The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1905-05-20
Address of Mr.. Geo. III. Brown


our country and in preserving the
Republic
Address of Mr.. Geo. III. Brown.
Mr.. G. H. Brown, of StatesviIle,
discussed the same subject, dealing
particularly with the loans made
Never deal with a rascal thinking
you can get even," said Mr.. Bro vn.
The danger is greater than the in.
come" Mr.. Browns suggestions While
directed to the young bankers, we're
of incalculable benefit to older mem
bers as well. Among other things he
said:
Banks should have a real capital.
not a fictitious ore
1.-THE officers and directors should
not be the chief borrowers. nor should
loans be made to stockholders merely
because they are interested in the
bank.
"a certain amount of profits should
be set apart semi-annually as a sur
plus fund. The larger the surplus the
better. not only for the safety of the
stockholders but for the protection of
depositors.
Banks should always keep strong
cash reserves, as times frequently oc-
cur when the strongest will stand in
need of them. Nothing in the long run
will pay better than a goodly amount
of idle money
Commercial banks should always
give preference to discounts to paper
based on actual commercial transac-
tons. 1t is not the part of the bust
ness of a bank to furnish it's customers
with capital. and loans should never
under any circumstances be made for
speculative operations in stocks.
Let no loans be made that are not
secured beyond a reasonable doubt;
give facilities only to legitimate and
prudent transactions: make your loans
on as short time as the business of
your customer will permit; distribute
your loans rather than concentrate
them. Large borrowers are apt to
control and dictate the policy of the
bank. and when this is the relation
between a bank and its customer it is
not difficult to decide which in the end
will suffer.
"A bank should treat it's customers
liebarlly, bearing in mind the fact
that bank prospers as its customers
prosper, but never let them dictate
your policy.
IF you have good reasons to dis
trust the integrity of customer. close
his account. Never deal with a rascal,
thinking you can prevent him from
cheating you. The risk in such a case
is greater than the profits.
In business know no mans politics.
Manage your bank as a business insti-
tuition and let no political partially or
prejudice influence your Judgment or
action in the management of it's af-
fairs.
Bank officers should bear in mind
that they are not only trustees of the
stockholders but that they owe some
thing to the public-that their whole
duty is not performed when good
profits are made and when soIvency
is secured. but that they should do all
in their power to encourage morality
in business and to elevate credit.
especially commercial credit to the
highest standard.
Healthy competition is the life of
banking. but experience has proven
that oVer-competition practically de-
stroys its profits. A growing manu-
featuring town is suggested as the best
location for a new bank, but before
starting a bank in any locality be sure
that the business needs it,
THE next important step is for the
mover of the enterprise to interest men
of capital and high reputation to take
part in the organization.
THE next point to be considered is
the amount of capital stock. which
should depend somewhat on the popu-
lation and character of the business
of business require more accOmmOda-
ton than others. AS the law limits
the loaning power of a bank to any
one individual or corporation to a
small per cent. of its capital the inn
portance of this point is easily seen.
1.-THE capital stock should be fully
paid up and paid in cash; notes are
not money and should never be ac-
copied in payment of capital.
''TThp confidence of the OpOnln must
be obtained if the new bank is to sue
coed. This should be the first move
to popularize the bank. Having OBJ
tanned it, never by word or act do
anything to shake or destroy it.
1.-THE bank once started it's policy in
popularizing it should be to treat
every one, rich and poor. with the
same courtesy. Be perfectly honest
and frank with every one.
"The speculative fever which seems
to have affected most all classes has
grown tremendously in the past few
years Much of the speculation now
carried on, such as dealing in futures
or on margin, is simply gambling. No
man of drinking. sporting or gambling
tendencies should be connected with a
bank, nor have it's accommodations
the risk is too great
'"The field of politics. with it's excite
Hent ana promise OF great pOSSlblll-
ties, is very enticing, but no bank CT
banker should ever become attached
to. or a part of the local political
machine, nor rely upon political inf1u-
ence to build up and sustain the
banks business.
1.-The old maxim in time of peace
prepare for war applies as we'll to
banks as to anything else. Prosperous
conditions will not always prevail but
troublesome times will come. The
prudent and careful b9nIxpr will no