Worcester Democrat and the ledger-enterprise. (Pocomoke City, Md.) 1921-1953, 1935-05-24
TRENDS FAVORABLE
IN STATE BANKING
Recent Figures Indicate Large
Increases in Deposits and
Invested Funds

Improvement in the condition of state
banks in almost every respect during
1884 Is shown by statistics recently as
sembled. Robert NJ Hanes. President
Wachovie Bank and Trust Company
Winston-Salem. North Carolina. points
out in an article in Banking" pub.
lished by the American Bankers Asso.
citation. 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 Of deposits in statt
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
state banks declined from $20,395.762.
600 on December 81. 1881, to $15.424.
$4,000 on December 81, 1888. The rec.
ord for 1884 shows a recovery to SIT,
5OS.766.O0O at the year-end.
Significance of Increased Deposits
ut is particularly gratifying to note
the expansion OF deposits. since 1t was
their decline which made necessary the
Stipulation Of investments, the calling
Of loans. and all the other phenomena
which go under the name of 'defiation
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 Qoans and
discounts plus investments) for state
banks, dropped from $40, 291, 1926, 900, at
the end of 1881, to Slabs. 77S. 900 at the
end of 1888. BY December 81, 1884, how.
ever. they had recovered to SIS. 769.510..
600. All Of this gain is accounted for
by the increase in investments during
1884, the expansion amounting to ap.
proximately $1,000, 100000.
/ "As for loans and discounts, they reg.
istered a 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 approx
mately $4,000, 10000 in 1892, and to ap
proximarely $1,9O0,OOO,O0O in 1888. it
was less than $500 900, 900 in 1884.
I'm another respect the balance sheet
figures for December 81, 1884. were es
pecially impressive. Bills payable and
rediscounts of the state banks. which
at the end of 1882 had reached a de.
preston high of $669. 900. had
dropped by the close of last year to the
low figure of SS2.101.000 One must
search the records as far back as 1917
to find bills payable and rediscounts of
state banks at lower figure. More.
over, it is reasonable to expect further
reduction of such borrowings during
the current year."