The sun. [volume] (New York [N.Y.]) 1833-1916, 1896-12-20
AN OLD BANKING RULE.

BANKERS Eighty Years Ago Took No
Chances with Untrustworthy Deposltors.
There were eight banks In New York In 1917,
and business was conducted by them on n somc-
what primitive scale. Most of these banks are
still in business. The City Bank, incorporated
five years before, was one Of them. The Bank
OF New York. incorporated in 1884. was another.
The Bank Of America, chartered in 1912, was n
third. The Merchants Bank. founded In 1903.
and the Mechanics Bank. founded in 1910.
Union Bank, and the New York branch Of the
United states Bank represented tho others.
banking privileges those deposltors who were
counts. On AnE, IL, 1917. they announced
their policy as follows:
II shall be understood and declared as an express
opening aceoInts with them that no ara,t shalt 10
or rrm shall oyrrdraw his or their account Win "ltHcr
Of the above banks and shall not Within seven days
cure lIs payment e tns ssti.Iaie.Ioon OF the bank over.
70 REPORT the name Of such person to the ofhe s"f BANKS.
Nonote or bill drawn, accepted or endorsed by the per.
Or they may IA then be or at Z l any ny A future ns0 lime S' sS Mnii have We
Tseiiy be c discoSnte Or 81 Ssr eIsnsr ' os .S aissG sanS Ss 'n NOR
shall an account ever he kept by either OF these banks
house with which he Or they may then 6s or at any
ners; or with any j Other person geS9 Witch p she BANK q / P may
have reason to suppose Is for his or their benent or
This ~cast-iron arrangement is what would be
called nowadays, commercial blacklisting. for
not only was the delinquent depositor precluded
from ever doing usiness with any OF the banks,
but If he was n member of II firm maintaining n
private account the Arm would be deprived OF
US banking privileges even after he had with
drawn from u, and u man who overdrew his
times the serious threat that any firm which
gave him employment would lose Its banking
Iaciilties IN New York. and could secure or re-
cover them only by. liquidating his debt, even II
contracted long before the date OF his employ
ment. BY this method Of mutual protection the
banks or New York, few in number ut that time
almost inhnitesimal business, we're able TO ex-
clude from their customers those who failed to
make good an oyerdraft, and the effect OF such
n rule was to make an overdraft on one bank a
mercial intercourse with all banks, a condition
which in the course OF speculation as II exists
to-day would he a barrier to the ordinary haz-
The Now York bankers Of eighty years ago
did not believe in taking snap judgments" on
derelict deDositors. for though their rules OF ex-
fortunate business man, they gave every de-
posltor seven days grace to make good u def
cheney In his account. The theory appears TO
on horseback or in ~carryall, TO reach his friends
In order that the sum required should be con-
tributed. many Of these friends keeping
boxes. in, cupboards, or under tho floor
ofthe cocklott. The Manhattan Company. the
second Oldest Of the banks OF New York,
chartered in 1900, Aaron Burr acting as Attor.
ney, took no part In the bIacklisting. II is not
recorded In any. OF the financial histories
whether many OF the casual depositors in the
their patriotic obligations to Uncle sam as TO
oyerdraw their accounts and TO put him under
the necessity OF Informing them that II within
the shortage. they would be turned sdrlft for
ever more.