The Hardin tribune-herald., 1935-07-19
TRENDS FAVORABLE
IN STATE BANKING
Recent Figures Indicate Large
Increases in Deposits and
Invested Funds

Improvements, in the condition of state
banks in almost every respect during
1884 is shown by statistics recently as
spmbled. Robert VI. ianeS. President
Wachovie Bank and Trust Company,
Winston-Salem. North Carolina. points
out in an article in Ranking" pub.
lishcd by the American Bankers Asso.
CiatiOn The figures on which this state
ment is based were gathered by the
Committee on State Bank Research OF
the association from reports furnished
by state bank supervisors throughout
the country.
Ever since 1921 the number Of state
banks has been declining" Mr.. Hanes
says. Between 1881 and 1884 the de.
cline was rapid. Figures for December
81, 1884. showed that the downward
trend has not yet ended. but the de.
cline last year was the smallest In
twelve years"
There are now. he says. about ten
thousand state banks. which term in.
cludes all state chartered institutions
with the exception Of mutual savings
banks. The article continues:
Even more significant was the end.
ing OF the decline >; deposits in state
banks which had been going on since
the collapse OF the stock market boom
In 1929. In recent years for which fig.
ures are available the drop has been
particularly abrupt. Total deposits in
900 on December 81. 1891. to s15.424.-
S23.0O0 on December 81. 1888 The rec.
ord for 1884 shows a recovery to ST..
50S,766 900 at the year-eud.
Significance Of Increased Deposits
ut is particularly gratifying to note
the expansion Of deposits, since 1t was
their decline which made necessary the
liquidation OF Investments, the calling
OF loans. and all the other phenomena
which go under the name OF 'deflation'
and have brought banks so much criti.
cism in recent years. 1t is now plain
that this was due to efforts Of the
banks to place themselves in the pos.
session Of enough liquid assets to meet
the growing demands Of depositors for
the return of part of the money which
had been placed on deposit.
That this is true is borne out by the
movement of invested funds Of state
banks. which has paralleled that Of de.
posits. These invested funds Uoans and
discounts plus investments) for state
banks. dropped from s20.291 .320. 900. at
the end OF 1881. to sl4.915.773 900 at the
end Of 1888. BY December 81. 1884. how
ever. they had recovered to s15.769 .510..
900. All Of this gain is accounted for
by the increase in investments during
1884. the expansion amounting to ap-
proximately s1.3O0.O00 900.
LAS for loans and discounts. they reg.
istered slight drop again in 1884. but
the rate of decline was much smaller
than in previous years. which in Itself
is progress. Whereas the drop in loans
and discounts amounted to approxi-
matelv $500 900 900 IN 1882. and to aT-
proximately $1,000 900 900 in 1888. It
was less than S5OO.OOO 900 in 1894.
I'm another respect the balance sheet
figures for December 81. 1884 were es-
pecially impressive. Bills payable an1
rediscounts of the state banks. which
at the end of 1882 had reached a de,
preston high of s6G9.7O9 900. had
dropped by the close of last year to the
low figure CT sS2.1Ol 900. One must
search the records as far back as 1917
to find bills payable and rediscounts OF
state banks at lower figure. More.
over, 1t is reasonable to expect further
reduction OF such borrowings during
the current year.