An Min Posted August 20, 2003 Share Posted August 20, 2003 In 1775 there were no commercial banks in the American colonies. The commercial Bank of England was already almost a century old, but few colonists had any dealings with it or with the Mother Country's enormous funded debt. However, there were some colonial institutions, both public and private, which went by the name of "bank", but most of these were very different from commercial banks. In the decades following the first attempts in Philadelphia, New York, and Boston to establish the Bank of North America in 1781, the Bank of New York in 1784, commercial banking endured political attacks, economic depressions, and angry mobs. In the early days of the American Republic, there developed two very distinct types of banks: commercial and savings. Saving banks only maintained lodged time deposits for individual use. Loans or credits to purchase unimproved land came from the land owner, which could be an individual, a large company such as the Holland Land Company, or the government. Sometimes wealthy personal friends supplied money. Country bank, which were commercial banks, but which broke many of the rules of strict commercial banking, also loaned money for real estate. Insurance and Trust companies did too. Individuals and country and city banks made personal loans packed only by promissory notes, though the latter usually tried to hide the fact. Unscrupulous brokers and 'monied' individuals, broke the states usury laws to supply short-term unsecured credit at high interest. Merchants, brokers, and commercial banks conducted currency exchanges. Commercial banks accepted special and demand deposits. They also created deposits by loaning gmoney of accounth that could be drawn on by check or draft. Finally, commercial banks, and sometimes other corporations, both public and private, used loans to issue their own promissory notes payable to the bearer on demand. By presenting the note at the bank of issue, the bearer received the notefs face value in gold or silver. Merchants considered bank notes the equivalent of specie (money in coins). A bank that could not convert its notes into gold or silver was considered insolvent and could lose its charter. 11. Which of the following statements best expresses the main idea of the passage? (a) commercial banking in early America was slow to develop (b) banking in early America was often unlawful © America developed its own banking institutions in response to local developments rather than duplicating those of England. (d) Commercial banking in Early America was not really commercial banking 12. The word genormoush in line 3 is closest in meaning to (a) serious (b) huge © established (d) hidden 13. Which of the following would be LEAST likely in a Colonial financial institution in America before the 1780s? (a) that it would be similar to a commercial bank (b) that it would be called a bank © that it would be private (d) that it would lend money 14. The word genduredh in line 7 is closest in meaning to (a) suffered (b) avoid © feared (d) survived 15. The word gwhichh in line 10 refers to (a) loans or credits (b) unimproved land © land owner (d) an individual, a large company, or the government 16. Which of following is the most likely inference about the behavior of country and city banks in making personal loans? (a) they preferred not to lend if they did not have enough money to cover the amount (b) they usually preferred to leave this function to individuals © they usually wanted to avoid risking a loss of customer trust about their capacity to honor a promissory note (d) they tried to hide the fact that their promissory notes werenft really money 17. The word g unscrupuloush in line 16 is closest in meaning to (a) wealthy (b) immoral © smart (d) experienced 18. Commercial banks supported their promissory notes by honoring to pay (a) in coins (b) in kind © in theory (d) in gold or silver 19. According to the passage, a commercial bank could have to close if (a) it did not have enough gold and silver (b) too many customers wanted to present their promissory notes for payment © the value of money in coins was not about equal with the value of gold and silver (d) lost its charter 20. The word gequivalenth in line 23 is closest in meaning to (a) amount (b) value © safe (d) interchangeable Quote Link to comment Share on other sites More sharing options...
Hippo Posted August 21, 2003 Share Posted August 21, 2003 Hi An Min, Long time no see ;-) Hope you are ok! Here go my answers: 11. C (may be D) 12. B 13. A 14. A 15. C 16. B 17. B 18. D 19. B 20. D Best regards. Quote Link to comment Share on other sites More sharing options...
hsengoren Posted August 21, 2003 Share Posted August 21, 2003 Hi An Min, We missed you and your questions. Q.16 I say D 16. Which of following is the most likely inference about the behavior of country and city banks in making personal loans? (d) they tried to hide the fact that their promissory notes werenft really money On the 2nd paragraph, it says: Individuals and country and city banks made personal loans packed only by promissory notes, though the latter usually tried to hide the fact. Q.19 I say C 19. According to the passage, a commercial bank could have to close if © the value of money in coins was not about equal with the value of gold and silver On the last paragraph, ýt says: Merchants considered bank notes the equivalent of specie (money in coins). A bank that could not convert its notes into gold or silver was considered insolvent and could lose its charter. On the rest, I don't have any objection. Quote Link to comment Share on other sites More sharing options...
Hippo Posted August 22, 2003 Share Posted August 22, 2003 Hi An Min, Could you post the answers that are stated to be right in your book? Best regards. Quote Link to comment Share on other sites More sharing options...
An Min Posted August 24, 2003 Author Share Posted August 24, 2003 11. Which of the following statements best expresses the main idea of the passage? © America developed its own banking institutions in response to local developments rather than duplicating those of England. 12. The word genormoush in line 3 is closest in meaning to (b) huge 13. Which of the following would be LEAST likely in a Colonial financial institution in America before the 1780s? (a) that it would be similar to a commercial bank 14. The word genduredh in line 7 is closest in meaning to (d) survived 15. The word gwhichh in line 10 refers to © land owner 16. Which of following is the most likely inference about the behavior of country and city banks in making personal loans? © they usually wanted to avoid risking a loss of customer trust about their capacity to honor a promissory note 17. The word g unscrupuloush in line 16 is closest in meaning to (b) immoral 18. Commercial banks supported their promissory notes by honoring to pay (d) in gold or silver 19. According to the passage, a commercial bank could have to close if (a) it did not have enough gold and silver 20. The word gequivalenth in line 23 is closest in meaning to (d) interchangeable Quote Link to comment Share on other sites More sharing options...
Hippo Posted August 24, 2003 Share Posted August 24, 2003 Frankly speaking, I don't understand the answer for the 16th. How do you think "loan, packed only by something" means that "the loan consits of only something"? Quote Link to comment Share on other sites More sharing options...
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