Index

INDEX Accommodation paper, 124,125 Accounts receivable, 169-172 Accrued liabilities, 195,196 Adams, A. E., 7,273 Adams, Norman I., 4,166 Agger, Eugene E., 66 American Bankers' Association, 146 Assimilation of the individual bank to the system, 68-72 Assumption, Illinois, 45 Atlantic National Bank of Jacksonville, Ma., 147 Baker, W. H., 133 Baltimore, Maryland, 45 Bank acceptances, 1,2,158-160 Bank borrowers' statements, reciprocal benefits of, 209211; significance of refusal to render, 211-213 Bank capital, 23 Bank credit, the nature of, 1-4; vs. commercial credit, 3, 4; legitimate scope of bank credit extension, 4-9; the bank acceptance as, 1, 2; the old theory and the new contrasted, 72-74 Bank credit department, forces underlying development of, 148-152; the rise of, 142-152; nature and work, 142,143 Bank examinations, internal and external distinguished, 295, 296; internal, 315-318; in foreign countries, 296 Bank supervision in relation to bank credit, 295 Bankers' banks, the nature of, 103; dilute cash, 104; Federal Reserve banks illustrative of, 104-112 Bankers' Trust Company of New York, 291,292 Banking transactions and accounts, 13-20 Banks as sources of credit information, 219-221 Beal, Thomas P., Jr., 279, 288 Benton, Andrew A., 317 Bills payable, for merchandise, 189; to own banks, 189, 190; for paper sold, 190-191 Blanding, Lowrie C, 213 Bonded debt and interest thereon, 192,193 "Book" surplus, 196 Borrowers' capacity, 207, 208 Borrowers' obligation, evolution in the form of, 123-131 367 368 INDEX Borrowers' statements, form of, 162-164 Boston, Massachusetts, 45, 137 Branch banking, in relation to note brokerage, 140, 141 Brokers' paper, new attitude of bankers toward, 141 Byerly, T. J., 236 Cannon, J. G., 146,216,221 Capital and surplus of bank borrower, 161, 165, 196, 197 Carthage, Illinois, 45 Cash on hand and in banks, in borrowers' statements, 165169 Cash, in relation to loan expansion in individual and collective banking, 77, 78 Cash withdrawals, 201, 202 "Cash credits," 235 Case, J. Herbert, 272 Central Reserve cities, 104, 113 Chase National Bank of New York, 65, 145 Chattel mortgages, 192 Claflin, H. B., 286 Claflin, The H. B. Company of New York, 285, 286 Claremont, New Hampshire, 45 Chemical National Bank of New York, 65 Clearing house bank examination, 302; the system described, 304-306; in relation to loans of small banks, 310312; in relation to "double"

borrowers, 312; incidental effects upon loans, 313 Clews, Henry, 131,133 Coates, Francis, 308, 312 Commercial banking, the nature of, 13-31. Commercial banks as bankers' banks, 119, 120 Commercial paper houses, 260294; characteristic features, 260-262; the paper, 262-264; form of business, 264, 265; profit of, 265-267; advantages of to borrowers, 267-270; disadvantages of to borrowers, 270,271; advantages to banks, 271-276; disadvantages to banks, 277. See, also, Note brokerage Concealed assets, 28-30, 253 Concealed liabilities, 30 Concealed profits, 253 Concentration of reserves, 120 Conover, Samuel S., 274 Cooke, Thornton, 237 Contingent liabilities, 194, 195 Copyrights, 185 Corn Exchange Bank of New York, 226 Corn Exchange National Bank of Chicago, 147 Crabb, John A., 247, 249 Craig, Justice G. C„ 245, 249 Craig, W. Oliver, 167,180 Corpus Christi, Texas, 46 Crane, F. W., 205-215, 273 Crawford, J. H., 237, 240 INDEX 369 Criticism, anticipated, answered, 74, 76 Country banks, 104 Credit worth, 161,198 Current liabilities, 162, 164, 197 Davis, C. H., 6 Deane, D. H., 234 Deferred assets, 185 Deferred liabilities, 195 Deming, J. K., 134 Denver, Colorado, 46 Deposits, are deposits bank credit? 2, 3; why banks compete for, 66-68 "Deposits of money with us,"

