Evening star., 1921-09-25
ny I. A. FLEMING.

Sdpitdl necessary TO the opening OIL
a bank has been subscribed by a
group of men and perhaps some
women-maybe there has been a rush
for the stock, as there certainly was
Tor one or two Of the successful
banks OF today when they were in the
stock selling stage.
In any event, when the money for
the capital is subscribed and paid in
location selected, officers agreed
upon and all ready for the doors to
open. bank officials should give much
thought to their shareholders.
The latter have sufficient confidence
In the banks officials to trust them
with the needed cash to give it the
required capital.
The management of that capital
requires caution, prudence and a feel
Ing OF personal responsibility on the
part OF every man authorized to lend
a dollar of it.
AS a first lesson in finance, the
purchase OF poor note at any price
is mighty poor bargain, even il you
nave chance of collecting it,
Equally important is it that the
bank officials realize that any form
OF personal ACKNOWLEDGMENT as Il side
consideration for the acceptance of a
note, even if secured by gold dollars,
is the beginning of Il bad ending. and
many sad ending has followed just
such action where the official making
the loan was taking no chances"
Men with high credit rating, men
with collateral or known and actual
market value. do not have to put
their hands behind their backs when
asking for accommodations, nor add
plus to the regular going rates of
interest
sympathy has small place in the
banking business. 1t may have large
place in the heart of the bank official,
but on general principles it is poor
policy to be generous with other peo-
pies money. This does not mean that
a worthy debtor should not be treated
with due consideration, that every
possible aid within reason should not
be extended to a customer in the cur
failing or liquidation of loans. but
in the making of loans sympathy
should not be a factor.
The good business man wants actual
dollars or certified checks from the
man who has slipped.
The banker who will take chances
with borrower who has put it over
on another bank or banker will re-
ceive q small need of sympathy
That he will receive what he is en-
titled to for taking a dangerous
chance-a more or less serious loss
is more than probable.
When a bank has opened its doors
and is taking in the dollars of the
friends of the officers, bank officials
have another sacred duty, that of
caring for the money of their de-
positors.
Laws have been made for the treat
ment of part of this money and good
banking methods dictate other rules
that will go further than the legal
requirements.
Clearing house privileges are needed
to give good standing to checks. else
would they have to be paid over the
counter, not a pleasant way OF doing
banking of a commercial character
The member bank through which the
new institution would clear will look
after its own welfare and the clearing
house will guard its members.
Generally speaking, the bank that
has been in business many years has
a large number of questionable loans
and Investments, perhaps gradually
working out, or 1T may be that the
bank management, IL aggressive. has
depleted its surplus TO clean its slate,
neiying o nfuture efforts to salvage
what 1t may from the loss.
This Policy Frequently Pays.
New banks have or should have
clean slate, no debts, no promises to
do this or that. and now that the
Investment situation is more normal
they should not run easily into the
losing stage through bad invest
ments.
annual returns should not be as
large. and that the principal ana IN; IN;
terest should be safely secured and
home occasionally,
A bank has a third duty to the
community in which it exists, in
which it gathers in deposits and
does business. The furtherance. if
possible, of every sound enterprise in
the location. some one possessed OF
security matters. to understad Sc
curities and government financial
operations, etc, and to have good
connections at home and in other
cities for his customers use
Speculation is the last thing a
banker should think of, even with
his own money. on a "sure thing" or
otherwise, for it leads to temptation
and is the friend of defalcation.
In banking a reputation, long lived
up to, is an asset worth while.
The banking business is no broad
highway to wealth and ease. Some OF
our good citizens have walked the
paths through to success after years
of EFFORT, but to the most conservative,
the most able, there come times when
the question Of policy is hard to solve
and other times when the actions of
others, for which they are in no way
to blame. give them sleepless nights
and worried days.
Any one recalling that night in Mo-
vember, 1913, when the former United
States Trust Company passed from its
stockholders control, will realize that
the bankers pathway is frequently
narrow and rough, and the same kind
Of a memory will carry one over the