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We shall close our notice of this truly valuable and sug. gestive book by a couple of anecdotes in relation to a country bank in England, under the operation of a run for specie. The extracts are interesting, by reason that we have nothing in our country precisely similar. Our country banks are never run for specie; all that is required of them is to pay by sight drafts on the commercial city of the State in which the country bank is located. The Atlantic banks are, however, occasionally subjected to such runs, but very rarely ; and, acting in concert with each other, a solvent bank can always pay, except in times which cause a general suspension of specie payments by all the banks. The writer remarks:
The only individual in the community, indeed, who cannot with impunity request a creditor to call again tomorrow, is the banker. Not that he gets payment of the debts owing to him with less trouble than other people; on the contrary, the banker is about the last person that a trader—particularly if he is in contemplation of bankruptcy-thinks of paying. Nevertheless, custom so rules it, that the banker shall pay his debts, principal and interest, whenever called upon to do so; and if he shall fail to do this, the Gazette is too good for him.
"It is in vain that a thousand channels of intelligence have again and again conveyed to the public ear the fact that you and all other bankers do not hold the whole of your deposits, in the shape of bank notes or gold, in your tills; and that to enable you to pay interest upon them, you have lent out the greater portion in making advances, and discounting bills, in the support and development of the trade of your district. The answer will be, that this may be all very true; that they, your depositors, are par
ticularly sorry, but that—they want their money, and must have it.
“But never despair, nor exhibit the slightest trepidation during the fiercest run, because nothing could be more fatal. If those who come first, see that you are excited and alarmed, they will not fail to conclude that there is grave cause for your alarm, nor will they fail to tell their neighbors so wherever they meet them; and thus possibly a run, that a little coolness might have averted, may be turned into a rush that will overwhelm you."
But the anecdotes :
“During the panic of 1847, the manager of a remote branch of a joint-stock bank called his accountant aside after the close of business one afternoon, and addressed him in terms something like these : 'Now, Mr. — you see how matters stand. I am off to head-office for more cash. You must work the branch through to-morrow somehow-I give you carte blanche.' And he did wisely. His accountant had just that sort of coolness, with a dash of audacity in it, fitted for such emergencies. There was a great rush of depositors with their receipts for payment the next day. He told them (quietly mending his pen the while) that he was very sorry, but a recent order of the directors was imperative —No deposit to be taken or paid short of ten days' notice.' The manager, if he were at home, which he would be to-morrow, might, perhaps, break through the rule; but as for himself, he was only a clerk, and couldn't afford to lose his situation. And he didn't.
“During the same panic, a cashier in the head office of one of the banks which were then run upon, had a check presented to him for payment, of an amount which he actually had not funds in the till to meet at the moment. He, therefore, with a daring humor, wrote in the corner of the
check 'no funds,' which was true enough in one senseseeing there were no funds in the bank to meet it--and dishonored the check. The transaction caused the withdrawal of a fine account, but it saved the bank,
“One other anecdote, and relative to the same period, and I quit the subject. The manager of a certain branch found himself, at the close of business, one arduous day, with little over £50 in his till, whilst it was impossible, before afternoon of next day, to increase his reserve. His accountant, a quick-witted fellow, before starting for headoffice, quietly locked the cash safe (keeping the fact to himself), put the key in his pocket, and took it with him, rightly judging that it would be better for the manager next day to meet his depositors with no money and a good excuse, than with a beggarly £50 and no excuse at all. The ruse succeeded. The manager had no difficulty in showing what he really felt, namely, a good deal of uneasiness, and the locksmith vainly laboring for hours to pick the impracticable lock, completed the illusion. The depositors, full of sympathy for the manager, with one accord agreed to call again in the afternoon, which they did, and their demands were satisfied."
REVIEW OF “ THE PHILOSOPHY OF JOINT STOCK BANKING."*
In England banking was conferred in 1708, as a mono. poly, upon the Governor and Company of the Bank of England ; but individuals, and partnerships of not more than six members, were permitted to act as bankers. The re..
· The Philosophy of Joint Stock Banking, by G. M. Bell. 18mo., pp. 105. London.
striction on the number of partners was removed in 1826 (after a persistence therein of one hundred and eighteen years), except that it was still retained in London, and in a circuit of country extending sixty-five miles around the city; and except further, that the enlarged partnerships were prohibited from issuing bank-notes payable in Lon. don, or from drawing bills thereon for a smaller sum than £50. Still, for this small relaxation of its monopoly, the Bank of England was compensated by a permission to establish branches in any part of England ; and it accordingly soon opened branch banks in every principal town, "much to the dissatisfaction and annoyance of country bankers, who could not compete with the branches in lowness of discount, or other facilities that the branches were able to give."
In 1833 the Bank of England's monopoly was further relaxed by a removal of the restriction which had prevented country banks from issuing notes payable in Lon. don, and from issuing drasts thereon for less sums than £50; and we infer that the restriction was removed which had prevented the establishment in and around London of banking partnerships composed of more than six members, for Mr. Bell says, “ the first Joint Stock Bank established in London was in 1834.” In other parts of England, joint stock banking commenced in 1826, and Mr. Bell's banking career commenced about simultaneously, for his book was published in 1840, and he says it is “the result of fourteen years' personal experience of. Joint Stock Banking, in the successive offices of cashier, accountant, branch-manager, and sub-manager."
The gradations thus classified seem like retrogressions rather than promotions, for in our banks the cashier* is
* An English cashier seems to be the functionary whom we call teller-The person who pays checks and counts deposits.
usually the highest executive officer, while an accountant is inferior in grade to several persons; but Mr. Bell's gradations were, doubtless, upwards, and we thence infer that he belongs to the class of distinguished persons whom we in America estimate fondly as self-made men, in contradistinction to men who attain honorable stations by favorable parentage, wealth, or other accidental advantages. With us, a self-made man holds the relation to a hereditary man that a good seedling fruit-tree holds to a grafted tree. While the grafted tree is yet a sapling, we know the flavor, size, and other qualities which will pertain to its fruit; but the seedling may produce fruit that will surpass every known variety. So a man reared amid affluence, and graduated at some good university, is a graft, of whom, while yet a youth, we may predicate what dogmas he will know at manhood, and what thoughts and aspirations will be exhibited by him ; but a man who collects information casually, who originates his own thoughts, makes his own expedients, and develops his ethics from his own experience and reflections, is a seedling who may excel in all desirable characteristics. Our Franklin was a seedling, our Fulton, and our best statesmen, soldiers, merchants, mechanics, and inventors, are, to a great extent, seedlings-excepting always our literati, who, as a class, are all grafts from English stocks, to some one of which every poet, essayist, novelist, and historian can as easily be traced as you can trace a golden pippin.
Mr. Bell's “Philosophy of Joint Stock Banking” is divided into chapters which, at successive periods of leisure, were originally published separately as leading articles in one of the London journals, and in the year 1840 were collected by the author and published in their present form. Banking literature was commenced earlier in England than in