Macon beacon. [volume] (Macon, Miss.) 1859-1995, 1907-12-14
The Need of Elementary Knowl-
edge of Banking.

The senseless 'runs" upon banks
whenever anything happens to cause
distrust Of some one institution, when
a single point of weakness is exposed,
are mainly due to dense ignorance of
the elementary principles and the ordi-
nary methods Of banking. This ignor-
ance is not confined to the unintelligent
and uneducated depositors in savings
banks, who may be incapable of under
standing or incessible to better knowl-
edge. 1t is common almost universal,
except among people whose business
brings them into closer practical rela-
tion with banks than that Of mere de
posters for the convenience of drawing
money as it is needed,
tbs extremely rare that the general
deposits, even in an embarrassed bank,
are not entirely safe if time sgiven for
realizing upon resources without sacri-
fee. In these recent days Of excite
ment the deposits in banks and trust
companies, except those shown to be al
ready in an nnsound condition, Of which
there has been only one or two, have
been entirely safe; but no bank can pay
a large proportion of its depositors all
all at once. 1t Keeps IN reserve only
enough cash to meet current demands
with sufficient margin Tor absolute safe
tym ordinary tunes, and depends upon
ne maturing obhgatons OF customers
to keep This UP while the bulk of its
funds are out in loans and investments
earning profit If.they were not en-
ployCd there woulp he no profit in bank
re ana no hanks Tor the accommoda-
uoa 81 oePosltors'
,!aaF''g oanN deposltofS are apt TO DC
ping 70 tde iacC thGt thelr money can
not be kept on hahd READY TO be pa!d out
III 2il[ moment except enough OF II 70
Hleel calIehJ oGnanus, Whlch VIII ordl-
Marty be- PROVIDED Tor from current re-
(GNlp.s' III must DC invested IN interest
bearing securities or IN real estate loans
SO as 10 orliE IN Ihe revenue ron
when interest Is palQ 20 ueposltorS. II
loey MAKE a suuuen uasn m great num-
perS lor lhelf money thelr Dahk VIII not
haFe enough on hand' ana the balance
IL Keeps on ceP9.SStt IN oIhef 6anNs Tor
emergencies VIII not ne sulllclent TO
meet a prolonged run. II must nave
un,e 20 teaIl4e upon Vhe securities by
selh1g lham qlhu upon loans by their
h''44tlly, ana III thls thefe may be
needless loss Tor the deposltors as a
Whole ~ Jle Dank has to suspend or
require ItS deposltors to give 1t time by
giving notice OF Withdrawals, 1t is not
a SlEn OF weakness put IS Que to the
blind selnsnness ana ignorance OF those
Wa9 are cIamorng Tor their deposits.
W.JhoQJ reason An understanding OF
how the haUk works would prevent a
run ~ most cases.
III is much the same with the ordma-
ny deposltors IN commercial banks,
many ol whom nowadays are small ira
deIs ana women househoIders. They DO
not realize that their money IS not al
ways IN the bank waiting for them
whenever they are pleased tocall forit.
MoSt OF 1t must be out working for the
banE' invested in commercial paper OF
loans on security which 1t takes time to
matuue. 1t IS going out and coming in
with greater or less Increment all the
time, and only portion iskept on hand
m cash, rarely more than quarter OF
me amount on deposit at any one time.
All the deposits are subject to demand
but it IS ordinarily expected that the
demand actually made for paying out
IRON DAY. to day VIII not exceed the