No bank manager, however long and ably he may have served a bank, ought to be permitted to conduct its affairs without supervision. Directors who do not direct occupy a false position toward the public, the depositors, the stockholders and the bank manager. The welfare of the several classes concerned in the institution demand that these officials should not neglect their duties. Before proceeding to discount paper, it is necessary to know what resources a bank has available for that purpose. This information is contained in a Statement from the General Ledger. The following form is copied from the Daily Statement Book of a bank in New York City:

Arctic National Bank of the City of New York.

Capital stock..........................

Surplus fund...........................

Profit and loss.........................

Discount..............................

Interest................................

Exchange.............................

Rents collected.........................

Total profits.........................

National circulation outstanding........

Dividends unpaid......................

Individual deposits A to —...........

"             #         — to —...........

*             *         — to Z..............

Certified checks........................

Total individual deposits............

Banks and bankers' deposits A to — ..

"                     "                 "        — tO — ..

*                  *              " — to Z....

Afternoon mail........................

Total banks and bankers' deposits___

Total footings.......................

Memoranda—Gross deposits.........

(Daily) Net deposits...........

Weekly average—Loans and discounts....

Specie.................

(Reported Saturdays Legal-tender notes

to                   Deposits..........

Cleartng-House.) Circulation.......

Monday.

Tuesday.

   
   
   
   
   
   
   
   
   
   
   

Wed.

The items are read, or the principal ones, and afterward the offerings, consisting of notes on which the owners are desirous of obtaining money of the bank. Instead, however, of reading these, a record, previously made in a book called an Offering Book, is read to the directors. In this book the names of the offerers are recorded alphabetically, the amount of each note, the time it is to run, the name of the indorser, where payable, and any other particulars relating to it. In small banks the notes offered are read without regard to alphabetical order.

If the amount of offerings exceeds the amount of loanable funds of course not all can be accommodated, even if their notes be desirable. But rarely does it happen when any considerable amount of paper is offered that it possesses a uniform value. Some makers or indorsers are better known, and are preferred to others. What therefore, happens, is to select from the entire amount offered the most desirable offerings, and to decline the remainder. Yet, often the entire amount offered is not enough to absorb all the loanable funds. Then the bank must look elsewhere to find a way for employing its resources. One way is to buy paper, though in buying it the board may pass on the transaction the same as would be done if offered in the usual way for discount. This business of buying paper is worth a brief explanation.

It is purchased by a bank of a note-broker. But where does he •get such paper to sell? Of merchants. Formerly they gave notes only for the merchandise they bought, but in recent times they give notes without reference to the purchase of any special merchandise, in order with the money thus obtained to discount their bills.