The Bank Act requires the banks to furnish the government with monthly statements of their assets and liabilities, and in addition to these, an annual statement to the shareholders. The latter differs only slightly in detail from the monthly statements, and is submitted to the shareholders at the annual general meeting, accompanied by the profit -and-loss statement and the report of the auditors. The annual reports of the several banks appear at various dates during the year, principally during the winter months. The monthly and annual statements are published in the various financial and other papers and are subjected to the closest scrutiny and analysis both by the press and the banks themselves.
The totals of the combined monthly statements of the banks as published by the government are of particular interest, as the figures generally afford a very fair barometer of the financial condition of the country.
To the average man a bank statement has no more than a passing interest. Even if he goes so far as to compare the statement of one bank with another, the bare figures tell him very little more than that one
Percentage to Total Liability to Public
Percentage to Total Assets
Percentage to Total
Liability to Public
Percentage to Total
Balance due Prov. and Dom. Governments.
Five per cent Circulation Fund.
Notes and Checks on other Banks
Due from Canadian Banks. . . .
Due from British Banks
Deposits elsewhere than in Canada.
Due from Foreign Banks
Due to banks in Canada
Due to Banks in United Kingdom.
Total Quick Assets
Total Liability to Public
Dominion Government Securities
Municipal Bonds etc.
Railway Stocks and Bonds....
Capital (Paid up)
Call Loans in Canada .......
Call Loans in elsewhere
Total Liability to Shareholders. .
Total Liquid Assets........
Mortgages on Real Estate sold by the Bank
The above percentages are based on figures obtained from the combined annual reports of several Canadian banks, and refer to no particular bank.
Figure 4 bank has larger deposits or loans than the other, but as to the standing or earning power of the banks in question, he can form but a faint idea until he has compared them on a common percentage basis, say, to total assets. A full understanding of a statement of a bank forms a very good introduction to the actual practice of the business; and in order to present the leading features in the most comprehensive form the statement1 on page 90 (Figure 4) has been prepared. This is based on the annual statements of several banks, with the amounts under the various headings reduced to a percentage to total assets. For comparison, a percentage to total liabilities to the public is also given. The several headings will be considered briefly in detail, and should be studied with special reference as to their relation, the one with the other. The percentages will be referred to as dollars in discussing them.
1 This statement should also be compared with the percentage of the combined monthly statements of all the Canadian banks as reported to the government for the month of July, 1913, Figure 2.
A bank statement is primarily intended to show the distribution of the assets of a bank and to whom they ultimately belong, the public or the shareholders. The bank occupies a dual relation to the public; it is, on the one hand, a borrower of credit and, on the other, a lender. The prime qualification for successful banking is so to command the public confidence that the public will deposit its money freely and continuously. The liabilities of a bank to the public are
therefore of the most vital importance to its existence and will be considered first.