Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1857-10-24

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attended with expense, Inconvenience, and anxiey,
and very naturally gave rise 10 the suggestion that
if large vault sale were erected in some cen
trial position to which each the 900 tra6ers could
bring his money for sale keeping great part Of the
expense and risk might be saved. The utility and
feasibility ofthis would be so apparent as to
secure its adoption, and, matter Of course, suit
able officers would be appointed to take charge of
this general depository,
But this arrangement though bene6cent one
did not fully meet the wants Of the business commu-
nifty. There was great deal Of unnecessary labor
connected with it. Every day great part of the
| specie must be taken out, and after circulating
through the city, be brought back to the depository
for safe keeping. 1t would soon be that, if
books were opened at this institution, in which
should be entered all the deposits 70 the credit of
each particular depostor and hen the amount charg
ed to each he should draw it out, it woild much
facilitate the transfer Of balances. For example:
A. owing $500, would give his order on for that
amount and B would then 90 TO the depository and
get the money, or he could have the amount passed
TO his credit; or, if he owed $500, could pass the
/ order or "cheok" to G, who in turn would either
pass it to D, or have it placed to his credit in
the books Of the institution. By this simple arrange
ment all the business Of the place might be carried
| on without the necessity OF passing from hand TO
hand any considerable amount Of specie, and such
an institution would be in fact no more or less than
BANK OF DEPOSIT.
OF this Sort was the first bank Of importance of
which we have any authentic history, and was the
/ Bank of Venice, established in I'LL 1t a gov
ernmental institution, and existed for some 900
years, afording great conyenieuces to the
not only of Venice, but OF great part OF Europe
The Bank OF Amsterdam, similar institution, was
established in the Netherlands in 1909 It received
deposit all the coins then in circulation, however
worn dipped, alleged they might be; ascertain
ed by weight and assay the value of the same
and passed them to the credit Of the depostof as
much blank money. This arrangement established
uniform and reliable standard of value and con
terred the greatest advantages the trade of Am-
sterdam. 1t continued its operations successfully
and without interruption until the invasion of the
French army 10 1895.
The hamburg is another institution much like the
preceding. 1t was founded in 1919 Il has ever
been, still is strictly bank of deposit and we
have the testimony of Mr.. McCulloch author of the
Commercial Dictionary, Ia very good authority,)
that "this is universally admitted be one of the
best managed banks il EUROPE" 1t has always ad-
hered closely 10 its functions as a bank Of deposit
has never loaned any part of its funds, but main
tanned in all respects its integrity both its depos
ltors and the public. 1t conferS immense benefits
and does no mischief affords the greatest facilities
for the safe keeping aud transfer of money, and
does nothing to disturb the natural laws trade. 1t
is, in fact model bank. 1t is supported by a small
commission paid by each dePostor and al its funds
the depositors nOLhing-the charges falling at last
those who drain the specie from its vaults for ex
portstion. This bank not only sustains ITSELF but
pays considerable revenue to the city.
Such was the origin of the simplest form of bank
ing, from which all others have precededin the natu-
raj course of events--fOr when bank of deposit
was fully organized, and its operation tested, it
would be seen that the institution might, with
great propriety and effect exercise yet another func
tion-viz., that of LOarsing money.
BANK OF DEPOSIT, DISCOUNT, AND CIRCULATION
The power and Importance of the bank would be
vastly increased, and it might in the legitimate ex
ecuuon Of lis appropriate functions furnish all the
fsciitieswhioh commerce could righufuly demand
To see this, however, distinctly, we will emu
merate the different services which it would per-
fOrm:-
LIST. 1t would be a secure place of deposit, as be-
fore shown for ali transient funds Persons rcceiy-
ing money they did not wish to use to-day, might
leave it passed to their credit and subject to their
draft at sight; and by means Of checks drafts the
greater part of all business obligations mig be dis
charged without removing any money from the |
bank.
