Decrease

of reserve $291,850. The (final) item reserve in the statement as i ued from the clearing house meant surplus reserve, although not specifically so stated. j In the newspapers the statement appeared as follows, being elucidated so as to show the reserve held (that is, specie and — legal tenders, which are generally referred to as cash holdings), ~ the reserve required and the surplus reserve, with the changes in these items: Current week. Preceding week. Changes. Loans.................$874,647,900 - $872,303,700 Inc.$2,344,200 Deposits............... 872,340,600 872,176,000 Inc’. 164,600 Circulation.............. 36,072,500 35,660,900 Inc. 411,400 Legal tenders.......... 67,274,300 68,503,300 Dec. 1,319,000 Sp@cie =.............. 152,338,200 151,269,900 Inc. 1,068,300 Reserve held.........$219,612,500 $210,863,200 Dec. $250,700 Reserve required....... 218,085,150 218,044,000 Inc. 41,150 Surplts....... 15. $yha7a50 $1,819,200 Dec. $291,850 In 1902 the Secretary of the Treasury (Leslie M. Shaw) suspended the requirement to keep a reserve against government funds on deposit in national banks upon the ground that these funds were special deposits which were fully secured by pledge of bonds with the Treasurer of the United States. This action by the Secretary of the Treasury caused a change in the make up of the bank statement by the addition to it of figures showing the average amount of government funds on deposit. The consolidated statement was thereafter i ued from the clearing house in the following form: Loans....... eee eee eee eee ees 1 $874,647,900 $2,344,200 Increase. Specie........--.-- eee eee eee 152,338,200 1,068,300 Increase. Legal tenders.............-... 67,274,300 1,319,000 Decrease. *Deposits.......--eeee eee ee es 872,340,000 164,600 Increase. Circulation................... 36,072,500 411,600 Increase. Reserve on all deposits................ 291,850 Decrease. Reserve on deposits, other than United States........:.005 cece acces 325,825 Decrease. * United States deposits included $40,633,400. In the newspapers the statement was made up in both the old and the new forms as follows: Current week. Preceding week. Changes. Loans...........+6+.++ -$874,647,900 $872,303,700 Inc.$2,344,200 Deposits............... 872,340,600 872,176,000 Inc. 164,600 Circulation.............. 36,072,500 35,060,900 Inc. 411,400 Legal tenders.......... 67,274,200 68,593,300 Dec. 1,319,000 Specie........... ee. 06+ 152,338,200 151,269,900 Inc. 1,068,300 Reserve held.........$219,612,500 $219,863,200 Dec. $250,700 Reserve required....... 218,085,150 218,044,000 Inc. 41,150 Surplus.............. $1,527,350 $1,819,200 Dec. $291,850 Deducting the United States deposits held by the banks from the aggregate deposits the bank statement compares as follows; Current week. Preceding week. Changes. Total deposits..........$872,340,600 $872,176,000 Inc. $164,600 United States deposits.. 40,633,400 40,769,300 Dec. 135,900 Deposits 25 per cent...$831,707,200 $831,406,700 Inc. $300,500 Reserve held........... 219,612,500 219,863,200 Dec. 250,700 Reserve required....... 207,926,800 207,851,675 Inc. 75,125 Surplus.............. $11,685,700 $12,011,525 Dec. $325,825 The detailed bank statement, which is i ued simultaneously with the consolidated statement, contains first the number of each bank (each bank has a number by which it is known at the clearing house) and then the name of the bank, after which follow the amounts of its capital, net profits (surplus and undivided profits), specie, legal tenders, deposits and circulation. _ _—" —_——. The bank statement is said to have been made up on rising averages when the items in it have been increasing in amount during the week; or the statement is said to have been made up on falling averages when the items in it have been decreasing in amount during the week. Generally speaking the bank statement is favorable or good when it shows that the position of the banks has been strengthened, as by an increase in the surplus reserve through or by means of an increase in their cash holdings rather than: by a decrease in their deposits, which often is effected by the calling of loans—by demanding and obtaining the payment of money loaned on call. As money loaned is credited to borrowers on their deposit accounts and increases the total deposits of the banks so the payment of loans by borrowers takes from and decreases deposits. As will be seen the calling and consequent payment of loans does not increase cash holdings but merely changes balances in individual accounts. A reduction in deposits reduces the amount of cash required to be held as a legal reserve and correspondingly expands (increases) the surplus reserve. Generally speaking, also, the bank statement is unfavorable or if particularly unfavorable is bad when the position of the banks has been weakened, as by a decrease in the surplus reserve through a decrease in their cash holdings rather than by an increase in their deposits, which often is effected by an expansion in (increase in the amount of) their loans, which correspondingly expands (increases) their deposits and correspondingly increases the amount of cash required to be’ held as a legal reserve. This additional amount is deducted from and correspondingly reduces the surplus reserve. The bank statement may be said to be favorable or good, however, if an increase in loans is reported when the banks are surfeited with money; also the bank statement may be said to be unfavorable or rather not good (but hardly bad) when it shows that money. is accumulating in idlene in the banks— when deposits are increasing, not as a result of increasing loans, but in the absence of a borrowing demand for money. There are other circumstances which make the bank statement favorable or unfavorable as disclosed in the circumstances themselves. There is also a non-member bank statement, which is a statement of the condition of banks which are not members of the clearing house but clear through members. This statement is i ued from the clearing house on Monday and shows the average condition of the banks for the week ending with and including the preceding Friday. The non-member bank statement contains the name of each bank followed by its capital, net profits, average amount of loans and discounts and investments, average amount of specie, average amount oi legal tender notes and’ (national) bank notes, average amount on deposit with its clearing house agent (the bank through which it clears at the clearing house), average amount on deposit with other New York city banks and trust companies, average amount of net deposits and average amount of circulation. 65