The evening world. Newspaper, October 6, 1922, Page 17

"The Bank Owes When a bank accepts a de- posit it agrees to repay the epo: itors money instantly when the to Deposi : depositor asks for it. What Payable heavier obligation could be ‘ laid a banker, what on Demand” req calculated to take him more scrupulous- ly carefulnf what he does with the money entrusted to him? For depesits cannot lie idle in the vaults. They must be put <2 worl: for the good of the community, in the shape of loans to merchants and manufacturers, investment in bonds of soand corporations, real estate mortgages and Government louns. Tt banks refirsed to lénd and invest, the wheels of in- dustry would come to a full stop, and banks can only justify their existence by lending and investing. And yet, if deposi- tors ask for their money it must be forthcoming without a moment’s delay. How can a bank lend money and at the same time have it available to pay depositors? ‘The answer lies in the bank’s reserves of cash and of securi- ties on which cash can immediately be raised, plus its other asects and especially its, surptus of assets over what it owes to depositors. The Corn Exchange Benk owes to depositors $195,339,103.41, which it has egreed.to repay on demand. « . [1] CASH For this Not all the money which comes flood- Purpose ing through the tellers’ windows of the » We Have’ Bank is toancd to borrowers of in- vested in bonds. A substantial past of it is held as a reserve to pay depositors who wish their checks cashed. A part of this money is kept in the shape of actual coin and banknotes in the tills, and another pert is deposited with the Federal Reserve Bank, where it can be obtained on a moment’s notice. The Federal Reserve Law requires that banks in New York City, members of the Federal Reserve System, shall keep funds on deposit at the Reserve Bank to the extent of at least 13 per cent of the amount which member banks owe to their own depositors on demand. In addition, these member banks may keep on hand whatever cash they think they need. The Corn Ex- change Bank has cash on hand, in the Reserve Bank and in other depositories totaling $33,779,885.6S, which is 17.29 per cent of the amount of our own deposits, against only 13 per cent actually required by law. [2] CHECKS ON OTHER BANKS A large part of the deposits received every day by The Corn Exchange Bank consists of checks dsewn on other banks. Thus, according te the statement printed on this page, we have on hand $12,132,969.84 im the shape of checks, which will be converted into cash es soon as they have passed through the Clearing House or been otherwise collected. ‘This soquires one day, 20 thet at a day's notice our cash reserve can be increased $12,132,969.84, bringing the total upto 23.50 per cent of what-we owe our depositors. {3} U. S. GOVERNMENT SECURITIES A part of the deposits of The Corn Exchange Bank has been invested in United States Government bonds end notes, r you will or not, you are concerned with the way your bank—* any bank—manages the money entrusted to it by its depositors. If this “money is wisely and conservatively handled it is safe and at the same time it is usefully employed. The readiest means you have of finding out what becomes of the funds deposited in a bank is by studying the statements published Periodically by the bank. Every dollar of assets and liabilities is set down there, and if you know what the figures mean you can form a clear judgment of the actual ‘condition of the institution. THE EVENING WORLD, FRIDAY, OCTOBER 6, 1922, How a Bank is Managed and Examined ECAUSE of the common complaint that bank statements are not easily understood by the public, The Corn Exchange Bank began in 1916 to publish ‘A Bank Statement that any Man or Woman Can Understand.” Under the various items of the statement were printed brief explanations, in plain language, of what these items mean. So popular has this form of benk statement become that we have gone a step further and show in detail, in this advertisement, how to determine the significance, in actual percentage figures, of the various items in a bank statement. A Bank Statement that any Man or Woman can Understand THE CORN EXCHANGE BANK NEW YORK Statement of October 2, 1922 The Benk Owes to Depositors © ¢ 2 2 = . $195,339,103.41 A conservative benker always hes this indebtedness in mind, and : he asrenges his assets 20 as to he able to meet any request for payment. For this Purpose We Have: {0} Gian ok 7333 2 $ & ° = $33,779,885.65 (Gla) RMA: Wooten nd Ocha) td th Sagal depostiician v0- turnable on demand. {2] Checks on Other Banks : 5 3 « 3 5 = 12,182,969.84 Payable in one day. {3} U.S. Government Securities? 