Consideration has been given in preceding chapters to such commercial bank operations as the receiving of deposits and the granting of loans. These transactions are all recorded in the general ledger of the bank. A summary of these records is of value to the bank officers, government, and the public, and so from the general ledger there is compiled a trial balance sheet known as the bank statement.

The Comptroller of the Currency, and also state superintendents of banking, periodically demand statements to aid the government in supervising banking institutions. Every national bank is required by law to insert its statement in the local press at regular intervals throughout the year, and, in fact, this notice appears quite frequently for its own publicity value. These advertisements present a systematic and classified tabulation of assets and liabilities, and prospective depositors may thus judge the solvency of the bank. A report of the previous day's business may guide the bank's officers in determining such policies as the granting of new loans and the renewal of old notes. Banks in general are also interested in the statements of other institutions, for interbank borrowing is conducted on an extensive scale. In closing this chapter, consideration will be given to the way in which banks analyze the statements of other banks which are seeking loans.

The daily statement by itself has only a limited significance. It presents merely a static picture of the bank's condition on a particular day, and should be compared with previous reports to study the true financial history of the bank for the purpose of analyzing the trend in deposits, loans, and other items. The statements of a particular bank have added interest when viewed in relation to those of other institutions. Such reports are combined in several forms. The large clearing houses compile weekly statements showing the financial status of their members, while the Federal Reserve banks and Federal Reserve Board report on a selected fist of member banks. The Comptroller of the Currency as well as the state superintendents issue annual summaries presenting the condition of banks throughout the country, as shown by the returns of the examiners and the statements of the banks. These publications offer an excellent basis for interpreting general financial tendencies.

The present chapter deals with the statement of an individual commercial bank. Its report as usually presented in the daily newspaper does not contain sufficient details for a complete analysis, and so the items as given in the form for national banks used by the Comptroller of the Currency will serve as a basis.