books



previous page: Other People's Money And How The Bankers Use It | by Louis D. Brandeis
  
page up: Banking Books
  
next page: Currency And Banking | by Bonamy Price

Banking, Credits And Finance | by Thomas Herbert Russell



banking, credits, finance, coins, money, stocks, exchange, clearing-house, notes, drafts, monetary system, federal reserve, foreign exchange, investments, stock exchange

TitleBanking, Credits And Finance
AuthorThomas Herbert Russell
PublisherWhitman Publishing Co
Year1916
Copyright1916, Whitman Publishing Co
AmazonBanking, credit and finance (Standard business)

International Business Library

Banking, Credits And Finance

By Thomas Herbert Russell, A. M., Ll. D.

Editor-In-Chief Author of "Business Principles and Methods," "Natural Resources and National Wealth," etc., etc.; former Editor-in-Chief Webster's Universal Dictionary

Assisted By A Corps Of Business Experts

Copyright 1916 By Whitman Publishing Co.

Racine - Chicago

"Business men do not realize how closely their banks watch them - how much the bank is bound to know about their affairs - how much seemingly small things in their daily lives affect credit. And big things that they sometimes want to conceal, too."

"It must be said, and said whatever men may think of it, that the finances touch everything, help everything, conclude everything. They are in the state what blood is in the veins of the human body; if it circulates, it carries along with it motion and life; if it stops, paralysis and death supervene. Good organization, good administration, a good condition of the finances, exert, therefore, imperiously, everywhere and always, a positive, healthful and vivifying action upon the government of a country and the prosperity of its people."

