Investment analysis of the common stocks of selected California banks. - Page 48 |
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35 !
p ro m is e t o r e t u r n t o t h e d e p o s i t o r s upon dem and• F o r
t h e u s e o f t h i s money t h e b a n k s g i v e t h e i r d e p o s i t o r s
c h e e k in g s e r v i c e s and o t h e r b a n k i n g s e r v i c e s , f r e e o r
a t n o m in a l c o s t •
S in c e a m a jo r p o r t i o n o f t h e b a n k s ’ d e p o s i t s a r e
s u b j e c t t o w ith d r a w a l on dem and, t h e b a n k s a r e r e q u i r e d
by la w , and a l s o by good b u s i n e s s p r a c t i c e , t o k eep a
p r o p o r t i o n o f t h e i r r e s o u r c e s i n l i q u i d f u n d s • The
s a t i s f a c t i o n o f d e p o s i t o r w i t h d r a w a l s m u st be made i n
I
c a s h by t h e b a n k s , e v e n when t h e r e i s an u n u s u a l l y l a r g e |
w ith d r a w a l dem and• T h e r e f o r e , b u s i n e s s p r a c t i c e r e q u i r e s •
| t h a t a d d i t i o n a l fu n d s be k e p t i n t h e b a n k s ’ v a u l t s and on
d e p o s i t w i t h t h e i r c o r r e s p o n d e n t b a n k s • The c a s h a s s e t s |
a r e c o n s i d e r e d t h e b a n k s ’ p r im a r y r e s e r v e s and s h o u ld j
p r o t e c t t h e b an k a g a i n s t e x c e s s i v e im m e d ia te w ith d r a w a l |
! d e m a n d s ■
j i
I S e c o n d a ry r e s e r v e s a r e e a r n i n g a s s e t s o f h ig h | iJ
I i q u a l i t y s h o r t - t e r m b o n d s , u s u a l l y g o v ern m e n t b o n d s . The
I
e a r n i n g s o f b a n k s from t h e s e b o n d s a r e u s u a l l y v e r y lo w . '
From 1935 th r o u g h 1947 t h e i r a v e r a g e y i e l d was c l o s e t o j
li
1 p e r c e n t . I n 1953 t h e a v e r a g e w ent s l i g h t l y above 2 i
| p e r c e n t f o r a b r i e f p e r i o d , and t h e n f e l l t o 1 .5 p e r i
3-Roland I . R o b in s o n , The Management o f Bank Funds <
(New Y ork: M cG raw -H ill Book Gompany, I n c o r p o r a t e d , 1 9 5 1 J , •
p . 41* j
Object Description
Description
| Title | Investment analysis of the common stocks of selected California banks. - Page 48 |
| Repository email | cisadmin@lib.usc.edu |
| Full text | 35 ! p ro m is e t o r e t u r n t o t h e d e p o s i t o r s upon dem and• F o r t h e u s e o f t h i s money t h e b a n k s g i v e t h e i r d e p o s i t o r s c h e e k in g s e r v i c e s and o t h e r b a n k i n g s e r v i c e s , f r e e o r a t n o m in a l c o s t • S in c e a m a jo r p o r t i o n o f t h e b a n k s ’ d e p o s i t s a r e s u b j e c t t o w ith d r a w a l on dem and, t h e b a n k s a r e r e q u i r e d by la w , and a l s o by good b u s i n e s s p r a c t i c e , t o k eep a p r o p o r t i o n o f t h e i r r e s o u r c e s i n l i q u i d f u n d s • The s a t i s f a c t i o n o f d e p o s i t o r w i t h d r a w a l s m u st be made i n I c a s h by t h e b a n k s , e v e n when t h e r e i s an u n u s u a l l y l a r g e | w ith d r a w a l dem and• T h e r e f o r e , b u s i n e s s p r a c t i c e r e q u i r e s • | t h a t a d d i t i o n a l fu n d s be k e p t i n t h e b a n k s ’ v a u l t s and on d e p o s i t w i t h t h e i r c o r r e s p o n d e n t b a n k s • The c a s h a s s e t s | a r e c o n s i d e r e d t h e b a n k s ’ p r im a r y r e s e r v e s and s h o u ld j p r o t e c t t h e b an k a g a i n s t e x c e s s i v e im m e d ia te w ith d r a w a l | ! d e m a n d s ■ j i I S e c o n d a ry r e s e r v e s a r e e a r n i n g a s s e t s o f h ig h | iJ I i q u a l i t y s h o r t - t e r m b o n d s , u s u a l l y g o v ern m e n t b o n d s . The I e a r n i n g s o f b a n k s from t h e s e b o n d s a r e u s u a l l y v e r y lo w . ' From 1935 th r o u g h 1947 t h e i r a v e r a g e y i e l d was c l o s e t o j li 1 p e r c e n t . I n 1953 t h e a v e r a g e w ent s l i g h t l y above 2 i | p e r c e n t f o r a b r i e f p e r i o d , and t h e n f e l l t o 1 .5 p e r i 3-Roland I . R o b in s o n , The Management o f Bank Funds < (New Y ork: M cG raw -H ill Book Gompany, I n c o r p o r a t e d , 1 9 5 1 J , • p . 41* j |
