, 1866-05-10
the old standard rules upon this all important

6n0lecf-
In former years Chicago has suffered I'M
menBely from the delusious which this false
principle is sure to foster and produce. Till
within very recent period nearly all the
financial business OF the city IVES done by
private bankers. The thing would work out
the erils almost sure to result from it, some
what In this wise Some one would rent fine
Office, place sign over his door With the
magic word Bank" beautifully painted on
IL, and forthwith commence business. The
few hundreds OF at most Thousands Of dollars
he had been able to scrape together were os-
tentatiously displayed N his show window,
or packed up in the glass case upon his coun-
1cr, and by moving cautiously a year or two,
large business was gradually secured. One
Of the sure ways to increase this business with
astonishing rapIdlty, vas to pay interest upon
deposits. Even. II the banker were honest
aud v ith the best intentions, Ills Judgment
wonld be almost sure TO be warped by the
immense amount Of business he would soon
find himself doing. He could. we'll affo-d, as
lie supposed, 10 pay six and even ten Per cent
for deposits when he was loaning them Mt
from twelve to twenty. But ere long crash
would come, when, If able to 60 through at
NIL, The honest banker would be forced to
sacrifice ali his fauc1ed profits, land he would
be fortunate If not his capital rs wel1), to meet
these inevitable interest bearing deposits.
For reckless men and rogucs, paying interest
on deposits Is the philosophers stone, for BY
II they,arc surc to guilt the community out Of
fortunes aud fine living. VIC hare often
been amazed to sec sensible men trust
their hard earnings 10 q man who had
fho afr p%crr IN nj xho p,arl
his door, because he would promise TO pay
them interest on their deposits, from whom,
In any other business, they would exact the
most ample security for loan OF fifty dol
lars. The fleeing OF one class Of dupes seems
not TO nave the least eject upon the simple
crowd who are to follow. We might give
scores Of examples Of swindlins bankers, from
Courad lack 10 names In tho carly history Of
the city, which wou1d not be recognized by
1.-THE OF our present readers One means,
perhaps the main one used by them TO gull
tic unsuspcctlng public, was to pay interest
on deposits.
Among Legitimate bankers the practice, If
we mistake not, was commenced In New York.
Three, four, sometimes SIX, per cent Is pnid
By the city hunks to the country bankers for
their accounts. By this means enormous
amounts Of money are accumulated,
which are in turn loaned out On call with
s.ap,royed collatcrals'' TO the stock gamblers
oi Wal street. The enormous transactions in
mat Unsuitable malstrom OF mammon are made
nniuly with the muncy deposited there by the
country banks. Hence conc the iullatious
snd contrastions Which periodically
sweep over the 1.nd, involving
thousands In hopeless ruin. How much
better would II be for the country, could we
70 back 10 the Legitimate principles of bank
ing. Each institution should keep Its own
funds, except only such IN amount Us its
customers may require 1t to draw against, in
its own vaults, to accommodate the manu-
lnc,nling and busIn1ss public that surround
IL. Better thousand fold stimulate aud
encourage thcn, than TO furnish means to the
bulls ~ and bcars'' OF, Wall street.
We are sorry 10 hear that the lad practice
| of paving interest on dcposits has been
adop,ed by SONG of our city banks. We
scarcely know a careful. sound banker who
docs not recayd It as Of doubtful utility. but
because others do IL they submit with the
hest p7ace they can. Some Chtca.o hanks.
We know. VIII not keen their accounts in a
| New York bank that pays interest on i1eposits.
and Of course they VIII not pay for deposits