-Introduction
At first sight it may seem that the study of principles and methods of Banking and Finance might be confined to those engaged in the business of banking or concerned with the actual problems of high f...
-Introduction. Part 2
History Of Banks And Banking A knowledge of the history of banks is desirable because it gives a clearer understanding of the essential principles on which modern banking systems are founded. The tim...
-Introduction. Part 3
Bank Reserves It is astonishing how many men of business, otherwise well informed, lack precise information upon such matters as the nature of bank reserves and government requirements regarding the ...
-Chapter I. Origin And Use Of Money
The true origin and function of money were expounded at least as early as the second century, when the great Roman Paullus wrote: The origin of buying and selling is in exchange. Formerly there were ...
-Man Lives By Exchange
When the division of labor has been once thoroughly established in a community, says Adam Smith, it is but a very small part of a man's wants which the produce of his own labor can supply. He supplies...
-Use Of Metal As Money
In all countries, however, men seem at last to have been determined by irresistible reasons to give the preference, for this employment, to metals above every other commodity. Metals cannot only be k...
-Origin Of Coinage
To prevent such abuses, to facilitate exchanges, and thereby to encourage all sorts of industry and commerce, it has been found necessary, in all countries that have made any considerable advances tow...
-The First Stamped Metals
The first public stamps of this kind that were affixed to the current metals seem in many cases to have been intended to ascertain, what it was both most difficult and most important to ascertain, the...
-Pounds, Shillings, And Pence
The English pound sterling, in the time of Edward I, contained a pound, Tower weight, of silver of a known fineness. The Tower pound seems to have been something more than the Roman pound, and somethi...
-Values Have Varied
From the time of Charlemagne among the French, and from that of William the Conqueror among the English, the proportion between the pound, the shilling, and the penny, seems to have been uniformly the...
-The Universal Instrument Of Commerce
It is in this manner that money has become in all civilized nations the universal instrument of commerce, by the intervention of which goods of all kinds are bought and sold, or exchanged for one anot...
-Chapter II. The Function Of Banks
As late in history as the year 1746, a British statesman, speaking in the House of Commons, inquired: What is it that we call a Banker? There is in this city of London a company or corporation, calle...
-Private And Public Banks
Banks have been broadly divided into private and public.A private bank is that in which there are but few partners, and these attend personally to its management. A public bank is that in which there ...
-Public Or Incorporated Banks
Public or incorporated banks may be broadly classified as national and state banks. National banks exist by virtue of national laws. State banks are governed by the acts of state legislatures. State ...
-National Banks
National banks of the United States are established under the National Banking Act and are subject to federal regulation. [See Chapter XIII.] National banks in other countries have certain relations w...
-Banks Of Discount And Deposit
A bank of discount is owned by the shareholders who contribute the capital. It receives commercial and other deposits, usually payable on demand. It discounts commercial paper, makes short loans for c...
-Chapter III. The Origin Of Banking
There is but little information available as to the kind of banks that existed in the earlier ages, or on what system they conducted their business. As most of the nations of antiquity subsisted chief...
-The Jewish Money-Changers
We read in the New Testament of money-changers who had tables in the temple of Jerusalem. It is probable they attended for the purpose of giving Jewish money in exchange for those various coins which ...
-The Banks Of Ancient Greece
With respect to the bankers of Greece we have more ample details, some of these being interestingly recounted by J. W.Gilbart, F.R. S., in his History, Principles and Practice of Banking. In Greece...
-Methods Of Athenian Bankers
The greater part of the Athenians employ their money in trade, but they are not permitted to lend it for any place but Athens. They receive an interest for the use of it which is not fixed by the law...
-Commerce Gave Rise To Bankers
Commerce increases the circulation of wealth, and this circulation has given birth to the occupation of bankers, which facilitates it still more. A person who is about to make a voyage, or who fears ...
-The First Joint-Stock Bank
In a treatise published by Xenophon, upon the Athenian revenue, we meet with the first suggestion for the establishment of a joint-stock bank. Of this historic step Mitford says: A very remarkable p...
-The Banks Of Ancient Rome
At Rome, the bankers were called Argentarii, Men-sarii, Numularii, or Collybistce. The banking-houses or banks were called Tabernce Argentarice, or Mensce Numularice. Some of these bankers were appoin...
-Origin Of The Word "Bank"
After commerce and the arts had revived in Italy, the business of banking was resumed. The word bank is commonly regarded as derived from the Italian word banco, a bench - the Jews in Lombardy havin...
-The Florentine Bankers
Though the States of Venice and Genoa made the most rapid advances in commerce, and established public banks, yet the department of banking appears to have fallen more particularly into the hands of t...
-The Bank Of Barcelona
So early as the year 1349 the business of banking was carried on after a fashion by the drapers of Barcelona, who were probably the most wealthy class of merchants in that city. But by an ordinance of...
-The First Bills Of Exchange
Before the discovery of the passage to the Indias, by the Cape of Good Hope, the Venetians enjoyed a monopoly of the lucrative trade of the east, by means of the Mamelukes of Egypt, with whom they wer...
-The Bank Of Amsterdam
The Bank of Amsterdam was established on the 31st of January, 1609. The magistrates of the city, under authority of the States, declared themselves the perpetual cashiers of the inhabitants, and that ...
-Bank Money At A Premium
The beneficial effects of this establishment in Holland were soon perceived, and bank money immediately bore a premium called the agio, which is a term to denote the difference of price between the mo...
-A Model For European Banks
The Bank of Amsterdam was the model on which were formed many of the older European banks, but they have varied very considerably from each other, according to the circumstances of the respective coun...
-The Bank Of North America
The Bank of North America owed its origin to the vigorous mind and enterprising genius of Robert Morris, who conceived the idea of it when superintendent of the public finances, and submitted to Congr...
-Chapter IV. Early Banking In England
There are four principal branches or functions of the business of modern banking, namely, (1) the exchanging of money; (2) the lending of money; (3) the borrowing of money; (4) the transmitting of mon...
-Money-Changing
For several centuries the only coin current in England was made of silver, and the highest denomination was the silver penny. This coin contained about half as much silver as one of the modern sixpenc...
-Re-Established By Charles I
This institution continued until the middle of the reign of Henry VIII, when it fell into disuse. It was reestablished in 1627, by Charles I, who then issued the following proclamation: Whereas the e...
-The King's Prerogative
As this measure occasioned some dissatisfaction, the king authorized, in the following year, the publication of a pamphlet, entitled Cambium Regis, or the Office of his Majesty's Exchanger Royal. In...
-Money-Lending
That part of the business of banking which consists in the lending of money was conducted during the Middle Ages under severe restraints. The taking of interest for the loan of money was deemed sinful...
-Early Rates Of Interest
The taking of interest for the loan of money was first prohibited in England by Edward the Confessor. This law, however, appears to have become obsolete; for, in a council held at Westminster, in the ...
-Expulsion Of The Jews
The wealth and the rapacity of the Jews occasioned the most cruel proceedings against them on the part of both the populace and the Government. These persecutions terminated by their expulsion from En...
-Interest Made Legal
In the year 1546, the taking of interest for money was made legal in England, and the rate was fixed at ten per cent. This Act was repealed in the year 1552, but it was re-enacted in 1571. The legal r...
-Money-Borrowing
That part of the business of banking which consists in the borrowing of money, with a view of lending it again at a higher rate of interest, does not appear to have been carried on by bankers until th...
-The Banking Goldsmiths
These bankers were the goldsmiths. Previous to this period, the business of the goldsmith was similar to what it is in our own time. They bought and sold plate and foreign coins; they procured gold to...
-Blamed For Money Scarcity
The new-fashioned bankers were also attacked by Sir Josiah Child, in his New Discourse of Trade, in the following terms: And principally this seeming scarcity of money proceeds from the trade of...
-The First Run On A Bank