193 Depreciation, 202-204 Derivative deposits defined and distinguished from primary, 40-44 Derivative deposits, ratio of to loans, 44-46 Derivative deposits, aggregate, tend to remain constant in amount, 52 Des Moines National Bank, 75 Dillon, W. G., 239, 249 Dividends, 206 Double liability, 23 Drake, R. H., 251 Earnings, 205,206 Elkhart, Indiana, 45 Endorsed paper, 126-130, 247, 263 Equipment, 182 Erie, Pennsylvania, 45 Exchange, 19 Federal Reserve Act, 104 Federal Reserve Act and bank examination, 299 Federal Reserve banks; location of, 104; ownership of, 104,105; reserves of, 105; functions of, 105, 106; loans of, 109; as bankers' banks, 104-112; in relation to note brokerage, 138 Federal Reserve Bank of Cleveland, 116 Federal Reserve Bank of New York, 116 Federal Reserve bank notes, 109 Federal Reserve Board, 105-113 Federal Reserve notes, 107,108, 109, 110, 111, 112 Federal Reserve system, 123; membership in, 104, 105; future credit expansion under, 112, 113; influence of, upon kind and quality of bank loans, 156-160 Fire insurance, 201 First National Bank of New York, 145 First National Bank of Boston, 145 First National Bank of Denver, 147 First National Bank of San Francisco, 147 First National Bank of Weston, Ohio, 258, 259 370 INDEX Flatau, Herman, 192 Flynn, S. R., 216, 219 Forgan, James B., 124,125,126, 222 Foster, A. C, 207 Fourth National Bank of New York, 145 Fourth National Bank of Atlanta, Georgia, 147 Frankfort, Kentucky, 45 Freeport, Illinois, 45 Gage, William T., 186, 226 Galesburg, Illinois, 45 Goodwill, 185 Gordon, W. C, 244, 246 Government deposits, 109 Greenville, South Carolina, 45 Gurney, E. R., 246, 250 Haden, Charles J., 228 Hamlin, Charles S., 157 Hand books as a source of credit information, 215 Hannan, Charles R., 272 Hanover National Bank of New York, 37, 38 Hazlitt, Henry, 118, 119 Hepburn, A. Barton, 187 Herrick, Clay, 162, 167, 171, 172, 205 Howell, Eugene, 241 Implied warranties, 126 Income account, 199-206 Independent banking and the rise of note brokerage, 139 Individual bank loan expansion traceable to the acquisition of primary deposits, quantitative determination of, 54-57; formula for determination of, 55, 56, 115; qualifications of formula, 57-59 International Paper Company, registration of commercial paper of, 291, 292 Interview the, as a means of securing credit information, 221 Investigating the borrowing bank, 256-259 Investigating the credit risk, 214-223; method in a particular case, 222, 223 Johnson, E. L., 233 Johnson, J. H., 179 Kains,A.,314 Kavanaugh, Thomas J., 170, 201 Klein, J. J., 127 Lacey, E. S., 4 Lending power of the banking system, 38-40 Life insurance, 186-188 Life insurance policies as collateral security, 225, 226 Lipman, F. L., 228 Livingston, William, 226 "Loan expansion" defined, 59 Loans, expansion of, a prelude to loss of cash, 20-22 Loans, relation of, to deposits, 63,64 INDEX 371 Loans; secured, 224r-234; warehouse, 226; cotton, 229, 230; crop, 230,231; secured by real estate mortgage, 231-234; of country banks, 242-252; to tenants, 249; of banks to banks, 253-259 Long, R. A., 210 Lowry National Bank of Atlanta, Georgia, 147 Lynch, Jas. K., 244 Machinery and equipment, 181, 182 Mad River National Bank of Springfield, Ohio, 116, 117 Manchester, New Hampshire, 45 Martin, W. McC, 157 Martindale, Joseph B., 190,212, 222 Mechanics' and Metals National Bank of New York, 118, 145, 222, 223 Medina, Ohio, 45 Meek, Charles E., 174 Mercantile agencies as sources of credit information, 215 Merchandise, 164,173, 179 Merchants' and Mechanics' First National Bank, Baltimore, Maryland, 147 Milford, New Hampshire, 45 Mills, A. L., 241, 274 Mississippi Valley Trust Company, St. Louis, Mo., 147 Morgan City, La., 46 Morrill, E. N., 245 Moulton, H. G., 6,84,85,86,87 Murray, Lawrence O., 298, 299, 302 McGrath, A. J., 255 National Association of Credit Men, 146 National bank notes, 19,109 National banks, loans of, 128, 130 National Bank of Commerce, New York, 145 National Bank of Commerce,

