A Veteran Specie Clerk.
 
 THE BANKS OF NEW-YORK, 
 
 THEIR DEALERS, 
 THE CLEARING HOUSE, 
 
 AND 
 
 THE PANIC OF 1857. 
 
 WITH A FINANCIAL CHART. 
 
 BY J. S. GIBBONS. 
 
 THIRTY ILLUSTRATIONS, BY HERRICK. 
 
 NEW YORK: 
 
 PUBLISHED BY D. APPLETON & CO 
 1864.
 
 EXTEP.ED, according to Act of Congress, In the year One Thousand Eight Hundred 
 and Fifty-eight, by J. 8. GIBBONS, in the Clerk's Office of the District Court 
 of the United States for the Southern District of New York.
 
 TO 
 
 GEOKGE H. ELLEKY, 
 
 Or NEW TOBK, 
 
 THE ATTTHOK DEDICATES THIS VOLUME, AS A MASK OF ESTEEM FOB HIS PERSONAL 
 
 CHARACTER, HIS TTPBIGHTNE88 AS A MERCHANT, AND 
 
 Hlfl CONSTANCY A3 A FRIEND.
 
 PREFACE 
 
 IT is not possible to introduce into a single volume 
 all that is curious or interesting about banks ; and 
 scarcely less difficult to avoid some things that may 
 appear trifling or impertinent. 
 
 The author has endeavored to give a picture of the 
 banks of New York as they are ; to describe the duties 
 of the officers and clerks, and their daily experience 
 in transacting business with the dealers ; also to 
 describe the conduct of dealers in their intercourse 
 with banks. Some of the scenes presented may seem 
 extravagant, and perhaps would be accepted as cari- 
 cature, if not vouched for as literally true. The errors 
 of the book are not, at least, in that direction. The 
 real exaggerations of fact and manner, if rendered 
 with the exactness of a daguerreotype, could hardly 
 fail to excite a suspicion of designed caricature. 
 
 A considerable part of the author's purpose has 
 been to give a general knowledge of the method of 
 bank book-keeping. It would be impossible to do 
 this thoroughly, without running into the dullest of 
 details. Any person of intelligence and vivacity will 
 supply the omissions or oversights under this head. 
 
 If the volume fails to show that there is nothing in 
 
 l
 
 VI PREFACE. 
 
 the business of banking to entitle it to more respect 
 than any honest mercantile employment, and that 
 therefore, the banker and the dealer meet on equal 
 terms, it is deficient in a very important respect. A 
 dealer commits no greater mistake, than to begin 
 treating with a bank as if it were a superior power ; 
 and its officers do not need such a stimulus to their 
 self-conceit. 
 
 * 
 
 The description of the Clearing House, and the 
 sketch of the panic, have made the volume one third 
 larger than was originally intended. 
 
 With respect to the panic, the author owes every 
 thing to the invaluable records of the Clearing House, 
 an institution which has brought about a new era in 
 our city banking, and the full usefulness of which is 
 hardly yet imagined even by a majority of those who 
 share in its direction. In a few mouths, it has done 
 more real service to the interests of trade in New 
 York, than the Chamber of Commerce in the century 
 of its existence ; though that has done as much as 
 it could, without the organization of an effective 
 financial bureau, such as the Clearing House must 
 become, as an auxiliary to its labors.
 
 CONTENTS. 
 
 CHAPTER L 
 
 IKTBODTTCTION Number of Banks, and their Managers and Clerks What Bank* 
 Represent What a Bank Is The New York System How a Bank la organ- 
 ized, and by whom managed Technical and Slang Terms. 
 
 CHAPTER IL 
 
 TH PRESIDENT His Legal Relations to the Bank Should be a Man of Educa- 
 tion and superior Character The Board of Directors Transacting; Business 
 Offerings for Discount Rambling Conversations The Artistic Diversions of 
 Mr. Marks Discounting Paper, and Discussions of Character Narrow-minded 
 Directors Operations In Sugar Directors Crotchett and Bnttonwood Adjourn- 
 ment Director Miller pays a Note of $10,000 Two Characters of a President 
 in contrast Personal Habits of Dealers enquired Into Commercial Agency 
 Reports Great Influence of the President Examining Collateral Notes Jonas 
 Marks (confidential) Claims of Directors conflicting with the Rights of Dealers 
 A Particular Friend in Trouble. 
 
 CHAPTER IIL 
 
 THE CASHIER His Special Duties Power of Appointing and Removing Him 
 Not Subordinate in Everything The Correspondence A Tight Market Receiv- 
 ing New Accounts Personal Solicitation Mr. A. "Won't submit to such 
 Treatment" In Debt to the Clearing House Kiting The Cashier in a state 
 of Siege Mr. Swcatem's Expostulation Mr. Boyle in a Rage A Great House 
 Saved Complaints of Dealers The Right Character for a Cashier Two Hun 
 dred Thousand Dollars Stolen. 
 
 CHAPTER IV. 
 
 THE PAYISO TELLKK His Duty, Bonds, and Salary Custody of the Vault, and 
 Keeping of the Key Desk Arrangements Sends Exchanges to Clearing House 
 Certifying and Paying Checks Certification Check-list Peculiarities of 
 Checks Careless Habits of Merchants Ingenious Forgery Detected Losses 
 never Discovered A Successful Forgery of $10,000 Classification of Accounts 
 Impositions on the Teller Samuel Filibuster Overdraws his Account Identi- 
 fying Indorsers Certifying Checks in Advance of the Deposit Various Inci- 
 
 vii
 
 Vlll CONTENTS. 
 
 dents Ignorance of Bank Usage How Alexander Jones may cheat The 
 Failure of Skarem & Co. The Teller's Proof Cheating by Certification A 
 Narrow Escape. 
 
 CHAPTER V. 
 
 THE DEPOSIT TELI.EE His peculiar Duties, and the Forms of his Account- 
 Books Forms of Exchange and Proof-list Of what Deposits consist Abel 
 Dodge deposits kiting Checks, and then fails The Teller has great Influence 
 In determining the Character of the Business Detection of Spurious Bills 
 Eapid Counting Claims for Differences Disputes Improved Discipline A 
 Thousand Dollars Short The Teller appealed to by the Cashier Causes 
 Accounts to be closed How he corrects the Errors of Dealers A Poor Shoe- 
 maker waiting for a Deposit 
 
 CHAPTER VI. 
 
 THE NOTE TELLER Classes of Notes Form of Collection Note-Book Adding 
 Cash Checks from Morning Letters Paying Notes, and saving Tickets Errors 
 of Note-makers The "Wrong Person served Various Incidents. 
 
 CHAPTER VIL 
 
 THE DISCOUNT CLEBK The Difference between Interest and Discount Offering 
 of Notes for Discount Examples Transcription of Records Discount Ledgers 
 Proof of Accounts Dealers calling, after a Board Session, to know what 
 luck The manner in which they are affected by Disappointment Terribly 
 Tight Times Mr. Axletree A Fraud. 
 
 CHAPTER VIIL 
 
 THE NOTE DEPARTMENT Notes the great Instruments of Commerce The Col- 
 lection Register Consequence of wrong " Timing" of Notes Page of Register 
 and Tickler Custody of Notes. 
 
 CHAPTER IX. 
 
 THE BOOK-KEEPER His necessary Qualifications The Alphabetical Arrange- 
 ment of Accounts Balancing Accounts Answering the Paying Teller's ques- 
 tions from memory John Brown gets a Notice, and proves that Alexander 
 Jones ought to have had it A Fraud Scale of Apportionment for a Ledger. 
 
 CHAPTER X. 
 
 XH* GENERAL BOOK-KEEPEB Description of his Books Form of a Bank State- 
 ment, and how it serves as a Guide in the Discounting of Paper. The Stock 
 Ledger. 
 
 CHAPTER XL 
 
 THE ASSISTANT TELLER Examination of the Exchanges, and his Help to the other 
 Tellers Form of Proof for the Separate Counting of the Exchanges.
 
 CONTENTS. IX 
 
 CHAPTEB XII. 
 THE CHECK CLEBK His Qualifications and Duty His Chances of Promotion. 
 
 CHAPTEB XIII. 
 
 THE RUNNER Prepares the Bank Notices for Distribution Collects Bight 
 Drafts, Ac. Serving Notices Difficulty of always finding the right Man Col- 
 lects Information, and imparts it to the Officers Serves as Talesman on a Jury. 
 
 CHAPTEB XIV. 
 
 THE POSTER The Keys of the Bank Building In his Custody General Duties 
 Counting Coin His Skill in Detecting Counterfeits The Old-fashioned Pouch 
 The Cashier in a pet, because Donaldson won't stay in two places at the same 
 time Messenger to other Banks Is the Bank's Letter Carrier Reports Delhi 
 not taken Assists the Paying Teller Tries the Door, to be sure that it is locked 
 Appointed to the Dignity of Specie Clerk Long and honorable Career of the 
 Bank Porter A Veteran in the Service The Gold Spectacles. 
 
 CHAPTEB XV. 
 
 PRESENTS No Favor in Banking between the Officers and the Dealers ; or if so $ 
 from the latter to the Bank Presents have a bad Influence, and lay the basis 
 for Fraud Anecdotes Practice of GEORGE CCKTIB, Esq., late President of the 
 Continental Bank. 
 
 CHAPTEB XVI. 
 
 BANK DISCIPLINE Source of the fears of Bank Officers with respect to Fraud 
 Plans of Gamblers The profitable occupation of Leisure Hours A System of 
 Daily Reports. 
 
 CHAPTER XVIL 
 
 How TO TRANSACT BUSINESS WITH A BANK Short Boles and Recommenda- 
 tions. 
 
 CHAPTER XVIIL 
 
 THE CLEARING HOUSE. The Old Plan of making Exchanges The Porter's Set- 
 tlement Irritations and Impositions Origin of the Clearing House Constitu- 
 tion of ditto The Rooms The Daily Routine Forms of the several Tickets 
 used An amazing Amount of Work done in Six Minutes The Time saved 
 Extraordinary Skill of the Settling Clerks Clearing House Proof Method 
 of Discovering Errors Scale of Fines Specie Certificates and Easy Settle- 
 mentsReclamation for Differences, how Settled Summary of Work Saved 
 over the Old Method The Records Their Great Value and Use A Clear 
 Principle In Banking demonstrated Limiting Influences The "Weekly State- 
 ments The Quarterly Statements good for nothing before the Clearing House 
 was organized Improvement in the whole System of Banking brought about 
 by the Clearing House The Result of Five Tears of Trial The Expenses of 
 the House The Admirable System and Order of its Accounts Tables, illus- 
 trated by a Financial Chart, for the Guidance of the Bank Board The first 
 Proposal for a Clearing House.
 
 CONTENTS. 
 
 CHAPTER XIX. 
 
 THK PANIC A General Sketch Gradual Reduction of Loans for Four Years-- 
 The Failure of the Ohio Life Insurance and Trust Company, and its Effect or 
 the Weekly Statements A great Change wrought In one Day The Reduction 
 of Loans not caused by the withdrawal of Deposits The Fluctuating Part of 
 the basis of Bank Loans considered The Steadiness of the Bank Deposit 
 Contrast In the Fall of Securities in two periods The Final Blow Cause of the 
 Panic The Influence of the Specie Settlements of the Clearing House An 
 Alleviation The Chart Separate Expansion cured, but Harmonious Expan- 
 sion allowed Measurement of Expansion by Specie Reserve Proportion of 
 Specie recommended An Exception The Difficulties of Bank Government 
 Incompetent and Dishonest Officers The Independent's List of Failures 
 What the Panic Developed Personal Credit the Cause of Fluctuation Bank 
 Currency No Connection between Loans and Circulation Bank Note Re- 
 demption Objections and Errors Trade in Bills Will Suspension occur 
 again? A Financial College Anomalies in the Banking System The Ox 
 goring the Bull Practical Absurdities Notions about Gold Its exact office 
 Causes of its accumulation in New York.
 
 ILLUSTKATIONS. 
 
 MB 
 
 1. THE SPECIE CLERK of THE UNION BANK, Frontttpitct. 
 
 2. THE BOABD OF DIBECTOBS DISCOUNTING NOTES, 81 
 
 8. THE ARTISTIC DIVERSIONS OF MB. MARKS, 88 
 
 4. THE PRESIDENT EXAMINING COLLATEBAL Nona, . . . 61 
 
 6. JUST ELECTED, ( .... 70 
 
 6. MB. A. WON'T SUBMIT TO SUCH TREATMENT, 88 
 
 7. THE CASHIER CAUGHT BY THE BUTTON-HOI*, M 
 
 8. MB. RIGHT UP, . 86 
 
 9. MB. RIGHT DOWN, 88 
 
 10. THE CASHIER IN A STATE or SIEGE, 90 
 
 11. MB. SWEATEM'S FINAL ARGUMENT, 91 
 
 12. A BAD BANK STATEMENT, 98 
 
 13. THE PAYING TELLER AND HIS CUSTOMERS, 144 
 
 14. A TIGHT DAY AT THE DISCOUNT DESK, 199 
 
 15. CONSOLATION BETTEB FARE THAN AT THE DISCOUNT BOABD, . . 209 
 
 16. OUTSIDE Two PEE CENT A MONTH, 210 
 
 17. INSIDE THE CONSEQUENCES OF Two PEB CENT A MONTH, . . 212 
 
 18. THE EUNNEB ON A FRUITLESS SEARCH, 249 
 
 19. MATTHIAS, POBTEB OF THE BANK OF THE STATE OF NEW YORK, . 264 
 
 20. FATHER COLE, .'..... 269 
 
 21. AN OLD-FASHIONED FBIDAY'8 SETTLEMENT, 294 
 
 22. PLAN OF THE CLEARING HOUSE BOOMS, . . . . . . . 803 
 
 23. THE CLEARING HOUSE MANAGES IN HIB PULPIT, .... 806 
 
 24. MAKING THE DAILY EXCHANGE, . . . . . . 807 
 
 25. A TON OF GOLD, ........... 815 
 
 26. THE SPECIE CLEEK WITH HALF A MILLION IN HIS POCKET, . . 816 
 
 27. FINANCIAL CHABT, ... 836 
 
 23. WALL STREET ON THE DAY OF SPECIE SUSPENSION, .... 846 
 
 29. A "BUN" ON A BANK, 861 
 
 80. THE FINANCIAL CHABT BEDUCED, . . . , . . . 867 
 
 81. DIAGRAM OF CUBBENCY AND LOANS, 880 
 
 82. THX BANK CIRCULATION, 884 
 
 3d
 
 A number of the Illustrations in this Volume were executed, under 
 the instructions of Mr. HEEBICK, at the New York School of Design for 
 Women. 
 
 Xll
 
 THE NEW YORK BANKS. 
 
 CHAPTER 1. 
 
 INTBODUCTION. 
 
 THEKE are fifty-three banks in the City of New 
 York, with an aggregate capital of about sixty-six 
 millions of dollars. The number of persons imme- 
 diately connected with them, as directors, officers, and 
 clerks, is nearly two thousand. The number of those 
 who transact business with them as stockholders, de- 
 positors, borrowers, or in some other capacity, is 
 several hundred thousand. In addition, a still larger 
 number reap from them a sensible convenience in less 
 direct methods ; and as to the influence which they 
 exert over the affairs of the community generally, 
 there is no way of forming even a proximate estimate 
 of it. Not an individual inhabitant of New York can 
 say that he is not, at every moment, either the better 
 or the worse for the existence of banks ; or both better 
 and worse. There are some, probably, who never touch 
 a bank-note, who never cross the threshhold of a bank, 
 who use gold and silver only in their business, and 
 who think that they are therefore free from all the 
 1* 9
 
 10 INTRODUCTION. 
 
 influences of banks ; but this is a mere fancy. They 
 can no more escape from them, than they can from 
 the influence of our common schools, or than they can 
 avoid breathing the common air. If they are day- 
 laborers, and get their wages in silvei^ those wages 
 are greater or less, because of the existence of banks ; 
 and so with the price of every thing they eat or wear. 
 Banks represent the capital, labor, and commerce 
 of the country. The fact that they exert such influ- 
 ence over the people, and that there is 'no escaping 
 from it, is of itself enough to set jealousy to work, and 
 to create parties in opposition to them. Even if they 
 had always been sources of unmixed public benefit, 
 there could be no guarantee for the future. But 
 they have rarely been conducted without sufficient 
 abuse of powers, to keep alive perpetual hostility 
 towards them, on one ground or another. The right 
 to issue " paper money" (to the public their most in- 
 teresting function) has not always been so guarded 
 as to prevent fraud, which has fallen chiefly on the 
 poor and working classes, and has therefore readily 
 been made the foundation of popular excitement ; and 
 this kind of fraud, more than any other, has escaped 
 the just penalties of the law. Politicians have eagerly 
 seized on these facts to win the support of " the out- 
 raged million." It has not suited them to speak of 
 the advantages which have resulted from the organiz- 
 ation of capital ; but they have kept before the eyes 
 of the multitude an exaggerated picture of the evils 
 which flow from the existence of banks, even charg- 
 ing upon them the consequences of individual extra- 
 vagance and dishonesty. It is surprising to what an
 
 WHAT A BANK 18. 11 
 
 extent they have succeeded in imposing these errors 
 and falsehoods on the public mind. Not only the 
 ignorant, but many who are well informed on general 
 subjects, have been made to accept the teachings of 
 the demagogue, that banks are, in their very nature, 
 opposed to honest industry, and oppressive to the poor ; 
 that they favor a monopoly of rights and privileges 
 by the few ; that they promote the extremes of wealth 
 and poverty in a country ; and finally, that they are 
 dangerous to popular freedom. For the last thirty 
 years, opposition to banks has been a lever in the 
 hands of politicians, with ignorance as its chief ful- 
 crum, to keep parties in office. The growing intelli- 
 gence of the people has gradually corrected this state 
 of things ; while better laws and methods of business 
 have removed much of the old ground of opposition 
 to banks. 
 
 The purpose of this volume is, to present a literal 
 history of the New York City banks in their present 
 organization and action ; to show how they are con- 
 nected with the interest and the convenience of all 
 classes of people ; to explain the manner in which 
 they transact business ; and to place them in their 
 true position as correlative with commerce, and not 
 above it. This will include a description of the duties 
 of the officers and clerks, and the daily incidents of 
 the business, with the frauds and abuses to which it 
 is liable ; and also of the Clearing House, which in- 
 troduced a new era in American Banking. 
 
 Some data, bearing on the causes of the panic of 
 1857, have enlarged the volume beyond its original 
 design.
 
 12 INTRODUCTION. 
 
 A bank is simply a plan of organizing capital, by 
 which the full benefits of it are secured. The separate 
 means of individuals are united together, and a large 
 sum thus constituted, which is hired out on interest 
 to those who need it. This combination, and the 
 manner of its use, may be compared to a dam across 
 a valley, and the accumulation in one body of the 
 water of the separate springs, which otherwise would 
 be of little service ; but being united, they form a 
 propelling power for extensive machinery. 
 
 Without the organization of capital in some form, 
 a community must remain in comparative barbarism. 
 The few who possess wealth above their wants must 
 either send it away for investment where it would 
 enrich other places, or it would for the most part lie 
 dead, while the poor would continue in ignorance and 
 drudgery. A public school, a library, or a church, 
 would be impossible without combination. It is 
 therefore a social necessity to organize capital, and 
 communities thrive in proportion as this organization 
 is eifected. They prosper, not only in material sub- 
 stance, but in education and morals. 
 
 Any one who has travelled among our country vil- 
 lages, out of the immediate influence of cities, has 
 occasionally been struck by the neglect of natural 
 advantages, the lack of energy, the rudeness of life 
 and character, and the almost savage features of the 
 common people. But on visiting the same place after 
 an interval of a few years, he has seen a total change : 
 a larger population, a better class of buildings, an 
 air of thrifty growth, and a manifest increase of com- 
 fort. The old lethargy has disappeared ; a new life
 
 THE NEW YORK SYSTEM. 13 
 
 has been infused into everything; even the counte- 
 nances of the people are softened ; a less brutal and 
 more intelligent spirit beams from their eyes. A 
 bank has been the starting point of this new career ; 
 the mill-dam has been built across the little streams 
 of capital, and the social machinery is brought into 
 play. 
 
 After it is organized, a bank gathers other capital 
 by saving. It presents the first practical idea of 
 economy and increase to thousands of people. It 
 brings out the old stockings, and pours their contents 
 into the common dam, which rises higher and drives 
 more wheels. 
 
 The objection to banks, that they foster credit, is a 
 complete solecism. Credit is at the same time the 
 co-efficient and the supplement of capital. The busi- 
 ness of banks is, to prevent abuse while making the 
 most of it. And so well have they succeeded in this, 
 that they have mostly retained popular favor and 
 confidence, in spite of their own errors, and of the 
 denunciations of their enemies. 
 
 The present system of banking in the State of New 
 York, is the result of much experience, and of many 
 failures in financial legislation. The plan of creating 
 banks by special charter was abolished in 1838, by the 
 enactment of a general law, under which any person, 
 or a number of persons, with the required capital, 
 may organize a bank. The law has since undergone 
 many alterations, and it continues to be " amended" 
 at every session of the Legislature. New restrictions 
 are constantly suggested by newspaper editors, or by 
 politicians who cannot in any other way so easily
 
 14 INTKODUCTION. 
 
 make themselves talked about as by threatening to 
 disturb the organized capital of the State. The own- 
 ers of one hundred and eight millions of bank stock 
 have cause for alarm, when Mr. Smasheuiup brings 
 in a bill for their " better protection." He is waited 
 upon by committees from New York, receives letters 
 from distinguished bankers, and for a time is the 
 focus of an immense circle. No name is so much in 
 other people's mouths, as Mr. Smashemup's ! It is 
 Mr. Smashemup's bill in the Assembly, and Mr. 
 Smashemup's bill in the Senate. Then come the 
 amendments to Smashemup's bill in both Houses, 
 and Mr. Smashemup is called on to explain, which 
 he does, by a great speech on banks, economy, cor- 
 ruption, and the public debt. Mr. Smashemup's name 
 is in all the newspapers, and even if his bill with all 
 the amendments is indefinitely postponed, he returns 
 to his constituents in " a blaze of glory," with good 
 chances of nomination to Congress. 
 
 The general banking law of the State of New 
 York, with its amendments, and all statutes relating 
 to it, consist of more than three hundred octavo 
 pages. The system is hampered with superfluous 
 provisions, but with the voluntary guards thrown 
 around it, and especially that of the Clearing House 
 in the City of New York, it is probably the best now 
 existing in any part of the world. The principal fea- 
 tures of it are as follows : 
 
 1. The deposit in the Bank Department at Albany 
 of ample securities for the redemption of all bills 
 issued for circulation. The original law admitted as 
 security, stocks of the United States, and stocks of
 
 THE NEW YORK SYSTEM. 15 
 
 the several States which should be satisfactory to the 
 Comptroller,* to the amount of one half at least of the 
 bills called for by any person or association, the same 
 to be equal to a stock producing five per cent per 
 annum. The security for the other half of the bills 
 might consist of bonds and mortgages on unincum- 
 bered, improved, and productive real estate, within 
 the State of New York, worth by appraisement double 
 the amount of their face, independently of any build- 
 ings thereon. This latitude of security proved unsafe. 
 The stocks of several of the Western States especially, 
 fell much below par, and the real estate in many cases 
 was accepted at a fictitious valuation. The conse- 
 quence was, the bills of banks which were forced into 
 liquidation, were not redeemed in full. The amend- 
 ments of the law, suggested by its longer operation, 
 have corrected this ground of insecurity, and the 
 bank-bills of the State of New York may now be con- 
 sidered "as good as gold," with the advantage of 
 more convenience for many of the practical uses of 
 trade. The basis of their issue is restricted to stocks 
 of the State of New York, and of the United States, 
 with a proportion of mortgages on real estate, not 
 exceeding two-fifths of its appraised value. The kind 
 of security is always expressed on the face of the bill. 
 Those which are based on real estate, are therefore 
 distinguishable by the public, and are treated with 
 little favor. The Bank Superintendent has recom- 
 mended to the Legislature to admit only stock-securi- 
 ties hereafter. 
 
 * Now called "the Bank Superintendent"
 
 16 
 
 INTRODUCTION. 
 
 The plates, from which the bills are printed, are 
 not allowed at any time to be in the keeping of the 
 bank. On satisfactory securities being deposited in 
 the Banking Department at Albany, the Superinten- 
 dent issues an order to the engraver to prepare a plate 
 under the direction of the bank requiring it, and to 
 print therefrom as many bills as are covered by 
 them. The bills are sent to the Department to be 
 numbered, registered, and countersigned, and they 
 are then forwarded to the bank. The plate is deposited 
 with an agent of the Superintendent in the same city 
 with the engraver, from whom the latter obtains it 
 by order, for any future printing. The following 
 print shows the state of the bill when it reaches the 
 bank. 
 
 w 
 
 t.a+i 
 
 
 A 
 
 
 
 
 
 
 No. 350. 
 
 
 *- *O O 
 
 (BO q 
 
 1 
 
 
 
 
 
 
 
 
 . 
 
 ill 
 
 M 
 
 
 
 1 
 
 U* ^ 
 
 anh 
 
 0f 
 
 tk g^ublit 
 
 $1 
 
 B 
 
 Will pay 
 
 ONE 
 
 HUNDRED 
 
 DOLLARS on demand 
 
 
 " 3 
 
 &< 
 
 to 
 
 the 
 
 bearer. 
 
 g 
 
 ~?S 
 
 <i 
 
 New 
 
 Fori, 
 
 t/iin. 4, 
 
 1856. 
 
 00 
 
 til 
 
 
 Cashier. 
 
 President. 
 
 When the blanks are filled by the signatures of the 
 President and Cashier, the bills are ready to be paid 
 out as money. 
 
 The over-issue of bills by the Superintendent, or the 
 surrender of securities before the circulation based on 
 them is returned to the department, is punishable 
 with a fine of five thousand dollars, or with five years 
 imprisonment, or both.
 
 THE NEW YORK SYSTEM. 17 
 
 2. The law requires a quarterly statement of the 
 condition of each bank, under the oath of the officers, 
 and the publication thereof in one of the newspapers 
 of the same locality as the bank. The original sworn 
 statement is placed on file in the Department; and a 
 summary of the quarterly statements of all the banks 
 in the State is published by the Superintendent, who 
 also compiles from them an annual report to the 
 Legislature. 
 
 The banks of the City of New York (which have 
 nearly two-thirds of the banking capital of the State) 
 are required also to publish in one of the daily news- 
 papers, on every Tuesday, a sworn statement of their 
 average of loans, specie, circulation, and deposits, for 
 the week ending on the previous Saturday. 
 
 All banks under the general law are required to 
 place on file, twice a year, in the office of the clerk 
 of the county where they are situated, a list of their 
 stockholders, as they stand on the first of January, 
 and the first of July, and to send a duplicate thereof 
 to the Department. 
 
 3. Under the old charters, the stockholder waa 
 responsible for the debts of the bank, only to the 
 amount of his corporate interest. He might lose hie 
 stock, or such proportion of it as would suffice to pay 
 the debts, but no more. There were instances ot 
 managers using bank funds for speculations, which 
 enriched themselves while ruining the institution, 
 and then retiring to live in luxury, leaving the de- 
 positors and bill-holders without redress. Under the 
 present law, the circulation is provided for by the 
 securities ; and to pay the deoositors. the stockholder
 
 18 INTRODUCTION. 
 
 is legally bound for the par amount of his stock ovei 
 again, if that should be necessary. In the worst cases 
 of bank insolvency, this extent of loss has never been 
 incurred; and with such a system of revision and 
 publicity as we now have, the condition of a bank 
 must be discovered long before it can reach that ex- 
 tremity of misfortune. 
 
 The banks in the City of New York are further 
 subject to the regulations of the Clearing House, of 
 which a full account is given in its proper place. 
 
 The plan of organizing a bank under the general 
 law is very simple. Articles of association, are drawn 
 up, in which the title, capital stock, and other par- 
 ticulars are recited ; the names of the first directors 
 are generally inserted, the act of subscription cover- 
 ing their election. The subscriber places opposite to 
 his name the number of shares which he is willing to 
 take, and pays for them in convenient instalments, as 
 may be agreed upon. When the amount of capital 
 is fully subscribed, a certificate of organization must 
 be filed in the office of the Secretary of State, and 
 another in the local office of County Clerk. The final 
 act of organization is the deposit of not less than one 
 hundred thousand dollars of securities with the Super- 
 intendent of the Banking Department. An individual 
 banker is allowed to begin business with a deposit of 
 fifty thousand. It is not imperative that circulating 
 bills should be taken out for this deposit, though there 
 is but one case among the city banks in which it has 
 not been done. The high premium on stocks, and the
 
 EXCHANGES. 19 
 
 labor and expense of maintaining the circulation, are 
 poorly compensated by its profits. 
 
 A bank is authorized to transact business immedi- 
 ately after depositing its securities with the Superin- 
 tendent. Until its own bills are prepared for use, it 
 pays out those of other city banks, retaining them 
 from the deposits of the dealers. It is usual for any 
 city bank that has a deficient circulation, to adopt 
 that of other banks as far as may serve its conveni- 
 ence. 
 
 The business of the first day brings upon a new 
 bank the necessity of coming into harmonious rela- 
 tions with every other city bank. It receives in 
 deposit checks on them, and also their circulating 
 bills ; and checks on itself are received by them in 
 like manner. The only avenue to exchange is through 
 the Clearing House, to which it is admitted by a vote 
 of the Association, after its affairs have been examined 
 by a committee of that body, and reported " sound." 
 The matters inquired into by the committee are, 
 whether the capital has been actually paid in, and 
 whether the general organization of the institution is 
 such as to merit public confidence. If they find any 
 cause of suspicion on these points, they report 
 adversely to the admission of the candidate ; and such 
 is the influence of the Clearing House with the public, 
 that this would be a serious, if not a fatal blow to its 
 credit. On the other hand, a favorable report would 
 give it at once an honorable standing. 
 
 The executive management of a bank is vested in a 
 Board of Directors, who select one of their number to 
 act as President. The directors are elected annually
 
 20 INTBODUCTTON. 
 
 by the stockholders. The articles of association gener- 
 ally require a director to hold not less than a certain 
 number of shares in his own right, on the presumption 
 that his personal interest will induce him to look 
 diligently after that of the institution. Nevertheless, 
 it is common for half the members of a bank board 
 to become irregular in their attendance at the meet- 
 ings for discounting paper, either from engrossment 
 with their own affairs, or because they have confi- 
 dence in other managers ; . the tendency of which is 
 to throw the general administration of the bank into 
 the hands of a few persons. If the officers are very 
 efficient, the few are apt to become less diligent, see- 
 ing that the routine goes on, whether they are present 
 or not. This concentration of power takes place more 
 or less in all our city banks. The average number 
 of directors to each is about thirteen, of whom, in 
 ordinary times, six or seven attend the semi-weekly 
 meetings. In a dull season, the number is often 
 reduced to three or four. Most of the banks have in 
 the Board several retired elderly gentlemen, who, 
 having nothing else to do, make a hobby of their 
 office, and call in almost daily to look over the Dis- 
 count Register, and to discuss the merits of every 
 commercial name for the fortieth time. To tell the 
 truth, they are capable of little else, and they often 
 destroy sound character by mischievous gossip. 
 
 It will be seen in the statement of the duties of 
 the officers how naturally they acquire exclusive con- 
 trol, when they are competent and trustworthy ; and 
 it is a frequent observation, that the business of a 
 bank is more successful when that is the case, than
 
 TECHNICAL TEEMS. 21 
 
 when the directors are very tenacious of their execu- 
 tive functions. The latter give their attention for 
 a single hour, on two days of the week, while a 
 list of discount offerings is read over; whereas the 
 officers devote their whole time to obtaining and 
 sifting the information by which their judgment is 
 swayed. 
 
 Bank directors are chosen for their wealth, com- 
 mercial experience, and influence in attracting to the 
 institution a good class of dealers. If they fail in 
 business, they either resign, or are left off the ticket 
 at the subsequent election. If they continue in pros- 
 perous circumstances, and act harmoniously together, 
 the same set are annually re-elected for a long series 
 of years. They own, in the aggregate, a consider- 
 able portion of the stock, and they hold the proxies of 
 personal friends who take no direct part in the elec- 
 tions. The officers generally hold the proxies of 
 distant stockholders the president, especially. 
 
 The government of our city banks is remarkable 
 for unanimity in council. It is seldom that the 
 harmony of a Board of Directors is disturbed by 
 dissension. Parties and cliques are uniformly fatal 
 to the business. They drive away depositors, and 
 injure the public standing of a bank. The stock- 
 holders sell their shares, and re-invest their money in 
 other institutions. 
 
 Most of the technical expressions employed by 
 bankers are sufficiently explained by their connec- 
 tion ; but some have various applications, and some 
 are duplicates. 
 