In the year 1667 occurred the first run of which we have any account in the history of banking. The business of the new-fashioned bankers had increased so fast, and they had become so numerous, that t...
-Opposition of Foreign Competitors
It was noticed that foreign competitors for English trade strongly opposed the project, and not long after the bank had been established, Bishop Burnet wrote: The advantages the king and all concerne...
-The Act Of Parliament
The act of Parliament by which the bank was established was entitled, An Act for granting to their Majesties several duties upon tonnage of ships and vessels, and upon beer, ale, and other liquors, f...
-Provisions Of The Charter
The whole subscription having been filled in ten days, a charter was issued on the 27th day of July, 1694. The charter declares: That the management and government of the corporation be committed to...
-Agents For The Government
In 1718, subscriptions for government loans were first received at the bank, and from this period the British government has found it more convenient to employ the bank as its agents in all operations...
-Events In The Bank's History
In 1745, there was a run upon the bank, occasioned by the rebellion in Scotland, and supposed to be for the purpose of supplying the adherents of the Stuarts with gold. A public meeting was held in Lo...
-Chapter V. The Utility Of Banking
In a commercial community banks possess a large sphere of usefulness. Their utility has been well described as six-fold: First, they furnish a safe repository for money;second, they encourage thrift b...
-The Safe-Keeping Of Money
In the first place, banks are useful as places of security for the deposit of money. The circumstances which gave rise to the business of banking in England was a desire on the part of the merchants o...
-The Allowance Of Interest
The bankers often allow interest for money placed in their hands on deposit. This is a direct incentive to thrift, especially in the case of depositors in savings banks. By means of banking, the vari...
-The Loaning Of Money
Another benefit derived from bankers is, that they make advances to persons who want to bor-row money. These advances are made - by discounting bills or notes - upon personal security - upon the joint...
-The Transmission Of Money
Another benefit derived from bankers is, that they transmit money from one part of the country to another. There is scarcely a person in business who has not occasion sometimes to send money to a dis...
-Exchange Of Currency
Wherever a bank is established, the public is able to obtain that denomination of currency which is best adapted for carrying on the commercial operations of the place. In a town which has no bank, a ...
-An Economy Of Time
By means of banking there is a great saving of time in making money transactions. How much longer time does it take to count out a sum of money, especially in various European currencies, than it does...
-Collection Of Drafts
A business man who has a banker saves the trouble and expense of presenting those bills or drafts which he may draw upon his customers, or which he may receive in exchange for his goods. He pays these...
-Safe Deposit For Valuables
Another advantage resulting from a banker in many places that lack safe deposit vaults is, that the customer has a secure place of deposit for any deeds, papers, or other property that may require pec...
-Valuable Help In Business
By having a banker, people have a ready channel of obtaining much information that will be useful to them in the way of their business. They will learn the way in which bankers keep their accounts;and...
-A Moral Influence For Good
Banking also exercises a powerful influence upon the morals of society. It tends to produce honesty and punctuality in pecuniary engagements. Bankers, for their own interest, always have a regard to t...
-Chapter VI. The Methods Of Banking
By Seymour Eaton. Banks are absolutely necessary to the success of modern commercial enterprises. They provide a place for the safe-keeping of money and securities, and they make the payment of bills...
-Currency
The legal medium of exchange of a country is called its currency, that which passes current, or circulates as money, such as coin and bills. Bullion is uncoined gold or silver. More than ninety per ce...
-The Officers Of A Bank
The directors of a bank meet regularly to consider the character of the paper offered for discount, and to consult regarding the general business of the bank. Sometimes the directors give the presiden...
-Suggestions To Bank Clerks
Ability, enthusiasm, tact and determination are as nec-cessary in banking as in any other commercial situations. Many of the most successful bankers in the country commenced as messengers and passed f...
-The Bank'S Cash
The actual usable cash of a bank is represented by the silver, gold and bills on deposit. It is estimated that the gold in use in the world amounts to $7,000,000,000, and that an equal amount has bee...
-Counterfeit Notes
All United States notes are printed in sheets of four notes of one denomination on each sheet. Each note is lettered and numbered twice. All notes of which the number when divided by 4, shows remainde...
-Bank Loans
A portion of the loans of many banks consists of investments in solid bonds, but the bulk of the loans of banks are made on commercial paper;time and demand loans are made upon collaterals of many des...
-Borrowing From Banks
It is the business of a bank to loan money to responsible persons, within reasonable limits. The regular customer of the bank is entitled to and will receive the first consideration if the demand is l...
-Rates For Loans
In loaning money on demand, when it is strictly understood between bank and borrower that the money so advanced is positively minute money - money returnable at any minute, when the bank calls for it ...
-When Interest Accrues
There are certain well-defined principles which make clear when interest is accruing and when it is not. Money voluntarily left by any one in the hands of another will not, of course, draw interest un...
-Forged Indorsements
A bank is supposed to know the signatures of its depositors. It is one of its first and most important duties to have them on file and immediately accessible by the use of a well-kept signature book. ...
-Trust Companies
The ordinary trust company with which city people are familiar is very similar in its management to a national bank. They invest their deposits and capital in the same class of securities, and they ar...
-Safe Deposit Vaults
Many of the banks, trust companies, and insurance companies make a special feature of renting small safe deposit boxes or drawers in their vaults to any and every person who chooses to pay the rent as...
-A Depositor's Credit
As a rule, banks do not make known even to a single individual the extent of a customer's business or the size of his bank account. However, any shareholder in a bank has a right, as one of the propri...
-Giving Bonds For Faithful Service
Bank clerks and officers are usually required to give bonds, that is, they must get some person to go their surety, thus guaranteeing faithful service, and agreeing to make good any losses caused by d...
-Use Of Instruments Of Credit
All the wholesale transactions of business and a large part of the retail transactions are completed by the passing of instruments of credit or negotiable paper, as notes, drafts,checks, etc.; a part ...
-Bank Examinations
National banks are examined once or twice a year by a United States Bank Examiner, who has authority from the Comptroller of the Currency, to whom his reports are made. These reports are seldom if eve...
-The Cheque Bank
This is an English institution with a branch in New York city and agencies in other cities. This bank sells to its customers a book of checks, each of which can be filled up only to a limited amount, ...
-Bank Statements
A bank statement is a balance-sheet of the bank's main ledger, and is sworn to by the cashier and attested by several of the directors. It is published at the time of its making in the local newspaper...
-Defalcations And Embezzlements
An experienced banker offers the following suggestions to prevent defalcations and embezzlements through the manipulating of the bank's record books: Secure clerks of high character and integrity and ...
-Commercial Crises
Disturbances of the course of trade arise largely from the necessity of readjusting its conditions to the common standard and measure of value. The common standard of value is money, and the condition...
-Chapter VII. The Clearing-House System
In large cities checks representing millions of dollars are deposited in the banks every day. The separate collection of these would be almost impossible, were it not for the clearing-house system. E...
-Check Collections
Each bank in a city receives on deposit, daily, checks on other banks. Instead of sending these by messenger to the other banks they are sent to the clearing-house at a fixed hour each day - in some c...
-The Wanderings Of Checks
Under old-fashioned methods, each bank was in the habit of selecting its collection agents, sending them by mail their collection paper, charging their customers very substantial collection rates and ...
-Clearing-House Management
The bank clerks who attend to the clearing-house business must be experts in their special work. The slightest error on the part of one clerk may prolong indefinitely the entire settlement. As a check...
-Foreign Clearing-Houses
England has three bank clearing-houses and France one. The clearing principle is used in England to adjust the complicated accounts of the through traffic of connecting railroads, and to simplify the ...
