The Nature Functions And Classification Of Banking Institutions
The terms, "bank" and "banking," are applied to institutions and to
businesses which differ considerably in character, functions, and
methods, but which nevertheless have certain common features which
justify their being grouped together. We can best prepare the way for
a discussion of these differences and common features by a description
of the services which these institutions perform in modern society.
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Rates
Besides rates of exchange considered in the preceding chapter, commercial banks are concerned with loan and discount rates. Rates on deposits, though sometimes employed, have no place in commercial banking, since commercial deposits are only the c... Saving And Savings Institutions
Saving is an individual matter for which the essential conditions are the development of the instinct to make provision against uncertainties of future income and to better the material condition of one's self and family, and a surplus of income abo... Services Performed By Banking Institutions
From the point of view of their customers these services may be grouped under the following heads: The safekeeping of money and other valuables; the making of payments; the making of loans; and the making of investments. It is a common practice ever... Some Defects In Our Investment Banking Machinery
A comparison of our investment banking machinery with that of European countries, especially Germany, reveals important differences. Among these the most notable are the wide use there and the almost complete absence here of the following: (a) the r... State Banks
From the very beginning of our national history institutions enjoying, among others, the privilege of commercial banking have been chartered by our states. For several years after the adoption of our constitution it remained an open question whether... Stock Exchanges
An essential part of the machinery of investment banking is the stock exchange. This is a place where the buyers and sellers of securities or their agents regularly meet for the transaction of business. It may be a portion of a street or a market pl... The Canadian System
In important respects the Canadian banking system differs from those of the European countries which have been described and from that of the United States. It consists of a varying number of relatively large institutions, each with several offices ... The Conduct Of Checking Accounts
A checking account is an ordinary book account on which are credited the cash deposited by a customer and the proceeds of collections, loans, and discounts made on his behalf, and on which are debited payments made to him in cash or on his behalf to... The Economic Functions Of Banks
Viewed from the standpoint of the nation rather than from that of individuals, the functions of banks may be described as those of intermediaries in exchanges and in the investment of capital. In the former capacity they supply the world with the ma... The English System
In the English system, the central bank is the Bank of England, with the possible exception of a few private banks, the oldest financial institution in the country. It is privately owned and privately governed. Its board of directors, chosen by the ... The French System
In France, the Bank of France is the central institution. It is the oldest of the important French banks of the present day, having been established in 1800 by Napoleon the First. Its capital, amounting at the present time to 182,500,000 francs, or ... The German System
The Imperial Bank, with head offices in Berlin, and about one hundred branches and more than four hundred sub-branches scattered throughout the country, plays essentially the same role in the German banking system that the Bank of England and the Ba... The Independent Treasury System
While not a banking institution, the Treasury of the United States handles its funds in such a manner and performs such functions with reference to the currency that it has become an important part of the banking system of the country. Previous t... The Interrelations Of These Institutions
Under the operation of the national banking act, New York, Chicago, and St. Louis have been designated as central reserve, and forty-seven other cities as reserve cities. The national banks in these reserve cities act as reserve agents for national ... The Issue Of Notes
As an alternative for or a supplement to the conduct of checking accounts a commercial bank may issue its promissory notes payable to bearer on demand. By the issue of notes is meant their transfer to customers in exchange for cash, for checks left ... The Nature Functions And Classification Of Banking Institutions
The terms, "bank" and "banking," are applied to institutions and to businesses which differ considerably in character, functions, and methods, but which nevertheless have certain common features which justify their being grouped together. We can b... The Operation Of Discount
Every person in this chain of credit is confronted with the problem of paying his debts as they mature by the use of the amounts due him from other people. Since it is rarely possible to arrange maturities on both sides in such a way that the amount... The Selection Of Loans And Discounts
The problem of the reserves is vitally connected with that of the selection of loans and discounts. As was shown in the preceding chapter, the chief business of a commercial bank is to conduct exchanges by a process of bookkeeping between individual... The Supply Of Cash
The credit balances on checking accounts and the notes of commercial banks are payable on demand in the legal-tender money of the nation to which they belong, and such banks must at all times be prepared to meet these obligations. The term employ... Trust Companies
Within a comparatively short period of time the trust company has developed into an institution of prime importance in the United States. In the beginning of its history it was, as its name implies, simply an institution for the administration of tr...