American Banking Author:Henry Parker Willis Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: CHAPTER II CLASSES OF BANKS We have spoken thus far as if the "bank" were a universal type of institution belonging to a single homogeneous class, and to t... more »he casual observer, perhaps, banks do not differ. They all seem alike. This is not the case. Banks are as highly specialized and as highly organized as any other institutions of the commercial world. Their classification may be founded upon either of several lines of distinction. A clear conception of the several classes of banks will facilitate greatly an understanding of the various banking functions about to be considered. The bank may be in the habit of extending credit, or as the phrase goes "making loans," or "lending money," for long periods or short periods. On the basis of this distinction, institutions may be classified as commercial or non-commercial banks, the commercial banks "being those which engage only in short-term transactions growing out of industrial and commercial business, while noncommercial banks operate chiefly in the investment field. Banks may confine their attention to a particular kind of loans or to loans made to a particular class of borrowers. In this case there is a true example of specialization, often for the sake of greater efficiency and speed in judging certain classes of paper. Banks may be grouped according to the laws under which they are organized and the functions which they are allowed to exercise by virtue of such laws. Sometimes they areclassified according to the habits they adopt with reference to reserves and the like. A good many other modes of classification might be suggested, but there are only two that need particular attention here. These two are the grouping of banks according to their legal status and the grouping according to their economic or commercial or f...« less