 The terms " dealer," " depositor," and " customer,"
 
 22 INTRODUCTION. 
 
 are synonymous, and are used, as to frequenc^, in the 
 order named. " Dealer" is the most common. 
 
 The word " line" applies to deposits, and loans or 
 discounts, either in the bank total, or on the indi- 
 vidual ledger. The officers say : " Our deposit line 
 is low," or " our discount line is full," in reference to 
 the aggregate of deposits and discounts. " Our 
 specie line," refers to the average of specie. The 
 dealer also says : " My discount line has run off," &c. 
 
 V / 
 
 There are a number of slang terms and phrases in 
 general use, which would fall harshly on polite ears, 
 if left entirely without apology. The words " tight," 
 easy," " blue," " short," " tough," " nervous," and 
 their synonyms, contain the pith and significancy of 
 whole sentences of ordinary description, and are com- 
 mon among all classes of people the most refined, as 
 well as the most uncultivated. 
 
 The author has no other apology to offer for con- 
 versations that may appear trifling or rambling, than 
 that they are literally true. The history of negotia- 
 tion would be imperfect without them.
 
 THE PRESIDENT. 23 
 
 CHAPTER n. 
 
 THE PEE8IDENT 
 
 THE PKESIDENT is the chief executive officer of the 
 bank. He presides at the meetings of the Board of 
 Directors, and to a great extent exerts the authority 
 of the Board in its recess. 
 
 In some of the larger banks, there is a stated Vice- 
 President to aid him in his duties, and to assume them, 
 entire, during his absence ; but generally a President 
 pro tern, is chosen in the latter case. 
 
 In all legal relations, the President is the bank, 
 though still subject to the Board of Directors. The 
 title of any real estate that it may own is vested in 
 him, and his official signature gives title by convey- 
 ance. 
 
 He is plaintiff or defendant in suits at law. 
 
 He is made the assignee of property as security for 
 debts due to the bank. 
 
 He signs, with the Cashier, all certificates of stock 
 issued to shareholders, and the notes or bills which 
 are paid out as money. 
 
 He is generally a large stockholder, and is the only 
 officer connected with the bank who does not give 
 bonds for his integrity in the management of his trust. 
 His identity of interest, with a public character for 
 uprightness, and the circumstantial guards which are
 
 24: THE PRESIDENT. 
 
 thrown around him, are held to be a better assurance 
 for his fidelity. 
 
 The salary of the President varies, according to the 
 time and labor which he gives to the business, from 
 two or three to ten thousand dollars a year. In some 
 institutions, he is a diligent and laborious officer, 
 entering with spirit into details, and making himself 
 acquainted with every important transaction. In 
 others, he is satisfied to leave details to the Cashier 
 and the subordinate clerks, holding himself rather at 
 a distance, and cultivating his official dignity. 
 
 It is considered desirable that the President should 
 possess an independent income, and be free from the 
 entanglements of trade. Engagement in other busi- 
 ness would distract his attention from the bank, and 
 might give rise to a conflict of interest. Under the 
 pressure of personal embarrassment, with the means 
 of relief in his official hands, even a rigid sense of 
 duty might be overcome. The highest tone of senti- 
 ment on this point is, therefore, adverse to his connec- 
 tion with the hazards of commerce. Yet several of 
 our most prosperous city banks have always been pre- 
 sided over by active, enterprising merchants. 
 
 There are other reasons why a bank president 
 should hold himself aloof from mercantile business. 
 With large capital invested in a particular branch of 
 trade, his views might insensibly become narrow and 
 partial. An engrossing special interest would divert 
 his mind from the close study of credits generally, 
 and make his judgment less clear, as the condition of 
 commerce becomes more critical. In a season of 
 growing stringency in the money-market, self-interest
 
 THE BANK STATEMENT. 25 
 
 compels bank directors, in common with others, to 
 withdraw their attention from all affairs but their own, 
 and thus additional responsibility is thrown on the 
 officers particularly on the President. The dis- 
 counting of paper is then less strictly confined to the 
 sessions of the Board. It is spread through every hour 
 of the day, with specialities and importunities which 
 can be dealt with, only individually and privately. 
 
 A bank president should be a man of education 
 and general knowledge. The accidents of the office 
 bring him into contact with every variety of disposi- 
 tion, and with all the different pursuits that are fol- 
 lowed in a great city. He ought, therefore, to be 
 sagacious in observing character, and to have a 
 practical acquaintance with modes of business. He 
 should also be familiar with the principles and prac- 
 tice of bookkeeping ; otherwise, he may be blinded 
 to any extent by the vast accumulation of figures, and 
 the changes which they perpetually undergo in bank 
 accounts. It is impossible for the executive officers 
 to follow all these changes in detail from day to day. 
 A summary of the condition of the bank is, therefore, 
 made up by one of the clerks, showing all its assets 
 and liabilities, and enabling them to judge of the 
 extent to which bills may be discounted. This is 
 called the Sank Statement. It is generally prepared 
 twice a week, for use at the meetings of the Board ot 
 Directors ; but in some of the larger banks, the foot- 
 ings of the several accounts composing it undergo 
 such material changes as require it to be made up 
 every day. These footings have a mutual relation 
 which must be preserved ; they are correlative also 
 
 3
 
 26 PRESIDENT AND BOARD OF DIRECTORS. 
 
 with the general aggregates of the market, as will be 
 apparent in a description of the Clearing House settle- 
 ments. 
 
 The Directors of the bank depend on the President 
 to explain to them the particular bearings of this 
 Statement. They are occupied during the recess of 
 the Board, each with his private affairs, and their 
 views of the market are influenced by the condition 
 and accidents of trade in their respective circles ; but 
 the President observes the whole field of commerce, 
 taking cognizance of the general causes of ebb and 
 flow in the financial tides. He examines, not only the 
 immediate capacity of the bank, but also its contin- 
 gent resources and liabilities. He watches the course 
 of the exchanges in the Clearing House, and the 
 wider currents of trade beyond, endeavoring to weigh 
 the probabilities for the future in the vast specula- 
 tions which rise before him. He observes the ship- 
 ment of coin to foreign countries, compares the im- 
 ports and exports of successive years, and so works 
 his figures into the great sum of the combined markets 
 of the world. To a man unskilled in accounts, the 
 figures of this prodigious sum are as unintelligible as 
 characters in an unknown tongue. 
 
 THE PRESIDENT, AND THE BOARD OF DIRECTORS. 
 
 THE regular meetings of the Board of Directors are 
 held twice a week. Generally, the principal business 
 transacted is the discounting of promissory notes, and 
 the loaning of money on securities ; but this often
 
 DISCOUNTING NOTES. 27 
 
 involves a good deal of discussion. The circumstances 
 of merchants, their standing in the community, the 
 character of the trade in which they are engaged, the 
 credit of persons whose notes they offer for discount, 
 the state of the market, the value of securities, and 
 whatever concerns the safety of the bank dealings, 
 are subjects of conversation and scrutiny in these 
 semi-weekly meetings. 
 
 The President is seated at the head of a table, and 
 the Cashier opposite, or by his side, as may be most 
 convenient. The Directors are seated around it, as at 
 a dining-table. In some banks, considerable formality 
 is observed in this arrangement, members having 
 particular chairs. A place next to the President may 
 be accorded to the oldest or most influential. In 
 other banks, the arrangement is determined by acci- 
 dent or habit. 
 
 The Cashier reads the minutes of the previous meet- 
 ing of the Board, and they are approved in the usual 
 form. He records the name of each director in attend- 
 ance, that questions of disputed responsibility, as to 
 particular measures, may not arise in the future. 
 
 The business transacted, during the recess of the 
 Board, is submitted at each meeting. Some bank 
 officers are very particular to have all discounts and 
 negotiations which are made by their personal discre- 
 tion, sanctioned by a vote of the Directors a wise 
 precaution for themselves, and a good guarantee for 
 the stockholders. The practice is irregular with 
 respect to this revision. It is apt to be passed over 
 rather lightly, especially if the officers stand very high 
 in the esteem of their associates ; but it ought to be
 
 28 PRESIDENT AND BOAED OF DIRECTORS. 
 
 remembered, that greater aggregate loss has resulted 
 to banks from unwise or dishonest conduct on the 
 part of the superior officers, than from dereliction in 
 any other quarter. Numerous instances are on record, 
 of institutions, with large capital and thriving busi- 
 ness, being crippled for years, or forced upon insol- 
 vency, by trusting too much in the hands of the 
 President or Cashier. It should, therefore, be an 
 absolute rule of the Directors to revise the business 
 transacted between the Board meetings, with the 
 same rigid scrutiny that they give to that which 
 comes up at the regular sessions. 
 
 The Discount Register, which is the book of origi- 
 nal entry for all paper discounted, is commonly 
 placed on the table, and if not specially referred to 
 by the President, is open to any director for inspec- 
 tion. Likewise, the Loan Book, if this is kept sepa- 
 rately from the Register. 
 
 The Statement, or such portions of it as are neces- 
 sary to show the extent to which paper may be 
 discounted, is read by either officer. The aggregate 
 of loans, deposits, and specie, are enough for this 
 purpose. The reading of other items is generally 
 dispensed with, as they do not materially affect the 
 state of the funds. The book is left within reach of 
 directors who may wish to examine it more critically. 
 
 The President announces his judgment : 
 
 " Gentlemen, the condition of the bank is favor- 
 able. Our liquidations have been prompt since the 
 last meeting of the Board. We have no protests, and 
 the market is quiet. The amount of notes offered 
 to-day is about four hundred thousand dollars ; and I
 
 DISCOUNTING NOTES. 29 
 
 am happy to say that we can discount the whole, if 
 they are satisfactory." 
 
 The Offering-Book, with an alphabetical record of 
 the notes, lies open on the table before the President. 
 The Cashier has the package of notes in corresponding 
 order, prepared to open each envelop, and to state 
 particulars : 
 
 "The first offering, Mr. President, is by Adams, 
 Jones & Co. Their notes are : one of James Wilson, 
 having seventy days to run, of sixteen hundred dol- 
 lars ; and one of Thompson & Moore, forty-five days 
 to run, of twenty-five hundred dollars." 
 
 James Wilson is a well-known merchant, of capital 
 and integrity. Several of the Directors express their 
 judgment in favor of discounting his note. No objec- 
 tion is made, and the President scores opposite to it, 
 on the Offering Book, the letter A which means, 
 accepted. 
 
 Thompson & Moore are not known, or but slightly. 
 The indorsers, Adams, Jones & Co., are entirely 
 responsible, and would, doubtless, pay the note 
 promptly, if the drawers should' fail ; but it is an 
 established rule of the bank, that no paper shall be 
 discounted without at least one good name besides 
 that of the indorser. 
 
 " Gentlemen, who knows Thompson & Moore ?" 
 The Directors enter into a free conversation, which, 
 if the parties are merchants of long standing, is likely 
 to elicit enough information to cause the note to be 
 accepted, or rejected. Or, it may be referred to the 
 officers, with discretion to act as their judgment may 
 dictate on further inquiry.
 
 30 PRESIDENT AND BOARD OF DIRECTORS. 
 
 The Cashier reads offering nnmber two, by Bailey 
 & Rush. This firm are in high credit with the bank, 
 and their paper is of the first class. "Note of 
 Sears & Co., three months to run, eighteen hundred 
 dollars ; and one of C. Jackson, sixty days to run, for 
 four thousand five hundred dollars." 
 
 " Gentlemen," says the President, " if no objection 
 is made, I will mark the notes of Bailey & Rush, 
 accepted. It is done. Let us have the next in order, 
 Mr. Cashier." 
 
 " Joseph Chambers offers a draft of Green & Davis, 
 of San Francisco, on Thrush & Co., of 'New York, and 
 accepted at seventy-five days, for five thousand dol- 
 lars." 
 
 It is, perhaps, the first time that the paper of 
 Thrush & Co. has been offered for discount in the 
 bank. The President is entirely unacquainted with 
 it. He asks for information. 
 
 Mr. Breckenridge knows something about them : 
 " They began business, a year ago, with thirty thou- 
 sand dollars capital are said to have done a profit- 
 able trade in the produce line had shipped heavily 
 to California. The Co. was a young man who come 
 out of Bacon's the big packers on West street. 
 Guess he hadn't much money say, five thousand 
 dollars ; but very smart. Thrush was the capitalist. 
 Put in twenty-five thousand dollars, hard cash 
 about all he had." 
 
 " What age is he ?" 
 
 " Thirty-five to forty." 
 
 " Man of family ?" 
 
 " Oh yes ! I've known him these twelve years. Got
 
 jf 
 
 g * 
 
 
 
 
 s *> 
 
 o .S
 
 DISCOUNTING NOTES. 31 
 
 half a dozen children. You must know him, Mr. 
 Groull ! He married Stubbles's daughter, wine 
 merchant, there at your corner. Guess he run away 
 with her, and made the old man mad. But they're 
 all reconciled long ago, and now he's Stubbles's prin- 
 cipal adviser in them new stores he's building in Mur- 
 ray street." 
 
 "Is that the man?" 
 
 " That's the man, sir." 
 
 " Well, who married Stubbles's other daughter ?" 
 
 The President warns gentlemen that they had bet- 
 ter not wander too far from the subject. The matter 
 before the Board is, whether Mr. Thrush's note is good 
 enough to be discounted. 
 
 " You said he was in the California business, Mr. 
 Breckenridge ?" 
 
 " Yes, sir. Made some very successful shipments 
 there last Spring." 
 
 " I've got mighty little confidence in California !" 
 says Mr. Groull, " mighty little !" 
 
 " It's a good way off, that's a fact," adds Mr. Breck- 
 enridge. " I'd rather do business with people that 
 trade near by." 
 
 Mr. Groull speaks again. " "Wouldn't touch it with 
 a ten-foot pole. Bad line. Let it slide, Mr. Presi- 
 dent. We can do better with our money." 
 
 Some of the Directors may have been listening in- 
 differently to this rambling conversation ; but the 
 majority are otherwise engaged. One has seized on a 
 morning paper, and all his thoughts are engrossed ^y 
 the latest news from Europe. Another has just taken 
 a fit to examine the Statement Book, and several are
 
 32 
 
 PRESIDENT AND BOARD OF DIRECTORS. 
 
 talking on their real estate prospects. Messrs. Breck- 
 enridge and Groull make themselves heard above the 
 suppressed confusion of other voices. The President 
 has tapped on the table with his pencil, but failed to 
 restore order. To a person outside of the door, it 
 would seem as if "the members were engaged in a 
 general wrangle. Meanwhile, Mr. Marks, with a 
 lively perception of the ludicrous, and skill enough 
 to prove that he is not now practicing for the first 
 time, has sketched sundry odd figures on the blank 
 page of a " tickler," and finishes by a caricature of 
 the two gentlemen above named, which he shows to 
 his neighbor, and he to the next ; and then follows 
 an explosion of laughter, which breaks up all other 
 distractions of the Board, and finally gives the Pre- 
 sident a chance to be heard.
 
 DIVERSIONS OF DIRECTORS. 33 
 
 " Come, gentlemen, come, come ! we shall never 
 get through our work at this rate." 
 
 But the President must have his laugh too ; after 
 which, the members fall into comparative order and 
 silence. 
 
 Such a scene as this is neither extravagant nor 
 unusual. The directors of a bank, like boys at 
 school, gradually get rid of personal restraints, when 
 they come together, and join heartily in a " little 
 fun." And why not ? To be always grave and dig- 
 nified is next door to being reserved and dull which 
 would make their meetings irksome, and lead to their 
 being shunned as " a bore." It does not follow, that 
 the real interests of the institution are treated with 
 less serious consideration than they deserve. 
 
 The Cashier now informs the Board, that Mr. 
 Chambers had called on him, and stated the capital 
 of Thrush & Co. to be unimpaired. They were pru- 
 dent men, and stood in deservedly high estimation ; 
 had but little paper out ; could buy any amount of 
 merchandise on credit, and so forth. He adds, also, 
 that the dealings of Mr. Chambers with the bank 
 had always been liberal and honorable. Owned con- 
 siderable real estate ; was known to have a large 
 capital, and to be prudent in his credits. Had 
 nothing under discount ; and his average balance of 
 deposit was seldom less than six or eight thousand 
 dollars. " "We ought not," he concludes, " to reject 
 his offering without good reason." 
 
 " Mr. Cashier, would you discount California paper ?" 
 
 " Yes, sir, if it is good." 
 
 " Ii' ! You may well say that ! But California is 
 2*
 
 34 PRESIDENT AND BOARD OF DIRECTORS. 
 
 not good. Not to be trusted, sir! Too far off! 
 T'other side of the world !" 
 
 " "What's the matter, Mr. President ? What's the 
 business before the Board?" asks Mr. Marks, sud- 
 denly, with an air of breaking loose from some 
 engrossing abstractions. "What are you talking 
 about, Mr. Cashier ?" 
 
 " Mr. Marks," answers the President, " we've been 
 discussing the standing of Mr. Joseph Chambers, and 
 of Thrush & Co., and their sons-in-law and family 
 relations generally. If you had been attending to 
 your duty, sir, you need not have asked the ques- 
 tion." 
 
 " Didn't hear a word of it." 
 
 "No, sir; so it seems. What have you got to 
 say?" 
 
 " Joseph Chambers is first-rate. I know all about 
 him, from his toes up to his hat. Good as wheat. 
 Worth over a hundred thousand dollars. It'll never 
 do to reject his paper !" 
 
 Several other directors express themselves favor- 
 ably to the discount of it. There is also some con- 
 firmation of the good reports of Thrush & Co. 
 
 Mr. Starr insists that a man must not be repudiated 
 as unworthy of credit, because he deals with Cali- 
 fornia, any more than if he were trading with Mexico 
 or South America. " If there is any specific cause of 
 discredit, let's have it out." 
 
 The President announces, that objection being with- 
 drawn, the note of Thrush & Co. is marked with the 
 letter A. The formality of a vote is not common in 
 determining the discount of paper ; the usual prac-
 
 DISCOUNTING NOTES. 35 
 
 tice being to decline it in the face of serious opposi- 
 tion, even by a small minority. In other words, the 
 general and harmonious sense of the Board is preferred 
 to the mere majority rule in disputed cases. No pru- 
 dent director will urge particular claims against the 
 prevailing judgment of his associates. 
 
 The several next offerings in succession may be by 
 dealers of established credit with the bank, whose 
 paper is well known. They are marked by the Presi- 
 dent with the letter A, nearly as fast as the Cashier 
 reads them off, if no objection is interposed. 
 
 The next is one of a less usual class. The large 
 dry-goods house of Merrimack & Slater wants a 
 discount of twenty-five thousand dollars. They offer 
 notes, which the Cashier reads off as follows : 
 
 White & Marshall, thirty-five days to 
 
 run $2,576.15 
 
 Robert Hancock, forty days . . 5,250.00 
 Wellington, Fairfax & Co., forty days, 8,976.40 
 
 Osborn & Wells, two months . . 15,75.00 
 
 Conrad & Co., three months , .& . 4,150.25 
 
 Oakford & Smith, four months . . 2,960.00 
 
 The President waits a moment for some indication 
 of opinion from the directors, although he may have a 
 decided judgment in the case. 
 
 Mr. Cassimer, a leading merchant in the dry-goods 
 line, suggests that there can hardly be any doubt as 
 to the disposition of that paper. " Nothing better in 
 the market, and no better customer in the bank. I 
 g'pose you'll have to pass the whole, Mr. President."
 
 36 PRESIDENT AND BOARD OF DIRECTORS. 
 
 " Too big," says Mr. Groull. " Twenty-five thousand 
 dollars! I'd rather divide it among twenty-five 
 different persons, than give it all to one. Bad policy 
 these big licks !" 
 
 Another director proposes to discount the half, 
 rejecting the long paper. " Some of it," says he, 
 " has four months to run. All good, no doubt ; but 
 twenty-five thousand dollars is a large sum." 
 
 A pause in the conversation. 
 
 Director Kent, also in the dry-goods business, 
 admits the sum to be large ; but reminds the Board, 
 that "the men are large. Don't they keep nearly 
 that amount on deposit in the bank, Mr. President ? 
 They are literally asking us to loan them their own 
 money. They can take the paper to any bank in the 
 city, and get it passed at a word ; and they will be 
 likely to do so, if you reject or change their offering. 
 You don't want to lose their custom, do you ?" 
 
 " No, sir," answers the President. " It is the policy 
 of the bank to treat this class of accounts in the most 
 liberal manner. They have nothing under discount 
 at present. We ought to pass the paper at once, to 
 their credit. I hope objections will be withdrawn. 
 Do I so understand it ? The Board acquiesces, and I 
 will mark it, accepted. The next in order, Mr. 
 Cashier 1" 
 
 " Shultz & Cooper offer three notes Jacob Lis- 
 ton, forty-five days, six hundred dollars ; and two 
 notes of Cobb & Walker, each one hundred and 
 fifty, at two and three months." 
 
 Director Groull wants to know " where's the use 
 of taking up time with that class of customers ? They
 
 DISCOUNTING NOTES. 37 
 
 apply every oflfering-(Jay, and keep no balance of 
 account. Let 'em slide." 
 
 " Has their account improved any of late, Mr. 
 Cashier ?" 
 
 " Not much, sir. They keep a balance of one or 
 two hundred dollars, and have a thousand under dis- 
 count." 
 
 " Letter K. Let's have the next." 
 
 "Hold on, Mr. President! Not too fast. These 
 small men are of use to us. They ought not to be dis- 
 carded too abruptly. They really want the money. 
 Give 'em that little note of six hundred dollars. It 
 will do them more good than twenty-five thousand 
 does to Merrimack & Slater." 
 
 An agreeable personal acquaintance between the 
 dealer and the director is the ground of this favor. 
 The note is discounted at the request of Mr. Miller ; 
 none of his associates deeming it worth while to press 
 an opposition in such a trifling case. But this class 
 of applicants receive no consideration when there is a 
 pressure of more deserving customers. 
 
 Among the offerings, is one by John Tillotson & 
 Co., who " respectfully propose" the note of Phineas 
 Crowfoot, three months to run, six hundred dollars ; 
 and one of Thomas Noble, sixty days, three hundred 
 and fifty. The offerers have no personal friend at 
 the Board, to speak promptly and to say : " I know 
 them. They are good, and ought to be accommo- 
 dated." But Director Buttonwood, who attends the 
 meetings once a month by convenient accident, asks : 
 
 " Who are Tillotson & Co. ? Aint they the concern 
 that broke a year or two since, and compromised
 
 38 PRESIDENT AND BOAKD OF DIRECTORS. 
 
 with their creditors at twenty cents on the dollar ? I 
 wouldn't discount any paper for a broken-down dry- 
 goods retailer." 
 
 "They are not in that business," answers the 
 Cashier. " They are crockery-dealers, and have kept 
 a fair balance of account in the bank for several years, 
 asking no more than reasonable accommodations. 
 Their capital was originally ten thousand dollars, and 
 they have probably doubled it in trade." 
 
 " How much have they under discount 2" 
 
 " Twenty-five hundred dollars." 
 
 " And what's their average balance ?" 
 
 " From eight hundred to a thousand." 
 
 Mr. Buttonwood thinks he has a right to talk more 
 than any other member, to ask more questions, and to 
 suggest more doubts of the solvency of dealers, be- 
 cause he doesn't trouble the Board often with his 
 presence. " He wants to be thoroughly posted up. 
 You don't expect him to give his voice, as a director 
 of this bank, in favor of discounting people's notes, 
 without knowing what they are, do you ? He has a 
 higher sense of his duty to the stockholders than 
 that !" 
 
 Mr. Buttonwood's sense of duty revolves about a 
 very small point within himself. He looks after the 
 interests of the stockholders, perhaps on twelve 
 several occasions of an hour each, during as many 
 months. He cannot afford to withdraw his attention 
 for a longer time from his private affairs. Conse- 
 quently, when he comes to the bank, he is ignorant 
 of the state of its business and of the standing of its 
 dealers. But his sense of duty will not allow him to
 
 ME. BUTTONWOOD. 39 
 
 countenance, by his bare presence, the discounting of 
 paper with which he is unacquainted. He has adopted 
 the notion that all the losses of banks come from the 
 officers and directors being unable to say, " no." 
 They are either too easy, or they have "got their 
 hand in the lion's mouth, and dare not draw it out." 
 He concentrates on the few occasions on which he is 
 present, the churlishness and the caprice that might 
 be less intolerable if spread over a longer period. He 
 obliges the officers to explain, for the twentieth time, 
 the circumstances of individual dealers, their capital, 
 extent of business, and so forth. His associates in the 
 Board submit, out of politeness, whilst inwardly wish- 
 ing that he would absent himself entirely from their 
 meetings. 
 
 Every Board of Directors has one or more of this 
 narrow-minded and self-conceited class in its compos- 
 ition. They do not get rid of them at the annual 
 election because of the fear of giving personal offence, 
 and making outside gossip injurious to the interests 
 of the bank. Or there may be less creditable grounds 
 of conciliation connected with the management of its 
 affairs, which might be exaggerated or perverted for 
 a malicious purpose by a disaffected man. It is hardly 
 possible to constitute a Board of Managers, represent- 
 ing, the different interests of trade, without a mixture 
 of the Buttonwood mould ; and this is often the 
 source of injury to the more obscure, but still deserv- 
 ing credits that enter into the business. 
 
 It is one of the duties of the President to protect 
 the dealer when he is unjustly assailed; and it is 
 directly for the advantage of the bank. Besides the
 
 4:0 PRESIDENT AND BOARD OF DIRECTORS. 
 
 general results of the fair treatment of credit, there 
 is this particular result ; that the best class of cus- 
 tomers that a bank can have, consists of those whom 
 it has nurtured from moderate to larger success, and 
 whose experience has been all along linked in agree- 
 able intercourse with its officers and directors. These 
 are not easily seduced to open accounts with other 
 banks ; but they are faithful to their old friends, and 
 they introduce other dealers. 
 
 If Mr. Buttonwood persists in opposing the discount 
 of Tillotson & Co.'s paper, the President adds his tes- 
 timony to that of the Cashier, and calls on the direc- 
 tors for any information they are able to give. 
 
 Director Platt knows Crowfoot. " He is perfect!} 
 good, keeps a retail store on Canal street. I woulc 
 sell him two or three thousand dollars of merchandis< 
 on credit, without hesitation." 
 
 " "What's his capital 2 What do you know abou I 
 that ?" asks Director Buttonwood again. 
 
 "Nothing very specific. Only the man has kept 
 store there many years, and is in fair credit." 
 
 " Then let his paper go. What do we want with 
 the notes of people that have no capital ?" 
 
 " What do you call capital, Mr. Buttonwood ? Isn't 
 stock, established business, ability, and good credit, 
 very substantial capital? What Crowfoot has, is 
 invested in these. Has he not frequently paid notes 
 at our counter, Mr. Cashier ?" 
 
 " Yes, many a time." 
 
 " Has the bank ever discounted any of them for 
 Mr. Tillotson, or other dealers ?" 
 
 The Cashier turns to the Discount Bill Book, where
 
 DISCOUNTING NOTES. 41 
 
 lie finds a record of all the paper passed to the credit 
 of Tillotson & Co. for two years, and the notes of 
 Phineas Crowfoot recurring at intervals during that 
 time. He adds : 
 
 " We have had as high as seventeen hundred dollars 
 of these notes under discount at once, and now have 
 none." 
 
 Director Potts is half impatient with this protracted 
 discussion. " Mr. President," he says, " I know both 
 Tillotson and Crowfoot. I would as soon trust either 
 of them three thousand dollars in trade as I would 
 any member of this Board. Where's the use of con- 
 suming so much time about so small a matter ? Mr. 
 Buttonwood knows more about the price of sugar 
 than about crockery credits. Pass the paper, and 
 let's go on with the business." 
 
 This being manifestly the general sentiment of the 
 Board, the President marks it accepted, and requests 
 the Cashier to go on. 
 
 " Robert Thompson offers a note of Samuel Price 
 for three thousand dollars, sixty days to run." 
 
 Price is known to be a retired merchant of large 
 wealth. Thompson gives his name as security instead 
 of his country business paper. Director Brecken- 
 ridge objects to it, on the ground that it is " accom- 
 modation paper." 
 
 Then for the hundredth time, perhaps, comes up 
 a discussion as to what constitutes accommodation 
 paper, and the impropriety of banks discounting it on 
 any terms. Without reaching a decision on this 
 contested point, the directors are satisfied that the 
 note of Mr. Price is " fire-proof," and Thompson
 
 4:2 PRESIDENT AND BOAKD OF DIRECTOES. 
 
 keeping a good account, is entitled to the credit 
 The President announces that he has marked it, 
 accepted. 
 
 Thornton & "Whitaker, iron dealers and manufac- 
 turers, inclose twelve thousand dollars of their busi- 
 ness paper as collateral to their own note for ten 
 thousand dollars at ninety days. The house is so 
 favorably known as to preclude discussion ; but on 
 the suggestion of one of the directors, the term of the 
 discount is changed from ninety to sixty days. 
 
 White & Co. offer several notes for discount. 
 Director Crotchitt has an indistinct notion that " those 
 fellows have been dealing pretty largely in railroad 
 stock. Can't say with certainty, but if the Board will 
 let that stand over, he'll get the information, and 
 report to the officers." 
 
 John Wilson offers his note at sixty days for five 
 thousand dollars, with one hundred and ten shares of 
 the Salamander Fire Insurance Co. as collateral. 
 
 " Good security, Mr. President. That stock is at a 
 premium of ten or twelve per cent. Wilson is a fair 
 man, and I guess his account deserves it. 
 
 No objection is made, and th.e President marks it 
 with the letter A. 
 
 Young, Sterling & Co., heavy sugar-dealers, offer 
 several New Orleans drafts for discount. They are 
 accepted by parties residing in New York. 
 
 Cranston & Thomas, on Charles Bancroft, $10,000 
 
 William English, Kussell & Co. . . 7,500 
 
 Do. " Perry & Co. . . 15,000 
 
 T. Robinson " Smith & Wheeler . 10,000
 
 DISCOUNTING NOTES. 43 
 
 The firm has already under discount twenty-five 
 thousand dollars, and their average balance of account 
 is forty thousand. 
 
 The President informs the Board, that Mr. Young 
 had called on him, personally, to say that the object 
 of so large an offering is to provide for their payments 
 through the coming month, and that the proceeds will 
 be drawn out gradually. 
 
 " You don't mean to discount the whole forty thou- 
 sand at once, do you, Mr. President?" 
 
 " That is for the Board to determine. Young, 
 Sterling & Co., are among our wealthiest dealers. 
 They have a capital of one million of dollars, inde- 
 pendent of the private property of the partners, which 
 would sell for as much more. The proportion of their 
 current balance with their discount-line, entitles 
 them to the highest consideration." 
 
 While the President is speaking, the drafts are 
 passed from hand to hand, and examined by the 
 directors. The general tenor of remark is favorable 
 to the offering, as a whole. The principal peculiarities 
 of the sugar-business are recited how the prospects 
 of the growing crop are speculated upon how the 
 market is sometimes controlled by a few operators in 
 concert with the great sugar-houses of !N"ew Orleans 
 or Cuba, and prices kept up or allowed to decline, 
 until the moment comes for combined action, and so 
 forth. It is suggested that all the sugar-men must 
 have incurred prodigious losses by the recent fall of 
 thirty per cent ; and that even at present prices, there 
 is room for a decline of nearly as much more. 
 
 Mr. Buttonwood, who deals largely in sugars, says,
 
 4.4 PRESIDENT AND BOARD OF DIRECTORS. 
 
 that no matter what the decline is, Young, Sterling 
 & Co., are above all casualty. His objection to dis- 
 counting large amounts of paper, so freely expressed 
 when dry-goods houses are in question, vanishes when 
 the sugar-trade calls. The dry-goods directors are 
 less likely to be influenced by prejudice against par- 
 ticular branches of business than any other class of 
 merchants. Their habit of longer and larger credits, 
 if more dangerous, is also more liberalizing than deal- 
 ing in the shorter credits of the grocer. They are 
 seldom found in the opposition to such offerings as 
 that of Young, Sterling & Co., when the condition 
 of the bank will admit of their discount. 
 
 Mr. Cassimer is in favor of passing all the drafts 
 to the credit of the offerers. 
 
 The President wants a general expression by the 
 Board for such large operations. " The house is rich, 
 gentlemen, beyond a doubt. But you must remem- 
 ber, that no house is exempt from great losses on a 
 falling market. The transactions in sugar have been 
 excessively inflated within the last few weeks. I 
 called on a friend in that line of business yesterday, 
 and he related to me some facts that you ought to be 
 made aware of. Four or five houses bought up sugar 
 to the amount of one hundred and forty thousand dol- 
 lars, giving their notes at six months in payment. 
 They held it a week, and sold at a cent a pound 
 advance, taking the notes of the purchasers for the 
 same time. These second purchasers sold at an addi- 
 tional advance of a cent a pound, for notes at six 
 months. The first set of notes have not yet matured, 
 BO that there is now afloat nearly half a million of
 
 DISCOUNTING NOTES. 4:5 
 
 V 
 
 paper on that single lot of sugar to say nothing of 
 the subsequent sales, of which we are ignorant. I do 
 not state these facts to prejudice the account of 
 Young, Sterling & Co., but on general grounds of 
 caution. Before passing their offering, I want the 
 unanimous approval of the Board." 
 
