Clearfield Republican. [volume] (Clearfield, Pa.) 1851-1937, 1861-03-20
BANKING.
From tho Scientific American New York;

| NiVm tho pVicHtluC american (New York;
There is nothing simpler than bank
I A number of persons who have money t,
, lend on interest find several advantages i,
, clubbing together and putting their none,
into common fund; they constant,
form an association with this aim, anc
such an association is called a bank. TIL,
management Of the funl is intrusted tt
experienced business men who are ac-
quainted, or who can make themselve,
quainted, with the wealth or poverty O.
persons applying for the use of any part oI
the fund, in order that it may be loaned
to those who are able to reray it again with
the interest agreed upon for its use.
These associations generally have money
coming in and going out daily, and it is
necessary to provide iron boxes or stronu
stone closets for its safe keeping, and
when these are provided, any person in
the community who has sum of money
which he does not want Immediately is
apt TO ask the favor of having il placed in
The bank vaults till he wants it. The
number of persons who thus have money
which the, do not require for immediate
use. and the sums which are constantly
left with the various banks for safe keep
ing is surprisingly large The managers
soon find by experience that as a portion
OF these deposits are Withdrawn others are
brought in, and there is thus large
amount constantly on hand. As business
men OF property, who can make safe notes,
are constantly calling for more money
than the capital of the ban k amounts TO
the directors loan a portion of these de-
/ osits, taking care always to keep enough
money on hand to pay any depositors who
are likely to call Cor it. As the bank pays
nothing to TIE depositors for the use of
their money, and as they get interest from
those to whom they loan it, they are gen
orally able TO make profit in this way
more than enough 10 pay the expenses of
rent, clerk hire, &c.
Besides the interest obtained Cor money
which is left with then for safe keeping, !
the tn banks have another source of profit in
tain banking companies became thor
oughly established, the discovery was made |
that they could buy gold and silver, or
other articles of value with their notes,
and if they made these notes in small
amounts, they would pass from hand to
hand in exchange for merchandise, the
same as coin and that a certain amount Of
them would remain constantly in circulas
ton. Banks accordingly exchange their
notes not on interest with merchants and
other business men for th cir notes on
interest, and thus make considerable
profit. OF course the banks must keep
SOHO specie on hand to pay any of these ]
notes that may be presented for payment, |
as they are all constantly due, Icing pay-
able on demand. As the bank obtains To
interest fof the specie which is in It's
vaults, there is constant temptation to
dimish this below safe sum, and the !
numerous failures of banks to pay their |
notes when they were presented,prompted
the Legislature of this State 10 require
every bank issuing notes to deposit sccu-
rity for their payment with an officer OF
the State. As the security required con-
sists of State stocks, mortgage, &C., which
draw interest, and as the bank notes DIR aw
no interest, the banks make the profit on
their circulation in the same way that they
did before the passage Of this useful law.
When a banking company loans money
10 a merchant, it is customary TO take out
the interest at the time of making the
loan. counting out the interest, or discount
ina it as j. is called hence the term dis
counting has come to be applied to the
transaction of making the loan, and the
whole amount of money out at interest 10
enlbractd in bank returns ander the term
of discounts. The banks of this State arc
required to publish statement weekly of
their average deposits, circulation, dis
counts and specie, for the week. The
statement for the week ending February
%, of the condition of the banks of this
city, is as follows:
Capital = s69,l4S, ,G32
Loans ll9,23b,29O
Specie 3S,o4i299
Circulation s,12s,f92
Deposits 9l,62s,s 1926
A portion of the deposits are fictitious
or nominal merely as we shall show in a
subsequent article.
seyn Minnie was one day talking to her
little class in Sunday school about Gods
great love to men. Wishing to impress
it upon their minds, and to kpow