3 2 5 ° 70,284,784.76 {4} Loans to Individuals and Corporations . 16,145,012.95 Payable when we eck for them, secured by colleteral of greater value than the loans. {5} Bonds. .. 3 sft tts 8 8 fl 4,355,716.73 Of saltroads and other corporations, of first quality and easily salable. (6} Loams - 7 ttt ttt tt 8 8 fF (49,246,246.40 Payable in tees than three months on the average, largely secured by collateral, {7} Bondeend Mortgages and Real Estate 4,346,023.00 {8} Thirty Houses ; 4,700,617.75 All located in Mew Yesk City. Total to Meet Indebtedness . «3214, 991,257.08 {9} 5 ee ae 9191052, 163167, solicit new deposits and retain those which have boca lodged with us for many years. Our listed resources, enumerated in this statement do not and can not include those assets of friendliness and helpfulness whieh this bank has in the personnel of its board of directors, ite officers and employes. These are acects which pay dividends to our patrons in service and satisfaction. THE FIGURES OF OUR BANK STATEMENTS ARE AUTHENTICATED AT LEAST SIX TIMES agencies and by the authorities of the Bank itself: land2—Twice a year the State Bank Examiners, without previournctice tous, sendin a forge of 57 men who count all the money and examine all the securitics we possess. 8-~At least once a year the New York Clearing House, of which this Bank te a member, examines our condition without notice to us. 4—The New York Federal Reserve Bank also makes its own examination of our accounts and assets without letting us know when to expect this scrutiny. §&—~The Directors of The Corn Exchange Bank are required by law to examine and verify the Bank's accounts at least once a year. This ts done, no notice being given in advance, by committees of clerks numbering 153 men, selected by the Directors. 6—~-Periodical examinations are made, without notice, by our own inspectors. All this is designed to check end verify every item which appears in our bank-etetrments. THE CORN EXCHANGE BANK NEW YORK The Corn Exchange Bank Supplies Banking and Trust Service Through Its Fifty-Three Offices Located in Greater New York described, $132,342,653.20, which is 67.75 per cent of the am punt we owe to our depositors. (5} BONDS porations. sale. The cash realized from the sale of the $24,355,716.73 of these bonds now on hand would bring or total cash up to $156,698,369.93 or 80.21 per cent of our deposits. {6} LOANS ‘The loans we have made te customers, largely secured by collateral and payable, on the average, in less than three months, represent a part of the service we render to the business community. The accompanying etaternent shows $49,246,246.40 of such loans outstanding. Our customers use the money we have advanced them to carry on their business. These loans constitute an additional safeguard to our depositors, for the reason that a large proportion of this commercial paper can be immediately disposed of for cash at the Federal Reserve Bank. That Bank, of which The Corn Exchange Bank isa member, will lend us maney against the notes which our customers have given us, or will purchase certain clesses of their obligations outright from us for cash. We have already shown how, if necessary, 80.21 per cent of the money required to pay our depositors could be realized. In order to secure the remaining 19.79 per cent, thereby covering our deposits dollar for doflar, it would only be necessary to rediscount or sell to the Federal Reserve Bank $38,640,733.48 out of the §49,246,246.40 commercial loans which we hold. In other words, the funds would be provided by disposing of 78.46 per cent of our customers’ commercial notes at the Federal Reserve Bank. This would leave a balence of $10,605,512.92 of commercial paper still un- touched, after providing for the payment of 100 per cent of our obligations to depositors. [7] BONDS AND MORTGAGES AND REAL ESTATE Thia item represents miscellaneous assets of The Corn Ex- change Bank acquired in the course of its business dealings. These asects are sound and, while not as easily marketable as the items listed above, constitute an additional guerantee of the benk’s ability to meet demands upon it. The total on hand, as shown in the annexed statement, is $4,346,023.00 which is less than 2.25 per cent of our deposits. {8} THIRTY BANKING HOUSES The item of $4,700,617.75 represents The Corn Bank’s main building and twenty-nine of the fifty-two premises branches. It will be noted that this The figures in the statements of The Corn Exchange Bank ere verified bythrecoutelde, independent able to meet every possible demand upon us. {9] THIS LEAVES A SURPLUS OF—