 Mr. Buttonwood wants to know if the bank has any 
 of the paper of " our old friend Dennis, in Reade 
 street 2" 
 
 The Cashier answers in the negative. 
 
 " Because," resumes Mr. Buttonwood, " I suspect 
 he had something to do with the last purchase of that 
 sugar. He has lost a hundred thousand dollars in 
 his business within the last year, and his credit is now 
 at a pretty low notch." 
 
 " What do you say, gentlemen ? Bring the matter 
 to a close. Shall the paper of Young, Sterling & Co. 
 be passed ?" 
 
 The directors respond unanimously, " Aye ;" and it 
 is marked to be discounted. 
 
 The Cashier announces that all the notes offered 
 have been discounted, and that there is no further 
 business. 
 
 " Move we adjourn." 
 
 Before the President can put the question to vote, 
 Director Breckenridge requests the Board to " hold 
 on a minute." He has " a little lot of coffee to pay 
 for, and wants some paper discounted to the extent 
 of six or eight thousand dollars." Two or three 
 voices say : " Send it to the President." Two or three 
 more repeat : " Move we adjourn ;" and all second the
 
 4:6 PRESIDENT AND BOARD OF DIRECTORS. 
 
 motion by a general pushing back of chairs, and put- 
 ting on of hats. Mr. Breckenridge understands his 
 paper to be discounted, and informs the President 
 that he will send it to the bank as soon as he goes to 
 his office. Half the members are already out of the 
 door, pairing off together to consult on their indivi- 
 dual speculations, and to forget that the bank is in 
 existence until the next discount day comes round. 
 It is as likely as not, that the President and Cashier 
 may congratulate each other that they are happily 
 out of the way. 
 
 Mr. Miller having disappeared for several minutes 
 in company with others, now returns alone : 
 
 " Mr. President, havn't I a note with collaterals 
 coming due to day ten thousand dollars ?" 
 
 " Yes. You didn't offer at the Board, and I ex- 
 pected of course you intended to pay it." 
 
 " Pay it, indeed ! " says Director Miller. " Here. 
 Let's look at it?" 
 
 The two go inside of the counter to the teller's desk. 
 The President gets the note, looks over the collaterals, 
 and finds them to consist of about twenty business 
 notes, the drawers of which live any where between 
 Halifax and the Gulf of Mexico, not one of which he 
 can know anything about, and the half of which are 
 payable at Mr. Miller's store. 
 
 " When are these coming due ?" he asks. 
 
 " Not this six months," answers Director Miller. 
 " But they're all as good as wheat. I'll tell you what 
 I'll do. I'll make a new note at ninety days. Just 
 pass it to my credit, and I'll send a check to take up 
 the old one."
 
 MR. MILLER PAYS HIS NOTE. 47 
 
 " Go ahead," says the President. 
 
 The times are easy. He knows Mr. Miller to be a 
 responsible man, or thinks he knows it, and marks the 
 note for discount. His slackness of authority and his 
 sense of strict propriety are at variance. The result 
 is, a weak protest or expostulation, which does not 
 even " lock the door after the steed is stolen." 
 
 " This is all right Mr. Miller, I dare say ; but I'd 
 rather you'd offer these matters regularly at the Board 
 meetings. You know how I'd be censured, if they 
 should turn out wrong ? I'm entirely willing to pass 
 such things occasionally for you or any other director. 
 We understand each other but there's Buttonwood ! 
 He don't come to the Board often ; but when he does, 
 you see how he pitches in ? And there's old 
 Crotchitt, the biggest stockholder in the concern. He 
 shuffles in at odd times, and will have the discount 
 register carried into the private room ; and there he 
 reads it as regularly as the newspaper. It's well 
 enough not to give these fellows a chance to find too 
 much fault ? Don't you think so ?" 
 
 " Oh yes, I understand all that ! It's a good rule, 
 if it was only generally observed. I'll try and 
 remember it next time." 
 
 The next time, Mr. Miller remembers it in the same 
 way. Or, instead of coming back after the adjourn- 
 ment of the directors, he steps in before the hour, and 
 has the transaction accomplished in advance. 
 
 This irregular and careless manner of discounting 
 bills for directors has not unfrequently led to the 
 most serious results. Tacit consent to the practice 
 might easily grow up from the direct personal confi-
 
 4:0 PRESIDENT AND BOARD OF DIRECTORS. 
 
 dence established between them, which makes it diffi- 
 cult to express dissent without indicating censure. It 
 was also found more agreeable to obtain their accom- 
 modations privately, than to submit their offerings in 
 open session of the Board, where they would be 
 competed with by the claims of dealers generally. 
 The practice led to anticipating the means of the 
 bank as these were liberated by maturing invest- 
 ments ; so that, in a stringent market, there was often 
 but little left to divide among the dealers on regular 
 discount days. This undue absorption of bank facili- 
 ties by a few privileged persons became matter of 
 common complaint ; and it was not difficult to induce 
 the State Legislature to require a specification, in the 
 quarterly returns, of " all sums due by the directors 
 of each bank," separately from the entire amount of 
 loans. The abuse has been measurably checked by 
 this statement, though there are various methods by 
 which the law may be evaded. 
 
 The authority of the President is entirely competent 
 to correct this abuse ; but it may be as much of a 
 convenience to him, as to any of the directors. His 
 private speculations would be narrowed, if he could 
 not get ten or twenty thousand dollars without sub- 
 mitting his wants at a regular session of the Board. 
 
 Mr. King is another sort of president. He is a stern 
 disciplinarian ; never borrows a cent of the bank ; 
 thinks borrowing discreditable in a bank officer. It 
 is a stretch of propriety, in his opinion, for a director 
 to borrow from his own institution ; but usage toler- 
 ates it. The by-laws of the bank require the direc- 
 tors to meet twice a week, to discount the paper
 
 A STRICT CONSTEUCTIONIST. 49 
 
 offered by its dealers. That is the time and place to 
 lend the funds. The dealers send ill their offerings 
 on the stated days, with the understanding that they 
 are to share equitably in the facilities of the bank ; 
 and it is unjust to them to dispense those facilities at 
 irregular times. Moreover, this is a fruitful source of 
 bank losses. If all the paper is investigated at the 
 Board sessions, we shall probably discover any that 
 is weak. He positively declines to exercise the dis- 
 cretion of discounting notes without the concurrence 
 of the directors. He will not have his mind burthened 
 with such a responsibility. That must be borne by 
 the directors. If they can get their paper discounted 
 by the officers in the recess of the Board, they absent 
 themselves from its meetings, and gradually come to 
 consider the bank as a mere personal convenience to 
 themselves, forgetting that they owe any duties to the 
 stockholders, and to the general commercial interest. 
 
 The habits of private life are often freely scanned 
 at the Bank Board. 
 
 " Yes ! Mr. Black is clever and smart. He has 
 capital, too. But he had no business to buy a house 
 on Fifth Avenue at sixty thousand dollars, and spend 
 forty more to furnish it. There's a hundred thousand 
 dollars gone clean out of his business ; and what's the 
 consequence ? Why, he comes here and wants to run 
 a discount line right along for the whole amount! 
 Gentlemen, banks were not got up to enable a few 
 people to live like lords, while the rest of the world 
 are sweating to keep body and soul together ! It's 
 just as sure to come to an end, as a man's notes are to 
 come due." 
 
 3
 
 50 PRESIDENT AND BOARD OF DIRECTORS. 
 
 " That may be, Mr. Fairfax ; but let me tell you 
 that Black is rich beyond a contingency. He owns 
 half the upper end of Brooklyn, and the city's stretch- 
 ing out in that direction like a young race-horse. 
 Why, in the course of another year, Black will have 
 a Fifth Avenue there, all to himself. I wish I had 
 only the quarter of that piece of property, and you 
 wouldn't catch me dickering dry-goods." 
 
 " Well I'd rather see the tenth part of it realized, 
 than hear what it's going to bring a year hence. Mr. 
 Black may be in his grave before the month's out, for 
 what I know ; and what then ? How are his notes to 
 be paid ? If his estate's worth five millions, the bank 
 would have to wait, perhaps, as many years. Mr. 
 President, my notion is, that we have no right to dis- 
 count any thing at this Board but a "bonafide com- 
 mercial note that will be paid when due. And on 
 top of that, the indorser must be able to take it up 
 himself, if the drawer should fail or die. Don't you 
 see that we are discounting this paper to pay for Mr. 
 Black's house and furniture, just for his single enjoy- 
 ment ? This isn't commercial paper, sir ! It's accom- 
 modation paper, in the true sense. Mr. Black has 
 invested his commercial means in a house and fur- 
 niture ; and now he wants us to ride him through ! 
 No, sir ; I'll never give my voice to any such thing 
 while I'm a member of this Board. Besides that, 
 such an establishment necessitates enormous expenses 
 of living. There's to be two or three grand parties 
 and balls every year. And a carriage, and a foot- 
 man, and one of these fellows with breeches and white 
 stockings, to scrape and bow at the door, and not
 
 EXTRAVAGANT LIVING. 51 
 
 less than a dozen servants, to keep the great house up 
 Mr. President, when you add Stewart's bill for silks, 
 and Weller's bill for ice-creams, and all that French- 
 ified sugar-work, with the foreign wines and hot-house 
 grapes, I can only say that it is fearful ! No business 
 in the world can support it, sir." 
 
 Mr. Joseph Exeter speaks only on extraordinary 
 occasions. 
 
 "There are certain principles, Mr. President, on 
 which sound trade is built up ; and one of them is 
 economy. I agree with my friend, Mr. Fairfax, in 
 what he has said about carrying a heavy discount 
 line for the personal accommodation of Mr. Black. 
 That is not commerce, sir. It is personal expendi- 
 ture, personal extravagance, personal luxury, and, in 
 the end, personal ruin. I don't want to see this 
 institution involved when the end comes." 
 
 Mr. Exeter points out the bad influence of such 
 examples on young men who are beginning business, 
 and concludes by a strong protest against Mr. Black's 
 offering. He is most likely to be set down as " behind 
 the age." He is unequal to the emergencies of 
 modern enterprise! 
 
 The President listens deferentially to the discussion 
 of the directors. Mr. Black is probably known to 
 him as a bold and " lucky" operator in whatever 
 chances the market may present to-day in real 
 estate, to-morrow in steamships, and next day in a 
 guano expedition, or a government contract. He has 
 important connections in trade, and his name may be 
 Been in half a dozen insurance, railroad, and mining 
 companies. It is not so easy tb reject entirely
 
 52 PRESIDENT AND BOARD OF DIRECTORS. 
 
 the offering of such a man. He must be concili- 
 ated. 
 
 " Gentlemen, if you will refer Mr. Black's offering 
 to me, I will endeavor to put him off with as little as 
 possible. It will be to the interest of the bank to do 
 something for him." 
 
 It is so referred ; and that gentleman is satisfied 
 with the one-half or one-third of the amount which he 
 asks for. 
 
 The duties of the President, in personal intercourse 
 with dealers, are regarded as limited to the treatment 
 of credit from a strictly commercial point of view. 
 He takes no direct cognizance of their moral habits 
 though these, in fact, often turn the scale against an 
 account. 
 
 Mr. Crafft has been a customer in good standing 
 with the bank. He has kept an average balance of 
 six or eight thousand dollars, and obtained a discount 
 line of twenty thousand one of the most satisfactory 
 class of accounts. 
 
 It is whispered one day, that Mr. Crafft is a gam- 
 bler, and his offering is rejected. His credit sinks, 
 and in the course of a few months; his line of dis- 
 count is reduced more than one-half. The paper that 
 he offers is the same that has heretofore been esteemed 
 satisfactory by the bank ; but it is frequently refused. 
 Personal solicitation of the President is equally unsuc- 
 cessful. 
 
 Mr. Brewer drinks brandy to excess. As with Mr. 
 Crafft, his accommodations are gradually reduced. He 
 keeps up his balance of deposits with more than com- 
 mon assiduity, to strengthen his claim. Kote after
 
 BAD HABITS. 53 
 
 note of his discount line is paid off, and he seldom 
 obtains " a favor." In endeavoring to maintain his 
 affairs with the bank, he frequently comes in contact 
 with the President. 
 
 " No, sir. We cannot do it. I am very sorry." 
 
 "But, Mr. President, my line is reduced from 
 twenty thousand dollars down to five. My balances 
 are even better than ever, and I offer you unexcep- 
 tionable paper, that is always paid at maturity." 
 
 " I am aware of that, sir ; but it is out of our power 
 to discount for you at present. We are obliged to 
 decline a large proportion of our offerings." 
 
 " Will you discount for me next week ?" 
 
 " Can't tell, sir. If you offer at the Board, and 
 your paper is satisfactory, it may be done." 
 
 This is an example of the common dissimulation 
 practiced by bank officers to get rid of undesirable 
 customers. How much better would it be : 
 
 " Your paper is rejected, Mr. Brewer, because you 
 are destroying yourself by habits of intoxication. You 
 are on the highroad to insolvency. Your account 
 entitles you to liberal accommodation, and it would 
 give us pleasure to render it. But your credit is 
 rapidly on the decline, and will soon be gone alto- 
 gether. Every bank in the city will haslen to get 
 your name off its books before it becomes positively 
 unsafe." 
 
 Such a warning would be more authoritative from 
 a bank president than from any other person. It 
 might be lost on the man who has gone so far as to 
 be already discredited ; but the example would not 
 be without influence on those whp are following at
 
 54: PRESIDENT AND BOARD OF DIRECTORS. 
 
 some distance in the rear. A merchant values few 
 things so nmch as his good name in the market ; and 
 he ought to know that every bad habit which affects 
 his character, is scored down opposite to it in the 
 Reference Book of the bank officer. If Mr. Crafft 
 and Mr. Brewer could have seen records like the fol- 
 lowing, they would have hardly thought it worth 
 while to make any appeal to the President : 
 
 " Richard Crafft, flour-merchant, "No. Pearl street. 
 Began business in 1840 with $25,000 capital. Manag- 
 ing, economical, and conscientious. Very successful. 
 Standing good. 1842, continues to prosper. Built 
 large house on Madison square, cost $30,000. Said 
 to have cleared fifty in the previous two years. 
 Capital now $40,000, besides real estate. 1843-44 
 45, affairs well conducted, credit unquestioned, 
 makes money fast. 1846 to 50, worth now $150,000, 
 besides real estate. 1851, living high, and takes 
 ' flyers' in the stock market. Caution. 18o2, credit 
 still good, large business, but has been seen at gamb- 
 ling-houses. Keep a sharp eye on him. 1853, 
 operates extensively in stocks. Is now often seen at 
 the gambling-table. June 1854, Crafft is reported to 
 have lost $40,000 at play, and in Erie, within the 
 last six months. October 1854, no better. Credit on 
 the decline. January 1855, continues in a bad way. 
 Think it advisable to reduce his account." 
 
 " Esau Brewer, dry-goods jobber, Broadway. Be- 
 gan in 1846 with capital of $40,000. Up to 1852, 
 successful, and highly esteemed. Capital at later 
 date increased to $125,000. April 1853, bought 
 country-seat. Expensive family, but enjoys good 
 credit. Paper to his own order sells at the best rates. 
 1854, is getting rather free with brandy. Business 
 continues thriving, and credit unimpaired. October
 
 WHAT IS A PRESIDENT TO DO ? 55 
 
 1855, Brewer called in to press for discounts. Looks 
 like a confirmed toper. Running down hill at a 
 gallop. January 1856, poor Brewer in again past 
 saving." 
 
 Information comes to the bank officers without their 
 seeking, and is generally brought the more promptly 
 in proportion to its evil character. Dealers who wish 
 to gain favor with the President, whisper rumors in 
 his ear, confidentially, that another dealer has met 
 with serious losses, or has fallen into bad company. 
 Each director contributes his share of gossip ; and the 
 " Commercial Agency" is bound to give immediate 
 notice to its subscribers of whatever may affect their 
 interest. 
 
 A bank president may be regarded, in some degree, 
 as a sponsor for the integrity of commerce. He is 
 perpetually in contact with the mind of trade, and 
 why should he not instruct it ? Where, if not by him, 
 shall a beginning be made ? Is he clothed with the 
 greatest power in society, merely to put a motion, or 
 to announce a vote in a Board of Directors, at a salary 
 of ten thousand dollars a year ? Are his hourly op- 
 portunities for giving wise counsel and timely remon- 
 strance to be turned off by a trick of dissimulation ? 
 
 Another question might be asked : 
 
 Are our Bank Presidents qualified by knowledge, 
 cultivation, and general weight of character, to exert 
 a good influence over their commercial pupils ? 
 
 They are not chosen for that purpose. The posses- 
 sion of wealth, and the power to control deposits, take 
 precedence of all questions relating to conscience, 
 intellectual accomplishments, and financial ability.
 
 56 PRESIDENT AND BOAKD OF DIRECTORS. 
 
 If a man is rich, he has many friends, and a wide per- 
 sonal influence. He is sought after to have his name 
 enrolled among the managers of various imposing 
 institutions. He is a patron of fashionable charities. 
 He is called on to preside at public meetings. There- 
 fore, he is a very proper man to be a Bank President ! 
 It is not supposed that these distinctions are incon- 
 sistent with the most desirable qualifications for the 
 office ; but they are too often admitted in substitution 
 thereof. 
 
 There is, happily, a saving clause in the organization 
 of a bank, which protects it against many of the con- 
 sequences of unfitness in the chief officer. The divi- 
 sion of labor is such as to compensate in the mere 
 mechanism of the business for want of capacity in the 
 individual ; and the Board of Directors have the right 
 to assume, either in session or by committees, the con- 
 duct of important affairs. They may limit the discre- 
 tionary powers of the President by by-laws, or by 
 closer personal attention to the business. 
 
 It is not unfrequent that the Cashier of a bank, 
 though nominally subordinate, is practically the 
 superior officer. His duties being to a great extent 
 concurrent with those of the President, it is easy for 
 him to step in and occupy the ground. He may hold 
 the reins of authority, and be the ears, the eyes, the 
 brain and the soul of the institution. The relation 
 works itself into such terms unavoidably, when the 
 President is unequal to his place. 
 
 The manual work that is performed by the Presi- 
 dent in a bank of the first class is but little. A 
 casual observer might think his salary of ten thousand
 
 PERSONAL INFLUENCE OF THE PRESIDENT. 57 
 
 dollars a year, out of all just proportion with it. But 
 his freedom from the annoyance of details leaves his 
 judgment cool, and enables him to give more uninter- 
 rupted attention to the causes which affect commercial 
 credit, and which may make it expedient to change 
 the course of the business. 
 
 The President of a bank is its personal and moral, 
 as well as its legal representative. If he is known to 
 be high-minded and honorable in his individual rela- 
 tions, the confidence of the community does not stop 
 at the man, but extends to the institution. Its coun- 
 ters are thronged by depositors, and many friends are 
 anxious to become its stockholders. Such a person- 
 ality is of prodigious account in an active market, 
 where competition divides the patronage of dealers. 
 It acts beneficially in the opposite direction also, by 
 repelling hazardous business. In banking, as well as 
 in social intercourse, " like seeks like." The President 
 who speculates in lands, railroad stocks, and mining 
 shares, attracts around him the plotters in these vari- 
 ous schemes ; and whatever may be the extent of his 
 private property, however high his standing and suc- 
 cessful his adventures, the capital of a bank is not 
 safe in his hands. At one time or another, in one 
 way or another, the institution is compromised by 
 unsafe investments. The solicitation of a personal 
 friend obtains a short loan on good security ; the 
 market changes, and the security depreciates while 
 the loan is extended from necessity, and perhaps 
 increased ; a substitution of securities is allowed ; 
 defective powers of attorney creep in by oversight ;, 
 the treasurers of the borrowing companies are changed :| 
 3*
 
 58 PRESIDENT AND BOARD OF DIRECTORS. 
 
 the original negotiators die; a thousand accidents 
 occur to involve and to complicate this class of 
 financial operations. The only rule of safety for a 
 bank is, to discard them altogether ; and this is the 
 rule of integrity to the commercial interest also. 
 
 The bank officer who is not proof against the tempt- 
 ations held out for the employment of funds in spec- 
 ulative channels is an unsafe trustee. 
 
 " "What !" says one, " shall I keep idle two or three 
 hundred thousand dollars, which the regular dealers 
 of the bank do not want to borrow, when I can loan 
 it, on call, at seven per cent interest ?" Accordingly, 
 he loans it out. This is the origin of the employment 
 of bank capital on the Stock Exchange a practice 
 which has often been severely criticized by com- 
 mercial men. 
 
 The desire to make the most out of the means of 
 the bank is natural ; but this does not always con- 
 sist in a particular economy, such as transient loans 
 outside of the commercial interest. It may be better 
 economy to let the excess remain as a dead weight, 
 until the renewed activity of trade shall again call it 
 into use. Such, in fact, has been the experience of 
 several of our city banks which have repudiated stock 
 loans altogether. They have found their reward in 
 attracting the best class of merchants to their coun- 
 ters, which gives a more stable deposit, and conse- 
 quently a more uniform line of discount. 
 
 The objections to call-loans on the Stock Exchange 
 are : that they inflate and sustain fictitious values ; 
 that they encourage the speculative market, and 
 stimulate the rates of interest, which commerce haa
 
 CALL-LOANS TO THE STOCK MARKET. 59 
 
 to pay ; that many of the securities bought and sold 
 are worthless, and to countenance dealing in them, 
 therefore, tends to fraud ; that the system, to a great 
 extent, is mere gambling, in which merchants are 
 constantly tempted to their ruin ; and that it corrupts 
 the whole market. 
 
 It is well known that the old commission-house of 
 Tumbledown & Co. was for many years a measure of 
 credit. " "Will you take some paper to-day ?" asks a 
 broker of a Bank President. 
 
 " Yes. "We'll take fifty thousand dollars, if it's as 
 good as Tumbledown & Co." 
 
 The same President was shocked one day to hear 
 that the house had been ruined by speculations in 
 " Erie," or " Harlem ;" and the probabilities were 
 as four to five, that his own loans to the stock-market 
 had something to do with it. 
 
 In some banks, stock loans have been prohibited by 
 a vote of the Board of Directors. "Where they are 
 admitted, the President commonly exercises his dis- 
 cretion as to the kind and amount of securities. There 
 is probably not a Bank Board in the City of New 
 York that would not pass a vote of prohibition^ if 
 strongly urged to do so by the President. 
 
 Among the duties of the President is, that of con- 
 stantly reviewing the credits of the bank. 
 
 Merchandise is sold from first hands to the jobber 
 on a credit of eight months (more or less), for which 
 the latter gives his promissory notes. The jobber 
 eells in smaller quantities (by the piece or single 
 package) to the retailer, on a credit of six months. It
 
 60 PRESIDENT AND BOARD OF DIRECTORS. 
 
 is good management for a merchant to have his bills 
 receivable coming due in season to apply their pro- 
 ceeds to discharge his bills payable. But the ability 
 of the retailer to pay the jobber depends chiefly on 
 the punctuality of the consumer in settling his bills. 
 Thus each class of merchants is dependent on another 
 class for the means of liquidation. A large cash 
 capital may enable a man to pay all his notes at 
 maturity, even if his debtors fall considerably in 
 arrears ; but the majority of traders of all classes are 
 obliged to carry full lines of credit. This system 
 supplies our banks with promissory notes, the discount 
 of which is their principal source of profit. 
 
 The New York city banks do not discount paper 
 until it comes within two or three months of maturity. 
 That which has a longer period to run, is therefore 
 unavailable for direct use. The bank, however, will 
 admit a modification of its rules, when satisfied that 
 the notes are good. It will receive a certain amount 
 of them as collateral security for the merchant's note 
 payable within the required time, reserving in such 
 cases what is called a margin for contingent losses. 
 Thus a dealer may deposit twelve thousand dollars 
 of paper, which has from four to eight months to run, 
 coupling with it his own note for six or eight thousand 
 dollars at sixty days. The excess is the margin 
 intended to cover loss by the possible failure of some 
 of the drawers, and the expenses of collection and 
 interest that would accrue, if the dealer himself should 
 fail and oblige the bank to have recourse to the col- 
 lateral notes. This is a very simple operation in 
 appearance ; but it invol ves the exercise of no com-
 
 ; Sit down, sir, and let me look at your collateral notes."
 
 DISCOUNTING NOTES WITH COLLATERAL SECURITY. 61 
 
 mon sagacity and discretion on the part of the bank 
 officers. They must endeavor to maintain an accurate 
 knowledge of the affairs of the merchant to whom 
 the loan is made, and of the responsibility of the 
 drawers of the collateral notes. The latter are resi- 
 dent in small towns and at trading stations all over 
 the country, from Canada to Mexico. It is impossible 
 for a bank officer to get much specific information 
 about them. It is presumed that the city merchant 
 has sufficient knowledge of his customers to justify 
 the credit that he gives them. But the President or 
 Cashier frequently enters into a particular examina- 
 tion of each note. 
 
 " Mr. Jobber, the Board of Directors has referred 
 your offering to me, to ascertain something about 
 these collaterals. Sit down, sir, and let us look over 
 them. Here is Joseph Scott, of Wheeling, four hun- 
 dred and sixty dollars, seven months to run. What 
 do you know about him ?" 
 
 " Well, Mr. President, Scott has dealt with me five 
 years, and never failed to pay promptly. He repre- 
 sents himself as an owner of real estate, worth ten 
 thousand dollars. Besides that, his stock averages 
 some twenty thousand over all his debts. I have a 
 correspondent there who confirms his statement, and 
 the Mercantile Agency here says the same thing. 
 Scott's general character is very fair. Church mem- 
 ber very gentlemanly. I sell him about three thou- 
 sand dollars a year, and he owes me, running, say 
 two." 
 
 " That's quite satisfactory. Now here's Zach & Co.,
 
 62 PRESIDENT AND BOAKD OF DIKECTOK8. 
 
 Chicago, who are they? Nine hundred and fifty 
 dollars, six months." 
 
 " Zach & Co. were recommended to me by my 
 brother-in-law, who lives close by one of the firm, a 
 little out of the city. Owns a fine country-seat 
 made forty thousand dollars by the rise of real estate 
 one of the early settlers half owner of a hotel 
 worth altogether not a cent less than a hundred thou- 
 sand dollars. We trust him from three to five, but 
 he pays cash half the time." 
 
 " Yery good. Next comes Stubbs & Brother, of 
 Shreveport, Louisiana, twelve hundred dollars. That's 
 a good way off!" 
 
 "Yes, sir, but very responsible men. They have 
 a capital of thirty thousand dollars. Their city refer- 
 ences are of the first class, and we have made parti- 
 cular inquiry as to their general habits and capacity 
 for business. This is their first purchase of us." 
 
 " Here are two notes Jackson & Smith of 
 Montgomery, Alabama, and Joseph Tompkins of 
 Galveston, Texas, made payable at your office, Mr. 
 Jobber. We shall decline them, as notes drawn in 
 that way are apt to be protested." 
 
 " Those people have always remitted promptly, Mr. 
 President. The reason of making their notes payable 
 in New York is, that they ship cotton to the East 
 and draw against it." 
 
 " That may be ; but- we prefer notes that are pay- 
 able where the parties reside. You must send us 
 others in their place." 
 
 " We can do so, sir, if you prefer it." 
 
 " Ezra Cooper, Savannah. Who's he ?"
 
 DISCOUNTING NOTES WITH COLLATERAL SECURITY. 63 
 
 "First-rate man. Owns a plantation with two 
 hundred slaves. Customer of ten years' stand- 
 
 ing." 
 
 The list of collateral notes is thus scrutinized by 
 the President or Cashier. The extensive correspond- 
 ence of the bank enables the officers often to cor- 
 roborate or to correct the representations of the dealer. 
 It has collected paper of the same drawers, or had it 
 returned protested. A short inquiry is frequently 
 appended at the foot of a letter to a Cashier in Co- 
 lumbus or elsewhere : " How does Geo. Draper of 
 (or near) your city stand?" The answer would gener- 
 ally be esteemed as more worthy of reliance than the 
 account of a dealer who is an interested party. 
 " George Draper, in the dry-goods business, is suc- 
 cessor to his former employers who failed a year 
 back. Has the good-will of the old store, stock twenty 
 thousand dollars, no paper out in these parts, prompt 
 in his dealings, and is careful how he trusts peo- 
 ple, I should say a man of the upper middling 
 class." 
 
 Another sort of answer will sometimes come : 
 " George Draper is just now out on a grand spree. 
 He is a good whole-souled fellow with but one enemy 
 in this world, and he is George Draper. Has real 
 estate, well mortgaged, a fine run of customers who 
 never pay till called upon and George is not the 
 man to call. Family of five children, two grown-up 
 and expensive daughters, and a son who is the best 
 sportsman in these diggings. Confidential. Tours 
 truly." 
 
 The President wants to verify a statement of the
 
 64 PRESIDENT AND BOAKD OF DERECTOBS. 
 
 affairs of Jonas Marks of Toronto, whose note for 
 twelve hundred dollars, at seven months, is among 
 Mr. Jobber's collaterals. He sends an inquiry to the 
 " Commercial Agency" of Messrs. Paul & Pry, and 
 in thirty minutes gets the following answer : 
 
 " [CONFIDENTIAL.] 
 
 " Jonas Marks, Toronto, U. C., general hardware. 
 Began business, in 1849, with cash capital, $10,000. 
 Not, very successful for the first two years rather 
 fond of frolics credit at home not good. In 1852, 
 got run over by a railway-car, and lost half a leg. 
 Recovered $5,000 damages. Settled down and 
 begun to thrive immediately. In 1853, married a 
 daughter of one of our wealthiest citizens -who has 
 since died, leaving an estate of three hundred thou- 
 sand dollars to be divided among twelve children. 
 M. is one of the executors. His business has much 
 improved since '52. In '55, he realized a handsome 
 sum by selling off some real estate, and was appointed 
 deacon in the church. Credit is now A 1." 
 
 The ledgers of Messrs. Paul & Pry are full of these 
 particulars. Family, social connections and habits, 
 are often traced with great minuteness. Nothing 
 that bears on credit is unimportant ; and there are 
 few facts of any consequence relating to it that 
 escape the record. If Mr. John Green of Galveston, 
 Texas, wants to buy goods in the New York market 
 for his notes, he must take care how he keeps fast 
 horses and runs into extravagant expenses. 
 
 The time of most excitement and difficulty to the 
 President, is in an extreme financial pressure. If he 
 is then himself free from debt, as he should be, he
 
 CLAIMS OF DIRECTORS. 65 
 
 becomes practically a dictator. The directors, who 
 are quite likely to want money as badly as other peo- 
 ple, are often themselves suppliants ; and from that 
 moment, their influence at the Board declines. They 
 are subject to the President, because they are depend- 
 ent on his will for loans ; and his will, being gov- 
 erned by a strong sense of justice and impartiality, 
 is in opposition to their desires. Single-handed, he 
 can resist the whole twelve if they should combine 
 against him to absorb an undue proportion of the 
 funds. 
 
 A director has a plausible argument in his favor 
 when he urges his claim for larger loans. He gives 
 valuable time to the bank, and is expected to uphold 
 it in emergencies ; therefore, he is entitled to pre- 
 cedence before dealers generally when he is himself 
 in an emergency. Besides, if a director should be 
 allowed to fail, the rumor gets abroad and will be 
 believed, that he is largely indebted to the bank, and 
 thus the bank will be more crippled than it would be 
 by sustaining him with additional loans. Against 
 these arguments the President opposes his resolute 
 negative. 
 
 " You have as much money out of the bank as you 
 are entitled to, and I will not consent to discount for 
 you another dollar. If you fail, I can't help it ; and 
 if the bank suifer in public estimation as a conse- 
 quence, the fault will be yours and not mine." 
 
 This is the language of a President whose experi- 
 ence warns him that it is easier to refuse at the right 
 stage of such a case than at the wrong one ; and that 
 a bank always sustains more injury by an officer's
 
 66 PRESIDENT AND BOARD OF DIRECTORS. 
 
 departure from sound rules of management than from 
 the misfortunes of an individual director. If the 
 President is publicly known as a man who will not 
 deviate from an impartial and upright course, even 
 to serve a personal friend in great extremity, his 
 institution cannot be hurt by false rumors. 
 
 On the other hand, a yielding President, or one 
 who is himself a borrower and embarrassed for the 
 want of funds, can exert no authority over a needy 
 Board of Directors. There is no restraint upon the 
 latter. " Common want makes mutual friends." The 
 convenience of dealers generally is disregarded, and 
 the funds- are absorbed by a few. If the institution 
 escapes immediate difficulty and discredit, it does not 
 escape ultimate damage by the loss of the best class 
 of dealers, who transfer their accounts to other banks 
 where a more honorable spirit prevails. 
 
