The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1876-10-11
How Banks Should DO Conducted.

Mr.. Lockwood, OF the National Bank,
Richmond, who attended the recent Bank
ers' Convention at Philadelphia the other
day, hands us copy Of ex-Secretary Nc
Culloch's address, from which we take the
following:
Banking, when intelligently and hon.
estly conducted, is an honorable business.
When so conducted it yields fair return
Oh the capital invested, and adds to the
general prosperity. Upon bank manage
ment hardly feel at liberty to say anything
to gentlemen so experienced and enlighten-
ed as those have the honor Of addressing,
and yet it may not be improper for me, an
old banker, to suggest, for the benefit OF
those of less experience, that there are GER
tain rules and principles the observance Of
which is necessary for the success Of bank
ing institutions, and for the fulilment OF
the duty which their managers owe to the
public. I will briefly enumerate them:
First. The capital of banks should be
real, not fictitious.
Second The managers should not be bor-
rowers, nor should loans be made to stock
holders merely because they are stockhold-
ers.
| Third, A certain amount Of the annual
profits should be carried to the surplus
| fund-the larger the surplus the better
not only for the safety of the stockholders,
| liable as they are, under the bank act, for
an amount equal to their shares, but for the
protection Of depositors.
Fourth. Banks should be kept strong in
their cash reserves, as times frequently oc-
cur when the strongest stand in need OF
| them. Nothing in the long run pays better
than q "goodly" amount OF idle money,
especially when specie is the only legal
money.
Fifth. AS banks are commercial lnstltu-
tions. created for commercial purposes,
preference in discounts should always be
given to paper based upon actual CONNER
eial transactions. Banks are not loan offices.
n il no part of their business to furnish
their customers with capital, nor should
loans be made under any circumstances 1or
operations in stocks, or to furnish facilities
in stock operations. :,
sixth. Renewals should only be permitted
TO secure doubtful debts, or IN cases IN
which more time is required than was anti
cipated when the loans were made to COM
plete the transactions upon which they were
based.
Seventh. Such salaries should be paid to
officers and clerks as will relieve them from
the temptation to dlSnOneSC plactlces-InS
services of those whose expenditures exceed
their incomes should be promptly dispensed
with.
Eighth. Bank managers should bear IN
mind that they are not only trustees or
stockholders, but that they owe something
to the public-that their whole duty is not
performed when good profits are made and
solvency accrued, but that they should do
all in their power to encourage morality in
business and elevate credit, especially COM
mercial credit, to the highest standard.
Accent my thanks for the patience with
which YOU have listened to this long and
hastily-prepred address lit would have
been better il had had more time to pre-
pare it), and the expression OF my regret
that I could not make better return for the
honor conferred upon me by your chairman
in inviting me to address you.