| Liabilities |
| Capital | $100,000 |
| Surplus | 29,000 |
| Undivided profits | 10,300 |
| Deposits | 279,775 |
| ———— |
| $419,075 |
| Resources |
| Loans | $275,000 |
| Bonds and stocks | 13,000 |
| Real estate | 15,000 |
| Other assets | 20,000 |
| Expenses | 2,250 |
| Reserve | 93,825 |
| ———— |
| $419,075 |
c. To sell $2,000 of its other assets for cash with a loss of $500; to make a semi-annual dividend of 4 per cent., of which one-half is credited to stockholders who happen to be depositors also, and one-half is paid in cash; to sell $4,000 of bonds at a profit of 15 per cent., and to carry $1,000 of its undivided profits to surplus. The account would then stand at the beginning of the new half year, as follows:
| Liabilities |
| Capital | $100,000 |
| Surplus | 30,000 |
| Undivided profits | 3,150 |
| Deposits | 281,775 |
| ———— |
| $414,925 |
| Resources |
| Loans | $275,000 |
| Bonds and stocks | 9,000 |
| Real estate | 15,000 |
| Other assets | 18,000 |
| Reserve | 97,925 |
| ———— |
| $414,925 |
Statement of A Representative National Bank
| Resources |
| Loans and discounts | $739,743.27 |
| Overdrafts, secured | 973.08 |
| U. S. bonds deposited to secure circulation | 100,000.00 |
| U. S. bonds pledged to secure U. S. deposits | 1,000.00 |
| Bonds other than U. S. bonds pledged to secure postal savings deposits | 7,000.00 |
| Other Securities | 191,098.05 |
| Stock of Federal Reserve bank | 4,800.00 |
| Banking House | 30,000.00 |
| Furniture and Fixtures | 5,000.00 |
| Due from Federal Reserve Bank | 20,000.00 |
| Due from approved reserve agents | 89,919.25 |
| Due from other banks | 12,074.23 |
| Checks on banks in same city | 6,051.46 |
| Outside checks and other cash items | 13,171.83 |
| Fractional currency, nickels, and cents | 283.14 |
| Notes of other national banks | 1,295.00 |
| Coin and certificates | 38,604.05 |
| Legal-tender notes | 25,000.00 |
| Redemption fund | 3,500.00 |
| —————— |
| $1,289,513.36 |
| Liabilities |
| Capital stock paid in | | $100,000.00 |
| Surplus fund | | 60,000.00 |
| Undivided profits | 40,877.46 |
| Less current expenses, interest, and taxes paid | 17,110.28 | 23,767.18 |
| Circulating |
| Notes Out-standing | | 98,500.00 |
| Individual deposits subject to check | | 404,871.37 |
| Certificates of deposit due in less than 30 days | | 596,335.82 |
| Certified Checks | | 125.00 |
| United States deposits | | 1,000.00 |
| Postal savings deposits | | 4,913.99 |
| | | —————— |
| | | $1,289,513.36 |
[33]The Method and Extent of Credit Issue.—Assume that a bank with a cash capital of $100,000 is opening for business in an isolated town and is the only bank in that town. How much can it lend? Ordinarily a bank lends by discounting a customer's note and by giving the customer a deposit credit upon its books for the proceeds of the note.... If, now, our bank in question lends $100,000, giving deposit credit for this sum, it has $100,000 of cash on hand against $100,000 of cash liability. Its statement will stand as follows:
| Resources |
| Cash | $100,000 |
| Notes | 100,000 |
| ———— |
| $200,000 |
| Liabilities |
| Capital Stock | $100,000 |
| Deposits | 100,000 |
| ———— |
| $200,000 |
Now let it lend another $100,000. With its loans and deposits each standing at $200,000 its reserves are 50 per cent. of its demand liability. Only with $666,666 of loans will its reserves have reached ... [a] 15 per cent. limit: