Wilmington daily commercial., 1873-10-23
A MIschlexon. -,s em Of BanLIpg.

THE PAYMENT OF INTEREsr ON DEPotIrs = 1T
FEEDS sPEoULAruRs AND DENIES BUSINESS
MEN.
In the course of his financial lecture in New
York, on Tuesday evening, Hon. Geo s. Bout
well referred severely to the practice OF banks
paving interest on deposits. in the course o.
which he said:
In the first place, as a matter of principle,
bauk il established upon the idea that the people
organized are capitalists, and have money 10
lend, and not that they are borrowers OF money
They are institutions established to arrest pam
ic Nhen specuators are disturbed and when
merchants are fearing for cohse qnehces, 1t IL
then that the banks, individually, and the bank
ing system as whole, should be as firm and as
staunch as the Treasury of the United. States.
Applause And without such personal expert
ence III banking, i know perfectly well that mer-
chant or dealer in goods giving his paper on
time, will find by the doctrine OF chances that II
natures on different days, and he has the means,
by the examination Of his books 10 know wheth-
er he is called on to pay it at particular times.
But with banks it is different Their raper ma
lures not by the operation Of time, but through
the appfehensions of men, and there Ii no busl-
ness That can resist and there is no business that
ought to resist practice OF that kind. APP
lanre Now, then, what is the effect upon the
business of the country West and South from
this practice farmer iu country town has
4iOO or $3.50 he thinks he may want it at fu-
ture time, but docs not know when. Ii he
should go to national bank and deposit that mon
ey. receive interest for the time 1t i5 left, and
call for it when very likely to dispose of 1t in
| that way Instead Of keeping it himself or loan
| ing it to tumeBody who may agree to pay it when
the tune express What is the cnnditon OF the bank
| that has paid interest? II does not dare loan
| that to a business man in the community on
/ time because it does not know when 1t may be
| called ON to respond. 1t il sent to New York or
Phadelphia, or some other city, and deposited
with the national bank there and, as matter
/ of fact, most of it comes to this city. What Is
Il the condition Of the bank here? 1t does not
| dare to loan the money by regular discount, but
| loans it upon call. In September. 1863, l had
| some means of knowing what were the effects
on the banks Of this city that had made loans
| upon loans on call but who dld not dare TO ask
the men who promised to pay to respond be,
cause they knew perfectly well they could not
respond, ,,.,,
| stautal business interests of the country Dur
ing the Summer mo1ths, when capital Is aDuh,
dant, the whole of the East and West is deprived
of it's surplus money. 1t cannot be obtained
for regular business purposes, but is sent tt
New-York 1t cannot be used here IN regulal
| legitimate business by merchants who get papel
| discounted on time, but II ls loaned TO person.
who expect to gain wealth by speculations
| Young men are tempted to use funds that u'
| not belong to them, and t happens that in near
lv every defalcalon the cause is traced TO specuia
ton in stocks that this practice Is an evllto th
| agricultural districts and to the City. Now, then
| yeuture the opinion that this year, with such all
as the Treasury of the United States would hav'
| furnished, you would have met the demand TO
| money for the purchases of the West and Soutl
without difficulty, If there had not been super
added to this natural and necessary condition o
things tho demands for money by the towns un
der the system which have. been dHcoursng up
on. In the West the East, and everywhere. pee
pie desired to get possession OF their funds, es
pecially when they were apprehensive OF nnan
cial disaster Therefore you had not only to NEE
the Legitimate demands of trade, but you had I
meet the accumulated demand growing out Q
this practice OF tue banks borrowing money an
paying interest for it.