New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1885-05-22
SENSE ABOUT BANKING,
A BOOK OF sHREwDNESS. WIT. AND RAKE
PRACTICAL KNOWLEDGE.

from n
author OF BuDns Letters TO BANK Manasei'
I2mo, PIP. 3l2 London: john Murray
Here we have book on banking that is not dry
xf,ho stories told were all narratives of events in
ctual life if the series of letters in which they are
given were all actually written by a bank manager
of long experience to a young friend recently pro-
NOTED to the management of branch Oahk' they
could hardly be more interesting thah tney are;
The writer is happy in his STYLE which is clear and
,;mnle though enriched by many illustrations and
frenuently enlivened by fine flashes OF hunor.
Though the STYLE is that of free and familiar gossip
The letters will repay most careful study For they
set forth the conditions of successful banking anu
the modes of dealing with almost every coacelVaOie
question or event in bankers life, with remarSaoic
ability and with wealth Of suggestion when only
Mr. Rae's practical experience OF forty years I'D
banking could have given. His work, therefore. Is
by no means light in matter as 1t is IN style oh
the contrary it deals with the vices prevailing III
the banking business on both sides OF inc ocean
with singular courage and severity, and there are
very few bankers. surely, who could not gain from
It valuable hints for their own guidance or ma In
II singing rebukes of practices in which they nave
long indulged At first glance, because the book
deals largely with the circumstances and surround
inps the social peculiarites and tho business
routine of English country towns, IL may DC
thought that 1T can have little Application 10 the
business of large cities or OF this country but
human nature pretty much the same on either siue
of the Atlantic and banking is the same business,
in its essential principles and IN thousands ol
practical applications within the sound oil trinity
beIls as IN distant manufacturing agricultural
districts of England. Such at least will be the con-
clusiou of those Americans who read Mr. RaeS
hook with An eve omen to the suggestions which
bear upon banking here For example, those who
have studied the career OF Mr.. Fish of the Marine
Baak will heartily concur with the following reply
TO the common opinion that bankers arc persons OF
superhuman sagacity:
On the contrary, my experience is that bankers
have the full average capacity OF beng taken III,
when they go beyond the safe line OF advances on
security and venture upon the qulcksandS oil
personal credit
AMI again, Mr. Rae says, of class of bankers not
quito unknown here one year ago. at least:
The slightest tendency to q mental folding OF the
hands to sleep during banking hours must be
wrested with at once and overcome. Inc manager
who is not at all times vigliant TO mote every
change in the circumstances of his customers, tne
aspect of their accounts the quality OF their Ds ana
the value of their securities; but gives way 10
mental Incidence. and lends loose ear 20 app
cannot fail in time TO bring loss 10 MS oranch anu
trouble upon himself The NEEDY GoTser s6 Smo
find him out, and he becomes their prey.
To how many in this country, moreover, within the
past trying year, has sad experience come which
due regard for the following practical suggestion
would have avoided:
Bear IN mind that every advance which you make
without security will rest for its safety on the
unerring accuracy of your Judgment as to the
means and character of the borrower. but IN sucn
cases your Judgements any man s-nIaIlDe
is il equal in any case to good collateral security
In making your selection and cn0lce OF the trust
worthy amongst your custOmers-ln separating the
sheen from the goats-your experience Will be more
than human if you do not take to your bosom
black sheep now and then. And the irony OF tne
thing will lie in this-your losses, when they DO
happen, will come from your chosen ones[trom
those in whom you have placed your business falt
and to whom unhapply you have lent the DahK 5
money without security.
Among the earliest letters are some of especial
usefulness on the modes of ascertaning the stand
ing of customers, on what can be learned from the
course of an account, and the nature OF liabii
ties Of current rumor for or against man, Mr.
Rae has small opinion. He would usually divide
by ten the common estimate of mans wealth, and
TO reports of financial rottenness he says:
When anv rumor reaches you therefore, either
TO the credit or discredit OF man. nave care
before acting upon it, to slit 1t to the bottom;
carefully weighing the probabilities Tor ana against,
and the evidence on which they rest, as II you
were hearing cause in court OF law Business
calumnes especially, of extraordinary vitality
You shall expose and stamp one ont as you
imagine and i'm a few months 1T will come back to
YOU again,from some distant quarter, as fresh ana
brazen if you had never crushed IL nnder an
angry heel Whilst you have conceived IL ueau anu h
buried it has been merely absent on tour Oh inc
district.
As an illustration both of Mr. Rae's method Of
puttinc his points in a practical way, and of the
abundance of shrewd suggestion which his light
and chatty narrative covers, the following history
of a managers blundsr in the matter of Mr. Bar
good may be quoted in full
Mr. Bargood commenced business in IS with
n capitai of $1,000. For the first two years, he
carried a moderate trade, and bought nothing on
credit, But in the third yearhe began to extend;
he became still more extended IN the fourth ana IN
the fifth year reached degree OF imitation which
rendered eventual explosion Inevitable.
The considerable balance which stood at his
credit with YOU for good portion OF the first two
years becomes rapidly diminished in the third,
disappears altogether N the fourth. and in tie fifth
year is replaced by balance against him. His
acceptances meanwhile, exhibit a corresponding
swftness of growth in number and amount. lie no
longer buys for cash. He buys on credit. and
shares in the general tendency of his affairs to
expansion, and shows a large and rapid increase.
Mr. BargOod. whilst awaiting himself to the full OF
his own credit, is giving credit far and wide to
other people.
account there are minor incidents TO be noted, the
significance of which alone might have opened Mr.
Littleworths eyes to the headlong course along
which BargOod was hurTyng To those who have
the capacity and will to look there eye-Openers
to be met with even in bank ledger, although not
of mirtnful cast They mcite the observer rather
TO wide-eyed and angry astonishment.
The amount of bills drawn by Bargood on Laxey
g. Co.. for example. ought to have challenged atten
ti0n lnSteal OF DclitR uTdNu 10 Oh lew
hundreds in all, which their original ami
su icent limit, they came in the end TO be drawn
for as many thousands.
Bnt if the increase the total of these bills held
no warning in it for your predecessor, the regu-
larity with each was discounted, few days before
another of similar amount became due, ought to
have awakened him to the fact that the paper on
Laxey & Co. was being kept adoat by series OF
renewals
Nor is this all. There appears amongst Bargood's |
acceptances an occasional one to LaXey * Co, |
thus ind catng the existence of crosspaper between
the parties Whilst Bargood at OXb0rOugh was
raising money, by drawing fictitious bills on Laxey
& Co., bills for value received in nothing they |
on their part, were hocussng their bankers with |
n lrnu 4Enrr. Mr.