 The directors of a bank are frequently solicited by 
 their friends and persons in trade to " speak a good 
 word for them at the Board." It is flattering to their 
 self-importance to be called on, as they often are, by 
 men who are vastly their superiors in social standing, 
 education and manners, and to be begged for " their 
 influence." It gratifies them to prove that if an 
 acquaintance may be considered an honor on one side, 
 it may be of substantial service on the other. But 
 this personal solicitation becomes annoying to them 
 in a tight market. They shift the ungraciousness of 
 a direct refusal on the officers. 
 
 " I'll do what I can for you, but you had better go 
 to the President." 
 
 The President then runs the gauntlet of incessant
 
 A PANIC DAY. 67 
 
 importunity. He appears to be a monster of insen- 
 sibility. Many who approach him on the faith of 
 long and intimate friendship, go away convinced that 
 all his professions of regard have been false, and that 
 he is " a hypocrite." He is charged with serving his 
 favorites, or using the bank funds to promote his own 
 speculations 
 
 It is now fifteen minutes before three o'clock on a 
 panic day. 
 
 Mr. Moreton is one of the oldest dealers of the 
 bank, and a large stockholder. He has already ap- 
 pealed to the President, between whom and himself 
 exists a strong personal friendship, and he now returns 
 for a last effort before the dreadful stroke of three. 
 
 " I am sorry to see you again, sir." 
 
 " You may be assured that the last extremity only 
 has brought me back. Mr. President, if I do not get 
 ten thousand dollars to-day, I shall go to protest and 
 the labor of my whole life is lost. Here are my 
 securities, worth three times the amount !" 
 
 " My dear sir, I am powerless both officially and 
 personally. The bank is on the verge of discredit. 
 I have no right to endanger the interests of our stock- 
 holders by loaning another dollar. Your case is but 
 one of twenty similar, that have been presented with- 
 in the last hour, and it has been my painful duty to* 
 reject all." 
 
 The President is truly in most trying circumstances. 
 His relations with Mr. Moreton are not merely per- 
 sonal, but social. Their families mingle intimately, 
 and their sympathies and enjoyments have been com-
 
 DO PRESIDENT AND BOARD OF DIRECTORS. 
 
 mon. The shock of bankruptcy is suspended over 
 the whole circle. Instead of renewing at evening the 
 pleasures in which he has so often forgotten the an- 
 noyance of his daily duties, he fancies dark halls, 
 deserted parlors, separated playmates and broken 
 " silver cords." 
 
 The two have withdrawn into an inner room, and 
 it is less the merchant and the banker, than friend 
 and friend ; nor could an impartial observer tell from 
 the expression of anxiety and despair in their counte- 
 nances, upon whom the blow is to fall the heavier. 
 
 " Must my name be dishonored for the want of a 
 sum comparatively so trifling as this ? Can you give 
 me no suggestion ?" 
 
 " I cannot." 
 
 It seems to Mr. Moreton that he could lay down his 
 life with less pain than he can submit to the forfeiture 
 of his commercial honor. His reputation, the success 
 of his whole life, the labor of thirty years, are slipping 
 from his grasp with the few remaining seconds of the 
 hour ; and then they are gone ! This is no exaggera- 
 tion of the real mental suffering of the sensitive and 
 - high-spirited merchant on the brink of bankruptcy, 
 nor of the painful interest of the bank-officer in the 
 fortunes of his friend. 
 
 1 In many cases, the disappointed applicant retires 
 cursing, in soliloquy, the bank as an incorporated 
 nuisance, and the President as an unfeeling monster. 
 The last thought that occurs to him is that his own 
 recklessness in trade or expenditure has had anything 
 to do with bringing his affairs into a bad condition ; or 
 that a bank with fifteen hundred dealers is liable to
 
 THE POUND OF FLESH. 69 
 
 have its deposits drawn upon faster than its discounted 
 bills mature, and that in such a case it is more help- 
 less than an individual merchant; it can neither bor- 
 row nor create capital. 
 
 It has been considered an axiom of financial wisdom 
 to repudiate " indulgence" as inconsistent with sound 
 banking. The man who recognizes only the " pound 
 of flesh," is regarded as an exemplary bank officer. 
 "He is an excellent man, but too sympathetic for a 
 President," is not an unusual remark, when the quali- 
 fications of a candidate are discussed. This is prac- 
 tically an assumption of the superiority of capital 
 over trade and labor ; but wherever a fair commer- 
 cial sympathy is allowed to displace the maxim of 
 Shylock, debts are more honorably settled, defaults 
 more promptly repaired, and the obligations of credit 
 more respected. A bank president who can intrench 
 himself behind bags of coin and look on the disasters 
 of the market without involuntary sympathy for the 
 sufferers, is unworthy of public confidence. He is an 
 enemy to commerce. 
 
 All the best interest of society are injured by 
 financial pressure. Education is interrupted in fami- 
 lies. Private enterprise is stopped, public works are 
 suspended, and wages are cut off. These results have 
 frequently been brought about or exaggerated bj 
 the bad management of banks ; therefore, to vest such 
 a power in weak hands is a public wrong.
 
 70 THE CASHIER. 
 
 CHAPTEK m. 
 
 THE CABHIEE. 
 
 THE internal mechanism and order of a bank depend 
 chiefly on the Cashier. For the greater part, his 
 powers are concurrent with those of the President ; 
 but they extend specifically to the details of the busi- 
 ness, embracing the supervision of the accounts, the 
 correspondence with other banks, and more active 
 intercourse with the dealers. 
 
 He keeps a record of the transactions of the Board 
 of Directors, to which he is Acting Secretary. 
 
 He signs, with the President, the certificates of stock 
 issued to shareholders, and the bank bills which are 
 paid out as money. 
 
 Checks drawn on other banks are usually signed 
 by him. When he is absent, they are signed by the 
 President. 
 
 He indorses, personally or by deputy, all drafts 
 and promissory notes which are sent to other parts 
 of the country for collection. 
 
 All drafts and notes received from others for pay- 
 ment in New York are indorsed subject to his order; 
 but on these, the official stamp of the bank is mostly 
 admitted as a substitute for his formal indorsement 
 as follows :
 
 Just Elected.
 
 OFFICIAL DUTIES. 71 
 
 Pay Walter Mead, Esq. 
 
 Cashier, or order. 
 'ANDREW MASON, Cashier. 
 
 
 BECEIVED PAYMENT. 
 WALTER MEAD, CA8HIEB. 
 
 
 The stamp is generally impressed with a kind of oil- 
 paint or ink which is not easily erasible. The bank 
 records are accessible for legal proof, and every note 
 paid through it could be traced and verified in case 
 of dispute. 
 
 The correspondence of the bank is conducted in the 
 name of the Cashier, officially. 
 
 In all cases where his signature alone is required, 
 that of the President may be substituted ; but the 
 alternate substitution is not allowed. 
 
 When the President is absent, the Cashier is the 
 principal executive manager of the business ; and he 
 is often so, practically, when that officer is present. 
 In several of our largest city banks, the Presidency is 
 a mere sinecure accorded to wealth, age, or influence, 
 with little reference to capacity, the Cashier being 
 regarded in fact as the superior officer. 
 
 He gives bonds to the amount of ten or twenty 
 thousand dollars. 
 
 Bonds are intended as indemnity in case of fraud. 
 They do not cover loss by indiscretion, neglect, or 
 errors of judgment, however gross these may be. 
 
 Formerly, the Cashier was forbidden to hold stock 
 in the bank of which he was an officer, for the reason, 
 perhaps, that it would place him too nearly on an 
 equality with the President and directors. Possibly
 
 72 THE CASHIER. 
 
 it was feared that a desire to increase his own divi- 
 dends might induce a speculative employment of the 
 funds. It was considered improper also that he 
 should keep his personal account in the bank, a restric- 
 tion that was extended likewise to the President, 
 under a general impression that it might be a bar to 
 abuses of privilege. These restrictions are still par- 
 tially in force, though mostly regarded with indiffer- 
 ence. They would be a slight obstacle to fraud with 
 men who are not restrained by a sense of right within 
 themselves. At the same time, experience has shown 
 the wisdom of absolute rules in moneyed institutions 
 by which the first approaches to temptation are kept 
 out of sight. 
 
 The Cashier receives his appointment from the 
 Board of Directors, who may also remove him in their 
 discretion. He retains office " during good behavior," 
 unless, as it occasionally happens, he is ousted in a 
 personal quarrel. 
 
 When a bank officer resigns his place without ex- 
 planation or obvious cause, such as ill-health or 
 change of residence, it is generally understood that 
 he has been guilty of some impropriety, or has been 
 found incompetent. This would be likely to defeat 
 his application for employment in other banks. 
 
 It is so grave a matter to charge a bank officer with 
 default, even if circumstances are strongly against him, 
 and might be so difficult of proof if he should stand on 
 the defensive, that he is mostly allowed to retire with- 
 out official exposure, unless the amount in question 
 is very large, or his conduct has been unusually 
 atrocious. His bondsmen are personal friends who
 
 SALARY. 73 
 
 are anxious to screen him from public disgrace, and 
 they manage to effect an amicable compromise. 
 Besides, a bank has nothing to gain by thrusting its 
 misfortunes out into public view. The conviction of 
 the offender would not shield it from the sus- 
 picion of having careless or ill-guarded methods of 
 business. 
 
 Although the power of appointing and removing 
 the Cashier is vested in the Board of Directors, he 
 is not unconditionally subordinate to them. He is 
 regarded by the stockholders as their direct repre- 
 sentative and trustee. If the President or directors 
 should attempt to use the funds of the bank for impro- 
 per or hazardous purposes, the Cashier might author- 
 itatively interpose. It would be his duty to do so. 
 He may object to any measures which he deems 
 injurious to the business or character of the institution, 
 without endangering the tenure of his office and with- 
 out offence to his superiors. If faithful and well qual- 
 ified, he is their co-ordinate in the administration of 
 affairs. 
 
 The salary of the Cashier depends on the peculiar- 
 ity of his duties. In some of the smaller banks, 
 where he is a mere clerk, it is two or three thousand 
 dollars a year; while in the larger where he is an 
 executive officer of high grade, it ranges from five 
 to ten thousand dollars. The latter sum is proba- 
 bly the highest paid in the City of New York. In 
 some cases he derives perquisites by acting as trustee 
 or treasurer for other companies. His compensation 
 is made liberal, that he may be under no necessity to 
 engage in other business, which, besides distracting 
 
 4
 
 74 THE CASHIER. 
 
 his thoughts, might involve him in debt and create 
 conflict of interests. 
 
 The Cashier reaches his desk about nine o'clock in 
 the morning. His first care is to examine the con- 
 tents of the letters received by mail. In the larger 
 banks an Assistant Cashier or Corresponding Clerk 
 attends wholly or in part to this service. 
 
 The inclosures of letters consist of bank checks, 
 personal checks, bank bills, drafts at sight or for 
 acceptance, promissory notes for collection, bills of 
 exchange foreign or domestic, government warrants, 
 railroad coupons, and any other form of document 
 which represents money. Land warrants are often 
 sent to the city for sale, as it is here that the readiest 
 market is afforded by the competition of emigrants 
 and speculators ; also, certificates of stock in banks, 
 in mining, manufacturing, and insurance companies ; 
 and State, County, and City bonds, which have been 
 issued for public improvements. 
 
 The first thing is to compare these inclosures with 
 the record of the letter. In banks of limited corre- 
 spondence, the Cashier may check off each item, and 
 hand over the documents to the clerks in whose 
 departments they are to be entered ; but in those of 
 widely-extended business he requires several assist- 
 ants. Sometimes the letter is passed successively to 
 the different clerks, -each of whom marks his initials 
 opposite to what he takes out, and it is then returned 
 to the Cashier so vouched. 
 
 Most of the documents are made subject to the 
 indorsement of the receiving bank, which is an 
 effectual bar to their abstraction and use in other
 
 CORRESPONDENCE. 75 
 
 channels, except by a forged indorsement. Bank notes 
 might be taken by a dishonest clerk, without imme- 
 diate detection ; but the deficiency being reported 
 to the remitting bank, suspicion and probable dis- 
 covery would follow. Bonds and stocks could not be 
 surreptitiously used withqut discovery. A fraudulent 
 holder would be arrested, when he came forward to 
 receive the interest. The bank correspondence is, 
 therefore, effectually guarded against fraud by the 
 clerks who may be employed in it, unless they have 
 the hardihood to attempt forgery ; and this could not 
 long be concealed. 
 
 The practice is common among our city banks to 
 add the available checks that are received in the 
 morning letters to the exchanges, before these are 
 sent to the Clearing House. The amount so used, 
 which in some of the banks with an extensive corre- 
 spondence frequently reaches three hundred thousand 
 dollars, is equivalent to so much deposit of the day 
 before. It is the saving of one day's interest upon it ; 
 or, practically, the specie of the bank is increased by 
 the sum so used, although the benefit that results from 
 it is more apparent than real, since other banks use 
 the checks that are drawn against the remittance in 
 the same manner, and neutralize the gain. The hour 
 devoted to the final preparation of the exchanges by 
 the addition of these checks, which must be culled 
 from many letters, is one of the busiest of the day. 
 
 The number of letters received by a bank of the 
 first class ranges from one hundred and fifty to three 
 hundred per day. The majority of them are formal, 
 being merely an abridged statement of the inclosures ;
 
 76 THE CASHEEE. 
 
 and these can be acknowledged by a corresponding 
 clerk. But many relate to matters which require the 
 personal attention of the Cashier ; such as the pur- 
 chase or sale of stocks, the re-discount of- bills receiv- 
 able, errors and misunderstandings of account, special 
 instructions relative to suspended debts, the capital 
 and credit of merchants, and so forth. 
 
 The number of letters sent out daily is about the 
 same as received that is, received and sent, from 
 three to six hundred. 
 
 When the money-market is " easy," the routine of 
 the Cashier's employment is very agreeable. The 
 different departments of the bank move along harmo- 
 niously, and without haste. The dealers call and 
 transact their business, and go away in good humor. 
 If they want paper discounted, it is done promptly. 
 They mix a pleasant sociality with their negotiations. 
 They often sit down and talk on indifferent subjects, 
 as in the common intercourse of private life. No 
 topic, grave or light, is out of place in the rooms of 
 the Cashier or the President politics, theology, his- 
 tory, education, public improvements, and personal 
 matters, are all mixed up together. Either officer 
 will discount a note without interrupting the train of 
 his ideas, and without dropping a sentence. " Let us 
 have credit for that?" "Yes, sir" is a trifling inter- 
 polation, that may give to a highly esteemed customer 
 the privilege of drawing checks to the amount of 
 twenty or thirty thousand dollars. Nothing can be 
 more pleasant than the call of a director to invite the 
 Cashier to an evening party. Sometimes it extends 
 to a bathing or a fishing excursion, the occasional
 
 A TIGHT MARKET. 77 
 
 enjoyment of which is not inconsistent with the inter- 
 ests of the institution. The President cheerfully 
 assumes extra duty on such occasions, and takes his 
 turn when he has the opportunity. The hours of 
 attendance at the bank are neither so early in the 
 moining, so late in the afternoon, nor so constant 
 during the day, as to prevent a wide latitude of per- 
 sonal leisure and polite indulgence. There is excite- 
 ment enough in these concomitants of " an easy mar- 
 ket" to make the office of Cashier one of the most 
 desirable that the community affords. 
 
 But the time comes for this agreeable experience 
 to terminate. The market shows symptoms of " tight- 
 ness." The amount of paper offered for discount is 
 suddenly doubled, and the amount discounted is 
 reduced one-half. Merchants are not satisfied with 
 their usual preparations for the future. They are bent 
 on accumulating twice as mucn ready money as they 
 need ; and they begin to call for loans as soon as the 
 Cashier reaches his desk in the morning, before the 
 bank doors are officially opened. Those whose offer- 
 ings have been rejected by the Board of Directors 
 come to ask for explanation and to make complaints 
 
 " What is the matter, Mr. Cashier ?" 
 
 " Our means are reduced, sir." 
 
 " Is my paper too long ?" 
 
 " No, sir." 
 
 " Is it too- short ?" 
 
 " No, sir." 
 
 " Then what is the difficulty ? Do tell me.'' 
 
 " Our deposits have fallen off, and we arr obliged 
 to hold on to our receipts."
 
 IB THE CA8HIEE. 
 
 " Don't you like the names?" 
 
 " We did not look at them. It was not worth while 
 since we had no money to loan." 
 
 " But you ought to look at them. Now, see here 
 look at this, and that, and then here" (turning the 
 notes over in his hand), " and there's another all 
 as good as wheat ! my dear sir /" 
 
 These two last words are spoken with peculiar 
 emphasis. 
 
 " It would give us pleasure to pass them all to your 
 credit, sir. They are not objectionable." 
 
 " Then, why not slip them in at once and be done 
 with it." 
 
 " Because, my good friend, it is simply impossible. 
 We have not the means." 
 
 " Oh, but my dear Mr. Cashier come, come, don't 
 say so ! These are only four little notes less than 
 ten thousand dollars in all !" 
 
 " My friend, you must believe me. Our coin is 
 reduced, and we cannot discount a dollar." 
 
 The Cashier is in the midst of an important letter, 
 and writes a word at a time as he answers this shower 
 of questions. The customer is at length satisfied that 
 he can get nothing by further importunity, and goes 
 away, promising to come back to-morrow. 
 
 No sooner is he gone, than his place is filled by 
 another, who asks the same questions and gets the 
 same answers. The conversation is varied by the 
 temper and circumstances of the applicant. 
 
 One of the clerks comes to him with a gentleman, 
 whom he introduces as Mr. Tarbox. 
 
 The Cashier says mentally : " What business have
 
 BECEIVING NEW ACCOUNTS. 79 
 
 strangers to come here for discounts? We have 
 enough to do to take care of our old customers." 
 
 The clerk adds : " Mr. Tarbox wishes to open an 
 account, sir." 
 
 Oh, that is quite another matter ! 
 
 " Mr. Tarbox, I am happy to see you, sir" shaking 
 hands. The Cashier is very polite. It is an agree- 
 able transition from being bored for loans, to find a 
 man who really has money in his pocket to deposit in 
 the bank. 
 
 The several dealers in waiting give way, and allow 
 the Cashier and Mr. Tarbox to pass to another room, 
 or within the counters, where they may talk without 
 interruption. 
 
 It is one of the most important duties of the bank 
 officer to receive new accounts. 
 
 " In what branch of business are you engaged, Mr. 
 Tarbox?" 
 
 " In the manufacture and sale of clocks." 
 
 " Are you a resident of the city ? 
 
 " Yes, sir. My store is at No. 2000 Pearl street ; 
 but my manufactory is at New Haven." 
 
 " What is your capital ?" 
 
 " It was originally thirty thousand dollars ; and 
 my profits have now increased it to sixty thousand." 
 
 Other questions follow, relating to the extent of 
 Mr. Tarbox's business, and to whatever may affect 
 his credit. He finally refers the Cashier to Mr. Starr, 
 one of the directors of the bank, with whom he has a 
 personal acquaintance. 
 
 " That will do, sir. I'll take your signature in this 
 book, and instruct the Teller to receive your deposit."
 
 80 THE CASHIER. 
 
 The Cashier seizes his first leisure moment to post 
 to his Reference Ledger the particulars stated, with 
 any additional information that he may get from Mr. 
 Starr ; and when Mr. Tarbox at a future time offers 
 his bills receivable for discount, the whole story is 
 brought out and read to the Board of Directors. 
 
 Thus, in the outset of the Cashier's personal inter- 
 course with the dealer, begins that scrutiny of char- 
 acter on one hand and imparting of confidence on the 
 other, which establishes a more intimate relation than 
 exists in ordinary commerce. 
 
 It is true, Mr. Tarbox is rather conferring favor 
 than asking it, by opening his account. But he is 
 laying the foundation for years of continual borrow- 
 ing and lending between the bank and himself; and 
 the general convenience of his business depends much 
 on his relations with the officers. He is preparing 
 the hinge of success, on which may turn a thousand 
 good bargains during the next ten years. 
 
 It is a serious mistake for a dealer to decline giving 
 to a bank officer a candid statement of his affairs, 
 when asked for it. Confidence fails at once, and it 
 can rarely be re-established. 
 
 Eight or ten anxious customers await the Cashier's 
 release from Mr. Tarbox. Among them are some of 
 his best personal friends. They will not be put off 
 by his first assurance that the bank has no money to 
 loan. Each one considers his case entitled to special 
 attention above all others. 
 
 " Good morning, Mr. Cashier." 
 
 " Good morning, Mr. A."
 
 PERSONAL SOLICITATION. 81 
 
 " I am very much surprised to find that my paper 
 is not discounted, sir." 
 
 " Ah, my friend, I am sorry ; but you see that 
 others are in the same predicament." 
 
 Yes, sir ; but that gives me no comfort. I have 
 my notes to pay." 
 
 " The Board did their best, Mr. A. Our receipts 
 happen to be very small just now, and we have been 
 sadly beaten at the Clearing House for three morn- 
 ings in succession." 
 
 " Mr. Cashier, this paper is A 1. You have nothing 
 better on your books. The amount is not large, and 
 the time is short." 
 
 " It is impossible sir, for the bank to discount it. 
 "We are obliged to turn away every application at 
 present." 
 
 " Have you looked at my account ?" 
 
 " I have not." 
 
 " Then you must do so and consider whether I am 
 not entitled to all that I ask." 
 
 " The Board of Directors have left me no discretion. 
 They decided that it was not safe to loan a single 
 dollar." 
 
 " My balance has not fallen below three thousand 
 dollars for months past. I make no unreasonable 
 requests." 
 
 " It is true, sir, that your requests are reasonable, 
 and that your account entitles you to -a liberal line. 
 But what can we do without the means of doing ?" 
 
 " The whole amount of my accommodations for a 
 year have been exceedingly moderate I do not 
 trouble you with incessant calls." 
 
 4*
 
 82 THE CASHIER. 
 
 " That is so, sir, but^-" 
 
 " Well, Mr. Cashier, I claim to be an exception tc 
 your general rule. You must discriminate between 
 men who bore you to death all the time, and those 
 who are reasonable in their demands. It is seldom 
 that I ask you for discounts, and when I do, I want 
 them." 
 
 " No doubt, sir ; and I assure you that we have 
 every disposition to treat you liberally. It is a very 
 unpleasant duty to reject such claims as yours ; but I 
 tell you again, and I want you to believe me, that we 
 have no alternative. We cannot move an inch." 
 
 " But sir, you must move an inch ! Do you pretend 
 to tell me that you will enjoy the use of my balance 
 of three or four thousand dollars, lending it out to 
 other people, and then when I want to get a little loan 
 myself, you will turn round and say you can't, and you 
 have no discretion and no power ? What do I care, 
 if you are short at the Clearing House ? Does that 
 pay my notes ? Now, sir, I will tell you and your 
 Board of Directors that I am not a man to submit to 
 such treatment !" 
 
 " Mr. A. if you are a reasonable man " 
 
 11 If I am a reasonable man! I am a reasonable 
 man, sir, and that's just the whole case. Because I 
 am so, I want my paper discounted. It is my right, 
 sir, and I don't mean to give it up !" 
 
 "Well sir, it is your right, and I don't want you 
 to give it up. But you must listen to me, while I put 
 the matter to your own judgment " 
 
 " I have settled it in my judgment already. I don't 
 want to hear this stuff about the Clearing House!
 
 " Now, sir, I will tell you and your Board of Directors, that I am not a man 
 to submit to such treatment."
 
 PUTTING OFF CUSTOMERS. 83 
 
 The Clearing House is nothing to me ! my notes have 
 to be paid that's my judgment, sir !" 
 
 " Do you think, Mr. A., that I am made of gold, or 
 that I can turn back the tides of the North River ?" 
 
 " I know very well that you cannot change the 
 market ; but you can discount this paper." 
 
 " My dear sir, I cannot do it without endangering 
 more and larger interests than yours. Our stock- 
 holders and creditors generally have rights as well as 
 you. A failure to pay our balances at the Clearing 
 House would be a fatal blow to our credit equiva- 
 lent to a protest ! Our deposits would be withdrawn, 
 and we could no longer keep your present discount 
 line where it is, which we hope to do by a course of 
 mutual indulgence with our dealers. There is no 
 possible remedy for this state of things but to wait 
 for the gradual maturity of our bills discounted. If 
 you will bring me your paper some days hence, you 
 will probably find us in better condition." 
 
 Mr. A. yields in a moment of cooler judgment. 
 If the Cashier, however, had treated him with a sullen 
 refusal, making no explanation, he would have gone 
 away in a fit of anger, and his friendly relations with 
 the bank might cease. 
 
 This may be called the science of contact. In a 
 tight market, bank officers are every hour brought 
 into collision with the most imposing interests of com- 
 merce in the hands of .men unaccustomed to denial, 
 whom it is very desirable to conciliate, and very easy 
 at such times to offend. Instances are frequent in 
 which the applicant has a large stake in the negotia- 
 tion. His credit and continued solvency may be at
 
 84: THE CASHIER. 
 
 risk. It may readily be imagined what arts of per- 
 suasion and earnest entreaty are then employed. 
 
 Messrs. B. C. D. and others who have been waiting 
 impatiently for Mr. A. to finish his interview, succes- 
 sively present their claims. Each one withdraws the 
 Cashier into a corner, or to his private room, and in- 
 sists on the special character of his application. The 
 failure of all who have preceded him does not con- 
 vince the last one that his chance is hopeless. None 
 will believe that the available resources of a bank can 
 be so reduced as the Cashier represents, and the ma- 
 jority attribute his refusal to the timidity or the 
 caprice, if not to some less creditable motive, of the 
 officers and directors. 
 
 The Cashier is again seated at his table, preparing 
 to resume an unfinished letter; but before he can 
 concentrate his thoughts, the Specie Clerk comes in 
 from the Clearing House and announces the result of 
 the exchange : 
 
 " Debtor, sir, two hundred thousand dollars." 
 
 " What ! Debtor again ?" 
 
 Yes, sir." 
 
 " Is that possible ? Have you made no mistake, 
 Joseph ? I added more than that from the morning 
 letters 1" 
 
 " I am sorry to say it, sir, but it is certainly so, and 
 our neighbors across the street are worse off than we 
 are." 
 
 All other employment must give way before the 
 indispensable matter of providing for the payment of 
 the Clearing House debt. The President is Bur- 
 rounded by six or eight of his particular friends, who
 
 IN DEBT TO THE CLEARING HOUSE. 85 
 
 are endeavoring to find some cause for the sudden 
 stricture of the market. One ascribes it to the exces- 
 sive importation of dry-goods, consequent on a reduc- 
 tion of duties ; another declares it is the competition 
 of the railroad debt with commerce ; another, that it 
 is the natural consequence of extravagant living. The 
 discussion is rather disorderly, and well adapted to 
 spread excitement among the dealers who come in to 
 transact business. They see that "the great mer- 
 chants" are roused ; and thus, from many banks, 
 increased anxiety and agitation is propagated through 
 the community. 
 
 The Cashier can have no assistance from the Presi- 
 dent under these circumstances; but leaves him to 
 the brunt of importunity by the dealers while he goes 
 out to seek aid from another bank. He may be so 
 fortunate as to obtain it, and to be again at his desk 
 in half an hour. Borrowing, however, brings no per- 
 manent relief. He gives a check for the amount, 
 which will come in against the bank in the exchanges 
 ,of the next day, and the debt recurs. How to pro- 
 vide for this, is a mental burden scarcely less engross- 
 ing than that which he has just discharged. There 
 is but one source from which permanent improve- 
 ment in the funds can be derived, and that is the 
 deposits. If these should increase, the bank would 
 experience immediate relief, but if they continue to 
 fall, the debt of the bank increases from day to day, 
 in spite of all temporary expedients. The anxiety 
 that weighs on the mind of the bank officer in thia 
 extremity cannot be appreciated by the dealers. It 
 ought to be a sufficient excuse for any apparent
 
 86 THE CASHTEB. 
 
 want of consideration for their personal embarrass- 
 ment. 
 
 This state of affairs is in strong contrast with that 
 which existed but a few days before. It is not only 
 in the officers' department that a change has taken 
 place. The number of persons who come into the 
 bank, for one purpose or another, is quadrupled. They 
 crowd and run against each other. Patience, and 
 even civility, is overborne by the urgency of each 
 man's errand. The most trifling circumstances pro- 
 voke angry disputes between the dealers' clerks, and 
 the book-keepers or tellers. A general excitement of 
 manner is evident, and the shuffling of feet and the 
 confusion of voices do not cease for an instant. 
 
 At the moment when the Cashier is again ready to 
 resume his correspondence, a man enters the bank 
 with a hurried step, and manifestly in a violent pas- 
 sion: 
 
 " Mr. Cashier, what kind of Tellers do you keep in 
 your bank ?" 
 
 " "We mean that they shall be gentlemen, sir." 
 
 Mr. Kight finds it very difficult to control him- 
 self. He thrusts his bank-book before the Cashier, 
 and points with trembling hand to an entry which 
 shows that he had that morning made a deposit of 
 fifteen hundred dollars. 
 
 " Do you see that, sir?" 
 
 The Cashier sees it. 
 
 ""Well, sir your Teller has refused to pay my 
 check for that amount, notwithstanding the money 
 is to my credit! He has sent it back to another 
 bank, and my name is dishonored, sir! Isn't this
 
 Mr. Kight up. "Do you see that, sir?'
 
 KIGHT 4 WING. 87 
 
 a pretty tale, that a man's credit is to be ruined by 
 a miserable teller who doesn't knovT his duty !" 
 
 " I think he knows his duty, Mr. Kight. You have 
 probably made a mistake yourself." 
 
 The cool manner of the Cashier does not soothe his 
 excited customer. He denies angrily that he has 
 made any mistake, and attracts the notice of all the 
 clerks by the violence of his language and his defiant 
 air, as the two pass to the desk of the book-keeper to 
 examine his account. The ledger shows that his 
 balance was less than fifty dollars on the day before 
 when he drew his check for fifteen hundred, and it is 
 apparent that he had obtained the use of that much 
 money one day in advance of his deposit. The pro- 
 cess is well known to bank officers and clerks under 
 the name of " kiting." It is often resorted to as a 
 last expedient to raise funds, by parties who know 
 better. Two parties who keep accounts in different 
 banks may change checks, and each deposit that 
 of the other, if their certification is not required; 
 and then each may draw out the money. Mr. 
 Kight may have supposed that his deposit of the 
 following morning would be admitted to pay his 
 check; but the Cashier explains to him that the 
 exchange for the Clearing House is made up and 
 dispatched before ten o'clock, so that funds coming 
 in after that hour are necessarily unavailable until the 
 next day. He might even go so far as to show him 
 the very bills that he had deposited still unused in 
 the drawer of the Receiving Teller ; but Mr. Kight 
 understands it. He now expresses his opinion that 
 " it is rather small business for a bank with three
 
 88 THE CASHIER. 
 
 millions of capital to return a dealer's check for fifteen 
 hundred dollars when the money is actually in the 
 bank, even if it can't be used for a single day." 
 
 " There is but one way for us to transact business, 
 Mr. Kight, and that is, to pay checks when we have 
 the deposit to pay with, and to refuse them when we 
 have not." 
 
 He adds: "It is true, sir, that your check for 
 fifteen hundred dollars would make no sensible differ- 
 ence in our general balance, but every overdraft goes 
 into one sum in the Clearing House exchange, and 
 the aggregate of overdrafts in this way has sometimes 
 reached forty or fifty thousand dollars." 
 
 Mr. Right's deposit is now available to him, since 
 the Teller has received payment for the dishonored 
 check from the bank to which he returned it. He 
 requests that it may be certified, with the intent to 
 redeposit it in the same channel as before, and so rub 
 out the discredit which his good name has suffered in 
 that quarter. 
 
 But at this moment a messenger from another bank 
 presents a check drawn by Mr. Wing which Mr. Kight 
 had deposited the day before. It is returned " not 
 good," and Mr. Kight must pay it. This absorbs 
 his deposit and leaves him with his own dishonored 
 check in hand. The whole transaction is now fully 
 exposed. Mr. Kight and Mr. "Wing had exchanged 
 checks, each trusting to make his account good by an 
 early deposit on the following morning ; but their 
 plan was thwarted in both banks by the vigilance of 
 the Paying Teller. 
 
 If the Teller, instead of returning Mr. Kight's
 
 Mr. Right Down.
 
 KITING. 
 
 89 
 
 check had charged it against the morning deposit, he 
 would now have Mr. Wing's dishonored check on his 
 hands without any means of securing its payment ; 
 and it might be a total loss to the bank. 
 
 The quarter of an hour given to this tedious expla- 
 nation is not entirely thrown away, since it affords 
 the Cashier a reason for closing Mr. Kight's account, 
 and thus getting rid of a dangerous customer. 
 