-Chapter VIII. Deposits And Depositors
When you enter a bank to open an account, inquire for the cashier, and, if convenient, take with you some one who can introduce you and identify you as the person you profess to be. If you go alone, ...
-Hints For Depositors
Do not wait until you get to the bank to count your money, or to indorse your checks and arrange your deposit. This should be done before you come to the bank, or at least, before you present yourself...
-A Banker's Hints
Do not draw a check unless you have the money on deposit or in your possession to deposit. Do not test the generosity of your bank by presenting, or allowing to be presented, your check for a larger ...
-Cashing Your Own Check
If you wish to draw money from your own account, the most approved form of a check is written Pay to the order of Cash. This differs from a check drawn to Bearer The paying teller expects to see y...
-Checks For Special Purposes
If you wish to draw a check to pay a note, write Pay to the order of Bills Payable. If you wish to write a check to draw money for wages, write Pay to the order of Pay Roll. If you wish to write a...
-No Funds
If you have deposited a check and it is returned through your bank marked No Funds it signifies that the check is worthless and that the person upon whose account it was drawn has no funds to meet i...
-Canceling Checks
Banks have a custom, after paying and charging checks, of canceling them by punching or by making some cut through their face. These canceled checks are returned to the makers at the end of each month...
-Certified Checks
If you wish to use your check to pay a note due at some other bank, or in buying real estate, or stocks, or bonds, you may find it necessary to get the check certified. This is done by an officer of t...
-Bank Drafts
Your bank check is really your sight draft on your bank. Of course it differs from an ordinary commercial draft, not only in its wording, but in its purpose. A check is used for paying money to a cred...
-"Kiting" Checks
Don't exchange checks to get twenty-four hours' credit. This is often done. The banks call it kiting. If your bank finds that kiting is included in your business methods, do not be surprised if you...
-Signatures
In the course of business we often come across very queer specimens of writing and eccentricities in signatures. A New York Insurance Company's Vice-President has a signature, as it appears on the pol...
-Suggestions To Bank Depositors
Don't exaggerate your financial condition. The bank has a history of it on its books. Do not borrow money to swell your deposits. Don't ask for special favors in the way of credit; good security is ...
-Chapter IX. Notes And Drafts
Promissory Notes A promissory note is a written promise to pay a specified sum of money. At the time of the note's issue, that is, when signed and delivered, two parties are connected with it: the ma...
-"Value Received"
These words are not legally necessary, although they usually appear on ordinary promissory notes. Thousands of good notes made without any value consideration are handled daily. A Promissory Note....
-Accommodation Paper
Notes and acceptances that are made in settlement of genuine business transactions come under the head of regular, legitimate business paper. An accommodation note, or acceptance, is one which is sign...
-Interest Notes
A note does not draw interest until after maturity, unless the words with interest appear on the face. Notes draw interest after maturity and until paid, at the legal rate. An English Note of Hand...
-Indorser Of A Note
An indorser of a note is any person who writes his name on the back of it, and by so doing guarantees its payment. Indorsements on notes are usually made in blank, that is, without the words Pay to t...
-Presentation For Payment
A note should be presented on the exact day of maturity. Notes made payable at a bank or at any other place, must be presented for payment at the place named. When no place is specified the note is pa...
-Protest
When a note is presented for payment at maturity and is not paid, it is usually protested,that is, a notary public makes a formal statement that the note was presented for payment and payment was refu...
-Date Of Maturity
In finding the date of maturity it is important to remember that when a note is drawn days after date the actual days must be counted, and when drawn months after date the time is reckoned by months. ...
-Payment On A Note
If a payment is made to apply on a note, such payment should always be indorsed on the back of the note. Such indorsement requires no signature. The usual form is to give the date and write Received ...
-A Joint Note
A note having two or more makers is called a joint note. If written We jointly and severally promise to pay, either maker is individually liable for the whole amount if the other does not pay his sh...
-Signature To A Note
The maker's signature to a note must appear in some form upon some part of the paper. It may be affixed by himself or his authorized agent, and it may be the full name or the initials only. ...
-Commercial Drafts
A commercial draft is really a letter from one person to another requesting that a certain sum of money be paid to the person who calls, or to the bank or firm for whom he is acting. Commercial usages...
-Collections By Draft
It is a very common thing to collect distant accounts by means of commercial drafts. A debtor is more likely to meet a draft than he is to reply to a letter and inclose his check. It is really more co...
-Draft Notices
When goods are sold for distinct periods of credit and it is generally understood that maturing accounts are subject to sight drafts, there really should be no need of notifying the debtor in advance ...
-When are Accounts Due?
Custom has made some rules which are now considered absolute by the best business houses. On general monthly credit accounts, all goods bought during the month are due on the first day of the month fo...
-Three-Party Draft
If the drawer of a draft owes some one in the same city with the person upon whom he draws, that is, if he has a creditor and a debtor in the same city, he can draw on the debtor in favor of the credi...
-Advantages Of Taking A Note
It is generally understood that a debtor is more likely to pay a promissory note than he is to keep a simple verbal promise. It will injure his credit if he allows his paper to go to protest. It is di...
-Drafts And Bills Of Lading
The use made of commercial drafts in connection with bills of lading is quite interesting. For instance, the live cattle are paid for in Texas by the proceeds of a draft, with bill of lading attached,...
-Protest Notice
The student will notice the copy of a protest notice - the form used by notaries in Massachusetts. An illustration is given of a protested note stamped (in red or some other color) by the notary. The ...
-Overdue Paper
Negotiable paper, whether made for accommodation or otherwise, may be transferred by indorsement and delivery or by delivery alone either before it has fallen due or afterward. There is a difference, ...
-Who is a Bona-fide Holder?
If the indorsee or holder of a note has no notice at the time he receives it, of any facts or circumstances that would prevent any of the parties to the paper before him from recovering the whole amou...
-A Set-Off
If a man has a claim against you and you have also a claim against him, you call your claim a set-off', that is something to set or cancel off part or all of his claim. Under ordinary conditions it is...
-A "Mark" Signature
When a man who cannot write is asked to sign a deed or mortgage or other legal document, the usual custom is to have him affix a cross as in the illustration, some one doing the writing for him. Such ...
-Power Of Attorney
To give some one else the power to sign or indorse checks, notes, or other important papers, is called giving such a one power of attorney, that is, the power or authority to be your attorney. Such au...
-The Return Of Vouchers
Banks usually return to promisors and acceptors all the paper which they have collected. When you pay a note or draft you expect to receive the canceled note or draft in exchange for the money which y...
-Due Bills
A due bill is an acknowledgment and evidence of a debt. It may be payable in money or in merchandise. The ordinary form of due bill is not negotiable. How Notes Differ from Other Contracts. There are...
-Legal Tender
In making money payments it is necessary often, or if the receiver demands it, to make payment in legal tender, that is, in the form of money required by law. For instance you cannot pay an account of...
-Note Brokers
Merchants sell a great many of their notes in the open market, that is, to note brokers. The banks buy these notes from the note brokers. The assistance of the broker who handles commercial paper is a...
-Single-Name Paper
The custom of issuing single-name paper has grown largely of late. The maker is the borrower, and the buyer must consider his personal credit when making the purchase. It is estimated that two-thirds ...
-Demand Collateral Note
An illustration is given of a demand collateral note. The bank loans money payable on demand and accepts, in this instance, railroad stock as security. The stock is held by the bank until the note is ...
-Collection Laws
An attachment is a writ issued at the commencement of, or during a suit at law in court, commanding the sheriff, or other proper officer, to attach the property of the defendant, to satisfy the demand...
-Chapter X. Credit And Exchange
