What Is A Bank Statement?

A bank statement is issued from the Clearing House of large cities each week. The weekly statement is the collective showing made by the banks belonging to the Clearing House Association. This consolidated bank statement in New York shows the average deposits, loans, specie, legal tenders, circulation reserve and surplus reserve for the week ending with and including Friday.

The deposits include balances of persons and concerns, balances to the credit of other banks, and all other money and credits subject to withdrawal. Under the item, Loans, is included money loaned and paper bought, such as promissory notes, drafts, etc. Under Specie, is included gold and silver coin, gold and silver certificates, redeemable in gold or silver. Legal tender means United States notes or greenbacks, and treasury notes are those issued for silver bullion, purchased under the so-called Sherman act. Circulation means the notes issued by national banks which are secured by government bonds, deposited by the United States Treasurer. A bank cannot count circulation in its reserve, and whether it is its own circulation or the circulation of some other bank, makes no difference. Reserve means the amount of specie and legal tender held. Surplus reserve is the amount of specie and legal tender held in excess of legal requirements. For instance, a national bank in New York City must, by law, maintain a reserve equal to 25% of its profits, a State bank must by law, maintain a reserve of 15%. In compiling a bank statement, a reserve of 25% is figured for State banks as well as national banks. The bank statement is supposed to be made up on rising averages when the itemized sums have been increasing during the week; or the statement is remarked to be on falling averages, when the sums have decreased during the week. The bank statement is favorable when it shows the position of banks has been strengthened by an increase in surplus reserve through an increase in cash holdings rather than by a decrease in deposits, the latter is frequently affected by calling of loans. Money loaned is largely credited to borrowers on their deposit accounts, increasing the total deposits of the banks; the payment of loans by borrowers decreases deposits. Calling and payment of loans do not increase cash holdings, but simply change balances in individual accounts. A reduction in deposits reduces the amount of cash required as legal reserve, and correspondingly expands the surplus reserve.

The bank statement is understood to be unfavorable when the position of banks has been weakened by a decrease in the surplus reserve through decrease in cash holdings rather than an increase in deposits, frequently changed by an expansion of loans, thus expanding deposits and increasing cash required to be held as legal reserve. The bank statement is favorable, however, if an increase in loans be reported when the banks have a large surplus reserve. It may be said to be unfavorable when money is idly accumulating in banks and deposits are increasing, not as a result of increasing loans, but in the absence of a borrowing demand for money.

What Is A Barrel?

The standard of a commercial barrel of pork is figured at 200 pounds, but it contains only 190 pounds of fresh or green meat, and the addition of brine increases the weight to 220 or 225 pounds. A barrel of flour contains 196 pounds; salt, 280 pounds; resin, 280 pounds; cured fish, 200 pounds. The number of gallons in a barrel of molasses, syrup, oils, turpentine, wines, liquors and all liquids varies from 40 to 50 gallons. Sales are made on the basis of actual contents only.

What Is A Bear?

A Bear in Wall Street is a speculator who believes in lower prices, who sells stock, grain, cotton, etc., short, or advises the selling of stock believing it can be bought back at a lower price.

What Are Bills Of Exchange?

They are written orders or requests from one person to another for the payment of money to a third, the amount to be charged to the issuers of the bills. There is practically no difference between a bill of exchange and a draft. A bill of exchange is commonly applied to an order for money payable in a foreign country. A draft is an order for domestic uses of payment.

Bills of exchange are a most important circulating medium. The wholesale transactions of the world, between countries, are affected by bills of exchange, which are international in origin. Commercial bills of exchange, accompanied by bills of lading or warehouse receipts, are very high class and command a lower rate of discount than bills not secured. In a stringent money market they are saleable when other bills are refused.

What Is Black Friday?

It refers to Friday, September 24, 1869, when Jay Gould, James Fisk, Jr., and his associates effected a partial corner in gold, the end of which was a disastrous failure, owing to the Government's Secretary of the Treasury, Boutwell, coming to the rescue of the country with $4,000,000 of gold given in exchange for bonds. In a moment the corner collapsed and the gold panic was broken.

What Is A Blind Pool?

A secret or blind pool is created when several persons contribute capital for operating in stocks or bonds on the long or short side, and when only the manager of the pool knows in what way the money is to be used. The purpose of such a pool is to fool the other operators in the market not in the pool.

What Is Meant By A Block?

It refers to a number of shares, 5,000, 10,000 15,000 or more, bought or sold in a lump at one time.

What Is A Board Room?

It is the exchange room on a stock exchange, or any room where boards of directors of a corporation meet.

What Is A Bonanza?

A rich mine, vein or find of ore, especially of silver or gold ore, or a profitable investment. Sometimes a lucky operation.