ence. But as this ledger deals with over a thousand accounts, it is not surprising that it did not exactly balance, and an error might have been made by us in taking off the balances from the ledger.

All the NOTES were listed and their total agreed exactly with the amount carried on the ledger. Every note was carefully scrutinized, and we believe that we are safe in saying that there is not a dollar of doubtful paper in the bank. The BONDS held by the bank for investment were also examined and listed and found to tally with the amount on the ledger. So far as we were able to determine the books and accounts were all methodically and properly kept, and the bank seemsto be in an excellent condition.

Auditing Committee.

OFFICIAL REPORTS.

National banks are required to make five reports of their financial condition each year to the Comptroller of the Currency. These statements are not made at regularly stated periods, but at irregular intervals, the Comptroller using his own discretion in making the calls. The reports must be made as of certain designated dates, the date usually being three or four days prior to the day upon which the official notice is received by the bank. The call is made upon all the national banks for the same date, but the Comptroller may call for a special report from any bank at any time.

Two sets of blank forms are sent out to each bank whenever the call for a statement is made. One set of these forms is intended to give a full and detailed report of the financial condition of the bank, and must be attested by the signatures of at least three directors. The other set of forms are simply condensed copies of the original report, and are intended for publication. The statements are made out in duplicate-one copy of each set is sent to the

Comptroller while the other is retained by the bank for its own files.

Few directors who sign these reports are familiar with their contents. They seldom take time, when called upon to sign them, to scrutinize the printed items and study the figures opposite them. A brief explanation of the several items in the same order in which they appear on the sheet may prove helpful to an intelligent analysis of the report.

The blank form upon which the report is made consists of a large double sheet, the inside left-hand page being devoted to "Resources," and the right-hand page to “Liabilities."

RESOURCES.

Loans and Discounts.-This item represents the total amount of loans which the bank has outstanding, including all "time, ""demand," "single" and "two-name paper, collateral and real estate loans.

as well as

Overdrafts.-Most banks have customers who occasionally issue checks for more money than they have on deposit in the bank. If such checks are paid by the bank, the account becomes "overdrawn." The amount opposite this item always represents the total of drawn accounts.

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U. S. Bonds to Secure Circulation.-As was explained in a previous chapter, a national

bank is required to maintain a deposit of Registered Government Bonds with the Treasurer of the United States as a basis for its circulation. This item represents bonds so held.

U. S. Bonds to Secure U. S. Deposits.-Certain national banks are designated as Government Depositories, in which the government funds are deposited. Such deposits, however, must be secured by approved bonds deposited with the Treasurer of the United States. The amount of United States Bonds so held in trust by the Treasurer as security for government deposits is designated by this item.

· U. S. Bonds on Hand.-This item represents all United States Bonds owned by the bank other than those deposited with the United States Treasurer to secure its Circulation and United States Deposits.

Premium on U. S. Bonds.-The difference between the par value of the United States Bonds owned by a bank and their actual cost price, is the "premium" paid for them-provided, of course, the cost price exceeds the par value, which is usually the case. Some banks "charge off" this premium at once when the bonds are purchased, while others carry it along as an asset, reducing it from time to time as the date of maturity of the bonds approaches.

Bonds, Securities, etc.-All other bonds or securities of any kind, including the premium

on them, owned by the bank are entered opposite this item.

It is

Banking House, Furniture and Fixtures.Included under this head is the amount invested in the bank building and the cost of furnishing the inside of the bank, such as, the vault, safes, furniture and fixtures, etc. the custom for banks to "charge off" from time to time a portion of this account also, in order to make allowances for depreciation, etc.

Other Real Estate Owned.—While a national bank is not permitted to purchase or hold real estate, except such as is necessary for the transaction of the business of the bank, they sometimes take it for "debts previously contracted" in order to secure themselves against loss. The value of any real estate thus held is represented by this item.

Due from National Banks (Not Reserve Agents).-Nearly all commercial banks have "reciprocal accounts" with other banks-that is, two banks may have an agreement whereby they will accept from each other, and credit as cash, checks or other items drawn upon banks in certain towns or within certain territory. A bank in Columbus, say, keeps an account with a national bank in Indianapolis, the bank in Columbus agreeing to accept all Ohio items from the Indianapolis bank, while the Indianapolis bank in return accepts all