Los Angeles herald., 1891-06-29
LETTER BAG.
Banks and Commercia1 Activities,

EDITORS HERALD: Inc OutSlQo world
and the casual observer probably regard
this as the business center of Southern
California. Up to this time it probably
has been, probably is today, but this is
largely the result of the force of circum.
stances, and our business institutions
and business men really deserve but lit
tie credit. 1t will require no argument
to establish the self-eyident fact that
this city neither controls the business it
should or occupies the important COM
mercial position that it might--that it
ought to. There are reasons for this.
We have the natural position, the abili-
ty and the facilities. The surrounding
country produces the business, but this
city does only meager portion OF the
whole.
That it does not do 30 is the direct re-
suit of there being no system among
our business men; of everything being
done on the go-as-you-please order; of
there being no good and sufficient busi-
ness reasons why the outlying districts
should seek this city for the transaction
OF its commercial matters.
We have no business organization
worthy OF the name, or that seeks to
promote or centralize the business in
terests OF this section.
1t is difficult to locate the exact prime
cause of this. Probably leading reason
is that our commercial interests have so
gradually grown from comparative in
significance to vast volume that the
primitive ideas and manner of doing
things has held on, and been modified
only in so far as positive necessity de-
manded.
In business, as in other things, there
is always a class who have grown up
with certain fixed customs, ana these
always resist and frown down upon anv
and all innovations and changes, and it
is next to impossible to convince them
that anything could be better than the
regime under which they have always
worked.
/, Only casual observation would con-
vince any progressive business man that
all of our common business affairs are
conducted on plans far behind the age,
and that lack of joint purpose and
action on the part OF our business men
loses this city a vast amount OF business
it should handle. As natural conse-
quence this city occupies position in
the commercial world far below what it's
natural position warrants.
To fully comprehend this latter fact,
1t is only necessary to make fair esti-
mate OF our principal products for any
given twelve months and compare the
result with our clearing house footings
for the same period. This comparison
would show that there does not more
than one-fourth of the value of the sta
pie products of this immediate section
pass through the banks of this city.
Our banks seem Indifferent to these
facts They will probably remain in
different SO long as they can continue to
put out their money at ten per cent. net
and quietly remain behind their
counters and send out notices to some
delinquent mortgagor and foreclose,
occasionally, on some unfortunate one
who can no longer pay his interest.
As rule, banks make more out of
commercial paper than on ordinary
loans. This being fact, it would seem
that they would be largely interested in
the centralizing of the business interests
OF any section contiguous to them. In
any other city they are. But know of
no bank in this city that takes any in
terest in purely commercial matters.
To the contrary, all of our city banks
appear to handle commercial business
as matter of necessity, and impress
the customer with the idea that they do
his business purely as matter of ac-
commodation to him.
We have many institutions fitted up
as banks, and calling themselves banks,
which would be rightfully classed sim
ply as money brokers or loan agents in
any progressive eastern city.
Our bankers could learn great deal
to their profit and the country's good
by studying the business methods of
banks not any further away than
Omaha, Denver or Kansas City.
1t is money that moves and promotes
commerce. But when money shows
itself an unwilling vehicle at any given
point, trade naturally seeks some other.
Money tied up in banks earns nothing.
In real collateral loans it may pay good
interest; but in either case it falls far
short OF its actual abilities to build up
the commercial Importance of city or
develop the resources of the adjacent
country.
When this section was new and pro-
duced little more than it Consumed.
money lending was, about all bank
could do. But wher we produce thou
sands OF carloads of merchandise per
annum, and when the shipment of each
car means that draft to the amount of
the value of it's contents must pass
through some initial bank, it would
seem that some bank, or banker, inter
ested in the welfare of this city, would
wake up to the fact that we have no
commercial bank. that shippers do their
banking with numerous small banks in
local towns, and that this fact tends to
scatter the business that naturally be-
longs, and would otherwise come, to
this business center.
OF course, there are other necessary
business contingents. These leave for
future consideration and mention.
But the above facts stand largely in the
way of the centralizing of the CONNER
cial interests of this immediate section,
and any and all efforts in this direction
must be sadly handicapped SO long as our
banks appear Indifferent as to whether or
not they handle the money and the COM
mercial paper representing the proceeds
of our products. If we are ever to ac-
complish much in this direction, it is
none to early too begin right now. In
fact some decisive action, not should,
but must be taken at some early date.
Trade is not unlike stream of water,
it naturally flows into the most inviting
places, and is far easier guided at first
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