The Sedalia weekly bazoo. [volume] (Sedalia, Mo.) 187?-1904, 1892-06-14

terest on twice as much rs we really
have in cash say half Of it will be
uncollected, and half collected. II
We were to pay 2 per cent on
such balance, we would he paying
4 per cen, ON the actual cash balance
with us. This kind Of recount is
very Improbable to all banks, and
they are seeing the point and are get
tidg rid of such, or reducing them
to a non-interest basis, and charging
them for remittances Of their balances
as they call for them, or RENTING for
them say twice a month. This class
OF out of town business is the kind
that Causes so much criticism of the
banking business at present, and will
have to be remedied as il is causing q
great many collections to be sent
in around about ways, in order to
have them collected at par. One
bank trying to lad of its unprofita-
bic or non-psyirg collections on other
banks.
Another class of collections comes
from country banks to us, cav from
small banks in the country. 95 per
cent of the collections or exchange
coming from those banks are cash
items. to exchange on larg- points,
such a. cO;ton bill If lading exchange
DARTS for shipment of cattle, or collect
ions on large hanks. This class of
business is very profitable as these
collections can he seut direct to our
correspondents, at large points and
drawn against at cur ples sure.
The difference between a country
bark account. end a local deppsitor.
is III It the country hank account is
more active than the local depositor's
and it is customary TO pay him iuleri at
on his balances.
Another class Ofexchange is given
US by our wholesale merchants, who
deposit checks from theic country
customers as cash, such items throw
ing the money Of the banks into the
country or 10 a direction where they
cannot draw against such crllec-
tions or cash items. aud puts
them in the same shape as
collections, from our neigh
boring city banks, or banks at other
reserve cities. This class Of exchange
is also not desirable. We sre not
seeking to make many more r. ciprocal
accounts on the old basi., but are sr-
ranging to give and receive, to our
correspondents, business which will
be mutual. The collection business
is getting to be costly rather than q
paying business.
Oui proportion of foreign cOllec-
tions is not as large As formerly.
The proportion of banks, who re-
turn reciprocal favors has been reduc.
ed Of late, as the collection business
has become Q nuisance. The renume-
ration is not commensurate with the
amount of work. and cost. There is
very little charging on collections, and
there is no bank making any great
amount ON collections at present.
A national clearing house we do
not think the thing, as in our opinion
it would not work. The existing
clearing houses could not, under the
circumstances, do work of this kind.
We would suggest that this can be
done only through banks at reserve
cities transacting the business for
their country correspondents and Civ
ing such facilities tn other banks st
large reserve cities as they can Offset.
The making of collections all over
, the country has gone to far, and il
being by degrees cut down and brought
into line 1t must be brought to . pay
ing basis. The banks which have
done the large collection business over
the country have come to grief. A
great many Of them have built uE
large deposits by doing . great dea
J of free business, but have had to pay
90 much for it that they either
| hsvenot made money or have
become spectators in . vain at