It is to credit alone that we are indebted for that intermediate agent which plays so important a part in the transaction of business, whether it be in causing supply and demand to meet, or in applyin...
-History Of Financial Exchange
In early times foreign trade consisted in the direct exchange of commodities. A caravan set out with a variety of manufactured articles, across the deserts of Arabia or Sahara, and came back with the ...
-Principles Of Exchange
In commerce the term exchange is generally used to designate that species of mercantile transactions by which the debts of individuals residing at a distance from their creditors are canceled without ...
-Exchange Terms
There are several terms used in connection with exchange which should be understood. Bankers' bills of exchange are bills drawn by bankers on bankers. Commercial bills are those based upon movements o...
-Domestic Exchange
The principle of domestic or local exchange is precisely the same as that described as underlying the foreign exchange business. In foreign exchange we have to do with a mixture of dollars with sovere...
-The Cost Of Shipping Gold
There are times when it is to the advantage of the banker or merchant to ship gold to meet foreign debts. Usually if sight bills on England cost more than 4.90 it is cheaper to ship gold. The followin...
-The World'S Currencies
In addition to the gold and silver coins, the United States has in circulation about $350,000,000 in greenbacks-the remnant of the forced paper currency of the civil war; about $155,000,000 in Treas...
-English Money
Any person may take bar gold to the extent of 20,-000 to the English mint and have it returned to him in sovereigns and half-sovereigns. The Bank of England receives bar gold at 3 17s. 9d. per ounce...
-"Crossed" Checks
The crossed check so common in Britain is unknown in the United States. It is simply an ordinary check that has upon its face marks which signify that it must be presented through some other bank or b...
-The British Consols
The British consols are securities representing the consolidated debt of England; the word consol being an abbreviation of consolidated. They are quoted in the financial columns of the newspapers. Her...
-Canadian Money
Many Americans hesitate to accept Canadian money, usually for the reason that they have difficulty in passing it and partly from ignorance of its security. The Canadian silver coins are in reality of ...
-Letters Of Credit
The ordinary letter of credit is the leading and usual instrument for the use of travelers in Europe and has now become such a common feature of banking that every one should be familiar with its form...
-Chapter XI Banking In Canada
By B. E. Walker.* In common with other social developments, modern banking is mainly the result of heredity and environment, and not of arbitrary legislation or the general admission in any wide degr...
-Bank Charters
It has been occasionally urged by writers in financial journals published in the United States, that banking in Canada is a monopoly, and, therefore, unsuited to the democratic principles of this coun...
-Liability Of Shareholders
In Canada, as in the United States, shareholders in banks are subject to what is known as double liability. For the benefit of any who may not understand the phrase, I will quote the section in ful...
-Term Of The Charter
Under the United States national banking system the life of a bank is limited to twenty years from the date of the execution of the particular bank's certificate of organization, but at the expiration...
-Banking Principles
What is necessary in a banking system in order that it may answer the requirements of a rapidly growing country and yet be safe and profitable? 1. It should create a currency free from doubt as to va...
-The Condition At Confederation
I will not attempt to follow the course of banking in the old provinces, but it is necessary to indicate the condition of banking and currency at the time of the Confederation of the provinces into th...
-The Basis Of Elasticity
I have already stated, in attempting to outline what is necessary in a banking system in order that it may answer the requirements of a rapidly growing country, that it should create a currency free ...
-Currency And Trade Requirements
In Canada, bank notes, as we have seen, are secured by a first lien upon the entire assets of the bank, including the double liability, the security being general and not special - not by the deposit ...
-Bond-Secured Currency
If our currency were secured by Government bonds the volume in existence at any one time would be determined by the profit to be gained by the issue of such bond-secured currency. It would, therefore,...
-Convertibility And Security
The next quality in a currency to be considered is, That it should be readily convertible into metallic money. I do not propose to discuss this at length. As I have pointed out, our safety lies in t...
-The Borrower And The Branch System
In discussing the banking systems in older countries, the borrower is not often considered. Men must borrow where and how they can, and pay as much or as little for the money as circumstances require....
-Supplying Local Wants
As I have indicated, it should be the object of every country to economize credit, to economize the money of the country so that every borrower with adequate security can be reached by some one able t...
-The Depositor
The legal position of the depositor is about the same in both countries. The note-holder's claim is preferred to his. We must not, however, expect that any government will relieve a depositor from the...
-Competitors For Deposits
There are some features in our deposit business which may be interesting to Americans. There are perhaps not half a dozen savings banks, as the term is understood in North America, in the whole of Can...
-Interest On Deposits
Returning from this digression to the subject of deposits, I have to deal with the objection that we pay interest on deposits. I am aware that many eminent bankers in the United States have expressed ...
-Bank Inspection
We have in Canada no public bank examiner as in the United States, nor are our annual statements audited as in Australia. When the audit system was proposed we resisted because we felt that it pretend...
-Reserves
With regard to the question of reserves, we hold with the majority of the banking world outside of the United States against fixed reserves. With us no reserves are actually required by law. The cash ...
-Chartered Banks Of Canada
The statistics of chartered banks in Canada show that in the 41 years 1868-1908 the capital paid up rose from $30,507,447 to $96,147,526, the liabilities from $45,144,-854 to $762,077,184 and the asse...
-The Laws Governing Credit
In an address in June, 1896, at the organization of the National Association of Credit Men, I stated: Credit can hardly be classed among the sciences, and certainly it cannot be said to be an exact s...
-Statements From Borrowers
The corner-stone of credit science may be said to be the requiring from borrowers of statements of the conditions of their affairs. This has now become an accepted custom in the relation between banks...
-The Credit Department
But if the statement is the foundation of the credit structure, the credit department may be considered to be the superstructure. This division of the bank's operating mechanism may be said to be the ...
-Analysis Of Statements
In our reviews of the credit science of to-day we have noted the universal custom of giving statements. We have glanced over the mechanism provided for the handling of these statements and correlated...
-All Benefited By Examination
The radicalness of the step is only apparent, not real - as all will be benefited by the examination proposed. The interpretation of credit statements is a technical operation, and the statements prep...
-Practical Features Of Bank Credits
We are a practical people who are more given to consideration of improving our methods than to reflection upon our existing greatness or that of our predecessors. For that reason I have up to this tim...
-Typical Balance Sheets
Typical balance sheet for manufacturers. Number of concerns averaged................. 62 Per cent Quick assets ............................... .$1,000,000 44 ...
-Net Worth Of Borrowers
Again, referring to these balance sheets, let us compare the net worth of these classes of borrowers: Manufacturers show net worth 73 per cent of their assets. Commission men show net worth 50 per c...
-To Encourage Manufacturers
As to the future: We are naturally looking forward to extending commercial loans at paying rates of interest. Inasmuch as loans which are secured by assets not readily convertible into cash are those ...
-Importance Of Credit Science
In conclusion, permit me to say that credit science occupies a prominent place in commercial affairs. The requirement of credit is a proper and necessary condition of business, and the usefulness of c...
-Chapter XIII. The Comptroller's Office
By James H. Eckels Former Comptroller of the Currency and President of the Commercial National Bank of Chicago. The office of the Comptroller of the Currency was created by an act of Congress passed...
-An Independent Office
There is a nominal affiliation between the Treasury Department and the office of the Comptroller of the Currency, but the Comptroller's office, differing from any other connected with the department, ...
-The Organization Department
The office in its organization has three or four departments. The Organization Department receives the applications for the creation of a national bank. The application must set forth the names of tho...
