Business: Banks, Third Quarter

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Numerous are the means by which a bank gets customers. Proximity, a nice building, friendly vice presidents are customary lures; another lure is an easy loan policy. Few prospective depositors spend as much time looking at a bank's balance sheets as they do investigating a company whose bonds they want to buy. One reason is that the average person can tell nothing from the average bank balance sheet. Another is that a person capable of telling at a glance what a bank's general position is usually realizes that only the people within a bank can tell whether or not it is liquid.

Knowing what percentage of a bank's deposits is in cash and U. S. Government bonds is helpful, can be estimated. So is knowledge of how much the bank has loaned. But no statement reveals the condition of the loans. How much the bank has invested in corporate bonds and stocks is important in gauging its condition, but few balance sheets state whether investments are at cost or market. In Canada the ten big banks publish lengthy, frank statements. A few small U. S. banks have adopted such a policy, but the majority hide their true condition in a conglomerate of massive figures. The Fifth Avenue Bank of New York, old, much patronized by dowagers, is unusually frank. Its statement of resources provides for 21 items and even separates coin from paper money. Yet a sum of ten millions includes all "public securities." How much of the amount is in Governments, how much in less liquid State and Municipals is not revealed.

Last week banks were starting to issue their third-quarter reports. In view of the great silent run upon all U. S. banking, these statements were inspected more closely than ever. Points which many a banker noted included:

Chase National Bank is still the largest although its combined resources of $2,215,122,471.81 are $214,187,744.70 lower than the June figure. The combined resources of National City Bank and Bank of America (Manhattan) were $2,103,068,276.44, putting Guaranty Trust Co. back into third place with its $1,717,584,871.27. Typical of the high degree of liquidity shown by the large Manhattan banks was Guaranty's statement. Cash on hand and due from banks was 350 millions while Government securities were 333 millions. These two items were a good half of the bank's $1,223.000,000 in deposits.

Corn Exchange Bank Trust Co., proud of statements which "anyone can understand," showed $30,900,000 in private securities, also $21,937,000 in bonds and mortgages owned.

Continental Bank & Trust Co., just merged with dubiously liquid Straus National, showed cash and Governments of 33 millions against deposits of 44 millions. Its call loans to brokers, long the specialty of this so-called "broker's bank," were ten millions. The statement bore a pledge that the bank would continue its old policy of liquidity.