New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1885-05-22

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traders stock-n-trade ana bOOk-debts, MS Dulld-
ings and machinery, his furniture and pictures are
usually set forth at cost price IN his balance sneee'
and n would take the same money perhaps 10 re,
Mace them But force him into bankruptcy anu
we know the result llis estate and effects, aiier
nassinp through that famous mill will re-exhiOlt
themseves in figures which it will be hard to recon
ellie and impossible to identify. with those at when
they stood in his books before the grinding;
You hold policy on the life OF \ oah Hardy lot
f3, 900 to secure balance OF account. me present
value of this security is some fl5O or one-thtu IHo
amount of premiums thus far PAID upon IT,. NJ, us
prospective value depends upon the period OF MI
| Hardy's demise. Should that be the unhappy re-
suit Of your calling npon him to pay up the security
will he available to its full amount IN lew months
afterward provided the policy has been assigned
to the bank and notice thereof registered III the
books of the insurance company.
But the inability to pay sum owing 10 pan n
has not ordinarily fatal effect on the lie Oh inc
debtor. As matter of fact the records OF your
bank would rather seem to show that the average
rate of mortality is unusually light among partlGs
indebted to the bank on the strength OF lie poll
cies In cases. indeed where the premiums are pald
by the bank the debtors frequently reach patrl-
archal age.
This book ris especially clear and strong also, IN
pointing out the ncalculable services which banks
render contrasted with the Insignificant charges
which they make. In describing the various KINDS
of money which paid in at banks in England
and which the banker has to turn into available
cash at his own cost, the writer incidentally shows
that the silver nuisance appears at times IN England
aswell as here.
The circulating medium of the provinces is not OF
uniform quality. and the par of most OF its com
ponents is nominal Some three-fourths oil tne
provincial circulation consists of soverelgns ana
OF TS So oyer E 2I P wt these cir
cuate the four millions of country bank notes,
which have the defect of not being legal tender,
and have for the most part 10 be RENTED 10 Lon
don to be converted into that medium. Then come
checks and drafts on other banks, dividend war
rants, interest coupons post Office orders ana Olls
fele
able within the limits of the United Kingdom
Last but not least you have to take into account
the silver Ill circulation. This VIII come 10 you
plente0usly in packets of f5 fl0 each, or direct
from your customers pockets in promlscuous hand
fuls embracing specimens OF our silver coinage lrom
a threepenny bit to crown piece.
1t may be inferred that there are some people in
England who would be called Greenbackers here
The notion that money can be created by fat does
not seem to be confined to either country as the
following comments on the clamor for increased
issues may serve to show:
But Mr. Bagster has views of his own as to the
right use of your circulation. He holds that when
the trading interests of OxbOTough are at stake
that is to say, in palmer English, when certain OF
its burgesses are hard up for mOney-it is mean In
bank like the District Union, holding nearly three
millions Of deposits to boggle at the risk of "a few
thousands concern paying an annual 10 per
to its propretors ought not to betray this mar
rOwneSs of view and sOrdld fear of loss Moreover.
if loss does arise, he contends that you can NIL the
gap up with your own notes which cost you moth
ing. 1t is but just to add that Mr.. Bagster would
deal with the National Debt in the same way; he
would pay it of by the issue of $50 MILL OF one
pound notes payable to bearer on demand.
There is character in one of Mr. Dickcnss novels
who when he gives his acceptance for an account
regards the debt as thereby satisfied and DIS
charged. Mr. Bagster obviously looks upon the
private issuer OF notes as species oil banking
Micawber.
Not less shrewd and practical is Mr. Rae in deal
ing with even the smallest minute of the banks
business. Thus, if an account has proved unprOft-
able, and it is desired to close it, the manager is adj
vsed not to write a letter to the client but to have
personal interview with him. first because mis-
understanding NAV be avoided. and second:
Ii is further objection TO yOur cOnveyngto a
customer wishes of an unpleasant nature by letter
that he may be from home at the Time and your
missive be opened by sSme one IN his absence. II
this some should happen to he nervous wife or
loose tongued clerk. he will have right to ask
You why you sent this epistolary bombshell after
him without any notice. Rather than be thus
brought to book, he would have endured an hours
warming in your svoatinG-roOn at any boaIabc
degree of Fahrenheit. Your customers without
exception, will prefer TO discuss the delicate ques
tions of their overdrafs and bills in camera; and
you will do wisely to humor them in this prefer
ence.
In the broader field of financial management Mr..
Rae believes that strong pay better in the
end than weak reserves and that sound and prudent
banking, if it does not catch all the small profits
that more reckless and expanded course would
secure escapes the occasional losses which sweep
away IN a single item more than the profits of such
business for years 1t Is not only true. he shows
that banks are still as much exposed to senscleSs
and mschicvDus runs as they were in the dark ages
of banking hundred years ago But the modern
changes in the modes of doing business, bringing
news from every part of the world during each days
transactions, involve risk Of sudden AMI violent dis
turbanccs TO which commerce not liable some
wears ago
Mr.. Rae touches the cause OF n great part Of the
rottenness in modern banking when he says, Every
bank failure which has happened during the last
forty years has been brought about by reason of
facilities of scandalous extent granted to three
four favored accounts" lie goes TO show that it
would be not only infinitely safer but far more
profitable to make hundred advances Of $1,000
each than to loan 100000 to one huge borrower
and that when the borrower of one Thousand asks
further aid and says that without it he must sus-
pend, the bank make up lis mind without seri-
GUS effort TO face the loss but no bank can regard
without dismay the possible stoppagc Of house
owing it 81 DO, OOO7 Thus it comes TO pass that, IN
too many cases I" a few large accounts arc allowed
to grow to abnormal figures until point is reached
when the borrowers become masters of the bank
and they and it drive blindly on to mutual pcrdi-
ton" So too, where advances made in large
amount against ships in the Of construction,
the native element of vessels thus launched and
sent to is manifestly paper; they float as much
on bills as on the ocean wave, and the outcome to
the discounters of sucn paper-as witness the ex-
perence OF Ovcrend, Quincy Il Co.'s ordinarily
more disastrous than eXhilaratng." With the same
keenness the writer describes the many kinds of
fraudulent kte-lying bills that are drawn and the
manner in which commercial credit is thus inflated.
Thus he says
A. has imported cargo of produce value say Co.
yyhi he to II. w 10 at a
and resells also speculation to c., who disposes
of it to d., wholesale dealer, who finally parts
with it to the trade, and draws upon the smaller
buyers against sales. Now if bills are drawn at
every stage of the process as they may easily be,