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the country lost $191,566,488 between the
10th of November, 1910, and the 7th of
January, 1911, the dates upon which
comparisons are based, as shown by
the responses to the calls of the Comp-
troller of the Currency.
There are a number of contributing
causes that make for just such condi-
tions.. In the city of New York alone,
where $158,000,000 loss occurred in the
deposits, the hundreds of corporations
pay out about $225,000,000 in interest and
dividend accounts on January 1 of each
year, the amount varying but the fig-
ures representing the approximate dis-
tribution at the beginning of 1911.
Checks go out on the evening of De-
cember 31. January 1 was a holiday,
also January 2. Many of these checks
were mailed to out-of-town investors,
although New York investors received
the greater part.
There was much uncertainty in the
market for securities at that time and
it is but natural to suppose that much
of this money was placed in savings
banks and trust companies that it
might earn a little interest pending
reinvestment. The natural shifting of
funds between trust companies, savings
banks, and national banks is such an
important factor that no actual com-
parisons could be made without the
showing of all three classes of fiscal
institutions.
Deposits were larger during the pre-
holiday activity of November than in
the after-the-holiday dullness of Jan-
uary-the always quiet month, the dull-
est save midsummer.
It may seem rather strange, but it is
a fact that when business is decidedly
lively the apparent deposits in banks are
larger than in dull times. There is a
lively interchange of checks in periods
of trade activity, and checks almost in-
variably count in deposits as double. A
check for $50,000 paid by this corporation
to that contractor is deposited in the
latter's bank. He is given credit for
the deposit, but the money standing
back of that check, the money that
honors it, is over in the other bank un-
til the next day at clearings-that is, as
a rule. The only way in which such
doubling would not show would be on
balances between banks.
On Friday of last week the clearings of
the banks of New York were $476,784,000,
balances $29 759,532; of Baltimore, $6,519,-
000; balances, $803,999; Philadelphia, $32,-
049,000; Chicago, $53,000,000, and Boston,
$28,000,000. It is easy to see how a drop
in the daily clearings through a let-up
in trade would cause an apparent loss
in individual deposits.
Another reason is readily found in the
fact that much of the reinvestment in
the first few days of January of this
year was in the bond market, and many
drew their funds from banks for the
purpose of participating in bond pur-
chases. Then deposits would shrink, and
the underwriter of the bonds, having
made a sale, would, certainly in many
instances, pay off the loans to the bank,
thereby increasing the cash in banks
but not in the deposits, and the state-
ment showed a gain in cash of $20,000,000
and a reduction in loans of $48,000,000.
But there was yet another reason that
contributed to this "mystery." The
passing of the Robin banks and the
smash of the Carnie Trust Company
brought some uneasiness and withdraw-
al of deposits both on account of timid
individuals and some who were not
timid.
The sales of stocks on the New York
Exchange in January, 1911, were 9,884,169
shares; in January, 1910, 24,116,544 shares.
The bond offerings, new issues, in
January, 1911, totaled $141,400,000; short-
term notes, $36,000 and the stocks $55,-
000,000, a total of $232,000,000. January,
1911, the bond sales increased 70 per
cent over the December, 1910, sales.
Cause enough for a loss of deposits.
### Since January 7 Over $100,000,000 Has Been Added to Individual Deposits in New York Banks
Two of the larger industrial corpora-
tions have established offices in New
York city, where their obligations are
listed for the benefit of anyone interest-
ed. In this way commercial paper brok-
ers will be able to tell just what the
aggregate of the corporated borrowings
are, and whether paper in their posses-
sion is genuine or not. The listing will
also give date of paper, length of time
to run from making, and all other infor-
mation necessary.
This is a step in the right direction-
the direction of financial publicity, and
in the line of policy desired by Comp-
troller Murray.
Chicago, St. Paul, Minneapolis, Pitts-
burg, St. Leuis, Philadelphia, and some
other cities have a most rigid inspection
of bank conditions. The banks conduct
their own examinations and the super-
vision is much more elaborate and more
frequent than State or national bank
examinations.
Chicago did not take the bull by the
horns until it was obliged to put up
$7,000,000 to save disaster when the
Walsh banks went down.
St. Louis kept aloof until they had to
hand over $1,500,000, and agree to ad-
vance $1,000,000 more in connection with
the Missouri Lincoln Trust Company
suspension.
All of the fifty-eight banks and trust
companies doing business in Chicago are
under clearing house supervision. With
a high-grade $25,000 a year examiner and
seven assistants, the clearing house has
determined to prevent wildcat financing.
The report of the head examiner shows
cash on hand; past due paper, bad
debts, loans to bank directors, loans to
corporations in which bank directors are
interested, and the character of assets
representing the bank's surplus, capi-
tal, and undivided profits.
A copy of this report is handed to the
president of the bank and each director
is notified that the report awaits his in-
spection. Another copy is filed under
seal in the clearing house, but is not
opened unless something wrong devel-
ops in the bank thus carefully searched.
No director can claim ignorance as an
excuse. If rottenness develops, rehabili-
tation follow quickly or a closure before
further loss is sustained.
In St. Louis the examiners, before as-
suming duties, are compelled to agree
not to take office with any bank or
trust company within 300 miles of St.
Louis for three years after leaving the
service. Thus the secrets of the exami-
nations are guarded.
