PREFACE

The purpose of this study is two-fold : to develop the principles of bank credit considered in the abstract and to set forth the main factors underlying the loans made, the credit extended, by banks to borrowers.

Part One is devoted mainly to an explanation of the way in which cash in banks becomes the basis of manifold loans and deposits, and to a statement of the relation of loans to the other principal items of the bank balance sheet.

The burden of Part Two is a consideration of the factors underlying and affecting the soundness of the contents of banks 7 portfolios. It has seemed natural and logical to give a somewhat detailed account of recent changes in our bank credit arrangements, including the evolution of the form of the bank borrower’s obligation, the growth of the note brokerage business, the establishment of the bank credit department, and the rise of the new business department and its effects on the quality of bank loans. The work of note brokers acting as middlemen between borrowers and banks has been given what seems a deservedly large place.

The structure of Part One is built in part on old and familiar foundations, and in part on foundations newly laid. The main sources of Part Two are the Proceedings of the American Bankers’ Association, proceedings of the various state bankers’ associations, reports of the Comptroller of the Currency, and banking periodicals. Information embodied chiefly in chapters VII-XI and XVI, and unobtainable from the ordinary sources, was secured by extensive correspondence and interviews with bankers and note brokers, to whom my sincere thanks are due.

For invaluable suggestions I am grateful to Professors Ray B. Westerfield, Fred R. Fairchild and Irving Fisher, of Yale.

CHESTER A. PHILLIPS
HANOVER, N. H.

LINK

http://bikibook.com/books/bank-credit-study-on-principle-and-factors/


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