-National Bank Examiners
After the bank has been established, it comes under the active supervision of the Comptroller of the Currency. Under the act he is empowered, subject to the approval of the Secretary of the Treasury (...
-The Department Of Reports
The examiner's report is made to the Comptroller of the Currency, and thence sent to the Department of Reports, where there is a large force of clerks to examine these reports, see what is defective i...
-The Redemption Department
There is another division of the Comptroller's office known as the Redemption Department, where mutilated and worn-out bank notes and the notes of banks which have gone into liquidation are redeemed. ...
-Insolvent Banks
If the bank impairs its capital, the Comptroller of the Currency notifies the directors and calls upon them to make good the deficit. In case they fail to do so, the Comptroller declares the bank inso...
-Responsibility Of The Office
The office differs from any other in Washington because there is absolutely no routine. Every case is an individual case, and the Comptroller must exercise individual judgment in every instance. The g...
-Liquidation Of Assets
As a result of bad banking or mistaken banking, banks are very likely to get themselves loaded up with assets not easily realizable, and when the pinch comes they fail and go into the hands of a recei...
-Chapter XIV. Monetary System Of The U. S
No. 1 - Gold and Silver Coinage. In 1786 the Congress of the Confederation chose as the monetary unit of the United States the dollar of 375.64 grains of pure silver. This unit had its origin in the ...
-The Silver Act Of 1878
The act of February 28, 1878, directed the coinage of silver dollars of the weight of 412 1/2 grains troy, of standard silver as provided in the act of January 18, 1837, and that such coins, with all ...
-The Standard Of Value
In providing for the coinage of the precious metals Congress established, by the act of April 2, 1792, the standard of value, consisting of certain gold and silver coins, at a ratio of 15 to 1 - that ...
-Coins And Paper Currency
There are ten different kinds of money in circulation in the United States, namely, gold coins, standard silver dollars, subsidiary silver, gold certificates, silver certificates, Treasury notes issue...
-Gold Coins
The coinage of legal-tender gold was authorized by the first coinage act passed by Congress, April 2,1792. The gold unit of value is the dollar, which contains 25.8 grains of standard gold .900 fine....
-Silver Coins
The principal silver coin is the dollar, which contains 412% grains of standard silver .900 fine. The amount of fine silver in the dollar is 371 1/4 grains, and there are 41% grains of copper alloy. T...
-Subsidiary Silver
The silver coins of smaller denominations than one dollar, authorized by the act of April 2, 1792, were half dollars, quarter dollars, dimes, and half dimes. They were the equivalent in value of the f...
-Issue Of Standard Silver Dollars And Subsidiary Silver
Standard silver dollars are issued by the Treasurer and assistant treasurers in redemption of silver certificates and Treasury notes of 1890, and are sent by express, at the expense of the Government,...
-The Silver Act Of 1890
An Act Directing the purchase of silver bullion and the issue of Treasury notes thereon, and for other purposes. [Public - No. 214. 1890.] Be it enacted by the Senate and House of Representatives of...
-Standard Bullion
Standard bullion contains 900 parts of pure gold or pure silver and 100 parts of copper alloy. The coining value of an ounce of pure gold is $20.-67183 and the coining value of an ounce of standard g...
-Coinage Of Gold
In the United States there is free and unlimited coinage of gold, that is, standard gold bullion may be deposited at the mints in any amount, to be coined for the benefit of the depositor, without cha...
-Coinage Of Silver
Under existing law in the United States subsidiary-silver is coined only on Government account. This coinage is made from bullion purchased by the Government under the provisions of section 3526, Revi...
-Trade Dollars
The trade dollar of 420 grains troy was authorized by the act of February 12, 1873. It was intended for circulation in oriental countries as a substitute for the Mexican dollar, which it slightly exce...
-Free And Unlimited Coinage Of Silver
This term, as used at present in the discussion of the coinage question, means the right of any person to deposit standard silver bullion in any amount at the mints of the United States and have it co...
-Redemption
Gold coins and standard silver dollars, being standard coins of the United States, are not redeemable. Subsidiary coins and minor coins may be presented, in sums or multiples of $20, to the Treasur...
-Foreign Coins Not Legal Tender
Section 3584 of the Revised Statutes of the United States provides that no foreign coins shall be a legal tender in the United States. ...
-Denominations, Weight, And Fineness Of The Coins Of Fee United States
Gold. Denomination. Fine gold contained. Alloy contained.* Weight. Grains. Grains. Grains. One dollar ($1)..... 23.22 2.58 ...
-Chapter XV. Monetary System Of The U. S. No. 2 - Paper Money
The first paper money ever issued by the Government of the United States was authorized by the acts of July 17 and August 5, 1861. The notes issued were called demand notes, because they were payabl...
-United States Notes
The principal issue of United States paper money was officially called United States notes. These were the well-known greenbacks or legal tenders. The act of February 25, 1862, authorized the issu...
-Gold Certificates
The act of March 3, 1863, authorized the Secretary of the Treasury to receive deposits of gold coin and bullion in sums not less than $20, and to issue certificates therefor in denominations not less ...
-Silver Certificates
The act of February 28,1878, authorizing the issue of the standard silver dollars, provided that any holder of such dollars might deposit them in sums not less than $10 with the Treasurer or any assis...
-Treasury Notes, Act Of July 14, 1890
These notes were authorized by the act of July 14, 1890, commonly called the Sherman Act. The Secretary of the Treasury was directed to purchase each month 4,500,000 ounces of fine silver at the mar...
-Fractional Currency
When specie payments were suspended, about January 1, 1862, both gold and silver coins disappeared from circulation. The place of the subsidiary silver coins was for a time supplied by the use of tick...
-National Bank Currency Authorizing Act
The issue of circulating notes by national banking associations was first authorized by an act entitled An act to provide a national currency secured by a pledge of United States stock, and to provid...
-Security
Under the provisions of existing law (1910) a national bank is required to deposit interest-bearing bonds of the United States with the United States Treasurer as security for its circulating notes in...
-Profits On Circulation
Tables published annually by the Comptroller of the Currency show the profit arising from a bank investing its funds in bonds and taking out circulation thereon, compared with the profits from investm...
-Profits On Capital Invested
In the Comptroller's report for 1907 was a tabular statement showing the annual net earnings and dividends on the capital of national banks for the preceding thirty-eight years, based upon reports mad...
-Capital Based On Population
A national bank may be organized by not less than five persons anywhere in the United States, subject to the following requirements as to capital and population. 1. With not less than $25,000 capital...
-Amount Of National-Bank Circulation
The aggregate capital of the 7,453 national banks in the fiscal year 1915 was $1,063,978,175, with a total surplus of $714,117,131. ...
-Chapter XVI. The Federal Reserve System
On June 23, 1913, President Wilson personally appeared before Congress and called public attention to the deficiencies in the existing system of banking and currency in the United States, at the same ...
-A New Epoch In Banking
With the adoption of the Federal Reserve Act, there was a general feeling that American business and banking had entered upon a new epoch. Many bankers throughout the country hastened to apply for mem...
-Main Features Of The Act
Under the new system the United States, as already indicated, is divided into twelve Federal Reserve Districts, each having a regional Federal Reserve Bank with a capital of at least $4,000,000 subscr...
-How Panics Are To Be Prevented
In ordinary times the business of banking goes on very much as before the passage of the new Act, and merchants and citizens can see little difference in conditions. The ordinary banks continue to be ...
-The Federal Reserve Act
An Act, to provide for the establishment of Federal Reserve Banks, to furnish an elastic currency, to afford means of re-discounting commercial paper, to establish a more effective supervision of ban...
-Organization
The organization and selecting of the Federal Reserve Cities was left in the hands of the Secretary of the Treasury, Secretary of Agriculture and the Comptroller of the Currency, this committee to des...
-Federal Reserve Board
A Federal Reserve Board is created which shall consist of seven members, including the Secretary of the Treasury and the Comptroller of the Currency, who shall be members ex-offcio, and five members a...
-Membership
Every National bank must become a stockholder in the Reserve Bank of its respective district, and shall subscribe to the capital stock of the Federal Reserve Bank in a sum equal to six per centum of t...
