1. Dialogue

Student: What type of bank is this? Banker. We're a commercial bank Student: Does that mean that your services are limited? Banker: To some extent. For instance, we can't offer the fiduciary services that a trust company can Student: What are they?

Banker: Well, they have to do with the administration of trusts and estates.

Student: Suppose I wanted to buy or sell some securities. Does your

bank

handle such transactions?

Banker: Yes. Through our brokerage house.

Student: Is your broker a member of the stock exchange? Banker: Yes.

Student: This is a state bank, isn't it? Banker: That's right

Student: Do you offer fewer services than a national bank?

Banker: No. In general, the only difference is that a state bank gets its charter from the state it's in, and national bank gets its charter from the federal government in Washington, D.C.

Student: Are there banks that don't offer regular commercial services?

Banker: Oh, yes. For example. Savings and Loan associations and the Federal Land Banks are only lending institutions.

Student: Would you say a savings and loan association is a bank? Banker: No. I'd rather just call it a financial institution. Student: How about a credit union? Banker: That's not really a bank, either.

Student: And a finance company is something entirely different. Banker: Yes.

Brokerage services

2. Dialogue

Customer: I have some corporate bonds that'll mature next month. Can you help me present them for redempton? Banker: Surely. Where are they payable? Customer: At one of the banks in New York Banker: Are they the registered or the coupon type?

Customer: They're registered in the names of both me and my wife.

Banker: You'll both have to assign them.

Customer: Yes, I know. And when the proceeds have come in, could you help me reinvest the funds in some preferred stocks?

Banker: Oh, yes. Our brokerage house can bid on some shares for you.

Customer: They charge the usual broker's commission, I suppose.

Banker: Yes, they charge the same as any reliable house. They have a seat on both the New York and the American Exchanges.

Customer: I've also thought of taking a filer on some common stocks, if I could find a good growth industry.

Banker: Well, the market looks favorable right now.

Governmental controls 3. Dialogue

Customer: Why does there have to be so much governmental control of banking?

Banker: Well, of course, the main objective of all these controls is to protect the depositor.

Customer: How about the borrower?

Banker: Yes, there are legal ceilings on the interest rates a bank may charge on loans.

Customer: This is protection against what they call usury.

Banker: That's right. Then there are controls that protect both the bank and the customer from loss by embezzlement.

Customer: By an audit of the books?

Banker: Partly. But also by requiring that each employee be bonded.

Customer: Don't these controls have something to do with financial conditions? I mean, doesn't the government try to protect the country against deflation and inflation?

Banker: Yes. But that gets pretty involved in monetary theory.

Customer: Well, didn't the government step in during the depression and put restrictions on bank operations?

Banker: Yes, it did. For one thing, it was necessary to build up the people's confidence in banks and discourage hoarding.