Evening star. [volume] (Washington, D.C.) 1854-1972, 1884-07-05
The MOraliZfmg Broker DiScOurses
upon Bank DepOSits.

LARGE LIABILITIES AND SMALL ASSETS-THE
sUGARED BAIT OF HIGH INTEREST AND HOW IT
CATCHES THE UNwARv-LARGE DEPOSITS WITH
IRRESPONSIBLE FIRMS AND THE CONSEQUENCE.
II don't know that object to the publlca-
ton of my opinions" remarked the broker
whose reflections on note shavers were pub
lished in The STAR fortnight ago. ''but it
was hardly the thing to term 1t a sermon or to
characterize me as preacher. am good
man. you understand, and 1 have great re-
spect for the clerical profession out the fact is,
it comes too high, it costs too much to be
minister even for one day"
''Costs too much" exclaimed the astonished
reporter. 'Why what do you mean?"
We'll, will tell you," replied the broker,
rather pensively, You see, on the Monday
morning following the publication was In my
office, busily engaged, when Kendall, who has
place, you know, next door. walked in.
said Good morning. and went on
with my work, not paying very much atten-
ton to him. Presently another broker dropped
in. and then three or four more, with some Clerks
sandwiched in, and, finally, noticed that there
was getting to be quite crowd in the office. l
looked around at the assembled brokers, but
they wore such solemn faces that it made me feel
rather uneasy. and l wondered II they had all
gone on the long side Of the market. Kendall,
however, did not keep me in suspense, but step
ping forward, as II he was the head OF delega-
ton to present gold-headed cane or ask for an
office, said:
Your sermon upon the evils Of note shaving
and speculation in Saturdays STAR was read
with deep interest by the brokers of this city.
We feel that We are sinners, and we are glad
that we have preacher to point out the right
way. We want to encourage you in these mis-
siOnary efforts, and as an evidence of our appre-
citation, and also Of our cordial endorsement. we
will place ourselves at your disposal for visit to
the nearest bar
'"Gentlemen:' ! replied with great amaze
ment, after making rapid mental calculation
OF the pecuniary obligations that would be in
Cured by the acceptance Of this offer. Your
proposition, preceded as it was by such f1atter
ing cOmmendaton fills me with contending
emotions. was not aware that efforts Of this
kind evolved an obligation of the description
to which you have SO delicately REFEREED"
THEY ALL DO 1T.
You are mistaken, sir responded all pres
ent in chorus their measured tones reminded
me Of the policeman in The Pirates. 'All minis
tiers of our acquaintance they continued in the
same mann err thus celebrate with their friends
'Of course" resumed the broker, mournfully.
''as the majority was against me yielded. But
that is the reason 1 said that it is expensive to
be minister. l have been thinking about it
since, and l don't see how some Of them can do
it on the salaries they get, unless there is min
sterial discount recognized by bar-keepers"
The broker sat medltatively considering this
point for some time In silence and then The
STAR reporter ventured to divert his mind in q
new channel.
"You said on Saturday." observed the reporter,
that money was deposited with these light
weight bankers because OF the high rates Of
interest paid. Why can't the regular banks pay
such interest ?"
81 suppose you mean," was the reply. ''by
regular banks the national banks In distinction
from firms doing what Is known as banking
business and receiving deposits. The national
banks pay no interest at all upon deposits and
have not done SO for years, and firms doing what
Is regarded as conservative banking business
adept the same policy. The reason for this Is
plain enough. Money Is plentiful, and can be
obtained on good security at five and six per
cent. When the rate Is higher the security is
not so good. For bank to effect loans at six
per cent. with proper regard for the interest
OF the depositors whose money they are using,
it would be impossible to pay interest and at
the same time meet the current expenses Of the
business and make a profit. If three, or say
four per cent was paid on deposits. then the
bank would be compelled to get about ten per
cent on their loans in order to make anything"
''As l remarked before" continued the
broker, there is always risk when greater
interest than the prevailing rate is obtained,
and a bank that takes such risks is unsafe, and
is SO regarded by good business men. For these
reasons the regular banks pay no interest at all
INTEREST on DEPOSITS.
'Do all banking firms pay high rates Of in
terest on deposits?" inquired the reporter
lit depends was the reply. ''Most banking
firms pursue as conservative policy as the reg
ular banks, and pay no interest at all. Others
pay some interest, but the usual way is for the
banker when he receives deposit to make some
arrangement about the rate Of interest to be
paid for the use of the money, which varies
with the amount deposited and the character of
the buStna6S GpnQral1y hanl firm
recognize no regular rate Of interest, but they
pay different rates to different customers Just
according to the bargain they can drive with
each customer when he deposits his money"
You expressed some surprise the other day"
said the broker, after q brief pause, ''that so
many people would be willing to deposit their
money with banking firms of apparently SO
slight financial responsibility when there were
banks OF assured sOundness. There is no occa-
sion for surprise. The majority of people want
to make money, and they want to make 1t rapid
ly. That is the American system Well, here Is
man that offers to pay 10 per cent a year. He
gives very plausible reasons why he is able to
pay such high rate Of interest, Just as Ward
did, or his Washington contemporary, Lewis. 1t
Is pay accounts or government contracts, or oil,
or something OF that sort, and in that way the
deposits make such an extraordinary showing
when the statement OF the suspended bank Is
made public. These bankers have got to do
something in order to meet the heavy demands
go into speculations of more or less risk. They
meet with losses and then naturally the specu-
latiOn grows wilder, until the elimination is
reached In disgraceful If not criminal failure ="
THE DESIRE TO MAKE MONEY.
"NOw, this is the explanation of the entire
NATTER" continued the broker in the tone of
one who Is anxious to close conversation
"People deprecate the folly of those who place
their trust and their funds with irresponsible
firms. But such people, as rule. either ha vent
any money to invest or have it out In real es.
tate or some sound, profitable investment. The
tendency OF human nature is to make money
some how and to make rs much as possible, and
all the laws Of usury, and it seems the lessons
of experience can't check It,"
why, knew man" he continued, 'who
bad recently large deposit with one Of these
banking firms. He was getting two per cent a
month and compromising his interest every three
months. When demonstrated with him and
told him that 1t was not safe he said: oh! 1t is
all right. The business is perfectly safe. They
deal in nothing but pay accounts and get five
per cent month, and SO you see that enables
the bank to pay me and have a good profit be-
Sides There is no use in advising such man, I"
remarked the broker. Il tried to show him
how impossible it was for any legitimate bust
ness to make such excessive profits as this with
out interruption or failure, but he would not see
this comment upon the folly of human nature
the broker ceased talking.
MOnitOry Verses.
Written for THE EVENING STAR