Northern tribune. [volume] (Cheboygan, Mich.) 1875-1885, 1883-06-02
Banks and Banking.

aphorism applies as equally to the bust
ness OF banking as to any other COM
mercial enterprise. Formerly the ri
valry between the banks, if indeed any
rivalry existed, was solely concerning
the very large accounts, and the smaller
folk were left to take care of themselves.
But in the last four or five years the sit
uation has decidedly changed. The
smallest accounts are now sought with
eagerness, and inducements of all kinds
consistent with safe banking are held
out as an attraction to customers. One
depositor is pleased with a nicely-bound
check-bOok; another is gratified because
he can have his little country checks
collected without charge. Some are
flattered because the bank has solicited
their accounts, while others derive a
more substantial qualification from &C
cOmmodations in the form of temporary
loans and discounts.
Among some of the older bank men,
unaccustomed to new ways and perhaps
tribe impervious to new ideas, there
still survives the notion that it is viO-
lation of propriety if not, indeed, of fair
dealing for one bank to solicit the ac-
SOuhp Va dhOtlCI Odilh . CuStOlucI. OOIu0
60 further and considerit to be some-
what out of good taste for bank to
make any open efforts to increase its
line of depOsitors. Such fanciful ideas,
however, have but little place in the
close and active competition of modern
times. Those who hold them are
classed by their fellows among the him
derers of progress, and institutions de-
nominated by such principles are likely
to be but laggards in the race. Methods
which might have been, and no doubt
were, very excellent twenty-five years
ago are quite out of place now. Bust
ness now is too close and competition
too keen to admit any restrictions save
those imposed by honest dealing and
faithful performance of contracts. 1t
would, however, be far from correct to
suppose that new bank depends for
even the greater part of its deposits
upon customers obtained from other in
situations. The establishment of new
bank implies of itself an increase in the
commercial activity of the place where
it is located. 1t shows that new indus
tries have been developed, that fresh
enterprises are on foot, that new firms
are commencing business, and it is to
secure the custom of all these that a
bank was organized. Again, by the
efforts of young institutions to secure
trade many persons are induced to open
a bank account who never kept one
before, and thus money formerly
boarded finds its way into the channels
of legitimate trade. The number
of these small accounts, which amount
in the aggregate to large sum, will no
doubt be greatly increased by the re-
moval of the stamp tax on checks,
which, though trihing in itself, is pc
culiarly Objectionable to persons whose
small means have been the result of
self-denial bordering on parsimony.
The foundation of the prosperity of
bank is the line of deposits. This is the
substructure upon which the whole
business of the institution rests. To in
crease this by every legitimate means is
a primary and all-important object.
And the word legitimate is not used in
a sense opposed to dishonest or unfair,
but simply to Indicate those methods
which experience has proved to be con-
sistent with the principles of sound
banking as opposed to sush practices as
do not commend themselves to the
judgment of careful iinanciers. Men
ton has been made of special induce
ments held out by various banks in or
der to secure an increase of CUSTOM but
these are of no value unless upheld by
a general feeling of confidence among
the public. This feeling of confidence
is not to be obtained by irregular and
spasmodic efforts, by special induce
ments, nor by ingenious advertising. 1t
is indeed no plant of hasty growth, but
requires long years of careful, honest,
and successful management to bring it
to perfection. Yet without it the in
crease of banks business drags slowly
and heavily along. Men are very
chary in trusting their money to the
safc-keeping of others, and, as has been
indicated, new institutions have many
difficulties against which to contend
Yet the old established banks are not
without their drawbacks also, more
dangerous than those which beset their
younger competitors, because more in
sidious and less easy of correction.
Chief among these is over-confidence, an
idea that the community could not get
along well without them. This
feeling leads to a disposition to neglect
new business and to rely on the old
standing accounts. These latter drop
off one by one, and, their places not be-
ing supplied by new accounts, the bust
ness imperceptibly declines, and when
once the affairs of any old institution
get on the down grade it is very hard to
recover the lost ground.
Another drawback to old intitutions
is having men at the head who have out
lived their usefulness. Old clerks who
have devoted the best part of their lives
to the service of the bank should be
placed on the retired list with vote of