 Intelligent dealers have occasionally contended 
 that the true presentation of a check through the 
 deposit channel, is at the moment when the exchanges 
 are brought to the bank counter from the Clearing 
 House ; and that if the deposit is there by that time, 
 it is all that could strictly be asked of them. But 
 if required, would the check be certified by the bank 
 on which it is drawn, at or before three o'clock of the 
 same day f That is the test of right in the case. In 
 fact, a check is paid to the holder at the moment that 
 it is allowed in his account so that he can draw the 
 money for it, no matter by what bank allowed. On 
 Mr. Kight's process overdrafts might be propagated 
 from day to day for any time or any amount, by 
 persons without a dollar of capital. 
 
 Once more the Cashier returns to his desk. A 
 new throng of disappointed dealers presses upon him. 
 Mr. Tarbox is whispering confidentially in one ear, 
 and Mr. Jones in the other. The Corresponding Clerk 
 thrusts a score of drafts under his pen for indorsement. 
 Dealers in manifest trepidation come in hastily, and 
 finding him pre-occupied, go out again. A dozen or 
 twenty wait in the lobby for a more favorable oppor- 
 tunity. One cries out from the doorway :
 
 90 THE CASHIEE. 
 
 " Mr. Cashier, can you draw on Boston ?" 
 
 " I'll ascertain sir. Mr. Jones I will listen to you 
 in a minute. Mr. Tarbox, I must refer you to the 
 President. Mr. Crook, see if we can draw on Bos- 
 ton." 
 
 In answer to as many different questions which are 
 spoken in a confidential tone, the Cashier answers 
 aloud. " Yes, sir. No, sir. Out of the question. 
 By no means. It must be paid, I can't help you" 
 and so forth. 
 
 Mr. Crook reports that the bank can draw on Bos- 
 ton for twenty-five thousand dollars. 
 
 " How much do you want, Mr. Bell ? Did you say 
 twenty thousand? Send us a certified check." 
 
 " Won't you take A 1 paper at ninety days ?" 
 
 " No, sir." 
 
 A very confident-looking personage, who evidently 
 thinks his claims are of superior consequence, walks 
 directly to the Cashier, and lays down a bundle of 
 stock securities. He communicates his business in a 
 whisper, meets with a flat denial, and retires in a 
 flush of anger. 
 
 Mr. Sweatem, of the long-established firm of 
 Sweatem, Sore & Co., seizes the opportunity for 
 which he has been watching an hour or more, to urge 
 his particular necessities. Single words and parts of 
 sentences only are heard, which indicate a decided 
 difference of opinion between him and the Cashier. 
 His expostulations might be rendered in a connected 
 form, as follows : 
 
 " It will not do, Mr. Cashier, to cut down our line 
 at present. We are all right, and doing a profitable
 
 Mr. Sweatem convincing the Cashier that his affairs are in a very prosperous 
 condition.
 
 PUTTING OFF CUSTOMERS. 91 
 
 business. I come to you as our last resource. "We 
 have tried other banks, and tried our friends all round, 
 but everybody is hard up. "We are nearly through 
 our heavy payments. A few days more, and we shall 
 be in smooth water. To be cut down now I tell you 
 it won't answer ! We have offered at the Board four 
 times in succession, and you have not given us a cent. 
 Now, Mr. Cashier, there's reason in all things, you 
 must give us this accommodation. "We are entitled 
 to it on every principle of right and justice." 
 
 To all this the Cashier answers : " I cannot, my dear 
 sir, act in opposition to the Board of Directors ;" and 
 Mr. Sweatem retires discomfited. 
 
 It is now what may be called " high 'change " in 
 the rooms of the President and Cashier. Both officers 
 are beset with remonstrance and importunity. The 
 attacking column lengthens and shortens, and disap- 
 pears and comes again ; and the tail lashes itself into 
 an angry growl at the tardiness of the head. A 
 stranger would suppose the bank to be in a state of 
 general disorder, from the multitude of dealers at 
 the different desks, and the incessant murmur of 
 conversation. 
 
 Some of the applications for money must be granted 
 notwithstanding the condition of the bank funds. 
 There are dealers who have kept large balances, and 
 ask loans for the first time. There are also current 
 loans in a critical state which must be indulged to 
 save the bank from loss. Seeing that some are suc- 
 cessful in their applications, dealers take offence, and 
 charge the officers with partiality. 
 
 " It is not true, sir, that your means are exhausted!
 
 THE CASHIER. 
 
 I have seen you discount paper for several of your 
 favorites since I have been waiting. 
 
 " Those are special cases which we cannot refuse. 
 If your account were as good as theirs without a cent 
 of loan, we would discount for you too." 
 
 Greater freedom of expression is commonly indulged 
 in by dealers in conversing with the Cashier than 
 with the President, whose official dignity imposes 
 more respect in tone and manner. The former 
 therefore, is more likely to get the brunt of an out- 
 burst of personal irritation. He receives it however 
 in an official capacity, and does not allow it to inter- 
 rupt the general suavity of his intercourse. Mr. 
 Boyle has tried persuasion in vain, and finally broken 
 out into violent abuse of the bank. 
 
 " Damn your institution, sir ! The only thing you 
 do is to supply your directors and a few favorites 
 with all the money they want! Public good indeed! 
 Public good ! ! It's all damned nonsense !" 
 
 " Mr. Boyle, if you are not satisfied with what I 
 have told you, go to the President. He is in his 
 room, and happens just now to be alone." 
 
 Mr. Boyle takes off his hat, which he had not 
 thought of before, and although his manner is not free 
 from excitement, it is reduced by many degrees, so 
 that he would hardly be identified as the same person. 
 
 " Mr. President, I have some most unquestionable 
 securities here, amounting to twenty thousand dollars, 
 on which I want a loan tff twelve or fifteen for thirty 
 days." 
 
 " My dear sir, you have come to the wrong shop. 
 I'm very sorry !"
 
 A bad Bank Statement. The Board adjourns " without discounting a dollar
 
 DESPERATION. 93 
 
 "Mr. President, can't you squeeze out that much?" 
 
 " It would be a greater gratification to me than to 
 you Mr. Boyle, if I could. You can hardly imagine 
 the pressure that is on us now." 
 
 " But consider Mr. President, what a humiliating 
 extremity this is! ; Here are securities just as good 
 as United States stock ! I could have sold them at a 
 hundred and twenty only thirty days ago and now 
 they would hardly bring par ! I want an advance 
 of but little more than fifty per cent on them the 
 paltry sum of twelve thousand dollars ; and I am told 
 by my bank that it can give me no help with its 
 capital of five millions ! "What am I to do, sir ?" 
 
 " My friend, with all my heart I wish I could 
 assist you. It gives me pain when merchants of your 
 high standing in the community appeal to me in this 
 manner, and the more because I am helpless. Surely 
 you can borrow from some source on that class of 
 securities !" 
 
 " No, sir. I believe there is not a bank in the city 
 that is not very much in the same condition as you 
 are. I must" says Mr. Boyle with great emphasis, 
 throwing his securities upon the table, " Mr. Presi- 
 dent, I MUST have five thousand dollars this day if it 
 is only till to-morrow." 
 
 " Wait a moment, sir. I'll consult the Cashier." 
 
 The consultation may result in giving Mr. Boyle 
 the privilege of drawing for five thousand dollars as 
 a loan payable on demand, or at one day's notice. 
 He gladly accepts it, though it leaves him at best in 
 the uncertainty that a condemned man feels when his 
 hanging is put off for a few days. His other obliga-
 
 94: THE CASHIER. 
 
 tions continue to mature, and the notice may come 
 on the top of them when they are of themselves as 
 much as he can bear. This kind of "relief" is very 
 deceptive. It is bad policy both for the bank and 
 the merchant. The former may be forced to sell the 
 securities in a depreciated market^ and the loss sus- 
 tained by the latter is so much out of his capital at 
 the moment when he most needs it- 
 Bank officers are not always insensible to alarm 
 when respectable merchants, failing in their best 
 endeavors, are driven into a corner and assume an air 
 of desperation. They know all the danger that hangs 
 over the market. Credit is prodigiously expanded ; 
 everything in a state of extreme tension ; the public 
 excitement is wrought up to a high pitch of appre- 
 hension, and there needs but a single failure of a 
 " great house " to explode the " mighty bubble !" 
 Who knows that it is a bubble ? "Who knows that 
 the highest point of the pressure is not reached to-day, 
 and that to-morrow the waters will not begin to sub- 
 side ? And then, gradually, things fall into their old 
 channels, confidence revives, and it is proved that 
 there was no bubble to burst after all ! Now if the 
 leading and rich commission or importing house of 
 Cottonade, Fabrique & Co., can only get through this 
 last day of the pressure, the credit of the forty job- 
 bing merchants whom they have been compelled to 
 assist will remain untarnished, and payments will go 
 on as usual ; but if they fail, the forty will fail, and 
 the forty have each on an average not less than two 
 hundred thousand dollars of bills payable out, mak-
 
 A GREAT HOUSE SAVED. VO 
 
 ing eignt millions scattered through the various banks, 
 which instead of being paid, will go to protest and 
 drag on for many months in a course of troublesome 
 liquidation. If the whole picture were painted on 
 canvas, it could not be plainer than it is to the 
 President and Cashier as they confer together on 
 the propriety of lending twenty thousand dollars to 
 Mr. Fabriqud, who sits in an inner room waiting for 
 their decision. 
 
 " I don't see how we can safely do it ?" says the 
 President, shaking his head, " and yet it will have a 
 terrible effect on the market I" 
 
 " And his securities are of the highest class too !" 
 
 " Yes, yes the very best. If these are not safe 
 there is nothing safe in the market." 
 
 " Mr. Fabrique is well nigh desperate. I wish we 
 could devise some way to help him 1" 
 
 " So do I, with all my heart. But we have run 
 behind at the Clearing House for several days in 
 succession, and we have every prospect of doing so 
 again !" 
 
 The Cashier being the younger man, has naturally 
 more energy of feeling than the President. He trusts 
 that they " may not be so unfortunate." Less gloomy 
 thoughts float in his irind. He catches at contingen- 
 cies which are too remote for the President to appre- 
 ciate. " Let us risk it !" he proposes with a suddeji 
 renewal of hope and courage, " This is too important 
 a house to be allowed to go down in an hour. We 
 have a large amount of bills depending on their cus- 
 tomers being kept up, and if they lose their main 
 prop "
 
 96 THE CASHIEB. 
 
 " True, true ! But it will be the same to-morrow. 
 We would only be getting deeper and not save them 
 at last !" 
 
 " Mr. Fabrique assures me that this loan will put 
 them through ; and to tell you the truth, Mr. Presi- 
 dent, I fear the consequences of denial more than I 
 do the Clearing house. He will make no other effort 
 to-day!" 
 
 " Well, Mr. Cashier, if you think you can manage 
 the Clearing House debt to-morrow, I will consent." 
 
 The house of Cottonade, Fabrique & Co. may, in 
 such a case, be the key-stone of the arch by which 
 the whole market is sustained. And after the danger 
 has passed away, no one is conscious that it was kept 
 in its place by a single bank cashier who had over- 
 come the " conservative " counsels of his president. 
 
 An act of courage begun, inspires the mind with 
 more courage, even if the consequences of it are yet 
 in the future and very doubtful, especially when a 
 sense of justice is at the bottom of it. Both President 
 and Cashier now agree that it would have been a 
 great commercial fault to let the house go down, and 
 their fears of to-morrow are measurably lightened. 
 
 The Cashier is frequently applied to by the clerks 
 for instruction in disputed matters, and by dealers 
 who have real or imaginary causes of complaint. 
 The general book-keeper reports several country 
 banks overdrawn perhaps a hundred thousand dollars ; 
 whence he concludes there must be a failure of remit- 
 tances or miscarriage of letters, or special understand- 
 ing with the officers. The Cashier has given no 
 authority to overdraw, and the telegraph is employed
 
 DOMESTIC TROUBLES. 97 
 
 to have the matter explained. It is found that letters 
 are missing; and the Porter is dispatched to the 
 Post Office, where he finds them just returned from 
 another bank to which they had been inadvertently 
 delivered. 
 
 " Mr. Cashier, why can't I have my collection 
 paper credited when it is past due 2" says a petulant 
 dealer, exhibiting his note-book. 
 
 " You can, sir." 
 
 " "Well, I don't get it ! Here's a note of twelve 
 hundred dollars due at Mobile a week ago, and 
 another of sixteen hundred at Baltimore which was 
 paid the day before yesterday ; and all the satisfaction 
 I can get out of your book-keeper is that he supposes 
 they are not heard from. I wish I could be saved 
 this annoyance of having to run to the bank every 
 day to keep your books straight 1" 
 
 " The clerk is right, Mr. Krabb. We have no ad- 
 vice of the notes, but I think we should get it by 
 to-day's Southern mail. Walk in, sir. Here is the 
 Porter with the letters now." 
 
 The Cashier finds a notice of protest in both cases, 
 which he hands over to Mr. Krabb, who vents some 
 additional bitterness on banks generally, as if they 
 were responsible for his misfortunes. It is often ludi- 
 crous to witness the manner in which people of a 
 certain temper seem to derive the greatest comfort, 
 when their affairs go wrong, in " blowing up the 
 bank." 
 
 Mr. Krabb gives place to a complainant whose 
 country checks have been refused on deposit by the 
 Receiving Teller, for which on inquiry the Cashier 
 
 5
 
 98 THE CASHIER. 
 
 finds there was ample ground. Then follows, from a 
 profitable dealer who cannot be turned aside, an 
 application for a clerkship on behalf of a young rela- 
 tive whose qualifications and even genealogy must be 
 stated at length, notwithstanding the assurance that 
 there is no vacancy, and none in prospect. An ofllcer 
 of a distant corresponding bank consumes an hour in 
 talking about the details of his account. A country 
 stockholder is disturbed about the misfortunes of trade, 
 and " drops in " to have his fears quieted ; another to 
 ask advice whether it is not a good time to" sell or 
 to purchase stock. The interruptions are endless, 
 often for trifling cause, and often vexatious. This is 
 the common experience of the Cashier of an active 
 city bank. 
 
 Whilst the Cashier has been thus occupied, his 
 assistant or corresponding clerk has prepared most 
 of the outgoing correspondence for the day, consisting 
 of acknowledgments, checks and notes to be forwarded 
 to other banks for collection, the return of protested 
 paper, and other formal matters. 
 
 The Southern mail brings a new batch of letters 
 from Philadelphia, Baltimore, Charleston, Mobile, 
 New Orleans, and elsewhere. Those which require 
 his particular attention are separated from the rest, 
 and he disposes of them as he finds opportunity. 
 During the last hour before three o'clock he is liable 
 to increased pressure and annoyance from dealers, 
 according to the" condition of the market. 
 
 The banking business of New York is generally 
 active throughout the year. A short term of relaxa-
 
 SPECULATIONS. 99 
 
 tion occurs in midsummer, but it bears no proportion 
 to the relaxation in trade. The period immediately 
 following the panic of 1857 was one of unprecedented 
 prostration, and wholly exceptional. For the pre- 
 vious ten or fifteen years, there was probably not more 
 than an average of a single month in the year when the 
 absence of either the President or Cashier would* not 
 have devolved an inconvenient burden on the other. 
 
 What has been said of the personal character and 
 influence of the President is in every way equally 
 applicable to the Cashier. There is perhaps more 
 necessity on his part for the exercise of patience and 
 forbearance, for the reason that the dignity and public 
 estimation of the higher office secures it against 
 many annoyances of the smaller accounts. 
 
 To gain confidence, the bank officer must deserve 
 confidence. He must possess the real qualities of 
 character that call it forth. Many of the circum- 
 stances of trade are of a kind that tend to weaken and 
 corrupt the moral sense. "When men are sorely 
 pressed for the want of money, they find some person 
 with whom to exchange notes commonly one in like 
 condition ; and thus a fictitious obligation is created. 
 The ebb tides of commerce are always floating down- 
 wards men who, yesterday, were floating up. There 
 are solvent merchants always drifting towards insol- 
 vency. In their efforts to stem the current, they 
 resort to every possible expedient to speculation in 
 land, or in guano companies to gambling at the 
 Stock Board, or at the faro table. The bank record*
 
 100 THE CASHIER. 
 
 contain many instances of men suddenly breaking 
 down after a long and successful career, with scarcely 
 a vestige of property left unmortgaged. These histo- 
 ries are all freshened up in the memory of the bank 
 officer, when the money-market becomes tight and 
 dangerous. They exoite his distrust, and he scru- 
 tinizes notes and securities, perhaps with undue 
 sever ty, while the needy applicant for money over- 
 rates their value, and strives to conceal the weak 
 points of his business. 
 
 "Why treat with such cases on any terms ? "Why 
 not discard them at once ? Because the parties are 
 already indebted to the bank, and it is the duty of 
 the officer to extend indulgence where the debt may 
 be saved. 
 
 The Cashier is necessarily in frequent contact with 
 the different clerks in the bank, and a description of 
 many current incidents of his office will be embraced 
 in an account of their duties. 
 
 Although it is not possible for him to maintain a 
 personal supervision of all the books of a bank in 
 detail, it is his duty to keep them in constant general 
 review. In the first place, it is indispensable that he 
 should have a perfect acquaintance with the theory 
 of the accounts, so that when his eye falls on any 
 page he shall comprehend it immediately, whether it 
 consists of a mere record of the notes lodged for col- 
 lection, the postings of an individual account in the 
 Ledger, the entries on the Paying Teller's Cash-book, 
 or anything else. One of the principal peculiarities 
 of bank accounts is the daily transfer of original
 
 HIS KNOWLEDGE OF ACCOUNTS. 101 
 
 records by many different persons to different books, 
 and their final concentration in one book which fur- 
 nishes the proof of the whole. This includes many 
 long and laborious additions which grow so rapidly 
 into vast accumulations and various dependence, as to 
 defy the vigilance of any one person. The Cashier 
 cannot make the additions, but he can in a few 
 minutes satisfy himself of the accuracy of transfers to 
 the general proof. He is not expected to examine the 
 separate accounts of a ledger of fifteen hundred pages, 
 but he can in an instant compare the footing of its 
 proof-sheet with the general ledger. If he wants to 
 test a particular point in any part of the system, he 
 knows what books and accounts to refer to without 
 the aid of the clerks tnemselves, and how to ask them 
 for explanation if he sees cause for it. To his prac- 
 ticed eye, a single glance is enough to inform him 
 whether a ledger is properly kept or neglected. He 
 can examine it as rapidly as he can turn over its 
 leaves. The observation for five minutes, of the man- 
 ner in which a clerk transacts his duties, is enough to 
 satisfy him of his competency. It may readily be 
 conceived that a Cashier so skilled shall exert a very 
 effectual supervision over a company of clerks by his 
 mere presence ; and on the other hand, it is apparent 
 that one who is deficient in such knowledge of 
 accounts may be blinded to any extent of error and 
 imposition. 
 
 The Cashier has it in his power to commit fraud 
 without limit, and to conceal it for a time, in spite of 
 all the vigilance of the President, clerks, and direc-
 
 102 THE CASHIER. 
 
 tore. By collusion with others, and especially with 
 the Paying Teller, it is difficult to say what he might 
 not do. A case like the following occurred within a 
 few years in the State of New York. 
 
 The Cashier of a bank with a capital of four 
 hundred thousand dollars became interested in a rail- 
 road, and was appointed its treasurer. In the course 
 of the negotiations and disbursements which he car- 
 ried on, the road became indebted to the bank by 
 overdraft. To conceal this from the President, who 
 was a stern disciplinarian and a near connection of 
 the Cashier, the latter obtained credit from a corre- 
 sponding bank by the re-discount of bills receivable 
 which had been forwarded to it for collection. This 
 involved the necessity of falsifying the accounts, so 
 that the collection paper should appear as part of the 
 assets of the bank, after it had been virtually sold to 
 another institution. Thus was established a three- 
 fold fraud first, by the overdraft, second by forgery 
 of records, third, by breach of confidence with his 
 superior officer. The Cashier had been associated 
 with the President for twenty years, and during that 
 time was faithful and efficient. The family connec- 
 tion existing between them served most effectually 
 to aid him in a system of concealment, which resulted 
 before discovery in the embezzlement of two hundred 
 and fifty thousand dollars. 
 
 As the embezzlement grew, it caused a correspond- 
 ing depression of the discount line of the bank, which 
 constantly passed under the eye of the President. 
 He was deceived by a fictitious statement of bills dis- 
 counted, which was kept up continuously as the case
 
 A FRAUDULENT OFFICES. 103 
 
 required. The accounts of the bank with its corre- 
 sponding banks in other cities were overdrawn ; post- 
 dated certificates of deposit were issued, and being 
 illegal, they were kept in negotiation by outside con- 
 federates, and in surreptitious channels ; the unem- 
 ployed circulating notes of the bank were secretly 
 hypothecated for loans ; the absorption of its resources 
 in one direction necessarily withdrew accommodations 
 from the regular dealers, and the consequent decline 
 of deposits was concealed by the withholding of indi- 
 vidual checks and by false ledger entries ; drafts on 
 other cities of which no entries were made were sold, 
 and the proceeds abstracted ; to provide against the 
 discovery of false additions where a page was likely 
 to be examined, the component entries were falsified, 
 and after the examination was made, the falsifications 
 were erased ; these, with many other processes, were 
 kept up for a year and a half without exciting the 
 suspicion of the President. Five successive quarterly 
 statements were sworn to, and forwarded to the Bank 
 Superintendent at Albany, in which the overdrafts 
 were stated, in four of them at less than two thousand 
 dollars, when they were in fact from one hundred to 
 one hundred and seventy thousand dollars, and in the 
 fifth at ten thousand, when they exceeded two hundred 
 thousand dollars. The amount of illegal certificates 
 and post-dated checks negotiated within the time 
 named, was more than a million of dollars. 
 
 During the entire period of this systematic embez- 
 zlement, the President of the bank assisted in the daily 
 management of its affairs, and was almost hourly in 
 contact with the Cashier and the clerks. He was an
 
 104: THE CA8HIEE. 
 
 experienced banker, both in theory and practice, and 
 gave perhaps more attention to the details of the 
 business than is usual for bank presidents who are 
 associated with active and skillful cashiers. It seems 
 hardly credible that such various and extensive frauds 
 could be carried on so long, without the exposure of 
 some weak point. But it is explained by the collusion 
 of clerks, and by the completeness of the watch that 
 was secretly kept upon all his movements. His daily 
 calls at the Post Office were anticipated by the Cashier, 
 who intercepted all letters which would excite sus- 
 picion, and there were many written to him for this 
 express purpose. The Post Office clerk was bribed 
 to withhold any that might come at an unusual time. 
 In fact, the President was dogged and blinded at 
 every step and hour of his existence, as any other 
 man would have been in the same position. Any 
 ordinary fraud would have transpired through an 
 honest clerk, but the clerk was not honest. No ave- 
 nue was left open by which suspicion could enter. 
 
 Such an extraordinary case as this is not accessary 
 to prove to an experienced banker, the utter impos- 
 sibility of preventing fraud by any combination of 
 sagacity, watchfulness, and supervision. There is 
 perhaps no record of a bank fraud extant of which 
 the perpetrator was not honest yesterday. The man 
 who has been faithful for twenty yeaie is faithless on 
 the next day. "What is to prevent it ?
 
 THE PAYING TELLER. 105 
 
 CHAPTER IY. 
 
 THE PAYING TELLEB. 
 
 THE Paying Teller of a bank stands at the head 
 of the clerks' department, and next in the usual order 
 of promotion to the Cashier. He is frequently called 
 also, the First Teller. 
 
 His duty, as signified by his title, is to pay out 
 money. No other clerk not even the President or 
 Cashier interferes with this function. 
 
 The nature of the banking business calls for direct 
 individual responsibility in the clerk. Money occu- 
 pies but little space and is easily abstracted. The 
 opportunities of fraud are frequent and beyond the 
 reach of vigilance. Each clerk is therefore required 
 to give bonds for his integrity ; and it is necessary in 
 the division of labor to assign specific duties, that one 
 may not be liable to suffer for the default of another. 
 
 The Paying Teller gives bonds, according to the 
 magnitude of the trust confided to him, to the extent 
 of ten or twenty thousand dollars. The latter sum is the 
 highest required by any of our city banks. It is usual 
 to divide this between several persons, the guarantee 
 being considered stronger in a moral point of view ; 
 and in case of default by the Teller it is redeemable 
 with less hardship than it would be if the entire 
 obligation rested on one. The bondsmen must be 
 
 5*
 
 106 THE PAYING TELLER. 
 
 men of established character and pecuniary ability. 
 Their names are submitted to the Board of Directors, 
 or to a committee of which the President is mostly 
 chairman. If they are not satisfactory, the Teller 
 must procure others. 
 
 A Director is not allowed to be bondsman for a 
 clerk in the same bank, nor one officer for another, as 
 such an obligation might be used to obtain an undue 
 influence over the favored person. A book-keeper 
 might hesitate to expose irregularities in the account 
 of a director to whom he was partially indebted for 
 his salary. 
 
 The use of bonds as a guarantee of integrity has 
 been questioned, because they will not be violated by 
 honest, nor respected by dishonest men ; and they 
 are apt to be regarded as formal instruments, merely 
 to answer a by-law or to maintain an old custom. 
 There are, however, indications in their requirement 
 which could not safely be dispensed with. The 
 ability of a person to find security for so large a sum 
 as twenty thousand dollars, is a strong proof of his 
 good repute, which is further attested by the charac- 
 ter of the guarantors. They are his commercial god- 
 fathers. They cannot be banished from his memory 
 when temptation knocks at the elbow. They must 
 frequently cross his footsteps on his first wanderings 
 from the path of rectitude. 
 
 The most responsible and critical service in the 
 bank is that which embraces the custody and dis- 
 bursement of its funds. This is assigned to the Pay- 
 ing Teller. There is some incidental exception in the 
 custody, to be hereafter noticed.
 
 CONTROL OF THE VAULT KEY. 107 
 
 The amount of money in his keeping may be sev- 
 eral millions of dollars, consisting of coin, bullion, 
 bank bills, stocks, bonds, and other documents. There 
 are generally three or four apartments in the vault, of 
 which one is appropriated to his exclusive use. He 
 holds the key, locks and unlocks it in person, goes to 
 it during business hours at discretion, unattended, 
 and is the sole trustee of its contents. He is jealous 
 of the charge, and shares it with nobody. He is sen- 
 sible that the key of his vault is also the key of his 
 character, and he will not give it to the keeping of 
 another for an instant not even to the President or 
 Cashier, without satisfactory explanation. If they 
 should officially require him to surrender it, distrust 
 would be implied, or perhaps dismissal from office. 
 
 On the other hand, there are possible circumstances 
 under which a Teller, conscious of his own rectitude, 
 would refuse to deliver his key even to his superior 
 officers. The terms of his bond make him contin- 
 gently independent of them. A suspicion that they 
 were in collusion for dishonest purposes would not only 
 justify such refusal, but make it an imperative duty. 
 Besides, his bondsmen have legal rights in the pre- 
 mises which might be compromised by allowing the 
 custody of his vault to pass into other hands. His 
 own rights also, and his character, might be involved 
 by the unconditional surrender of his key on any 
 demand. 
 
 Again, if the Paying Teller, without obvious cause, 
 such as sickness or necessary absence, should tender 
 the custody of his key for a single night to the Presi- 
 dent or Cashier, or to another clerk, it would be
 
 108 THE PAYING TELLER. 
 
 declined. The tender might be made for the express 
 purpose of creating a divided or doubtful responsi- 
 bility for a default. 
 
 The statement of these details is necessary to 
 show the exact relation of the Paying Teller to his 
 trust. There is no apparent obstacle to his abuse of 
 it, nor are the means of detection so immediate as to 
 prevent escape. Neither would his arrest necessarily 
 insure the recovery of money abstracted, which 
 might greatly exceed the amount of his bonds. His 
 position is more vulnerable than any other in the 
 bank. It is the only one that is out of the reach of 
 daily observation by other clerks, and in which fraud 
 may be practiced without collusion or risk of imme- 
 diate discovery. Nor does it seem possible to devise 
 any method of supervision to prevent abuse, or ade- 
 quate indemnity to cover it. 
 
 This close custody of the vault does not, however, 
 limit the right of the officers to enforce the most rigid 
 examination of its contents. They may require him, 
 in their presence, to weigh every bag of gold, count 
 the silver and bank bills, and test the accuracy 
 thereof by his books, , to their full satisfaction. Or 
 they may call in the aid of other clerks to perform 
 this service. It is impossible that he should know at 
 what time the officers, or a committee of the direc- 
 tors, may wait on him to make the examination. His 
 accounts must therefore be kept in such order as to 
 stand the test. 
 
 The necessary qualifications of a clerk in this post 
 can be better understood by following him through 
 his daily routine, than by any other mode of descrip- 
 tion.
 
 ROUTINE. 
 
 The plan of his accounts is entirely simple. He 
 has a certain amount of cash on hand from which to 
 pay checks. The amount of the latter subtracted 
 from the former must agree with the remaining 
 balance. The only modification of this process is the 
 debit and credit of the exchanges through the Clear- 
 ing House. 
 
 The Paying Teller reaches the bank about nine 
 o'clock in the morning. He unlocks his vault in per- 
 son, and the Porter assists in carrying to his desk the 
 trunks and trays containing as much money in bank 
 bills and coin as he will be likely to want during the 
 day. He locks the vault, and retains the key in his 
 personal care. 
 
 The bills of the issuing banks are technically dis- 
 tinguished from those of other banks by the name of 
 " Office Notes." The money-drawer is divided into 
 boxes, in which the different denominations are dis- 
 tributed. To facilitate payments, the smaller denom- 
 inations are usually kept counted in packets of fifty 
 bills each. A packet of fives contains two hundred and 
 fifty dollars ; a packet of tens, five hundred dollars, 
 and a packet of twenties, one thousand dollars. The 
 bills below five (consisting of threes, twos, and ones) 
 are generally kept in packets of fifty dollars gross, 
 and mixed together for the convenience of dealers. 
 A check for the precise amount of any of these 
 packets, is paid in an instant without recounting the 
 bills. For intermediate amounts the packets are 
 opened, and they must of course be recounted. 
 
 The theory of the bank accounts requires that all
 
 110 THE PAYING TELLEK. 
 
 payments of money must be made by one Teller. The 
 result is, that all money received must appear on his 
 books.* The Exchange sent to the Clearing House 
 is money paid out, and it must therefore pass through 
 the accounts of the Paying Teller. The particular 
 description of this exchange comes appropriately 
 under the head of the receiving department of the 
 bank, where it originates. It is sufficient here to state, 
 that it is composed of the checks and bills on other 
 banks taken in deposit, and each day sent in for 
 redemption at the Clearing House counter. It is 
 officially delivered in a prepared state to the Paying 
 Teller by the Receiving Tellers, on each morning fol- 
 lowing its receipt. The former takes cognizance of 
 it only in the aggregate, responsibility for its accu- 
 racy in detail resting on those by whom it is pre- 
 pared. 
 
 To dispatch this Exchange to the Clearing House 
 is the first duty of the Paying Teller every morning. 
 This is generally done by half past nine o'clock ; and 
 at ten precisely, the Teller opens his little gate in the 
 counter railing, and is ready for the current business 
 of the day. 
 
 The payment of checks begins immediately. A 
 stranger presents one for five hundred dollars, with a 
 request for certain denominations of bills. He wants 
 " two hundred dollars in twenties, one hundred and 
 fifty in fives, and the balance in ones, twos, and 
 threes." 
 
 There Is an accidental modification of this role, widen will be found explained 
 Blsewhere.
 
 ROUTINE. Ill 
 
 Here is a requirement for rapidity and accuracy 
 quite above mediocrity. The Teller must pass 
 through his hands forty single bank bills and three 
 packets. 
 
 Another applicant wants " five hundred dollars in 
 twenties, two hundred in tens, one hundred and fifty 
 in fives, and forty in smaller bills." This will require 
 the counting of more than one hundred bank notes. 
 
 These are the simplest transactions of the desk ; yet, 
 following rapidly in succession, they call for presence 
 of mind, precise tact, and no common skill in mental 
 arithmetic. 
 
 The debit Exchange from the Clearing House is 
 brought in by the Porter about half past ten o'clock ; 
 and although the chief labor of its examination 
 devolves on an assistant, the Paying Teller will not 
 pass it into his accounts until satisfied by personal 
 revision that it is correct. It amounts frequently to 
 a million of dollars or more,* consisting mostly of the 
 checks of dealers. The signature, indorsement, and 
 other peculiarities of each, must be scrutinized before 
 it is charged to the drawer. This examination is pro- 
 tracted from one to two hours, subject to the current 
 accidents of the business. It is dropped on the in- 
 stant, remitted for two or five minutes, resumed, im- 
 mediately dropped again, and again resumed, with 
 constant interruptions. 
 