-Public Subscription
In the event that the subscription by National banks should be insufficient, the Organization Committee may offer to the public, at par, such an amount of stock as they may determine. No individual, c...
-Board Of Directors
Every Federal Reserve Bank shall be conducted under the supervision and control of a Board of Directors who shall perform the duties usually appertaining to the office of directors of banking associat...
-Depositors
There are no depositors in the Reserve Bank of a district other than the members of the district and the United States Government. ...
-Discount Operations
Upon the indorsement of any of its member banks, with a waiver of demand, notice and protest by such bank, a Federal Reserve Bank may discount notes, drafts and bills of exchange arising out of commer...
-Earnings
After all necessary expenses have been paid or provided for, the stockholders shall be entitled to receive an annual dividend of six per centum on the paid in capital stock, which dividend shall be cu...
-The Federal Advisory Council
The Act provides for a Federal Advisory Council of twelve members (one representing each Federal Reserve District) who are appointed respectively by the directors of the Reserve Banks for a term of on...
-Duties Of The Reserve Board
The Federal Reserve Board exercises a general supervision over the affairs and management of the Federal Reserve banks. It has the power to discount paper, issue Federal Reserve notes, and perform oth...
-Federal Reserve Agents
In each district there is a Federal Reserve Agent, appointed by the Federal Reserve Board, who acts as chairman of the board of directors of a Reserve Bank, maintains a local office of the Federal Res...
-Influence Of The New System
The advantages of the Federal Reserve system began to be apparent very soon after its establishment. Thus, in their first annual report to the Federal Reserve Board, the directors of the Federal Reser...
-Importance To The Community
Of the importance to the community of the new banking system and safeguard, the Chicago directors said: Notwithstanding the almost negligible demands on most of them for either credit or currency, t...
-Attitude Toward Member Banks
The Federal Reserve Bank of Chicago belongs to its members. They have furnished the entire capitalization and are the sole depositors, they have elected six of the nine directors and the directors in...
-A Great Constructive Measure
The Federal Reserve Act became a law as a great, far-reaching constructive measure to bring co-ordination and unity, consolidation and central control, out of our separated commercial banks under ind...
-Practical Guarantee Of Deposits
The original National Bank Act provided for supervision of banks, and its amendments increased the efficiency of this supervision. The Federal Reserve Act provides additional safeguards. The Comptroll...
-Chapter XVII. Monetary Events Since 1786
1786 Establishment of the double standard in the United States with a ratio of 1 to 15.25; that is, on the basis of 123.134 grains of fine gold for the half eagle, or $5 piece, and 375.64 grains of ...
-Monetary Events Since 1786. Part 2
1847 Abolition of the double standard in Holland by the introduction of the silver standard on the basis of a 1-florin piece .945 grams fine, the coinage of which had already been decreed in 1839. ...
-Monetary Events Since 1786. Part 3
1871 Replacing of the silver standard in Germany by the gold standard. Coinage in 1873 of gold pieces of 5, 10 and 20 marks pieces, the latter weighing 7.168 grams fine. Silver, 60 1/2d. 1871 ...
-Monetary Events Since 1786. Part 4
1885 Introduction of the double standard in Egypt. Silver, 48 3/8d. 1885 Prolongation of the Latin Union to January 1, 1891. 1886 Great decline in the price of silver, which fell in August ...
-Chapter XVIII. Foreign Exchange - Part I
By H. K. Brooks.* While foreign-exchange transactions are generally regarded as being quite complicated, and there are some operations requiring experience and patient study, the system as a whole ca...
-Foreign Departments Supersede Brokers
American merchants who formerly imported goods from foreign countries through brokers at seaport cities now have foreign departments for the transaction of the business direct. Our manufacturers, who ...
-An Opportunity For Students
In an article published in one of the leading financial papers - The New York Financier - it was stated that the demand among bankers and large mercantile houses for young men having a general knowled...
-What Foreign Exchange Is
Foreign exchange is a system by which commercial nations discharge their debts to each other. This indebtedness may represent the value of commodities exported to or imported from other countries, mon...
-Magnitude Of Foreign Trade
One can hardly appreciate the magnitude of the business between the United States and foreign countries which, directly or indirectly, is transacted through the medium of the system we term foreign e...
-Knowledge Of Monetary Systems
A knowledge of the moneys of account, or monetary systems, of the various foreign countries is one of the first things necessary to a clear understanding of foreign-exchange transactions. Paper money...
-The Only International Money
Gold, by virtue of commercial usage and the laws of the various countries of the world, may be said to be the only international money, and its purchasing power is practically the same all over the ci...
-How Gold Shipments Are Handled
As gold shipments between the United States and foreign countries, particularly Europe, are an important factor in foreign-exchange transactions, it is well to learn how they are handled and the expen...
-Commercial Bars Of Gold
In accordance with the United States Mint regulations, a charge of four cents per $100 is made for what are known as commercial bars of gold, which are from 990 to 997 thousandths fine. The shipper ha...
-"Money Of Account"
It is not necessary to recall here the names and denominations of all the coins or money used in the various foreign countries. I shall simply give the money of account of the principal countries. By ...
-European Moneys
I have now given a general idea of the kinds of money in use in the countries of North and South America, Asia, Africa, and the principal islands of the Atlantic and Pacific oceans. We now come to Eur...
-The British System
Foremost among all nations of the earth in the magnitude of its commerce, its vast colonial possessions and dependencies, and consequently its importance as the chief financial center, Great Britain f...
-"Sterling" Exchange
Probably more foreign exchange is drawn in sterling - here and in other countries as well - than in the money of all other countries combined. This is due, however, to the fact that London is the fina...
-Two Kinds Of Exchange
There are two kinds of exchange - direct and arbitrated. Direct is when between any two countries; arbitrated, when between two places in different countries through the medium of some other place in ...
-The Rate Of Exchange
The fluctuation in the price of exchange, or, as it is termed, the rate of exchange, is due to a number of causes. If the value of the goods we exported greatly exceeded the value of the goods we im...
-Effect Of Discount Rates
The discount rates at London, Paris, Berlin, and other European centers very materially affect the buying and selling price for commercial bills drawn against commodities exported. These discount rate...
-Par Of Exchange
Par of exchange means equal of exchange. There is a mint par of exchange, and also what might be termed a commercial par of exchange. The mint par of exchange between the United States and fore...
-Quotations Of Rates
Quotations for foreign exchange, such as checks, drafts, commercial bills, etc., are rarely understood except by those familiar with the business. In quoting the rate of exchange for drafts, checks, e...
-Peculiarity Of French Quotations
One peculiarity in the French quotations is that the rate is always advanced or lowered by % of a centime; for illustration, the next lower rate to 5.15 would be 5.15 %, then 5.16 1/4, 5.16 7/8, 5.17 ...
-German And English Quotations
Quotations for German exchange, where quoted for 4 marks instead of a single mark, are also supplemented by the plus or minus fractional quotations; as, for example, if 95 5-16 per 4 marks was thought...
-Meaning Of Newspaper Quotations
As an illustration let us take a clipping from the Chicago Tribune, quoting the rates for foreign exchange. Under the heading Foreign Exchange Market it starts in by saying: Foreign exchange clos...
-Before And After Clearings
Here is still another newspaper quotation, which, while not applying directly to foreign exchange, materially affects its rates in the western market: New York exchange - 30 cents discount before cle...
-Chapter XIX. Foreign Exchange - Part II
By H. K. Brooks The basis of a foreign bill of exchange is, as its name implies, a commercial transaction of international character, which consists in the purchase of goods or commodities in one cou...
-Commerce And Exchange
Trade between countries may be said to be conducted in a manner somewhat similar to that employed here between cities or towns, except that the method of payment or reimbursement to the shipper necess...
-A Typical Transaction
The process by which a foreign commercial bill of exchange drawn against commodities exported is created and handled, and reaches its termination, may best be illustrated by an actual transaction, and...
-Foundation Of Foreign Exchange
