The Charlotte journal. [volume] (Charlotte, N.C.) 1835-1851, 1845-02-28

SCOTCH SYSTEM OF BANKING ADOPT
ED IN CHARLESTON.

From the Southern Patriot. Z
SCOTCH SYSTEM OF BANNING ADOPT
ED IN CHARLESTON
We understand that the South Western
Rail Road Bank have determined TO at
tempt the establishment Of that portion oil
the Scotch system of Banking, which con-
sisls in advances of such sums, not less
than $1,000, and for such periods, not long
er than six months, as the wants oil The
borrowers may require, on such personal
security or hypo,hecation Of stocks as The
Directors may approve. The bank VIII
not, however, allow inteIes, on deposits, as
is the custom in Scotland. The benefits 10
a commercial community from the aGop'
ton Of this system are SO obvious rs
scarcely to need illustration. To the bor-
rowers il saves interes, on all such sums ms
they may not desire 10 employ actively
TO The bank it gives quick circulation TO
lis paper, while il draws deposits. later
es, commences only from the lime the
funds are drawn out and ceases tue moment
they, or any portion of them, are paid IN.
|, is called in Scotland the system of cash
credits, and, adopting The language OF Nc
Cullock, "ihe individual being enabled to
draw the whole sum, or any part oil IT,
when he pleascs, replacing il, or portions
of it, according US he finds II convenient,
interest Icing charged DULY on such part
as he draws out" The effect Of this scheme
of banking on The industry Of Scotland has
been surprising. The following is part
of the Report Of Committee Of the Bri-
fish House Of Lords, made in 1897, on
this subject:
"There is Also" SAYS their lordships
" one part Of their system, which is stated
by all the witnesses land, in the opinion o.
the Committee, very justly stated 10 have
had the best effects upon the people o
Scotland, and parlcla-ly upon the middline
and poorer Glasses Of society, in producing
and encouraging habits Of frusality ans
industry. The practice referred 10 is lha
of cash credits. Any person who applies
to bunk for cash credit is called upon Il
produce two or more competent sureiIcs
who are Jointly bound and after full III
i,.I,, tho Oh Of thu aDul,f.u mt
the nature of his business, sud the sutli
ciet " OF hi. securities, no Is allowed Il
open credit aud to draw upon the bsnl
for tho whole OF its amount, or for sucl
part as bis daily Transactions may require
To the credit Of The account he pays II
such sum as ne may mol have occasion L
use, and in,sres, is charged or credited up
on the daily balance as the case may be
From the facility which these cash credi
give TO all the nalliransactions of the cour
try, and from the opportunities which the
afford TO persons, who being in business Wit
little or no capital but their character
employ profiably the minutes products I
their industry, II cannot be doubted thi
: the most important advantages arc derive
to the whole community. The adyanias
5 to the banks who give these cash credt
: arises from the call which they continue
y produce for the issue of their paper, al
' from The opportunity which they afford e
5 The profitab employment Of par, Of the
$ deposits. The banks are indeed so sen4
1 Bile Of this, that in order to make this pa
4 of their business advantageous and secur
:, il isnecessary that their cash credits shou
F.. tas they express ~ be frequently operate
4 upon hat they refused TO continue them u
less this lmpIe condition be fulfilled. ri
o total amount &C their cash credits is sta',
n by one witness 10 be 5000, 000i., Of whi,
4 tile average amount advanced By the ban
NAV be one third"