The Semi-weekly leader. (Brookhaven, Miss.) 1905-1941, 1914-05-16
CONSERVATIVE BANKING
What a Leading Financial Journal Be-
Iieves to Be Only Safe Way
to do Business.

0tates may promulgate new
banking laws every day in the year.
but there are no new laws of
finance. the principles of which are
as immutable as the laws of nature.
All must obey the same old laws of
Conservative banking or pay the
penalty which their violation i'm
poses This was the keynote of an
address delivered by Mr.. Tucker
Royal, President of the Royal
National Bank, of Palestine, Texas.
Laying down the principles of
conservative banking" Mr..
Royal said:
That the banker is a trustee for
his depositors and that his trustee
ship must never be forgotten IS
fundamental principle upon the OBJ
servance of which depends that
banking growth and stability at
the basis Of commercial life itself.
There must be clear recognition
and appreciation of the banking
function. In proportion to its
capital 1t is the largest of all debt.
ors, while its assets consist princi-
pally of evidences of credit. The
banker is the credit regulator of
his community, and it is funda-
mentally necessary that he exercise
the greatest care in order that
credits do not grow out of proper
tion to the cash in which they are
redeemable. Permanent and con-
tinued prosperity depends upon
adequate banking facilities, and
these facilities it is the function of
bank to furnish. guided. however,
by correct principles and sound
business methods.
Banking is not simply busi-
ness, but it is a profession, and
most Jealous profession, imposing
on its ,votaries life of constant
mental training and labor. Bank
ing should be the bankers life
work. and he should seek success in
that line as the acme of his ambi-
ton, and should pursue it with all
energy, persistence and zeal requir-
ed to accomplish success and dis
tinction in other lines of profess
sionaI Iife..
Zone should not follow the busi-
ness simply from the love of money,
but take it as calling worthy of
the best powers and labor of the
best and ablest men. No principle
of banking is more vital than a
realization that large reserves
are more profitable at all times.
| The success of a bank, its growth
! and usefulness. depends upon the
ability of the, management to keep
its assets liquid and readily avail
able Close and thoughtful analy-
sis reveals this to be the real secret
Of success in commercial banking.
The constant temptation Of the
banker is to tie up his resources in
fixed investments which exhaust
his lending power and are the
greatest factors in creating tight
money
1t cannot be repeated tao often
that it is not the function of a.
weIl-managed bank to furnish busi-
ness capital for its customers, yet
the granting Of standing lines of
credit and the continuous renewal
of paper is virtually taking an
interest in the business of the bor-
rover and thereby violating the
principles of conservative banking.
Nothing could bring more speedy
ruin to the borrower than unlimit-
ed credit, regardless of security.
Fhe laborer is worthy of his hire.
The banker is entitled to his COL
lateral, his per cent. and his diyi-
dend. This is said to be pre-emi
nentIy a day Of specialties, and
Done but specialists can compete
with specialists in the struggle for
supremacy Amateur BANKERS will
have a little chance to win in the
contest as amateur lawyers and
doctors and ministers.
ITO create and retain a large
surplus account and to create it
quickly is considered not only the
part of wisdom. but should be the
desire of every conservative banker.
The surplus of bank is not only
its strength, but in one sense, it is
the only thing it does not owe.
There invariably comes time
when the presence or absence of a
surplus account affects vitally al
banks life and history. The repu-
tation of bank will be found not
to rest upon earnings paid out. but
those retained for the safety and
larger growth Of the institution.
I'm conclusion. will state that
the time is here when the depositor
must exact of his banker such wis.,
dom and judgment and executive
ability as must be acquired only
by long. earnest and exclusive ap-
piication. He must avoid all spec
ulative ventures. for cool and con-
servative investment and not spec
Hlarion is what builds for the
future. Speculation opens oppor-
tunities. but it takes conservatism
to turn them to good account.
Conservatism enters into de-
tails. speculation jumps at conclu.
sions; conservatism travels the
highways. speculation dashes over
the unbroken turf; the one keeps
the beacon light burning at its
Igoal, the other is lost in a laby-.
rinth Of uncertainty; the one sails
over the placid deep. the other
wanders rudderless on an angry