 Some of the large banks have made the receipt and 
 examination of the Clearing House Exchange the 
 
 * In some of the larger banks, more than two millions.
 
 112 THE PAYING TELLER. 
 
 work of a separate department, as a better guarantee 
 against mistakes. 
 
 ""Will you certify that, sir?" It is a check for 
 thirty thousand dollars, drawn by Slater & Co. They 
 have not half that sum on deposit in the bank, but 
 usage justifies the certification on certain terms, of 
 which the Teller takes instant cognizance from mem- 
 ory. These relate to the capital, manner of business, 
 character of the men, and other circumstances which 
 may make it safe for the bank to pay checks in ad- 
 vance of the deposit. 
 
 "Are Slater and Co. sufficiently reliable to justify 
 my loaning them thirty thousand dollars without 
 special security? May I trust their ability and honor 
 to restore their account before three o'clock ?" 
 
 This is one of the most interesting and critical 
 emergencies of the Paying Teller's desk. If he should 
 refuse the certification, the credit of Slater & Co. 
 would be shocked as with an electric discharge. Even 
 if he holds it in suspense an instant, as though a doubt 
 troubled his mind, the doubt is communicated to the 
 owner of the check and is reflected against the draw- 
 ers. He certifies it without hesitation. This is the 
 best possible proof of the high standing of a dealer 
 with his bank. 
 
 The discretion of the Teller in certifying checks is 
 for the most part independent of the superior officers, 
 and they are averse to interfering with it. In doubt- 
 ful cases, he refers to them for special instruction. 
 Dealers apply to them also to reverse his judgment, 
 though not often with success. Either of them would 
 oe likely to answer " the Teller understands his busi-
 
 KOUTINE. 113 
 
 ness better than I do." Such is the influence ac- 
 quired by a competent and judicious clerk in this 
 post, that he obtains a degree of respect from the 
 customers of the bank little less than is accorded to 
 the President or Cashier. 
 
 The Paying Teller alone is authorized to certify 
 checks. His name written across them, ordinarily on 
 the face, pledges the bank to pay them when subse- 
 quently returned through the exchanges or otherwise, 
 if the indorsements are correct. Any city bank will 
 receive on deposit certified checks on other banks in 
 good standing, without reference to the drawers, and 
 pay out its own bills, or gold, for drafts against such 
 deposits. 
 
 Under the old special charters, our banks were 
 allowed to issue currency to twice the amount of 
 their capital stock, and bills of the higher denomina- 
 tions of one, five, and ten thousand dollars were in 
 common use. Checks were then mostly paid in bank 
 bills, and certification was rather exceptional. But 
 since the enactment of the General Banking Law in 
 1838, the old charters have gradually expired, and 
 their circulation has been withdrawn. There is no 
 fact that better indicates the improved character of 
 our banking system, than its diminished paper issues. 
 The old laws would give to our present city capital 
 an issue of more than one hundred and twenty millions 
 of dollars, whereas we have now (in 1858) less than 
 the one-tenth part of this sum registered, and less 
 than the one-fifteenth part in actual circulation. The 
 result of this decrease of bank currency is that busi-
 
 THE PAYING TELLER. 
 
 ness is transacted mostly by checks. In an average 
 market the daily exchanges of the Clearing House 
 alone are near twenty-five millions of dollars, and our 
 entire city circulation is but seven millions, which is 
 principally absorbed in the retail trade. The amount 
 of bank bills redeemed daily through the exchanges 
 does not average over two or three hundred thousand 
 dollars ; the balance consists of the checks of indi- 
 viduals, and of bank checks on each other. 
 
 Certified checks are mostly returned in the debit 
 exchange of the following day, through the Clearing 
 House. They are used either for deposit, or to pay 
 notes in other banks than that on which they are 
 drawn. Being of nearly equal credibility with bank 
 drafts, they are used also in remittance to distant 
 parts of the country, in which case they do not appear 
 for redemption for several days. They are, however, 
 charged to the drawers immediately, certification 
 being equivalent to payment. The Paying Teller's 
 record of certified checks is a fac simile of the 
 Receiving Teller's deposit book in its rulings, exten- 
 sion columns, postings, and method of proof the one 
 being a credit, and the other a debit entry to the 
 dealer. See example on page 115. 
 
 This manner of posting certifications is of recent 
 origin. The certification check list is a new book 
 not yet generally adopted in our city banks. The 
 aggregate is posted to Certification Account, which 
 balances the separate charges to individuals. "When 
 the checks are finally redeemed, they are carried to 
 the debit of this account, which thus always shows 
 the balance of certified checks remaining out. This,
 
 CERTIFICATION OF CHECKS. 
 
 115 
 
 ao o f- 
 
 O 
 
 
 
 M
 
 116 THE PAYING TELLER. 
 
 or some equivalent plan, is indispensable to prevent 
 fraud or error by the duplication of checks. On the 
 old plan, the dealer's ledger account was not actually 
 charged with certified checks until they were re- 
 turned. They might be in transit long enough for 
 the memory of the Teller and the Book-keeper to 
 become dim, or for other transactions to throw them 
 out of sight. A pencil memorandum on the Ledger 
 (a usual method of noting them) might easily be 
 effaced by accident or design. In fact, it was such 
 abuse and accident that led to the adoption of the pre- 
 sent plan of posting certifications. 
 
 The Teller has resumed the examination of the 
 Exchange checks, after certifying that of Slater & Co. 
 Those which are defective, or of doubtful character in 
 any respect, are laid aside for more particular inspec- 
 tion ; the immediate pressure being to charge the 
 mass of them to their respective accounts in the 
 Ledger ; for these are liable to be drawn against con- 
 tinuously, and it is important to know their actual 
 condition. 
 
 Meanwhile, the current transactions of the business 
 are going on. The presentation of checks at the 
 counter is more frequent as the day advances, and 
 some require correction or explanation. One is not 
 indorsed, or improperly indorsed. Another is post- 
 dated. The date of another has been altered, and the 
 Teller must be satisfied whether honestly or not. 
 Another is drawn against an uncertain account, and 
 is referred to the Book-keeper to be assured correct 
 before payment. These various accidents are modi-
 
 AJLTERED DATES. 117 
 
 fied by the disposition of the holder of the check. A 
 crabbed customer will block access to the Teller's 
 gate, contesting his right to be paid in spite of inform- 
 alities, until six or ten new comers crowd behind him 
 and become impatient of delay. Being unacquainted 
 with the exact liabilities of a bank, and the various 
 tricks attempted on the Teller, they often regard his 
 precautions as mere " stickling " at trifles. 
 
 Of what consequence is it if a check drawn to the 
 order of John C. Brown is indorsed John Brown? 
 The consequence might be the repudiation of the pay- 
 ment by the dealer, and loss of the whole amount by 
 the bank. There is as much difference between these 
 two names, legally and in bank usage, as between the 
 names of John C. Brown and Abel Dodge. Yet, if 
 the Teller knows that John Brown is the man to 
 whom the money was designed to be paid by the 
 drawer, he might pass over so slight a discrepancy as 
 the omission of the letter C. And the drawer could 
 not then avail himself of such discrepancy to dispute 
 the rightfulness of the payment. 
 
 Of what consequence is it if a post-date is altered 
 to an anterior date ? It does not make the signature 
 less genuine, nor does the dealer pay more than he 
 has promised ! 
 
 No. But a check paid before due is not chargeable 
 to the dealer until the true date transpires. He 
 might withdraw his balance meanwhile, and fail to 
 provide for it subsequently, thus throwing the loss on 
 the bank. It -is therefore hazardous to admit of dates 
 that have undergone any apparent alteration. 
 
 The post-dating of checks is regarded by bank offi-
 
 118 THE PAYING TELLER. 
 
 cers as a commercial misdemeanor. A dealer who 
 persists in the practice after being warned of its im- 
 propriety, would lose credit, and probably receive 
 notice to withdraw his account. 
 
 There are ordinarily some checks in the Exchange 
 that are rejected for want of funds, or other cause. 
 These are returned to the sending banks by a messen- 
 ger, who brings back to the Teller the bank bills or 
 coin. The bank returning them has a right to de- 
 mand gold, since it has paid gold for them in the 
 Clearing House settlement. 
 
 Unfortunately, the same condition of the market 
 that makes it difficult for the banks to maintain a 
 creditable average of specie for the weekly state- 
 ment, is fruitful in overdrafts ; and the reclamations in 
 gold are sometimes large reaching many thousand 
 dollars. 
 
 All the checks that pass the Teller's examination 
 are given to a clerk for entry on his Check List, 
 whence they are charged to their respective accounts 
 in the Ledger. The bank bills, and the amount 
 received for reclamations, go into his general cash. 
 The Clearing House Exchange is then wholly incor- 
 porated in his accounts. 
 
 THE PAYMENT OF CHECKS. 
 
 There are three facts of which the Teller must take 
 special cognizance in the payment of checks. First, 
 Is the signature genuine ? Second, Is the account of 
 the drawer good ? Third, Is the person who presents
 
 CARELESS HABITS OF MERCHANTS. "119 
 
 the check entitled to receive the money. Generally, 
 the last occurs only when indorsements are to be veri- 
 fied ; although an accomplished Teller never loses 
 sight of it, even when checks are drawn payable to 
 the bearer. Forged checks are almost uniformly so 
 drawn. 
 
 There are many points of exposure under each of 
 the three heads named. First, of the signature : 
 
 The tricks of forgery are so ingenious as to consti- 
 tute a standing terror to banks ; and so loose are the 
 habits of many merchants in the custody and writing 
 of checks, that the temptation to try experiments in 
 this direction is frequently presented. 
 
 Check-books are left open on the desk within sight 
 of casual and unknown visitors. They might be 
 abstracted for half an hour long enough to give 
 the forger some of the most material points of suc- 
 cess : the style of writing, the color of the ink, the 
 number next, or near in order, and above all, a 
 leaf of blank checks with the name of the merchant 
 engraved on the end. 
 
 "There's no danger in our office. Somebody is 
 always there. Our name was never forged yet. 
 And besides, if it should be, the loss won't be ours. 
 That's the bank's look-out." 
 
 The last suggestion is probably not the least 
 influential. If the Teller pays a forged check, the 
 bank, and not the merchant, is the loser. And so 
 a careless security on the part of dealers opens the 
 door and invites the forger to come in. 
 
 Instead of allowing his check-book to be as public 
 as a newspaper, the merchant shoujd guard it with
 
 120 ' THE PAYING TELLER. 
 
 the same care that he does his cash-box or his bills 
 receivable. 
 
 The Signature-Book contains the autograph sig- 
 nature of every dealer in the bank, in alphabetical 
 order, so that the Teller may compare a suspicious 
 signature with the original an hourly necessity, in 
 consequence of the dissimilarity of writing by the 
 same hand at different times. The first thing required 
 of a new customer is, to write his name and residence 
 in this book ; and if a stranger, the name of the per- 
 son by whom he is introduced. The signature of a 
 firm is written by each member, with his individual 
 name opposite. The names of foreign correspondents 
 are often cut from letters and pasted on the page. 
 
 There is nothing in bank history more remarkable 
 than the unfrequent and comparatively trifling loss 
 by forged signatures. It would seem almost miracu- 
 lous to a spectator standing by the counter of one of 
 our active city banks, to witness the rapidity with 
 which the Teller pays checks (often at the rate of 
 three in a minute), whilst at the same time he is sub- 
 ject to perpetual interruptions from within and with- 
 out. At the end of the day, he has paid from four to 
 six hundred checks amounting to more than a million 
 of dollars a large proportion to strangers. In the 
 fifty-three city banks, during the same six hours, 
 there have been paid from fifteen to twenty thousand 
 checks, covering thirty millions of dollars and not 
 one forged signature ! The records of the Clearing 
 House show that the amount of payments for a year 
 through that channel has reached the prodigious 
 aggregate of seven thousand millions of dollars.
 
 FOKGERS DEFEATED. 121 
 
 Another large amount, not represented in the ex- 
 changes, is paid over the counters making a grand 
 total of probably eight thousand millions in three 
 hundred days ; and yet it is seldom that the commu- 
 nity is startled by an announcement that a forged 
 check of any importance has slipped through the 
 hands of the paying Teller in our city banks ! 
 
 It is doubtless to the terrors of the law, partly, that 
 banks are indebted for this fortunate immunity. But 
 these are operative mostly on a single instant of time 
 when the check is presented. That passed, the 
 forger is comparatively safe. He may set rewards 
 and telegraphs at defiance. It is, therefore, the skill 
 and discernment of the Teller, first and last, that keeps 
 the forger at a respectful distance skill, not only in 
 detecting false signatures, but in reading men at sight 
 by the most obscure of all characters written upon 
 the manner, and covered by practiced dissemblance, 
 more quickly than you would read Roman capitals. 
 The value to the bank of this detective faculty can 
 hardly be exaggerated. 
 
 Again, the forger seldom appears in person at the 
 counter. He employs, to draw the money, an inno- 
 cent agent, who will exhibit none of the signs of con- 
 scious guilt. The teller is alive to this hazard, and 
 questions strangers in such a manner as to dispel or 
 confirm his apprehensions. 
 
 " Do you wish to pay this money out for wages in 
 the city?" Or, 
 
 " Is this for your own use sir ?" 
 
 " No, sir ; I am drawing it for another." 
 
 "Who?"
 
 122 THE PAYING TELLER. 
 
 " For a stranger, who requested it ?" 
 
 " Where is the stranger ?" 
 
 The answer would make it clear whether there is 
 ground for suspicion. An innocent person would 
 answer promptly, and betray no symptoms of fear. 
 The forger or an accomplice would fly at once. 
 
 The time chosen by the forger to present checks is 
 generally between two and three o'clock, when the 
 counter is crowded by applicants, and the Teller is 
 obliged to pay as quickly as possible. He has a 
 choice of days also, preferring Saturday or the day 
 before holidays, when the business of two or more 
 days is crowded into one. On these " double days " 
 the vigilance of the Teller is particularly roused, and 
 it is not unusual for the President or Cashier to give 
 him a passing admonition to " look out for forged 
 checks." 
 
 The researches of the forger have been carried so 
 far as to discover that the fourth of the month, and 
 especially of certain months, as of March, October, 
 and November, is what bankers call " a heavy day," 
 and is more favorable for his tricks than most others. 
 
 Confidential marks independent of the signature 
 have sometimes been agreed upon between the mer- 
 chant and the Teller, as a further aid to the latter in 
 distinguishing the genuineness of checks such as a 
 pin hole in a certain letter, or the omission of a usual 
 feature in writing ; but these distract attention from 
 the more essential points to be guarded, and if dis- 
 covered by the forger, would greatly improve his 
 chances of success. One of his first steps is, to obtain 
 a genuine check, and subject it to microscopic exam-
 
 INGENIOUS FORGERY DETECTED. 123 
 
 ination. The following instance, which came under 
 the immediate notice of the writer, shows how inge- 
 niously this is sometimes done. 
 
 A stranger made a small purchase at a produce 
 store after the banks were closed for the day, and 
 tendered in payment a genuine bill of one hundred 
 dollars. The merchant having deposited all his 
 money, could not return the difference, which was 
 over ninety dollars. Neither could he get the bill 
 changed by his neighbors. The stranger, seeing the 
 difficulty, said carelessly : 
 
 " No matter, sir, about bank bills. Give me your 
 check for the difference. 
 
 It was given without hesitation. 
 
 On the following morning, it was paid at the coun- 
 ter of the bank ; and immediately after, another check 
 for six hundred dollars with the same signature was 
 presented by a boy. There were no appearances of 
 irregularity in the latter, but the intuitive precaution 
 of the Teller against fraud suggested the question, 
 suddenly and sharply spoken : 
 
 "Where did you get this?" 
 
 " A man gave it to me." 
 
 "Whatman?" 
 
 " At the corner." 
 
 The boy took instant alarm, and escaped before the 
 Porter could be called to intercept him. 
 
 The check was a forgery. It had been traced over 
 glass from the genuine signature, as became evident 
 when the two were applied together. 
 
 Unsuspecting Hoys are sometimes induced by the 
 promise of a dollar or two to present a forged check,
 
 124: THE PAYING TELLER. 
 
 while the rogue lies in waiting. In such a case, the 
 money has not unfrequently been paid, the boy fol- 
 lowed, and his employer arrested in the act of receiv- 
 ing it. 
 
 The forger works in the dark. He has ample time 
 to prepare every circumstance that can favor his 
 purpose, and to study all the contingencies of failure. 
 
 The following case shows how one bank may be 
 used to facilitate fraud on another. It will also 
 enforce what has been said on the proper care of 
 checks. 
 
 A leaf of blank forms was stolen from the check- 
 book of a wealthy merchant who was a director in 
 one of our city banks. A small business transaction 
 was then contrived by which a full genuine check 
 was obtained. 
 
 The forger might now practice on the signature at 
 pleasure. When satisfied that he could produce afac 
 simile check, he filled up one of the stolen forms with 
 an odd sum under three thousand dollars, and presented 
 it at the bank. To avoid suspicion, that might be 
 excited by so large a check if drawn payable to the 
 bearer, he made it payable to his own order in an 
 assumed name, and requested the Teller to certify it, 
 saying, that the indorsement would be guaranteed by 
 the bank in which he intended to deposit it. The 
 deliberation and coolness with which he referred to 
 the manner of satisfying the rule of the bank with 
 respect to indorsements, and his possession of the 
 auxiliary points of number, apparent consecutiveness 
 with previous checks, and especially the check itself 
 with the name of the merchant engraved on the end,
 
 LOSSES NEVER DISCOVERED. 125 
 
 procured him the genuine certification of the Teller 
 without suspicion. 
 
 He then opened an account in another city bank, 
 using the name of a well-known Cashier in Albany as 
 introductory to the officers, and exhibiting the check, 
 the certification of which vouched for the signature. 
 He indorsed it in their presence ; and thus every for- 
 mal requisition in bank practice was complied with. 
 
 There was now no obstacle to his drawing his own 
 checks against the deposit, which he did for the entire 
 amount within an hour ; and although some suspicion 
 was excited by this summary use of the whole, it was 
 allayed again by the unquestionable genuineness of 
 the certification. 
 
 This forgery remained undiscovered for a fortnight ; 
 and was brought to light only by the apparent over- 
 draft of the merchant's account, which led to a com- 
 parison of his check-book with the bank ledger. The 
 difference being the exact amount of the fraudulent 
 check, it was easily detected. 
 
 The overdraft of an ordinarily well-kept account 
 raises an immediate presumption of error or forgery. 
 Either a deposit may have been omitted, or a check 
 wrongly paid. The book-keeper sends for the dealer's 
 bank-book, balances it, and returns the checks can- 
 celled, in which process the discrepancy is explained. 
 If is by no means improbable, however, that forged 
 checks sometimes elude detection both by Teller and 
 dealer, in which case the latter is the loser. In neither 
 of the instances given was the dealer himself able to 
 distinguish the fraudulent from the genuine signature ; 
 and but for the experimental question of the Teller in
 
 126 THE PAYING TELLER. 
 
 one case, and the collateral evidence of the merchant's 
 cash-book in the other, both might have gone through 
 the accounts, and the dealers been so much poorer, 
 but no wiser. 
 
 Is it possible that men in business might incur 
 these serious losses without such sensible inconve- 
 nience as to excite suspicion and search, or without 
 the ability to trace and detect them ? 
 
 Yes. No fault is so common among merchants as 
 that of keeping an inexact and slovenly cash-book. 
 Instead of a daily test balance, the cash account is 
 often suffered to run for a week, more or less, until 
 the current disbursements and receipts are so jumbled 
 together as to defy all analysis or proof. A balance 
 is then forced supposed to be " not far out of 
 the way nothing to affect the general results of the 
 business." Not hundreds merely, but thousands of 
 dollars are lost, both by slow abstraction and in the 
 lump, through the little opening between an exact 
 balance and the difference of " a few dimes !" and 
 the loser is unconscious that this may be the chief 
 cause that urges him towards insolvency. 
 
 There are circumstances under which it may be 
 impossible for the Paying Teller to detect forgery. 
 
 Some years since, the financial clerk of a wealthy 
 importing house presented a forged check for ten 
 thousand dollars at the counter of one of our principal 
 banks, and it was paid without hesitation. He had 
 long been in the service of his employers, was known 
 to enjoy their full confidence, and to hold the custody 
 of their private papers. It was a usual circumstance
 
 CARELESS CASH ACCOUNTS. 127 
 
 for the house to draw checks for that or larger amounts, 
 and the fraud was consummated without presenting 
 a single point to excite suspicion. It was discovered 
 by the report of an overdraft in the account, and the 
 simultaneous elopement of the guilty clerk. 
 
 The following singular case came within the know- 
 ledge of the writer. 
 
 The bank account of a highly respectable house 
 was reported overdrawn two thousand dollars; and 
 one of the firm denied the genuineness of a particular 
 check for that amount. A number of his checks 
 were so arranged as to conceal all but the signatures, 
 and he was requested to point out the forgery. He 
 acknowledged his inability to discriminate between 
 that and any other. On close inquiry, it appeared 
 that he had been in the habit of signing checks in 
 blank to the order of his book-keeper, to be used 
 in his absence, and the one in question was of this 
 description, excepting that it was payable to bearer. 
 He was asked if he could swear that the signature 
 was not his own to which he answered in the nega- 
 tive. Yet it was not made subject to order in his 
 usual form, and he had no recollection of having 
 signed it. Under these circumstances, the bank 
 insisted that it was genuine, and the house submitted 
 to the loss. 
 
 There are circumstances under which a bank 
 might be exempt from liability for the payment 
 of forged checks. A want of due care by the mer- 
 chant to guard his own affairs against attack, 
 though a vague ground of defence, is entitled to
 
 128 THE PAYING TELLER. 
 
 some weight. The employment as clerk of a person 
 known by him to have committed forgery would be 
 a good defence in equity, if not in law. 
 
 It would be tedious to describe all the ingenious 
 devices of the forger to blind the Paying Teller. 
 When an old trick wears out, a new one is invented. 
 While he is on the watch against new tricks, an old 
 one is suddenly revived. 
 
 The signature and indorsement of a check being 
 genuine, the Teller must be satisfied that the account 
 of the drawer is good. 
 
 Some of our larger banks have fifteen hundred 
 accounts open in the ledgers, all of which are liable 
 to draft without notice. It rarely happens that more 
 than one-fourth of them are checked against on any 
 single day. Some will remain unused a week or a 
 month, and then suddenly start into great activity. 
 Some show regular daily receipts and payments, 
 with one deposit and from two to five checks. Some 
 will have a single deposit at long intervals, with 
 checks once or twice a week to pay family expenses. 
 Some will accumulate rents and dividends for several 
 months, and be drawn against in one large sum for 
 investment. The account of an active merchant will 
 show from five to fifteen checks in a day, while that 
 of a broker or private banker will have over one 
 hundred. Some will always have a respectable 
 balance on hand, no matter how many checks are 
 paid, and others a small balance, no matter how few 
 are paid. 
 
 The question occurs, How can the Teller remember
 
 CLASSIFICATION OF ACCOUNTS. 129 
 
 the balances of fifteen hundred different accounts 
 while paying or certifying checks at the rate of three 
 or four in a minute ? 
 
 From a careful examination of the deposits and 
 checks of a dealer, it is easy to judge whether they 
 belong to a legitimate business, or whether they are 
 mostly mere transfers between different persons and 
 accounts ; also to what extent his balances are main- 
 tained by loans and transient accommodations. It is 
 not difficult to ascertain whether a man uses his credit 
 excessively or with prudence ; nor to get information 
 of his personal habits, associations, and general cha- 
 racter. The contact of the Teller with merchants in 
 all branches of trade affords many opportunities of 
 inquiry which, with those in possession of the bank 
 officers, enable him to classify the dealers, and thus 
 assist his memory. 
 
 In the first-class stand those of known large capital, 
 who never give out their own notes. They may sell 
 on credit, but they buy always for cash. Their de- 
 posits in bank are generally far greater than their im- 
 mediate wants. When their checks are presented, 
 the Teller may safely pay them without reference to 
 the condition of their accounts ; for if they should 
 even appear overdrawn at the moment, he knows 
 that they will make an ample deposit before the close 
 of the day. In addition to this, they are likely to 
 have a considerable amount of promissory notes 
 lodged in the bank for collection which are a colla- 
 teral security. 
 
 The middle class of dealers are the most numerous. 
 Less independent as it regards capital, and relying on 
 
 6*
 
 130 THE PAYING TELLER. 
 
 the bank for loans, they are yet generally safe and 
 trustworthy. They will not transgress its rules, lest 
 they forfeit its confidence. The Teller pays their 
 checks commonly without examining their accounts, 
 depending on their integrity and self-interest to rec- 
 tify possible errors by overdraft or otherwise. 
 
 Next come the retail shopkeepers, mechanics, and 
 small manufacturers. Many of this class keep ac- 
 cumulating accounts, and seldom call for loans; or 
 if so, to a very moderate extent. Separately, their 
 deposits are not large, but in the aggregate, they add 
 materially to the loaning facilities of the bank. 
 They draw but few checks, and their accounts are not 
 liable to sudden changes. The Teller soon acquires 
 such a knowledge of them as to remember which 
 need watching ; and the Book-keepers aid him in this 
 by an alphabetical list of balances. An old bank 
 gradually expurgates its ledgers of troublesome 
 accounts, while a new bank, from competition for 
 business, or non-acquaintance with the character of 
 dealers, is likely to fall heir to them. 
 
 By this, or some similar classification, the Paying 
 Teller is able to " keep the run " of his customers 
 with surprising closeness. But there is still room left 
 for accidents and irregularities, which are a source of 
 perpetual annoyance to him. The number of de- 
 positors who lack mercantile training is very large. 
 They have never learned the value of time or rules 
 in business, and " hot water " seems to be their " na- 
 tive element." They can seldom tell what money 
 they have on deposit without asking the bank Book- 
 keeper. They make mistakes of addition in their
 
 IMPOSITIONS ON THE TELLER. 131 
 
 check-books, or omit entries, or give out checks with- 
 out recording them. It is not unusual for people of 
 this careless character to meet in a bank lobby to 
 consummate street bargains, and to take from their 
 hat crowns loose checks which they exchange for 
 hundreds or thousands of dollars; they post-date 
 them a week or a fortnight ; the printed title of the 
 bank is often erased, and that of another illegibly 
 substituted ; the signatures are carelessly written, and 
 blotted by folding, and they are stuffed in a pocket- 
 wallet, to be forgotten, or remembered by accident. 
 They give notes to each other drawn payable at banks 
 where they keep no account. All these documents, 
 when due, are presented to the Paying Teller, who is 
 thus made the focus of many irregularities by total 
 strangers. There is not an hour of the day free from 
 their annoyance. He must examine them to ascer- 
 tain what they are, and his time is taxed, often when 
 he is most occupied with pressing duties. 
 
 A man offers a promissory note of Thomas Brown, 
 for certification. 
 
 " Mr. Brown keeps no account here." 
 
 " Dont you think he'll send the money to pay it ?" 
 
 " I dont know anything about him." 
 
 " "Wont you take the note and hold it till the money 
 comes ?" 
 
 " No, sir. It's contrary to our rules." 
 
 "What shall I do?" 
 
 " I can't give you any help, sir." 
 
 Jacob Grimes keeps no bank account, but he 
 takes the liberty of making his notes payable at the
 
 132 THE PAYING TELLER. 
 
 Commercial Bank. He brings a handfull of bills or 
 gold, and offers it to the Teller. 
 
 "What is that for?" 
 
 " To pay my note due to-day." 
 
 " It is not our practice to receive money from per- 
 sons who keep no account with us." 
 
 This is something new to Mr. Grimes. "What are 
 banks made for," he thinks, " if not to accommodate 
 the public." 
 
 He considers the Teller churlish, and the bank " a 
 nuisance" ; but he does not consider that his own case 
 would be but one of twenty or thirty if the practice 
 were admitted, and that it would then be a serious 
 interference with the regular duties of the Teller. 
 Neither does he reflect that the bank would be 
 responsible if a forged note should be paid instead of 
 the genuine one, which might easily occur, since the 
 Teller is unacquainted with the signature of the 
 drawer. 
 
 Mr. Grimes may be obliged to wait at the counter 
 of the Paying Teller half the day before his note is 
 presented involving a loss of time, and perhaps 
 of temper also, for which nobody but himself is to 
 blame. 
 
 Merchants in distant cities frequently make their 
 notes payable at a bank in New York, and remit the 
 money within a short time of their maturity. To send 
 it back would cause the note to be protested, and 
 injure the credit of the drawer. The letter of instruc- 
 tion with the inclosure is therefore handed over to the 
 Teller, who pays the note when it is presented. It is
 
 IMPOSITIONS. 133 
 
 then cancelled and returned to the remitter. Instead 
 of bank checks, drafts on other parties, and sometimes 
 on other cities, are sent, which adds both labor and 
 risk to the gratuitous service. Bank officers have 
 occasionally advised this class of correspondents that 
 their letters would not be taken from the post-office if 
 they continued the practice : but it has grown into a 
 permanent annoyance, and is mostly submitted to. 
 
 The common idea that banks are public institutions 
 is probably the ground on which they are expected to 
 serve the public without compensation. It should be 
 remembered that they are private associations, or- 
 ganized for the special benefit of the stockholders, 
 and not for that of the people at large. They have 
 as much right as an individual merchant to refuse 
 service that yields no compensation. They cannot 
 escape legal responsibility to their accepted dealers, 
 for any omission or neglect of proper forms ; but they 
 cannot be forced to assume responsibility against their 
 choice or judgment. 
 
 If non-residents and parties who keep no bank 
 account were required to pay a small commission for 
 this kind of imposed service, it might become an 
 acknowledged function of the business. 
 
 There are many cunning and unscrupulous persons 
 who maintain the appearance of respectability in 
 their bank dealings until an opportunity offers to 
 secure some advantage by trick or accident. They 
 may obtain an introduction through other dealers with 
 whom they are connected in trade, and who are them- 
 selves deceived as to their real character. By adroit 
 management, and strict propriety of conduct, they
 
 134: THE PAYING TELLER. 
 
 gradually win the confidence of the officers and clerks ; 
 and obtain considerable loans, with the usual indulg- 
 ences that are enjoyed by good customers. An 
 overdraft of account by cross deposits with dealers in 
 other banks may first expose them in their true colors. 
 If money should be credited to them by mistake, they 
 would not hesitate to use it. Instead of reporting 
 errors in their favor, they would adopt them, and 
 keep silence. They change their accounts from one 
 bank to another as their tricks fail, or when they have 
 gained all they can hope for. Against these, the 
 combined vigilance of the Teller and other clerks is 
 not always successful. 
 
 " Do you know," asks the Book-keeper of the Paying 
 Teller, "that you overpaid Samuel Filibuster's ac- 
 count a thousand dollars yesterday ?" 
 
 " No. But he is an honorable man, isn't he ?" 
 
 " He has always kept a fair balance ; and I have 
 never seen any proof of his being tricky." 
 
 " "Well send for his book, and write it up. There 
 may be a deposit or a collection omitted 1" 
 
 The examination discloses no error of the kind. 
 The Teller thinks that Mr. Filibuster may continue to 
 make deposits as usual, and afford him an opportunity 
 to reserve the amount of the overdraft. If it is an 
 unconscious error on his part, he will do so. But the 
 day passes without such fortunate accident. It is 
 certain Mr. Filibuster knows that he has checked 
 out of the bank a thousand dollars more than he had a 
 right to, and that he means to make the most of it. 
 This is the very " accident" that he has hoped for, 
 and in view of which he has long and carefully
 
 SAMUEL FILIBUSTER. 135 
 
 observed the rules, to win the confidence of the 
 bank. 
 
 It is the duty of the Teller to report such a trans- 
 action to the superior officers ; but as it will weigh 
 against his character for vigilance and sagacity, he 
 first attempts to recover the amount by personal 
 negotiation with Mr. Filibuster. That gentleman 
 protests that it is " a most unaccountable error" and 
 one which he exceedingly regrets ; but he has no 
 means in possession to rectify it at present. 
 
 " I trusted to your honor, Mr. Filibuster. You 
 know it is an injury to a dealer to examine his 
 accounts before paying his checks !" 
 
 " Yes, sir and I am very sensible of your gentle- 
 manly conduct in the whole course of my dealings 
 with you. I must say you have treated me with 
 great politeness, and I feel the more regret for that 
 reason." 
 
 " Cant you deposit part of the sum to-day, and 
 the rest to-morrow ?" 
 
 " Indeed, ^ir, that is quite impossible." 
 
 " I dont want to report this to the President and 
 Cashier, for that would injure you in their esteem. 
 But I shall be obliged to do so, unless you make your 
 account good." 
 
 These considerations, urged with very conciliatory 
 manner by the Teller, in spite of the indignation 
 which he feels burning within, almost impelling him 
 to a personal assault on " the scoundrel" for his " vil- 
 lainy," are without effect. He steps into the Cashier's 
 room, and tells him of the misfortune. 
 
