Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1883-04-27
BANKING AND BANKERS.
Interesting Interview Intended
20 Instruct the ignorant.
Nashville Banner, Is.

A reporter fell in with member o
! a College street banking firm yester
! day evening, and the conversation
! turned on banking and finances. Tit
newspaper man being unfamiliar with
the subject, allowed the banker to d.
most OF the talking, eontenting him
self with an occasional side remark
calculated to induce his companion K
"unbosom" himself.
"How's the money marketP the re-
porter ventured to inquire.
We'll, easy enough for gilt edge
with short time to run. Not doing
much in the accommodation line
however. There is only fair demand
for discount. and the banks have a
sufficient surplus to meet all require
ments."
by discount you mean INTEREST,"
| well, as a fact, yes; it amounts
simply to that, though there is differ
ence, or used to be, between discount
and interest. The profit of q banking
business consists, in general terms, OF
interest on money. Strictly, it is com.
posed of interest, discount and OK
change. Interest is simply the rent of
money. In old times interest was not
considered due until the principal had
been enjoyed. We don't often do that
way now. When a note is discounted
at bank, the interest for the period
which it has to run before maturity is
subtracted Immediately. This is what
the public understands as compound
ing interest. The loan of money on
simple interest would give the ad.
vantage to the borrower. By the
method of discount it is reserved to
the lender.
How do you manage the discount
process2"
well, the general practice of banks
in Nashville is for the Board OF Di-
reotors to meet once each day, say at
neon, to act on the notes offered for
discount. The President presides
over the meetings. Among other
things, the Board DISCUSSES the cir
clmstances of merchants, their stand
ing in the community, the character
of the trade they are engaged in, the
credit of persons whose notes they
offer for discount, the value of securi-
ties, and whatever concerns the safety
of the bank. Sometimes, often | may
say, at these meetings expressions like
these are heard: How are the offer
ingsY You newspaper men use the
same expression to indicate the actiV-
ity Of demand for money. The bust
ness transacted is submitted at each
meeting ofthe Board. At the meet.
ings the President generally makes an
announcement to tile effect that the
condition of the bank is favorable (if
it ISL The liquidations have been
prompt since the last meeting. No
protests, and the market is quiet. The
amount of notes offered is large, but
he is very happy to say the bank can
discount the whole, if they are salts.
factory.
Now, perhaps you would like to
know how the board go about dis
counting note. They have what is
called an offering book with a record
of the notes offered. For instance, the
first offering is from New nickel &
Grab. Their notes are: One of Rio
Grande Jones, having ninety days to
run, 500; and one of Torbitt, Gofetcbit
d Co., sixty days to run, of $500.
Now, the directors know that Rio
Grande Jones is a well known mer-
chant Of capital and integrity. No
objection is made, and the president
scores opposite to it in the offering
book the letter A which means
accepted.
Now, for the other note, of Torbitt,
Gofetchit & Go. 1t is, perhaps, the
first time that the paper of T. G al
Go. has been offered for discount in
the bank. The president asks for in
formation. One of the directors
knows them; went into business a year
ago, with so, 900 capital, said to have
done good business. The Co. is
young man; hadn't much money when
he went into business, but pretty |
sharp; married and has FIVE children,
married SHAREHOLDERS daughter over
the way, the pork packer; guess he run |
away with her and made the old man
mad; all reconciled now aud stands in |
with Stamdoodle in the hog business,
and in all them new houses he is |
building down Millionaire street. |
This settles the business and the
paper is marked A.
Then somebody else's paper is
taken up and after discussing it, the
board agree not to discount it. so
ordered, says the president, and down
goes the letter R, which means res
jected.
"A bank, also, is kind of bio
graphical bureau. A bank keeps what
is called reference book, in which
entries like these may be found, but
OF course it is kept from the publicl
Peter Perkins, produce dealer, No.
VI - street; began business in 1878
with 1000; successful. 1879, very
successful, built a large house on
Hlghtone street, cost $25, 900. Cleared
500, 900 last year. 1880, worth $50, 600
besides real estate; living high and
visits the race track behind a spanking
team. Caution, business still good,
but seen him at gambling table; pays a
good deal of attention to fast horses
and the races; reported to have lost
$4,000 in Tennessee bonds, 1883, no
better; credit on the decline; continues
in bad way; think it advisable to re-
duce his account; looks like a con-
hrmed topper; running down hill fast;
past saving. >"
What would Perkins say if he were
to see that2"
But there is another thing, in
fact several of them, that the public
ought to know. You might put the
head of how to transact business with
bank over what l am going to say
now.