matters be-
fore committees of Congress recently
has indicated possibility that such
publicity will shortly be required Of in
vestment afdliates Of national banks.
Opponents OF the extension Of this
practice to commercial banks insist
that, even If it might be found advis-
able in the future, now is no time to
advance the idea because Of the en-
barrassing situation many weak banks
would be tn-bankS which can work out
OF their present difficulties If given o
little time, but which might be forced
TO close II 1t were necessary to make
known the real facts about their in
vestments and their loans.
Some persons, among them thought
full and conservative observers, feel
that publicity Of this character would
be mistake at any time. Banking
is matter Of confidence. they say, and
the depositor should select bank in
whose officers and management he has
confidence, and not try to follow the
details Of operation. The ordinary
customers Of a bank would either not
take time and trouble to analyze the
bank statement anyway, it is argued,
or II he did he would not get q very
much better understanding Of it then
he does now.
The statements Of Federal land
banks and Of joint stock land banks
give much greater detail as to their
condition than do ordinary commercial
banks, and yet probably few Of those
who deal with the banks or buy their
securities inspect the statements Of
condition.
New Suggestion.
One suggestion which has received
some approval from conservative bank
ers is that after each examination the
amounts Of assets listed by examiners
as doubtful or slow or as losses be
shown in the bank statements. This
might lead to more careful loans and
investments. or It might lead to less
severe criticism Of paper on the part
of examiners-and the evidence seems
all to point to not enough severity in