 " Mr. Filibuster has overdrawn his account a
 
 136 THE PAYING TELLER. 
 
 thousand dollars, sir, and now refuses to make it 
 good." 
 
 " What ! Filibuster ? I thought he was an honor- 
 able man !" 
 
 " So did I, sir. He has kept up a good show in his 
 account I suspect for this very purpose." 
 
 " Send him to me." 
 
 The Cashier considers it a piece of extraordinary- 
 luck if, after a fortnight's negotiation, he can bring 
 Mr. Filibuster to give his notes at six, nine, and 
 twelve months, for the amount of his overdraft. A 
 civil suit would yield but a barren judgment, if suc- 
 cessful, besides increasing the loss. 
 
 The identification of indorsers gives more annoy- 
 ance to the Paying Teller than any other part of his 
 business. The object of making a check payable " to 
 order " is, on the part of the drawer, that he may 
 have the indorsement of the person to whom it is 
 given as an additional evidence of the payment ; and 
 the receiver of the check desires it .as a security in 
 case of loss. The risk of the indorsement is thus 
 thrown on the bank. If it should pay a lost or stolen 
 check with a forged indorsement, the person to whom 
 the money is due may claim the payment over again. 
 There is no apparent commercial propriety or justice 
 in dealers throwing this risk on the bank, as it really 
 belongs to their own business. A check drawn pay- 
 able " to bearer " is as legal and complete payment 
 as if drawn payable to the order of the receiver. It 
 is a reasonable precaution in the transmission of 
 checks by mail, to make them subject to the order of 
 those to whom they are sent ; but this is unnecessary
 
 IDENTIFYING INDORSEES JOHN GILPIN. 137 
 
 in direct personal transactions. It is a source of 
 annoyance and frequent dispute to the holder of a 
 check as well as to the Teller. He is frequently a 
 stranger, and can offer no positive proof of his iden- 
 tity. 
 
 John Gilpin, of Maine, presents a check at the 
 counter payable to his order. 
 
 " Who is John Gilpin ?" asks the Teller. 
 
 " That is my name, sir." 
 
 " I have no doubt of it ; but our rules require that 
 we should have some proof of it." 
 
 Mr. Gilpin has not a single acquaintance in New 
 York who happens to be known at the bank. He 
 returns to the maker of the check, at the suggestion 
 of the Teller, and requests him to vouch for the 
 indorsement, or to change it for another, payable "to 
 bearer " instead of " order." This being refused, he 
 presents it again at the bank, and complains that he 
 is subjected to such trouble and loss of time. He 
 thinks the Teller is " more nice than wise." But 
 there is no reason why the bank should assume a 
 dealer's risks, when the dealer himself is afraid of them. 
 
 The certification of the check may improve the 
 holder's chances of using it in another channel. The 
 bank is then bound to pay it when the indorsement is 
 properly verified. 
 
 Indorsed checks paid through the Exchange, are 
 understood to be guarantied by the bank from which 
 they are received; and any that are unsatisfactory or 
 informal are immediately returned for correction. 
 Any bank will guarantee the indorsements of a dealer 
 in whom it has confidence.
 
 138 THE PAYING TELLER. 
 
 In many cases, the Teller trusts to his skill in 
 physiognomy and in the discernment of character, 
 and pays checks without positive identity of the in- 
 dorsers. 
 
 The most acceptable form of check to the Teller 
 is, that which is printed payable " to bearer." His 
 only responsibility, then, is for the genuineness of the 
 signature and the state of the account. If such a 
 check should be lost, and subsequently paid to a dis- 
 honest finder, neither the bank nor the drawer of it 
 would suffer but only the person who lost it, as in 
 the case of a bank bill. The vigilance of the Teller 
 is alive, however, to be assured that " the bearer " is 
 the right bearer. Any remission of personal scrutiny 
 of all who approach his counter, would be to abandon 
 the outer wall of his defence against forgery. 
 
 The practice of certifying checks for the better 
 class of dealers, before they have, made their deposit, 
 is common in our city banks. It is a measure of the 
 credit which the bank is willing to give. A cus- 
 tomer who thinks himself entitled to it, takes offence 
 at its refusal, and withdraws his account. A whole- 
 sale merchant would deal more cautiously with a job- 
 ber, if his checks did not command this credit in his 
 own bank. 
 
 This advance certification is an indispensable econ- 
 omy in our method of banking. The funds which 
 compose the deposits of a dealer, are the product 
 of sales or collections made at different hours of 
 the day, and they cannot be brought together in one 
 sum until near the close of it. Their deposit in 
 several eums would add immeasurably to the labor
 
 CERTIFYING CHECKS IN ADVANCE. 139 
 
 of the clerks by multiplying entries ; and if the 
 Teller should withhold certification until the credits 
 are actually made, the transactions of the day would 
 be crowded into the last hours, causing much incon- 
 venience and increased risk of error. The 'aggregate 
 certifications of a bank in full business may reach 
 several hundred thousand dollars before the deposits 
 begin to come in all depending on the discretion 
 and judgment of the Paying Teller. At the close of 
 the day, the Book-keepers report to him whether any 
 dealers have failed to make good their accounts. 
 
 "When the market is growing tight, the Teller be- 
 comes more watchful of his certifications. The 
 failure of two or three usually prompt dealers to 
 cover their checks seasonably, is perhaps the first 
 warning for this necessity. All but the first class of 
 customers are told, that it is " against the rules to 
 certify in advance of the deposit." 
 
 "Then you have constantly violated your own 
 rules !" 
 
 " It is safe to relax them in an easy market ; but 
 our experience proves it to be unsafe in a tight 
 market." 
 
 Reflecting men see the reason for this, and conform 
 to it, while others get angry and denounce the bank 
 and all its officers and clerks as " arrogant " and 
 "undeserving of public confidence." It is not far 
 wrong to set the latter down as among the weaker 
 class, towards whom extra caution will be prudent. 
 A merchant of sound capital has a common interest 
 with the bank in clipping the widely-spread wings 
 of credit, by which commerce generally is endangered.
 
 140 THE FATING TELLER. 
 
 A great service comes to the trading community 
 from the periodical contraction of bank facilities. 
 The collection of debts is more diligently urged, and 
 wild speculation is arrested. 
 
 When the return Exchange is brought in from the 
 Clearing House, it is counted on a separate table, and 
 proved by an Assistant. The checks and bills of 
 which it is composed are incorporated with the 
 accounts of the Paying Teller. The checks must 
 undergo the same inspection as those which are paid 
 over the counter. The signature, date, and indorse- 
 ment of each one is separately examined, and the 
 accounts drawn against ascertained to be good. 
 Among these are many checks of distant banks and 
 correspondents, often with six or eight transfer in- 
 dorsements, for the general accuracy of which the 
 last remitting bank is held. The Teller particularly 
 observes that the course of transfer from one to ano- 
 ther is correct ; and requires a special guarantee 
 indorsement of the city bank to which it is paid, for 
 any informality or omission. If at any subsequent 
 time it should be discovered that one of the indorse- 
 ments is fraudulent, it claims repayment from said 
 bank, which claims in turn from its correspondent, 
 and so on, until the first victim of the fraud is reached, 
 on whom the loss falls. If the forms of transfer 
 appear to be correct, the guarantee against forgery is 
 valid by custom without special writing. 
 
 While the Teller is pursuing this examination, the 
 current business of the day goes on with increasing 
 pressure from the outside. So long as he can dispose 
 of the applications uninterruptedly, as they are pre-
 
 .', INTERBUPTIONS. 
 
 sented, the lobby is comparatively quiet and free 
 from obstruction; but even a momentary stoppage 
 causes the crowd to gather, and soon ten or a dozen 
 persons are waiting to be served in turn. Expressions 
 of impatience are not uncommon. The Teller is pro- 
 nounced "slow" "indifferent to the convenience of 
 customers " " incompetent " and " tantalizing," by 
 his deliberation of movement. Deliberation is the 
 secret of his accomplishing so much. In truth, there 
 is hardly a moment when he may not be said to be 
 doing two or more things at once, and yet with such 
 a habit of concentration on each at the juncture as to 
 avoid confusing them together. 
 
 The interruptions to which he is subject are almost 
 incessant. The Cashier has just received advice of 
 the issue of a number of.duplicate checks by a corre- 
 sponding bank, to replace the originals which have 
 been lost in the mail. He brings the letter and list 
 of duplicates to the Teller, who is occupied several 
 minutes in obtaining a clear understanding of the 
 case. Some of the originals might be in the hands 
 of pei-sons then waiting to be served, and he must be 
 able to detect them at sight. 
 
 " Will you pay me this check, sir ? I don't want to 
 be kept here half a day !" growls a hot-tempered cus- 
 tomer at the gate. 
 
 " Yes, sir," answers the Teller, " if you will have 
 the discrepancy corrected between the figures and 
 the writing." 
 
 " How did your exchanges come out the day before 
 yesterday?" asks a messenger from another bank.
 
 142 THE PAYING TELLER. 
 
 " A thousand dollars over." 
 
 " That's lucky ! Our Teller is short a thousand 
 that must be it !" 
 
 " "Well, if he can establish his claim, and no othe. 
 bank contests it, I'll pay it." 
 
 It is a mutual obligation between bank tellers to 
 afford each other every facility for discovering such 
 errors. One who does not answer truly and promptly, 
 can hardly expect to be so answered in his turn. 
 
 The Teller might appropriate this thousand dollars 
 to himself; but he is too well aware of the hazards of 
 detection. He cannot know that it has not been 
 designedly placed in his way, and that the bank offi- 
 cers are not in the secret. However dishonorable it 
 may seem to resort to such a plan for detection, none 
 other is so easy, effectual, and harmless ; for the dis- 
 honest only can be injured. It is objectionable on 
 the ground of laying temptation, and inducing a first 
 fault. Yet what is to be done, when suspicion has 
 been awakened, and where fraud may be practiced 
 so secretly as to defy all ordinary vigilance? 
 
 " I want five thousand dollars in gold for that 
 check not good," says another bank messenger. 
 
 The Porter or Specie Clerk, who keeps the coin 
 prepared for such demands, is absent, and the Teller 
 may be obliged to go to the vault for it. 
 
 In the next moment, a check which had been sent 
 to another bank through the exchanges, is returned 
 for a written guarantee of indorsement. If satisfied 
 of its correctness, the Teller gives the guarantee
 
 INCIDENTS MR. BUNGLE. 143 
 
 Otherwise he pays the money for it, and returns it to 
 the dealer who had deposited it. 
 
 T A stranger offers to the Teller five hundred dollars 
 in bills, to pay a check which he had drawn on the 
 bank. Keeping no account, his money is refused, 
 but he persists in an altercation about it, to the hin- 
 drance of those behind him. 
 
 A dealer wants thirty or forty thousand dollars in 
 coin, to pay duties at the Custom House. 
 
 Another hands in a memorandum of a check that' 
 he has given out, but of which he wants to arrest 
 payment. 
 
 Another inquires whether a lost check, of which he 
 had previously given notice, has been paid. 
 
 A Porter from the Merchants' Bank presents a dozen 
 notes of different parties for certification, and he is 
 immediately followed by one from another bank, with 
 a bag of gold which he reports ten dollars short, and 
 which may be the occasion of some dispute. 
 
 The other clerks have frequent necessity to com- 
 municate with the Paying Teller with respect to the 
 state of accounts, and he with them. 
 
 A noisy colloquy occurs with a dealer whose check 
 has been refused, because of his deposit having been 
 credited to another party ; and with another whose 
 account appears deficient, because a promised discount 
 of paper has not been entered on the books. 
 
 " Here !" says Mr. Bungle, returning a handful of
 
 144 THE PAYING TELLER. 
 
 rumpled bank bills and coin, " that money which you 
 paid me is twenty dollars short." The Teller examines 
 it, and satisfies Mr. Bungle that the error was in his 
 own counting. 
 
 Many persons who present checks are so ignorant 
 of bank usage as not to know when an indorsement 
 is necessary ; some forget it until they have reached 
 the Teller's gate, and are then obliged, after filling 
 the omission, to take their place again at the foot of a 
 line of twenty, and wait their turn. In character and 
 disposition, -the applicants are as different as in their 
 features boys, workmen, sailors, doctors, knaves, and 
 drunkards. Some want " half gold and half notes," 
 some " half silver and the rest in small bills," some 
 " all bills," and some " all gold and be damned to you." 
 
 The Teller is often obliged to break away from a 
 line of impatient customers to prepare his settlement 
 balance of two hundred thousand dollars (more or 
 less) to be sent to the Clearing House, or to receive 
 the same. If he has not the whole sum in coin certi- 
 ficates, he pays part in gold. 
 
 There are three other channels through which 
 checks may be paid by the bank, simultaneously 
 with their payment by the First Teller. The Kote 
 Teller may receive them in discharge of a note ; the 
 Deposit Teller may take them in credit, and the Kun- 
 ner in settlement of a draft each without the know- 
 ledge of the others. For example, if Alexander Jones 
 has a balance of one thousand dollars in the bank, he
 
 ALEXANDER JONES. 14:5 
 
 may draw that amount in bills or gold from the 
 Paying Teller; he may give his check for it to 
 another dealer for deposit in the same bank ; he may 
 take up a note with it at the Note Teller's desk ; and 
 he may pay a sight draft with it to the Runner: 
 BO that he may draw out four thousand dollars, while 
 he has a balance of but one thousand. There are 
 two guards against this, as it respects the Tellers, 
 viz.: their mutual advisements, and the good faith 
 of Alexander Jones. The Runner has the latter 
 only to rely upon; for he cannot tell whether the 
 check is good or bad until he returns to the bank. It 
 is a creditable fact, both to the integrity of dealers 
 and to the watchfulness of the clerks, that fraud is 
 seldom attempted by the duplication of checks in 
 this manner. The bank owes its security, no doubt, 
 to the power of credit. If men are not governed by 
 correct principles, they are restrained by the fear of 
 being cut off from facilities which are essential to 
 their success in trade. 
 
 If a dealer deposits checks on other banks, which 
 prove not good when sent through the exchanges, 
 they are chargeable to his account directly, or he is 
 bound to redeem them. But a check on the same 
 lank is as actually paid when taken in deposit by 
 the Receiving Teller, as if paid by the First Teller in 
 bank bills ; and if it should not be good, the recourse 
 of the bank is to the drawer of it not to the depositor. 
 Likewise, if a dealer takes up his note with the check 
 of another dealer on the same bank, the recourse of a 
 bank is to the drawer of the check, and pot to that 
 dealer.
 
 146 THE PAYING TELLER. 
 
 The proportion of checks liquidated through the 
 several other channels together, is small compared 
 with that paid by the First Teller, and it is confined 
 to receiving them in account. It does not extend 
 to the actual disbursement of gold or bills to the 
 applicant. 
 
 There are times when the Paying Teller would 
 seem, to an outside observer, to be almost helpless 
 against threatened losses. 
 
 It is one^of those " panic days" on which men are 
 driven to desperation by the utter failure, one after 
 another, of all their resources. Employers as well as 
 clerks are seen hurrying along the streets to borrow, 
 or to beg a respite from their obligations. Merchants 
 who were never known to be " short" before, are now 
 seen to enter the bank in great agitation, and after 
 fruitless intercession with the officers, to go out again 
 with hopelessness and discredit impressed in every 
 feature. The President and Cashier themselves mani- 
 fest extreme anxiety. All the counters are thronged 
 by dealers in a high state of excitement. The clerks 
 are deeply engrossed in examinations, mutual in- 
 quiries and messages, hurrying from desk to desk, 
 amidst the general confusion of voices, the rattling of 
 specie and the perpetual reverberation of banging 
 doors. There is a prevalent sense in the bank of 
 apprehension and alarm. But the Teller goes on 
 impassively with his certifications and payments, not 
 suffering himself to be flurried by what passes around 
 him, and exhibiting not the slightest discomposure 
 of manner.
 
 A FAILURE. 147 
 
 The Cashier lays an open note on his desk : 
 
 " CASHIER COMMERCIAL BANK : 
 
 " DEAR SIR : Please certify no more notes of our 
 firm after receipt of this. Mar. 4, 2 P.M. 
 
 " Yours, respectfully, SKAREM & Co." 
 
 " Too late, sir. I have already certified forty thou- 
 sand dollars!" 
 
 " The deuce you have !" 
 
 "Yes, sir but they are honorable men. I have 
 no doubt they will protect the bank." 
 
 More notes of Skarem & Co. are brought in for cer- 
 tification. 
 
 " No funds to pay those notes." 
 
 " Wliat do you say?" 
 
 " I have a written notice not to certify any more 
 of their paper." 
 
 The messenger hurries off to communicate the 
 intelligence to the officers of his own bank. It has 
 already found currency in " the street," and the num- 
 ber of firms heretofore in good standing, that are 
 seriously involved, is a subject of free speculation. 
 The liabilities of " Skarem & Co." are variously stated 
 at from two to five millions of dollars, and all the 
 probable consequences of their failure are exaggerated 
 by public rumor. 
 
 Three o'clock. The Paying Teller closes his gate. 
 A few straggling notes and checks for certification
 
 148 THE PAYING TELLER. 
 
 concludes the day's business, and leaves him at liberty 
 to look after the indulged accounts. A string of 
 twenty depositors yet wait their turn. 
 
 Skarem & Co. have made a deposit sufficient to 
 cover all theii certifications; but the Teller finds 
 that Wilkins & Smith, for whom he had certified near 
 seventy thousand dollars, have not yet made their 
 account good. He is alarmed, and communicates the 
 fact to the Cashier. While they are in consultation, 
 the clerk of Wilkins & Smith hands in their book 
 with twice the required amount of funds. 
 
 "That," says the Teller, with manifest relief, 
 " makes us right for the day." 
 
 EXPLANATION OF THE PAYING TELLER'S PKOOF. 
 
 THE business of the day begins with the balance of 
 cash on hand, $3,100,728.37. 
 
 The money received on the previous day by the 
 Deposit and the Note Teller (here called second and 
 third) consists of three kinds of funds: office notes, 
 specie, and exchange funds. All must be added to 
 the above balance. 
 
 The title "Commercial Bank" is adopted to sim- 
 plify the explanation of some terms. 
 
 Office Notes means, the bills of the Commercial Bank 
 in distinction from those of all other banks. Uncur- 
 rent bank bills, and checks that cannot be used in the 
 Exchange, are classed under the same head, and con- 
 stitute the Office List. 
 
 The items numbered 1, 2, 3, and 4, are the unex- 
 changeable portion of the funds, and with some
 
 PAYING TELLER'S PROOF. 
 
 149 
 
 <i 
 
 * 
 
 O CO <M ^H ,-H (M CO 
 CM ^ CO CO CO rH ^* 
 
 iiiilii 
 
 52 S?2 
 
 
 
 
 t *'^5'' <:0 ' rt ' 
 
 P 
 
 
 
 
 
 ^ I* 00 ^H ^M ^< iO 
 CO <?4 O t~ ^* O ^ 
 Oi CO ^ iO^ G* iO t^ 
 
 ** 
 
 
 
 
 CO <N O OS Oi 
 
 
 S 
 
 
 05 
 
 O O Os os 
 
 ^gS go o rH 
 
 WO*rH "5 
 
 
 
 i-T c>f e>f T)T 
 
 S" 
 
 "3 
 
 
 y- 
 
 ^s^*S~^~** f^ ,~^ 
 
 
 1 
 
 
 CT 
 
 
 
 E 
 
 
 *^ 
 
 ** *( 1t gj r-4 
 
 S 
 
 
 
 to 
 
 ~~^~?*~? j "**' 
 
 w 
 
 
 
 .a 
 
 si .'a <2 
 
 ^ 
 
 
 
 I 
 
 S - 3 
 
 
 
 
 V 
 
 D, " 
 
 I 
 
 
 
 p? 
 
 H oo 
 
 
 
 
 
 
 S9-8 'S 
 
 <^ CO ej oS 
 O -Q ** 
 
 1 
 
 
 
 
 
 m "S 
 
 - o 2 3 
 
 1 
 
 
 
 i 
 
 1,1 12I 1 
 
 1 
 
 
 
 o 
 
 W F o *i 
 
 o 
 
 
 
 
 " s ? o S 
 
 1 
 
 
 
 9 S = 
 
 
 *3 
 
 
 
 
 "3 "3 o 
 
 g 
 
 
 
 H 
 
 . -* O O rt 
 pa H H 
 
 1 
 
 
 ,5 -t- 
 * CO 10 
 
 i-H OO t- CC 
 O O rl d * 
 
 \ 
 
 
 CO 
 
 *O OO CO CO *O 
 
 
 
 <M 
 t- 
 
 S 
 
 O IO - * 
 * O 00 T< t- 
 
 
 d (M C 
 
 i-H r 
 
 cT co 
 O *a 
 
 CO CO ^H O t- 
 
 
 r 
 
 
 CO OO OS 
 
 
 
 
 
 
 
 
 CO O 
 
 
 M 
 
 
 Jl 
 
 
 
 4t- C 
 
 cJ 
 
 i-l t- W5 O OS CO 
 
 t- OO OS O OS O 
 
 
 OO t- 
 
 * o"oT 
 
 1 1 
 
 OO > 
 
 o" 
 
 "i. ! 
 
 
 oo >o * o oJ \a 
 
 CO t- CO C^ CO t^- 
 
 
 '- 
 
 CfT < 
 
 
 Ol (N OO >O OS O 
 
 
 
 
 
 CO OS 
 
 CO OS ^ CO 
 
 
 
 
 p^ 
 
 
 
 (M W3 <M 
 
 
 
 
 
 
 >O CO 
 
 
 I 
 
 o {2 
 
 8 
 
 
 C^4S-2I^2^' fl^S 
 
 
 ^0 
 
 R-00 
 
 is 
 
 i 
 
 2 ' 
 
 3 
 
 t) 
 
 <* 2 to 
 
 a | 
 
 rfj o ^ S3 
 
 * S- * S W) 
 
 .2 w Sea 9 
 
 - "9 a 
 
 n 
 
 * V 
 
 2 a 
 
 ~- <D 
 
 3^ 
 
 Jl 
 
 gj 
 
 of 
 
 1 
 
 t-> ^~* 
 
 d o 
 
 ,a to 
 
 4." ^^J 
 
 WJ o o-o 
 
 
 Jl 
 
 i 1 ! 
 
 , 
 
 ep 
 
 i_r 
 
 o _ 
 
 
 
 
 2 ..^S-----* JH 
 
 
 g'li 
 
 
 | 1^" | 
 
 g - Wc^COtNCOC^CO"* * fl 
 
 a c - - * * 
 
 
 
 
 43 H t 
 
 d i S 
 CJ C3 TO - 
 
 f 
 
 is- 
 
 2 S 
 
 
 
 
 . . , . . S "S 
 
 
 ^5 5; S "2 
 
 S a a 
 
 *e3 **" 
 
 u ** 
 
 " ^* * "** M 
 
 
 QJ O W ^H 
 
 CJ HH 
 
 H 
 
 K 
 
 H 
 
 
 o cc 
 
 M E
 
 150 THE PAYING TELLER. 
 
 exceptions, are incorporated in the Paying Teller's 
 general cash. The items 5 and 6, make the Clearing 
 House Exchange, amounting to $878,058.02. 
 
 The checks that are added from the morning letters 
 must be credited to the remitters on the books of the 
 Third Teller, and are transferred by him to the Pay- 
 ing Teller $91,876.18. 
 
 The exchange received from the Cleaning House in 
 return for that sent to it number 8, $870,463.27, 
 completes the entire amount of the Paying Teller's 
 cash $4,997,745.43. 
 
 The payments are as follows : 
 
 The exchange sent to the Clearing House, which is 
 the precise amount of the items 5, 6, and 7, on the 
 other side of the account number 9, $969,934.20. 
 
 Numbers 10 and 11 are, respectively, portions of 
 the items numbered 1, and 2, returned to the Second 
 and Third Tellers. They may consist of country 
 checks, or checks that remain unpaid for some cause, 
 or uncurrent bank bills, the responsibility of convert- 
 ing which into exchangeable funds belongs to the 
 Tellers who received them, and not to the Paying 
 Teller. 
 
 Number 12, is the whole amount of the dealers' 
 checks paid in this department during the day. 
 
 The sum of these payments being subtracted from 
 the footing of the opposite side of the account, calls 
 for the balance in cash of $2,996,504.12. 
 
 So much for the books. 
 
 The Paying Teller now counts up all the office 
 notes, or bills of his own bank, by denominations, and 
 finds them to be $140,843. He has redeemed bills of '
 
 EXAMINATION OF CASH. 151 
 
 corresponding banks to the amount of $9786. He 
 counts over the specie (that in the vault by bags or 
 certificates), and on adding these sums together, finds 
 the whole to agree with the Proof. 
 
 If there is a discrepancy, he mostly discovers it by 
 revision. Errors of surplus or deficiency that cannot 
 be explained, must be marked on the Proof, and 
 reported to the Cashier. Their solution may come 
 about by accident after the lapse of weeks or months. 
 
 The short summary marked B. is the most import- 
 ant statement in the whole history of the business. 
 It is exclusively in the keeping of the Paying Teller, 
 is out of the reach of all the examinations and tests 
 of the general accounts of the bank, and no clerk has 
 any necessity or right to look into it. The President, 
 the Cashier, or a committee of the Board of Directors 
 may investigate it when they think proper ; but they 
 rarely do it with any thoroughness the President or 
 Cashier perhaps not once in twelve months. In some 
 banks, the Board of Directors is divided into standing 
 committees of three or four members each ; and these 
 committees rotate as examiners for stated periods. 
 In others, special committees are appointed for the 
 service; but not one bank director in twenty has 
 enough practical acquaintance with accounts to give 
 real value to his certificate of accuracy. All the 
 bank frauds that have been perpetrated in New York 
 have been carried through repeated directorial exam- 
 inations, and not one within the author's knowledge, 
 has ever been discovered by them. Discovery has 
 almost uniformly been the result of accident, of self-
 
 152 THE PAYING TELLER. 
 
 conviction, or of unmanageable magnitude in the 
 default. The methods of concealment in the hands 
 of a skillful clerk, are too many and too intricate to 
 be detected by common scrutiny. 
 
 A better method is, for the Cashier to select two or 
 three intelligent clerks who are not connected with 
 the Paying Teller's department, to assist him in the 
 examination. This is the practice of several banks 
 which are under the best discipline. 
 
 The office list in this statement has frequently been 
 used to cover the embezzlement and misuse of funds. 
 Under the specification of " sundries," or " cash items," 
 or "mutilated bills," any deficiency could be con- 
 cealed. The Teller may carry on false figures for 
 years, and no after-examination could prove them 
 false. 
 
 The office list has also been used by bank officers 
 to conceal their improper application or abstraction 
 of funds. The President or Cashier may make loans 
 on " traps,"* seal them up, mark on them a fictitious 
 value, and instruct the Teller to " put them in the 
 office list." Such abuse is not discoverable by the 
 Teller. He commonly obeys the instructions of the 
 officers without inquiry, and may thus be made the 
 involuntary instrument of fraud. In case of discov- 
 ery he would be held blameless. But with just views 
 of his own duty and responsibility, he might object to 
 receiving from the President or Cashier, any sealed 
 securities or vouchers to be counted as funds. If they 
 
 * This Is a common term, signifying uncommercial, and worthless documents, 
 such as depreciated railroad bonds, land grant bonds, railroad acceptances, bad or 
 Accommodation notes, broken stocks, Ac,
 
 CERTIFICATION. 
 
 should offer him securities of an improper kind, it 
 would be his right an'd duty to refuse them; nor 
 would any bank officers dare resent such refusal. 
 
 The modern improved discipline of banks, together 
 with the various legal reports of their condition, has 
 lessened the facility of fraud by the office list. Large 
 sums under the head of " sundries " or " cash items," 
 are regarded with distrust. 
 
 The substitution of copper for gold in the sealed 
 bags is a very hazardous experiment, and yet it has 
 occasionally been resorted to with success by a dis- 
 honest Teller. The difference in bulk of the same 
 weight of gold and copper would be too obvious to 
 the experienced eye of the Porter, to escaj)e detec- 
 tion ; and the difference in weight of the same bulk 
 would be discovered in the handling of it. 
 
 Certification is the most dangerous and least 
 guarded function of any person connected with the 
 bank, whether officer, director, or clerk. It 'is, in 
 fact, the power of bank issue ; and it is vested exclu- 
 sively in the Paying Teller. By simply writing his 
 name across the face of a check, he gives it the cred- 
 ibility of an official bank draft. He can do this at 
 his own house as well as at the bank counter, and for 
 people who keep no account with the institution as 
 well as for those who do. 
 
 The use of the Certification Check List, is to pre- 
 vent dealers overdrawing their accounts by the dupli- 
 cation of checks. It cannot prevent the Teller from 
 certifying beyond the record. 
 
 The Paying Tellers of New York disburse daily 
 near twenty-five millions, and in the course of a year 
 
 7*
 
 154 THE PAYING TELLER. 
 
 eight or ten thousand millions of dollars ; and the 
 aggregate of all losses incurred through them by 
 mistakes or by abuse of trust, is not, at the highest, 
 as much, perhaps, as the one ten-thousandth part of 
 one per cent ! This is strong testimony in favor of 
 their general fidelity as a class, in view of the exten- 
 sive powers with which they are intrusted ; and 
 especially, in view of the power of certification, which 
 in the manner of its use up to the present day', has 
 been without any other protection than their own 
 sense of propriety and honor. 
 
 Yarious changes have been proposed by bank offi- 
 cers in the method of certification. "When an example 
 of its abuse is made known, the subject is freely dis- 
 cussed by them, and it is felt to be the weakest and 
 most unguarded point in our banking system. Some 
 institutions have adopted a stamp in red or blue ink 
 to accompany the signature of the Teller; but the 
 stamp could be duplicated or secretly used without 
 difficulty. Others have proposed to conjoin the sig- 
 nature of another clerk with that of the Paying 
 Teller ; and others, to create a certifying department 
 with an exchange issue of checks. 
 
 The plain truth is, that the power of certification is 
 too easily abused, and too destructive in its abuse, to 
 be vested in single hands, without effectual super- 
 vision. 
 
 The following example shows how checks fraud- 
 ulently certified may be kept alive from day to day, 
 and assist a large default, without causing any irregu- 
 larity in the books of a bank, and without exciting 
 the suspicion of the officers and clerks.
 
 AN EXAMPLE. 155 
 
 The Paying Teller began by certifying a check in 
 advance of the dealer's deposit ; and on the following 
 day certified another, that it might be negotiated, and 
 the means thus obtained to remove the first out of 
 eight; to provide for the second, a third was certi- 
 fied, and so continuously on, the negotiations of one 
 day furnishing the means to redeem the checks of the 
 day before. The amount was gradually increased, 
 until twelve or fifteen checks, for amounts between 
 four or five thousand dollars each, were afloat in the 
 various channels of negotiation. They were drawn 
 for irregular sums, that they might wear a business- 
 like appearance. No entry of them was made on any 
 of the books, and no apparent deficiency was caused 
 in the Teller's daily cash. An examination of. his 
 statement, similar to that marked B, on page 149, 
 would have developed no clue to the fraud, 
 which consisted entirely of floating certifications. 
 There were two confederates in the plan one a 
 dealer in the bank, and the other a broker whose 
 account had been closed for irregularity several 
 months before the exposure came about. As the 
 fraud could be maintained only by a complete daily 
 renewal and negotiation of the whole of it, the three 
 met in the evening at the office of the broker, and 
 the Teller was advised of the banks in which the 
 checks had been deposited, so that he could lay aside 
 those particular exchanges in the morning, and thus 
 prevent them from passing into the hands of the 
 Assistant Teller. It was then also ascertained what 
 amount of checks must be negotiated on the following 
 day, and they were written by the confederates, and
 
 156 THE PAYING TELLEB. 
 
 then certified by the Paying Teller. Subsequent 
 developments proved that this process had been car- 
 ried on for many months, the amount gradually 
 increasing until it reached seventy-five thousand dol- 
 lars. There had been, in the mean time, five or six 
 examinations by committees of the Directors, and the 
 usual certificate of accuracy in the accounts was 
 recorded. 
 
 The Teller who perpetrated this fraud was a very 
 accomplished clerk. His self-possession, when all 
 around him was excitement and hurry, seemed to 
 increase with the emergency. He manifested an 
 extraordinary faculty for detecting the slightest indi- 
 cations of fraudulent or dishonorable purposes in 
 others ; and the bank owed to him many fortunate 
 escapes from loss by the various tricks and imposi- 
 tions which are practiced by dealers in extremity. 
 To all these qualifications, he added such diligent 
 habits of business as to attract, in an unusual degree, 
 the personal attention, respect, and confidence of every 
 director, as well as of the officers of the institution. 
 It was subsequently found that he had been a regular 
 attendant at a gambling-house, even before his appoint- 
 ment as Teller. The discovery of his fraud caused an 
 immediate examination into the accounts of many 
 other Tellers in the city banks. In two cases each, 
 a deficiency of more than one hundred thousand 
 dollars came to light, and in a third, one of seventy 
 thousand. 
 
