1905. 1904.
Loans $1,120,426,800$1,056,553,500
Deposits 1,165,151,700 1,100,586,100
Circulation 45,308,300 36,480,400
Specie 215,174,200 210,002,800
Legal tenders84,333,700 78,143,000

Explain why loans and deposits in the above table show practically the same increase from 1904 to 1905.

14. How would the balance sheet of a commercial bank issuing an ordinary asset bank-note currency stand after the following operations?

The bank opens business with a paid-up capital of $2,000,000 and a surplus of $400,000. It spends $50,000 in its own bank notes for furniture and fixtures. It discounts at six per cent. for various customers $4,000,000 of 60-day notes and bills receivable, the borrowers taking one-fourth of the proceeds in cash, one-fourth in the bank's own bank notes, and leaving the balance on deposit. Customers cash checks on their accounts for $600,000 receiving two-thirds of the amount in the bank's own bank notes and the other third in coin and other kinds of "lawful money." Other customers make deposits of $900,000, of which one-third is in "lawful money," one-third in the bank's own bank notes, and one-third in the checks of other depositors in the same bank. The bank buys at par $1,200,000 of railroad bonds, paying for them in its own bank notes. It pays with its own bank notes expenses for wages, stationery and taxes to the amount of $10,000. (b) What percentage of reserve is it carrying at the end of these operations?

15. Statement of a national bank.

LIABILITIES RESOURCES
$ Thousand $ Thousand
Capital,464. Loans and discounts,708.
Surplus,203. Over-drafts,.1
Undivided profits, 53. Bonds to secure circulation (par value) 450.
Circulation, 404. Other stocks and bonds, 163.
Deposits,419. Due from reserve agents,105.
Due banks, 29. Due from banks, 21.
Banking house, 32.
Current expenses and taxes, 3.
Checks and cash items, 4.
Exchange for Clear. House, 11.
Notes of other banks, 15.
Gold, 30.
Silver, .9
Legal tenders, 9.
Redemption fund in U. S. T. 20.
——— ———
1,572. 1,572.

What can you learn from this statement about the kind of business which the bank is carrying on, and its power to withstand a financial storm?

16. How would the balance sheet of a commercial bank stand after the following operations? The bank begins business with a paid-up capital of $300,000 and a surplus of $60,000. It discounts for customers $600,000 of four-months notes and bills receivable, at 6 per cent., the borrowers taking one third of the proceeds in cash (i.e., lawful money), and leaving two-thirds on deposit. Customers deposit $200,000, of which one-half is in cash, one-quarter is in checks drawn on this bank, and one-quarter is in checks drawn on other banks.

17. Suppose that this bank now reorganizes as a national bank and, to secure the privilege of note issue, buys United States 2 per cent. bonds of a par value of $90,000 at [$102.] These bonds it deposits with the Treasurer of the United States and receives the full amount of national bank notes to which it is entitled. Depositors withdraw by check $180,000, the bank giving them $45,000 in its notes and the balance in lawful money. A dividend of 2 per cent. is declared, and is paid, one-half in lawful money and one-half in the form of deposits. Present the balance sheet.