The buying of foreign commercial bills of exchange is the principal medium of bankers and foreign-exchange dealers in placing funds to their credit in banks abroad against which they issue checks, dra...
-Buying Commercial Bills
The buying of commercial bills of exchange can be safely undertaken only by those thoroughly familiar with that business. It is practically equivalent to loaning money upon security you have not seen....
-Hypothecation Certificates
It is the custom of large buyers of foreign commercial bills of exchange to exact of exporters what is termed a hypothecation certificate. This certificate, after describing the nature of the shipme...
-Various Rates Of Discount
You should always bear in mind that a different rate for discount applies to the different classes of bills. For instance, on documentary bills where documents are for payment, the discount or rebate ...
-The Bank Of England Rate
The Bank of England official minimum discount rate is fixed by the directors of the Bank of England at their meetings upon Thursday of each week, and their decision usually appears in the financial co...
-Safe And Unsafe Bills
There are certain classes of commercial bills which, unless special care is taken, are regarded as unsafe. In the case of cotton, on account of the different grades and the fact that there is so great...
-Documentary Bills
Documentary commercial bills of exchange drawn upon firms or banks where documents are for payment cannot be discounted upon the market, as in the case of such bills where documents are for acceptance...
-Cost Of Revenue Stamps
Drafts drawn in the United States payable in foreign countries are subject to the revenue laws of such foreign countries, and the cost of stamps so affixed abroad must be paid by the holders of the bi...
-Miscellaneous Charges
European banks are noted for charging for every item possible in connection with every transaction handled - such items as postage on letters sent to you during a certain period, cost of cablegrams, c...
-Convenience Of Sterling Exchange
The volume of transactions in French, German, and other continental exchange is quite small compared with that of sterling exchange. The reason for this is that most banks have accounts or balances on...
-Precautions Against Wrong Payment
A crossed sterling check is one payable either to bearer or order, having the name of a banker, or two parallel lines and the abbreviation & Co., written or printed across the face, thus: ..........
-Chapter XX. Investments
By D. R. Forgan.* There is a sense in which all business enterprises are investments. To build a ship or a railroad, to start a store or factory, to pay wages or place an advertisement - to do anythi...
-Bank Deposits Are Largely Credits
It is a common error to consider bank deposits as money in the bank, whereas they are largely composed of credits on a ledger. When a banker lends a customer $100,000 he takes the customer's note an...
-Little Actual Cash Demanded
In only a small portion of the transactions thus accomplished by credit will actual cash be demanded, and against this the banker must keep a certain percentage of his deposits in cash reserves. If th...
-The Potency Of Credit
In any financial discussion we shall soon go astray if we lose sight of the place and potency of credit. It is estimated that 90 per cent. of all business transactions are done on credit, and the curr...
-Recent Expansion Of Credit
The past few years have witnessed a remarkable expansion of credit in this country. The bank deposits increased about $3,500,000,000, and new stocks and bonds issued during the period probably reached...
-Effect Of Public Confidence
If confidence abounds, people readily invest in the representatives of property - stocks and bonds - and this creates a strong demand and a high price. On the other hand, if confidence be shaken, peop...
-Funds Available For Investment
The funds available for investment, which gradually absorb securities, come chiefly from the following sources, the first two of which have already been suggested : 1. Savings banks deposits - repres...
-Increase Of Investment Securities
In such good times as we had for several years prior to 1901 the combined demand from all these sources was enormous; hence both the rise in the price of securities and the rush to create and float ne...
-What Constitutes Desirability
A man of little experience and superficial knowledge may answer readily enough, but the answer will come slowly from a man of conservative judgment. The desirability of any investment consists of thre...
-I. - Public Securities
Government Bonds At the head of this class stand Government bonds, of which there were at one time outstanding over $2,500,000,000, but of which there are now only about $1,000,000,000. These are hel...
-II. - Real-Estate Securities
The purchase of real estate itself may be considered as an investment if it is already improved and yields an income, or if the purchaser improves it immediately after its purchase. To buy unimproved ...
-II. - Real-Estate Securities. Continued
Building And Loan Associations One of the worst forms of investment in real estate, in my opinion, is building and loan associations. They are gotten up in most attractive forms to catch the monthly ...
-III. - Corporation Bonds
Railroad Bonds Under this head come, first, railroad bonds, which have absorbed more capital than any other investment in this country. In the year 1899, there were 187,781 miles of railroad in opera...
-III. - Corporation Bonds. Continued
Public Utility Bonds Another large and rapidly growing class of bonds is composed of the issues of corporations operating public utilities, such as street railways, telephones, gas and electric-light...
-IV. - Stocks
The great difference between bonds and stocks is that, while the former are a lien on property of one kind or another, the latter frequently represent nothing more tangible than earning capacity, good...
-IV. - Stocks. Continued
Miscellaneous Stocks In addition to these great classes there are miscellaneous stocks too numerous to be here discussed. With regard to them as to all other securities, few general rules for insuri...
-A Safe General Rule
It may be said, however, that the safest general rule is to be content with a moderate rate of interest. From 3 1/2 to 5 per cent. is all that can now be looked for in securities which will require no...
-Chapter XXI. The Stock Exchange
By Seymour Eaton. The general public too often regard the stock exchange merely as a noisy congregation of brokers who gamble in the securities of government and corporations, under the guise of legi...
-Technical Terms Of Stock Exchanges
The term bull is applied to those who are purchasers of stock for long account, with the purpose of advancing prices, as the tendency of a bull is to elevate everything within his reach. The term bear...
-Brokers
Brokers are persons employed as middlemen to transact business or negotiate bargains between merchants or individuals. There are bill or exchange brokers who buy and sell foreign bills; note brokers w...
-Stock Companies
To organize a stock company it is necessary for a number of persons to come together and make a certificate to the effect that they propose to form a company to bear a certain name, for the purpose of...
-Shares Of Stock
The usual par value of a share of stock is $100. That is, if a company organize with a capital of $50,000, they will have 500 shares to sell. Each person who buys or subscribes for the stock, that is,...
-Capital Stock Increased
The capital stock of a concern may be increased or diminished by a vote of the majority of the stockholders representing a majority of the stock. Preferred Stock. The preferred stock of a corporation...
-Dividends
The directors of a company after paying the expenses and laying by a certain amount for contingencies, divide the profits among the shareholders. These profits are called dividends, and in well manage...
-Surplus Fund
It is not customary to pay a larger dividend than good interest on the investment. In some states some classes of corporations are not permitted to declare dividends larger than a fixed amount. The pr...
-Treasury Stock
It often occurs that a new company finds it necessary to set aside a certain number of shares to be sold from time to time to secure working capital. Such stock is held in the treasury until it is nee...
-Guaranteed Stock
When a stock is issued, upon which a certain dividend is guaranteed it is called guaranteed stock, Watered Stock. When stock is issued to the shareholders without increase of actual capital the stock ...
-Sale Of Stock
Stock is usually sold on certain explicit conditions, such as the paying of ten per cent. down and the balance at stated intervals. If the conditions which are agreed to by the shareholder are not met...
-Banking And Finance. Questions For Review
Chapter I. Origin And Use Of Money 1. What is the true function of money and how early in history was it understood? 2. What were the earliest mediums of exchange? 3. What is the reason for the use...
-Associate Editors
Richard Canning, President Northwestern Finance Company, Minneapolis, Minn. H. M. Coombs, special lecturer on Credits and Collections, International Law and Business Institute. James J. Craig, LL.D....
-Authorities Consulted
Cyrus C. Adams, author of A Text-Book of Commercial Geography. Joseph A. Arnold, Editor and Chief of Division of Publications, U. S. Department of Agriculture. W. J. Ashley, M. A., professor of Ec...









TOP
previous page: Other People's Money And How The Bankers Use It | by Louis D. Brandeis
  
page up: Banking Books
  
next page: Currency And Banking | by Bonamy Price