ID 1t would be place where all notes running |
TO maturity might be LEFT for collection, and where
all having notes to pay would be sure TO find them
wnen due. For example, suppose individual has |
notes against twenty different persons, becoming due
at various dates for several months come Instead
OF keeping them in his own possession and being
at the trouble Of presenting them the promissors
OF giving them notice when uue, he leaves them all
at the bank, which assumes the responsibility of no.
utyIng the persons who owe them, and who, at the
day when they are due, go the bank and pay them
The amount 50 padls passed TO the credit of A. who
eau draw 1t from the bank ut if he has occasion
use it. or which remains for safe keeping if he has
not by this arrangement not only great deal of |
labor and care is saved to individuals, but all the
notes deposited must be paid when due, or be PRO
at IL nd off
cally "dlshonored"-nO regardful of his stand
ing at the bank, In commercial circles, will allow
Ms note to lay over This secures perfect prom t.
n IS In the payment of all negotiable obligations
mater OF no small con sheraton to business men.
ID This bank would furnish place where CAPT.
talists could advantageously invest their money In
all wealthy communities there are great numbers OF
persons who, Tor various reasons, do not themselves
wish to employ their money. Some are too feeble,
some too old or too young, some too proud, per-
maps indecent to do this; and yet is desirable that
al the capital of society should be in active
possible Now, if by an institution like the one
We speak OF, all these classes OF persons secure
A safe aud profitable of their money, a great
benefit is conferred those who would lend as well
As those who must borrow. the money left in the
bank becomes part Of its capital" The bank is
sues TO the capitalist "a certificate" that he has
81, 900 Tor any other sum- as tue case may bel in
the 'stuck OF the bank" These certificates, in com
mon parlance, are 'bank stock" and as they are
from hand to hand by entries at the
bank, they become articles of merchandise, always
a ready sale; and if the credit of the
bank itself Is good, Ottentimes bearing premium
hat is, bringing more than their par value
4th. Such bank might issue certificates of
deposit These differ in one essential Characteristic
from notes Of circulation. A person in New York,
in which place viii suppose institution of this
kind to be situated, goes to the bank and deposits
50, QUO; and takes certificate that such amount
mas been placed to his credit payable to him his
order. This certificate he may indorse, payable to
correspondent at ST. Louis aud toward 1t to him,
and the latter eau readily pass it any who has
payments TO make il New York. The difference be-
5ween certificate and common bank-nOte is, that
he former being payable to order, only be col
ected by the person to whom it is payable, while
bank noie is good to any who may change TO get
hold Of it, whether rghtfully not. 1t is a safer
node Of making remittances.
9th. Such bank may purchase or collect bills of
exchange, and in this way perform important
ice for the public
Without going at present into the general subject
# commercial exchanges it will be sufficient for our
present purpose SHOW in what manner the objects
mentioned may be accomplished A, in Boston, has
old merchandise to B, in New Orleans for which B
las given him his note acceptance for the amount.
wishing TO realize the money for this, takes it to
he bank in Boston, which, after deducting the in
crest and small per for exchange" gives |
the net amount in cash-Or, if does want the
money until his note Of acceptance is due he de-
Osts the same in the Bank for collection"
In either case, the bank in Boston, having the note
T bill Of exchange, sends it on TO New Orleans to |
bank Of a similar character which collects the
money of and passes it to the credit Of the Boston
,snk. c. in Boston, has in the meantime pUrchas- |
OF d, in New Orleans, a bill of cotton for which
e wishes to pay. c goes to the Boston bank and I
SKIS for draft on New Orleans This the bank is |
BILE to give him, because BIS note having been paid
the bank New Orleans, il has funds Of its own
q that city. The draft which c obtains and for
-hoh he is problbly charged a small per cent
exchange he sends TO D of whom ne bought the
elton, who, in turn, goes to the bank in New Or
,ans and collects the money. So, by these Oper- l
lions, B, in New Orleans, has paid A, in Boston;
nd G, in Boston, has paid D. in New Orleans and +
o money has been transferred either way.
We have said that the banks in the cases referred
,, would charge small per cent exchange. The t
rincipe on which this charge is that it will
Dst a given sum TO transport money from Boston 10 e
ew Orleans or from New Orleans to Boston, and S
lerefore it is right for the banks 10 make such t
barge as the trans portatOn insurance, &c, would
mount to- In poipt of fact both parties the indi. q