The president of a bank is selected by the directors from their own number and is usually reelected from year to year. He generally presides at their meetings, reports to them or has the cashier report upon the doings of the bank and sees to it that their directions and policies are carried out. In the small country bank the president is often only the nominal head, chosen because of his wealth or influence and not expected to be active in its management. Again a president may be selected who has large business interests outside the bank, but who is recognized as the ablest man on the board and the natural choice for the position. In either case much of the active management of the bank must be left to the cashier, but the latter type of president, by his energy and ability, is likely to dominate the entire policy of the bank. The active president of the larger bank is usually a trained banker, who has been, perhaps, vice-president or cashier, and who entered the bank as messenger or bookkeeper.
1 Briggs v. Spaulding, 141 U. S., 132.
The chief single duty of the president has to do with lending the bank's funds. In some banks the management of loans and discounts is left largely to the discretion of the president with but slight supervision on the part of the board of directors. It may safely be stated, however, that the "one-man bank" is never on as sound a basis as a bank in which the loans are carefully considered by a capable board of directors. As a general rule the president is given wide authority in granting loans, subject to maximum limits established by the board. In some banks the board of directors, or a finance or discount committee, meets every day or several times a week to pass upon the paper offered for discount, thus relieving the president of much of the responsibility. The modern practice of requiring borrowers to submit detailed statements of their business, and an alert credit department, have been great aids to the president and the board in making loans and discounts.
In many of the smaller banks the vice-president has very little to do. Often he is merely one of the directors who temporarily assumes the duties of the president in his absence or in case of his disability. The signing of circulating notes is the only duty that the vice-president is especially authorized by law to perform, and this of course only in the absence or inability of the president. In large banks, however, the vice-president shares with the president in the active management, and is a very busy man. He receives customers, looks after certain classes of loans, manages some particular department, and relieves the president of many routine duties. Some banks have more than one vice-president. As a result of consolidations a bank in Chicago has no less than six vice-presidents, all active in the management of the bank.