St. Louis, Mo., 147 National City Bank of New York, 145 National Park Bank of New York, 145 National bank supervision, 296299 National Reserve Bank of Kansas City, Mo., 147 National Shawmut Bank of Boston, 145 Naumburg, E., 124 Nelson, John M., 225 New business department; rise of, 152-155; relation of to bank credit department, 155 New England cotton mills, depreciation of, 203 Newport, New Hampshire, 45 New reserve, the distribution of as a foundation of manifold new loans, 58-63 New worth, 165, 196, 197; relation of to credit worth, 198 372 INDEX New York banks, loans of, 127, 128 New York, N. Y., 45, 137 Non-liability paper, 256 Note brokerage system; weaknesses of, 277-287; correctives, 287-294; growth of, 131-141 Notes receivable, 169,172 O'Brien, W. H., 301 Open accounts, "frozen" credit, 158; in borrowers' statements, 191 Option in the purchase of brokers' paper, 265 Organization expenses, 185 Oskaloosa, Iowa, 46 Overdrafts, 16, 17, 235-241; comptroller of the currency issues ruling against, 236; objectionable features of, 237, 238; in state and national banks, 238, 239; rules for controlling, 239, 240; dependent upon bank supervision, 240; an index of the soundness of banks, 241 Overflow cash, 54,57,59, 60, 61, 62 Page, Edward D., 127 Parker, Robert A., 198, 212 Patents, 185 Permanent assets, 162 Permanent liabilities, 162 Philosophy of bank credit, 3276 Pierre, South Dakota, 46 Post, William, 149, 173, 174, 178, 179, 182, 194, 219, 221 Primary deposits, differentiated from derivative, 40-44 Profits, 199, 201, 205, 206 Proprietorship interest, 165,196, 197 Protective liabilities, 22-28 Quick assets, ratio of to current liabilities, 197 Rate of interest, 250-252 Ratio of derivative deposits to loans, factors determining the, 46 Ratio of cash to deposits in individual bank, regulation of, 79-82 Ratio of cash to deposits and to loans in the banking system, 82,83 Ratio of reserve to deposits vs.

ratio of surplus to credit liabilities, 102 Read, Albert M., 226, 228 Real estate, 179-181 Reckitt, Ernest, 169 Rediscount rate as a factor in credit extension, 114r-118 Rediscount rate in relation to the general price level, 117, 118 Rediscount rate in relation to volume of trade, 117, 118 Rediscount rate and the traditional theory of bank credit, 118 INDEX 373 Regional banks (Federal Reserve banks) regarded as one bank of branches, 106,107 Registration of commercial paper, 291-293 Reserve, relation of, to demand liabilities, 20, 21 Reserve deposits, defined, 106; volume of, 109 Reserve liability, 23-25 Reserves, legally required, 108; centralization of 111, 120 Reserve, relation of to surplus, 94-96 Reserve cities, 103,104 Residual cash, 73 Rockport, Massachusetts, 45 Roe, Louis M., 177 Salaries, 201, 202 Salem, Massachusetts, 45 San Francisco, California, 46, 50 Sales, 204, 205 Schmidt, J. L., 272 Schryver, R. H., 237 Scottsville, Kentucky, 45 Scoville, C. C. K, 247 Seattle National Bank, Seattle, Washington, 147 Sensenich, Edgar H., 225 Shepperd, Owen, 291 Sims, R. N., 238 Single name paper, 127, 128, 129, 262 Slow and past due paper, rules for reducing, 248, 249 Slow assets, 162 Smith, C. T., 251 Smith, W. H., 236 Smith, W. W., 187 Smylie, R. W., 232 Snyder, F. B., 205, 220 Southwest National Bank of Commerce, Kansas City, Mo., 147 St. Joseph, Mo., as a jobbing and credit center, 136 State bank supervision in relation to bank loans, 299-302 Stocks and bonds in borrowers' statements, 183,184,, Surplus, 25-29 Surplus reserve, formula for the determination of the amount that a bank can lend on the basis of, 71 Surplus, a new but erroneous doctrine of, 84-94 Surplus and reserve, tendency toward direct variation between, 96-101 Surplus reserve, 108 Talbert, Jos. T., 139, 276, 280, 302 Ten days' option in the purchase of brokers' paper, 265 Thompson, R.G., 229 Tiffin, Ohio, 45 Tootle-Lacy National Bank, St.

Joseph, Mo., 147 Trade acceptances, 158,159 Trade, the, as a source of credit information, 216-220 Trade-marks, 184,185 374 INDEX Traditional theory of banking, a critical analysis of, 34-38 Tregore,J.H.,176 Turnover, 204,205 Undivided profits, 25-29 United States National Bank of Portland, Oregon, 147 Valuation of assets, 27, 29 Van Vechten, Ralph, 280, 289, 293, 307, 312, 313 Weston, W. S., 211, 244 Wexler, Sol, 313, 314 Wheeler, H. A., 208 White, Horace, 36 Whitfield, William, 171-175 Whitney-Central Nat'l Bank, New Orleans, La., 147 Wilson, A. W., 231 Wilson, J. W., 311, 312 Wing, Daniel G., 203 Wylie, James R., 282 Zimmerman, H. M., 309 Printed in the United States of America.