 Fraud and collusion may always be presumed from 
 the use of certified checks as collateral security for 
 loans. There can be no honest reason for not draw-
 
 AN EXAMPLE. 157 
 
 ing the money for them, as they are charged to the 
 account of the dealer when they are certified, and he 
 not the holder of the checks, is the man who must 
 pay them. In fact, they are already paid. The hypo- 
 thecation of certified checks is like the hypotheca- 
 tion of gold ; and when one deposits gold as secur- 
 ity, agreeing to pay interest on it, the presumption 
 is, that it is a surreptitious transaction. The only 
 possible excuse would be, an expected advance of 
 premium enough greater than the interest, to jus- 
 tify the hoarding. No dealer in money is so igno- 
 rant as not to know these facts. A broker who 
 receives certified checks as collateral security for 
 loans, becomes a party to the fraud, because the tacit 
 if not the expressed condition is, that he shall with- 
 hold them from the bank. 
 
 The Paying Teller, to a considerable extent, holds 
 in his hands the commercial fate of the merchant, in 
 the power to certify checks. He is therefore likely 
 at times to be tempted and embarrassed by personal 
 relations. Old companions and friends are shaken by 
 the financial storm, but he must prefer his own duty 
 to their interest. He must be unapproachable by 
 bribes of feeling, as well as of money. His greatest 
 danger is in the first exception to rules, which draws 
 after it a second exception. A Teller of one of our 
 city banks once made the following confession to the 
 author : 
 
 A personal friend and a highly respectable mer- 
 chant called at the bank after three o'clock, and 
 requested him to certify his check for six thousand
 
 158 THE PAYING TELLER. 
 
 dollars. He represented, that by paying off a loan 
 for that amount, he would release collaterals which 
 he had already negotiated for nine thousand dollars, 
 and that he would deposit the latter sum within half 
 an hour, thus making his check good. After a long 
 resistance, the Teller yielded not to the merchant, 
 but to the friend, on the express condition that the 
 check should be used for no other purpose. He was 
 met on the way to redeem his promise, by a creditor, 
 who overcame his purpose by the force of a superior 
 will, and obtained from him the certified check. 
 Finding that the borrower did not return, the Teller 
 became alarmed. He had delayed charging the cer- 
 tification until the deposit should be brought in, and 
 now withheld it to avoid inevitable exposure on the 
 following morning, and consequent dismissal and dis- 
 grace. After a week's labor and suspense, during 
 which he suffered the most painful anxiety, and with- 
 held the check, he secured the money, and then in- 
 formed the officers of the transaction. They were 
 satisfied that the lesson would make him more watch- 
 ful in future, and their confidence in him was rather 
 improved than abated. 
 
 The Paying Teller is the natural successor in office 
 to the Cashier a very influential consideration to 
 make him deserve the good opinion of the Directors, 
 and the esteem of the public. 
 
 He generally proves his cash within half an hour 
 after three o'clock. The Porter assists him in carry- 
 ing his trunks and trays into the vault, which he locks, 
 and with the key in his pocket, leaves the bank for 
 the day.
 
 THE DEPOSIT TELLER. 159 
 
 CHAPTER Y. 
 
 THE DEPOSIT TELLEB. 
 
 THE accounts of a bank are divided into two classes, 
 known as individual and general. 
 
 The former are personal, belonging to individuals 
 or firms. The latter are those of other banks, and such 
 as show the aggregates or results of the business ; as 
 Stock, Expenses, Bills Discounted, Profit and Loss, 
 Cash, Interest, Exchange, and some others. 
 
 The original entries of the former, called Indi- 
 vidual Deposits, are made by the Deposit Teller, and 
 the latter by the Note Teller. The Note Teller also 
 receives the money paid in for notes lodged for col- 
 lection on personal account. Both of these clerks are 
 Receiving Tellers, and are distinguished also as 
 Second and Third Tellers, in the order named, from 
 the rank which they hold with respect to promotion. 
 If the place of the First or Paying Teller becomes 
 vacant, the Second or Deposit Teller takes it, and he 
 is succeeded by the Third, or Note Teller, the quali- 
 fications of the clerk in each case being undisputed. 
 
 The duty of the Deposit Teller is to receive all 
 direct deposits of money brought by the individual 
 dealers of the bank. The book in which he enters 
 these is called the Second Teller's Cash-book. "While 
 in use, it lies open before him on the desk, with such
 
 160 THE DEPOSIT TELLER. 
 
 conveniences of blotting-paper, pencils, eraser, and 
 India-rubber as may be required. There are com- 
 monly two of these Cash-books open at the same time, 
 for alternate use by the Teller and the Book-keepers. 
 They have the same rulings precisely as the Certifica- 
 tion check-list, on page 115. The name of the depo- 
 sitor, and the amount of his deposit in the first 
 column, is the Teller's original entry, corresponding 
 in the figures with that which he makes in the Dealers' 
 Bank-book. A form of the Bank-book is given on 
 page 161. It is the Teller's receipt to the latter for 
 his deposits. The letter A is the initial of his name, 
 and identifies the receiver of the money. The exam- 
 ple shows a succession of deposits, and other entries, 
 which, with the extension columns of the Second 
 Teller's Cash-book, will be more appropriately ex- 
 plained under the head of J3ook-7ceepers. 
 
 The deposits of merchants consist of bank bills, 
 coin, personal and bank checks, certificates of depo- 
 sit, and other documents which represent money. 
 The dealer is required to state them in detail as in 
 the form on page 161. The banks generally furnish 
 printed tickets with blank spaces for the name of the 
 dealer and the figures. These are not only a help 
 to the Teller, with whom small economies become 
 great gains, but to the depositors also, many of whom 
 stand in need of instruction as to order and system in 
 their accounts. They may commit any number of 
 mistakes in their cash-book at home, but the tickets 
 will always set them right with respect to their depo- 
 sits in bank. The Teller will not receive money 
 without them. If his cash does not prove at the end
 
 DEALER'S BANK-BOOK AND DEPOSIT TICKET. 161 
 
 Dr. 
 
 OF P-RAT/FIEVS 
 
 The Commercial Bank in afc with SLATER & Co. 
 
 Or. 
 
 1855 
 June 
 
 July 
 
 18 
 
 1'.' 
 21 
 1-i 
 \ 
 3 
 10 
 11 
 
 12 
 
 <i 
 
 14 
 
 To Cash, A 
 
 $ 
 
 30,000 
 19,240 
 6.352 
 10^051 
 1,275 
 21,000 
 17,001 
 22,363 
 
 2,487 
 1,625 
 1,000 
 
 c. 
 
 Ho 
 
 42 
 60 
 
 1C 
 
 18 
 5n 
 
 June 
 July 
 
 !'. 
 20 
 24 
 28 
 5 
 6 
 10 
 12 
 16 
 
 By Cash. . . 
 Balance. 
 
 $ 
 
 960 
 14,240 
 30,000 
 2,240 
 500 
 15,045 
 25,000 
 16,840 
 8,750 
 18,819 
 
 c. 
 15 
 
 16 
 50 
 
 75 
 
 84 
 
 " A 
 
 " ^1 
 
 " .4 
 
 " A 
 
 " .4 
 
 " A 
 
 " Bills discounted 
 
 "Jones 2 ' 500 
 ies ' 12.50 
 
 " Brown 
 
 " Cash. . . .A 
 
 
 132,396 
 
 40 
 
 132,396 
 
 40 
 
 To Balance 
 
 18,819 
 
 84 
 
 
 
 
 DEPOSIT TICKET. 
 
 
 
 GO 
 rH 
 
 T 
 
 rH 
 
 I 
 
 .2 *
 
 162 
 
 THE DEPOSIT TELLER. 
 
 of the day, he re-examines them, first by comparison 
 of their footings with the book entry, and then by 
 checking off each item, and revising the additions. 
 They enable him to trace and identify all the checks 
 on other banks, and so assist his memory that he can 
 recall most of the transactions of the day. After 
 proving his cash, he rolls them into a compact bundle, 
 marks the date on the cover, and puts them away for 
 future reference, in case of necessity. 
 
 The Exchange Drawer is a drawer divided into as 
 many boxes as there are banks. The bills and checks 
 of each bank are separated by distribution, each kind 
 in its own box. The following example shows a com- 
 plete list, excepting in the length of it, which is about 
 eight inches. It is a statement of all the bills and 
 checks of the Mechanics' Bank, received by the Com- 
 mercial Bank during one day. 
 
 COMMERCIAL BANK, JUNE 18, 1855. 
 
 
 $ 
 
 c. 
 
 
 
 1,550 
 
 
 
 
 640 
 
 72 
 
 
 
 6,284 
 
 26 
 
 
 
 1,000 
 
 
 
 
 275 
 
 46 
 
 
 
 160 
 
 16 
 
 
 
 1,546 
 
 90 
 
 
 
 2,500 
 
 
 
 
 4,542 
 
 60 
 
 
 
 2,740 
 
 65 
 
 
 
 21,240 
 
 75 
 
 
 See this amount transferred to the Prooi; on page 163 No. 4
 
 THE FROOF LIST. 163 
 
 Every bank in the city has one such list against 
 every other bank ; that is, fifty-two lists, its own Office 
 List making the fifty-third. When the footings of 
 these fifty-two are copied on a general list, called 
 The Second Teller's Proof, and added together, they 
 constitute the Deposit Teller's portion of the Exchange 
 which goes to the Clearing House. It appears in gross 
 on the Paying Teller's Proof of the next morning, as 
 a part of his receipts, as on page 149, $554,982.99. 
 
 THE 
 
 SECOND TELLER'S PROOF. 
 June IBlh, 1855. 
 
 1 Bank of New York .................... $21,154.42 
 
 2 Manhattan Company ....... . ........... 15,000.00 
 
 8 Merchants' Bank ...................... 80,150.75 
 
 4 Mechanics' Bank ...................... 21,240.75 
 
 5 Union Bank .......................... 10,142.14 
 
 6 Bank of America ...................... 14,972.16 
 
 7 Phenix Bank ........................ 11,243,60 
 
 8 City Bank ............................ 16,800.19 
 
 9 North River Bank ..................... 
 
 10 Tradesmen's Bank ..................... 5,204.17 
 
 11 Fulton Bank .......... ; ............... 6,315.90 
 
 12 Chemical Bank ....................... 14,510.80 
 
 13 Merchants' Exchange Bank ............. 18,260.01 
 
 14 National Bank ........................ 16,210.40 
 
 15 Butchers' & Drovers' Bank ........ . ...... 1,745.00 
 
 16 Mechanics' & Traders' Bank ............. 4,520.72 
 
 17 Greenwich Bank ...................... 7,240.65 
 
 18 Leather Manufacturers' Bank ........... 16,762.40 
 
 19 Seventh Ward Bank ................... 7,265.10 
 
 20 Bank of the State of New York ......... 27,566.70 
 
 21 American Exchange Bank ............ 41,317.62
 
 164: THE DEPOSIT TELLER. 
 
 22 Mechanics' Banking Association $1,500.25 
 
 23 Bank of Commerce 27,005.16 
 
 24 Bowery Bank (Suspended.) 
 
 25 Broadway Bank 8,742.10 
 
 26 Ocean Bank 5,740.00 
 
 27 Mercantile Bank 4,960.11 
 
 28 Pacific Bank 1,950.00 
 
 29 Bank of the Republic 18,100.05 
 
 30 Chatham Bank 1,750.82 
 
 31 People's Bank 1,200.06 
 
 32 Bank of North America 16,200.60 
 
 33 Hanover Bank 1,850.00 
 
 34 Irving Bank 3,200.00 
 
 35 Metropolitan Bank 88,716.94 
 
 36 Citizens' Bank 1,325.60 
 
 38 Grocers' Bank 1,300.02 
 
 40 Nassau Bank 6,240.14 
 
 41 East River Bank (Suspended.) 
 
 42 Market Bank 15,270.65 
 
 43 Saint Nicholas Bank 1,201.10 
 
 44 Shoe and Leather Bank 14,964.10 
 
 45 Corn Exchange Bank 5,317.69 
 
 47 Continental Bank 12,572.64 
 
 48 Bank of the Commonwealth 9,214.00 
 
 49 OrientalBank 1,625.50 
 
 50 Marine Bank 1,100.16 
 
 62 Atlantic Bank 2,560.08 
 
 63 Importers' & Traders' Bank 22,540.13 
 
 64 Park Bank 19,378.96 
 
 65 Artisan's Bank 1,842.65 
 
 $554,982.99 
 
 Office List 13,938.71 
 
 Specie 3,884.95 
 
 Checks 64,387.92 
 
 $637,194.57 
 
 Footing of Cash Book 637,194.57
 
 BEHIND THE MACHINERY. 165 
 
 The foregoing list presents an exact proof of the 
 cash with the Deposit Book. 
 
 The manner in which the several items, excepting 
 the checks, are incorporated with the cash of the 
 Paying Teller, may be seen by comparing them with 
 the entries of the Proof on page 149. The item of 
 $64,387.92 is the amount of checks on the Commer- 
 cial Bank itself, and they are charged to the accounts 
 of the drawers. 
 
 It is not unusual for depositors who receive large 
 checks by their morning letters, to send them to the 
 bank for addition to the Exchange before it is dis- 
 patched to the Clearing House, in which case the 
 Deposit Teller passes them over to the Paying Teller. 
 This would require some additional entries at the foot 
 of the Proof, which would complicate it to the gen- 
 eral reader. 
 
 The whole duty of the Deposit Teller is performed 
 when he finishes this Proof. He locks up the fifty- 
 three packets or lists of money in a trunk, and deposits 
 it in the vault, when he is at liberty to leave the 
 bank, which he does mostly from half-past three to 
 four o'clock. He is expected to be at his post in the 
 morning in season to deliver his Exchange to the 
 Paying Teller, and to assist in the incorporation with 
 it of the Proof List of the Note Teller. 
 
 There are no complex calculations in the accounts 
 of the Deposit Teller. Simple addition and subtrac- 
 tion embraces all the arithmetic required. It is the 
 understood rule of the bank to avoid needless con- 
 versation, and to never speak to a Teller when he is
 
 166 THE DEPOSIT TELLER. 
 
 engaged in counting money. In truth, the mere 
 mechanical performance of the duties of this desk is 
 compatible with a very moderate degree of intelli- 
 gence. It will be sejen, however, on looking behind 
 the machinery, that a dull brain might easily prove 
 a very bad investment for the bank. 
 
 By far the larger part of the deposit of our city 
 banks consists of merchants' checks, given to each 
 other in payment of debts, or for mutual accommoda- 
 tion. Without the certification of the bank on which 
 they are drawn, these are no more than personal 
 obligations, of the validity " of which the Teller can 
 have but little knowledge. The stated rule is, that 
 they must be certified before deposit ; but this would 
 be attended by so much inconvenience and loss of 
 time, that it is relaxed with dealers of good standing, 
 who are supposed to be responsible for any that may 
 be returned dishonored, and who, in selfdefence, are 
 not likely to deal with unsafe people. And so it 
 happens, from usage, that a large proportion of all 
 checks received are uncertified. 
 
 Mr. Tarbox may deposit twenty checks amounting 
 to five thousand dollars. They may be drawn on as 
 many different banks, and it may take one or two 
 hours' running and waiting to get them all certified. 
 The Teller has no definite knowledge of the personal 
 responsibility of the drawers ; but Mr. Tarbox him- 
 self is a man of capital, prudence, and honor. He 
 therefore receives the checks, although he knows that 
 they will be drawn against immediately, and that a 
 day must elapse before they will reach the banks 
 where they are payable, whence any of them that
 
 ABEL DODGE. 167 
 
 are not good will be returned to him for redemption. 
 It is not unlikely that one or two of the twenty may 
 be sent back. If so, they are immediately presented 
 to Mr. Tarbox, who pays them by his own check. 
 The Teller might have recourse to his account in the 
 bank, the current balance of which is probably 
 sufficient to cover them ; but this would be leaving 
 Tarbox in the dark as to the dishonored checks, the 
 collection of which might be endangered by delay. 
 Moreover, if not apprized of their debit to his account, 
 he might overdraw that by his own checks. It is, 
 therefore, not only courteous, but necessary to the 
 safety of both bank and dealer, that he should be 
 advised without delay of any default in the checks 
 that he deposits. 
 
 Abel Dodge might prove to be less honorable than 
 Mr. Tarbox. He may not have given the Teller any 
 reason to think so as yet, and his deposit is received 
 in the same way. He draws his own check for the 
 whole amount within an hour, and presents it for cer- 
 tification. If the Paying Teller should want confirm- 
 ation of the deposit having been made, he has only 
 to ask the Book-keeper, who answers in the affirma- 
 tive ; and Dodge thus gets his own check certified, 
 against a deposit which consists of the uncertified 
 checks of other people. If the latter should prove 
 bad, the bank can have recourse only to Mr. Dodge. 
 To trace such a transaction, we may suppose one of 
 them to be returned from the bank on which it is 
 drawn. A messenger presents it to the Paying Teller 
 about midday, and demands the money for it. 
 
 " Joseph Pine's check not good, sir. I'll take the 
 gold, if you please."
 
 168 THE DEPOSIT TELLER. 
 
 It is paid, and passed over to the Deposit Teller, 
 who, wishing to avoid censure for unwatchfulness, 
 sends it to Mr. Dodge by the Porter, with instructions 
 to get the money for it. The Porter returns, with 
 information that Dodge has failed, and can't pay. 
 
 " Did you tell him it was a debt of honor ?" 
 
 " I did." 
 
 " What did he say to that?" 
 
 " Said he knew it, and was very sorry, but could'nt 
 help himself. Would be very happy to pay it, and 
 wishes he had the means." 
 
 " That's consoling. Did you ask him about Pine ?" 
 
 " Says Pine's failed too." 
 
 " What 2 Both on the same day ?' 
 
 " So it seems." 
 
 " Hang the pirates ! I'll go and see 'em after bank 
 hours, and try if I can't squeeze something out of 
 'em." 
 
 In such a case, the Teller may prove a better nego- 
 tiator than the officers of the bank. If he should be 
 able to make any kind of arrangement by which the 
 bank will receive final payment, he submits it to the 
 Cashier for his approval. Otherwise, he has the morti- 
 fication of informing that officer of the casualty, and 
 of the failure of his attempt. 
 
 Bank officers are not apt to be censorious when 
 satisfied with the general method and accuracy of 
 the Teller's desk. They know that losses are incident 
 to the business. But if they are of frequent occur- 
 rence, or if they manifestly result from incapacity or 
 carelessness, the Teller loses his place. 
 
 An accident of this kind stimulates his vigilance.
 
 BEFEBENCE OF DOUBTFUL CHECKS TO CASHIER. 169 
 
 Like small misfortunes in any business, it doubtless 
 wards off larger. He looks more closely into the 
 ledger balances, scrutinizes with a sharper eye 
 accounts, check, and persons, and consults his fears. 
 Other Able Dodges may turn up any day. He 
 enforces his rule of certification with more vigor, and 
 perhaps needlessly in many cases, giving offence to 
 thin-skinned dealers and lazy clerks. 
 
 " Now, where's the use of my traipsing all over the 
 city to get checks certified, when I know they're 
 good?" 
 
 " "Well I can't help it. You know the rule of the 
 bank, and ought not to require me to break it. Here's 
 one large check of five thousand dollars, which I will 
 not take on my own responsibility. If you get 
 the Cashier's consent, very good. I'll take the rest of 
 your deposit to-day, but hereafter you must get all 
 checks over a thousand dollars certified." 
 
 The dealer obtains the Cashier's consent, with an 
 admonition, however, that it is better to observe the 
 rule of the bank than to give the Teller an oppor- 
 tunity to refuse his deposit. If he has any doubt of 
 the check being good, or of the ability of the dealer 
 to redeem it if bad, he refuses at once. " No, sir. It 
 is the Teller's province to decide that point, and I 
 will not interfere with him." The Teller understands 
 this to be an approval of his course. 
 
 The risk of neglecting certifications falls back on 
 the merchant. The rule of the bank is, therefore, his 
 best protection, and should be appreciated as such, 
 rather than be deemed offensive to credit or standing. 
 Yet it is not unusual for a dealer or his clerk, when 
 
 8
 
 170 THE DEPOSIT TELLER. 
 
 asked why he does not get his check certified, to 
 answer, pettishly : " Because there's no need of it. 
 "What do you want me to run my legs off for, when 
 'tis no use ?" 
 
 The Teller of a bank may have reasons which are 
 unknown to the dealer, for requiring certain checks 
 to be certified, and which he is not at liberty to com- 
 municate. He may have received the same from 
 other parties to such an amount as to create suspicion 
 of kiting. This is the most vulnerable part of his 
 business the easiest and most specious method of 
 overdraft. It is that at which the Able Dodges are 
 sure to aim; and when the market is troubled, the 
 aim is frequent. 
 
 It is the Teller's duty to keep alive and always fresh 
 his knowledge of the general state of accounts, by 
 asking the book-keepers how they stand, what is their 
 average " run," and so forth ; by examining the 
 ledgers in person ; inspecting the character of the 
 deposits and checks, just as the Paying Teller does ; 
 consulting that officer ; comparing notes and experi- 
 ences ; clearing up doubts, or confirming suspicions ; 
 and so on, incessantly. In fact, he has much to do in 
 determining the character of the whole business. If 
 he is gifted with brains, vivacity, patience, and a civil 
 spirit, he may sift out the wheat from the chaff 
 separate the sheep from the goats, and exert a most 
 practical influence over the success of the institution. 
 A conceited, pompous fool (a character not unknown 
 in the New York banks) repels the better class of 
 customers from the counter, and attracts those who 
 are not above flattering him one day to cheat him on 
 the next.
 
 TELLER EXPOSED TO FOEGEEY, ETC. 171 
 
 " Why do you reject this check from my deposit." 
 
 " Can't you see, without asking ? What do you try 
 to walk over the rules of the bank for, putting in 
 uncertified checks ?" 
 
 " We shall not draw against our deposit within five 
 times the amount of that check, sir, so that you will 
 run no risk by taking it. Besides, we know it to be 
 good." 
 
 " Well, I don't ; and that's the point to be settled 
 here " 
 
 Such a Teller will lose business, by losing the 
 respect of dealers. Clerks tell their employers, and 
 the contagion of disrespect spreads. It is less com- 
 mon, however, to meet examples of this kind now 
 than it was formerly. Civility is found to be a com- 
 mercial investment. A surly, ill-mannered Teller, 
 would be complained of to the officers or directors, 
 and, if found incorrigible, would be dismissed. 
 
 The Deposit Teller has the same need to examine 
 signatures, indorsements, dates, and other peculiari- 
 ties of checks, as the Paying Teller. Dealers who 
 are entirely honorable and above practicing imposition 
 themselves, may be imposed on by others with frau- 
 dulent or kiting checks. The name of the depositor 
 must be indorsed below all others on the back of each. 
 In the hurried reception of deposits, he takes special 
 cognizance of this last indorsement, as the key to 
 discovery if any thing should prove wrong. He can- 
 not always examine at the moment the whole history. 
 That is sure to be done at the counter where final 
 payment is made, and the error, if any, comes back 
 thence for correction.
 
 172 THE DEPOSIT TELLER. 
 
 Reclamations between the banks are of every day 
 occurrence. A check is dated ahead, or the date is 
 obscure, or omitted ; it lacks an intermediate indorse- 
 ment, or is indorsed " by attorney," without proof that 
 the attorney is authorized by the principal ; the filling 
 up in the body does not correspond with the figures, 
 or is entirely wanting. Singular as it may seem, a 
 check will occasionally slip through the hands of a 
 Teller, without signature: he recognizes a familiar 
 style of writing, and the absence of the name does 
 not arrest his attention. 
 
 In the hurry of distribution, checks are thrown into 
 the wrong box, which takes them to the wrong bank. 
 All these errors come back to be corrected, by the 
 same channel through which they go out. ~New 
 modes of error are turning up every day. ~No Teller 
 has ever yet reached the end of them, and never will, 
 while the firm of Cunning, Carelessness & Co., does 
 half the world's business. 
 
 Merchants frequently keep accounts in two or more 
 banks. They draw checks on one to deposit in an- 
 other. This is a mere changing of balances ; and as 
 nothing is easier than for a man to sign his own name, 
 the Teller regards it with suspicion. Unless well 
 satisfied of the integrity and safety of his dealer, he 
 insists on the certification of all such checks. The 
 shifting of balances is sometimes unavoidable by a 
 merchant. He may draw on one bank in expectancy 
 of funds which he designs to deposit therein, and fail 
 to receive them ; in which case he writes a transfer 
 check on another, to restore his balance. 
 
 There is a protective feature in many accounts
 
 RECOURSE TO COLLECTION NOTES. 173 
 
 which keeps the bank safe against overdrafts; that 
 is, when dealers have notes deposited for collection. 
 As these are paid, they are posted to the credit of 
 their owner, and may make up his deficit. Bank 
 officers will sometimes admit temporary overdrafts in 
 anticipation of the maturity of collection notes ; or, 
 what is better, make transient loans, holding them as 
 collateral, by which the irregularity of overdraft is 
 avoided. The Deposit Teller takes no cognizance of 
 this source of recuperation, unless he finds necessity 
 to resort to it. 
 
 The financial connection of merchants in good 
 credit with an inferior class, tends to drag the former 
 down, and to confound them with the latter. " How 
 comes it," says the Teller to himself, " that our friend 
 Blunt is getting hooked in with such a fellow as 
 Dodge?" Blunt, thenceforward, becomes himself 
 subject to closer scrutiny. His account is more nar- 
 rowly inspected ; and if it should appear that there is 
 any thing like an established connection, he sinks a 
 degree in commercial standing. 
 
 The word foreign applies to banks out of the city. 
 Most of the New York city banks receive on deposit, 
 either at par, or at a small rate of discount, individual 
 checks on banks at a distance. Merchants in Buffalo 
 remit their checks on banks in that city, to their 
 creditors in New York ; and here they are received as 
 cash, deducting enough to cover the exchange and ex- 
 penses of collection. They may be returned not good 
 after several days, when the depositor must promptly 
 redeem them. The interval between their deposit and 
 their return, is long enough to allow the dealer to close
 
 174 THE DEPOSIT TELLER. 
 
 his account and leave the bank in the lurch. It fol- 
 lows that the Deposit Teller is practically discounting 
 paper all the time. The aggregate amount of checks 
 in transit for collection may often reach one or two 
 hundred thousand dollars, for the security of which, 
 the main reliance of the bank is on his judgment. 
 
 Drafts on individuals and private bankers in the 
 city, are received to a "limited extent, in deposits; 
 but this throws on the bank the trouble of collecting 
 them, and makes it responsible for indorsements in 
 which it has no interest. Dealers are therefore 
 mostly required to collect them on their own behalf. 
 
 The ingenious methods of counterfeiting bank bills 
 by photographic and other processes are such as to defy 
 any ordinary powers of detection. Besides making 
 entirely spurious bills, there are many tricks of altera- 
 tion and substitution which are very successfully prac- 
 ticed. A genuine plate of a broken bank is changed 
 in its title to conform to some existing bank. The 
 lesser denominations of bills are altered to the higher 
 three to ten, or one to fifty. The ink is extracted 
 chemically, and other titles and figures are neatly ex- 
 ecuted with a pen. The genuine dies, stolen from the 
 engravers, are imprinted on false bills. A small and 
 different portion is cut out of each of ten or fifteen 
 genuine bills, and a new bill made of the pieces, neatly 
 pasted together. The chances of success in these 
 various processes, are in proportion to the number of 
 different kinds of bills in circulation. The notes of 
 near two hundred banks are receivable in deposit in 
 New York. If each one issues six denominations, it 
 gives a total of twelve hundred different imprints.
 
 DETECTION OF SPURIOUS BILLS. 175 
 
 The attention of the Teller is not so much directed to 
 confirm the genuineness of each bill, as it is to detect 
 unusual appearances like one in a crowded street, 
 who does not observe common peculiarities, but at 
 once distinguishes a man in Turkish or other singu- 
 lar costume. But he might often be deceived by 
 fraudulent bills in his rapid counting, were it not 
 that other eyes than his own are bent upon their dis- 
 covery. No sooner is a counterfeit launched upon 
 the community, than some one of the several thousand 
 clerks in our banks and brokers' offices detects it, and 
 it is immediately announced in the public papers, 
 with such a description as to make its subsequent 
 detection easy. He has another guard in the watch- 
 fulness of his dealers, who, it is presumed, will not 
 knowingly present spurious bills. Notwithstanding 
 these defences, however, he is always on the alert. 
 The counterfeiter employs workmen of equal skill 
 with those who produce the genuine bill ; and although 
 engravers periodically announce a new improvement 
 or device which cannot be successfully imitated, they 
 are as often cheated by a fac simile that puts them 
 to the necessity of another trial. 
 
 The Teller acquires an instinctive faculty for the 
 detection of spurious bills. To stand by and observe 
 him counting, it might be supposed that he could 
 hardly get a glimpse of each, so rapidly do they pass 
 through his hands. He looks as if he were trying 
 how many times he could strike the ends of his fin- 
 gers together in the twentieth part of a second ; but 
 you see a steady stream of bills issuing beneath them, 
 and gradually gathering into a pile.
 
 176 THE DEPOSIT TELLER. 
 
 There goes one aside, without perceptible pause in 
 the swift handling! He checks the item on the list, 
 and with his right hand thrusts the pile into a drawer, 
 whilst with the left he tosses the single bill back to 
 the depositor. 
 
 "Counterfeit five dollars off!" 
 
 He makes .the entry, deducting it from the list, 
 hands the book to the dealer, and takes the next in 
 order, in which there is a package of mixed denomi- 
 nations of several hundred dollars. He gives it a 
 smack on the counter to loosen the bills, and a pecu- 
 liar toss, which makes them fall over like the leaves 
 of a book, affording an instantaneous glance at their 
 ends. His eye has caught in that instant an old 
 acquaintance ! 
 
 " Where did you get that altered bill ?" he asks of 
 the customer, meantime counting ".twenty, thirty, 
 fifty, fifty-five, sixty," and on he goes like lightning. 
 The dealer looks astonished, not thinking it possible 
 that the question could have reference to a bill in his 
 money. The Teller repeats, without ceasing his count 
 for an appreciable instant " one twenty, one thirty, 
 two, five, one forty-five say, where did you get that 
 altered bill sixty-five, one seventy, eighty, two 
 thirty that" he says, tossing it in his face " two, 
 altered to ten two eighty-five, two ninety-five, three, 
 five, ten three thirty-five ten off, right." And the 
 deposit is entered, and the dealer's book is returned 
 before he knows it, and the Teller is in the midst of 
 another count for the next customer in order. 
 
 This is very curious to an inexperienced observer. 
 But there are certain well-known spurious and altered
 
 CLAIMS FOR DIFFERENCES. 177 
 
 bank bills which are distinguishable by a quick 
 Teller, as readily as the countenance of his landlord 
 who approaches to ask for his quarter's rent. Counter- 
 feits in general have their run, and then mostly dis- 
 appear. To-day, it is a new ten, with which, if it is 
 a close imitation, the Teller may be caught but only 
 once. He studies over its peculiarities, comparing 
 every part with a genuine bill, and he would sooner 
 mistake a parasol for a hat than be cheated by it 
 again. Next week, a spurious five has its run, and 
 there may be an interim of a month before another 
 appears on the stage. The bank counter, however, 
 is the last place for counterfeits to be presented. They 
 are generally set afloat in country places, or among 
 the small shops, where they are more likely to escape 
 immediate detection. A few days, and often a few 
 hours, is enough to spread the alarm, and to give all 
 the peculiarities of the forged bill to the public 
 papers, so that Bank Tellers are apt to be fore- 
 warned. 
 
 CLAIMS FOR DIFFERENCES. 
 
 WHILE the Deposit Teller is pressed with the cur- 
 rent business of his desk, the Paying Teller comes to 
 his elbow, and waiting for a pause, shows him one of 
 his Exchange lists of the day before. " Claim of 
 twenty dollars short in that item," says he. 
 " Don't believe it. Didn't differ a cent." 
 The messenger who brought the list from the claim- 
 ing bank speaks up : " It is so, you may depend on it. 
 Mr. Sharp counted it himself, and is very positive." 
 
 8*
 
 178 THE DEPOSIT TELLEE. 
 
 " Don't care if he is. My cash was right. Did he 
 prove his exchanges ?" 
 
 " Yes, sir." 
 
 "Well give my compliments to Mr. Sharp, and 
 tell him he'll not get the first red cent of his twenty 
 dollars out of me." 
 
 Mr. Sharp may find his cash correct at the end of 
 the day. Having, as he supposed, discovered an 
 error, he made the claim at hazard, rather than allow 
 the proper moment for so doing to pass without it. 
 
 A specific error should be reported to the bank in 
 whose money it is found either a deficiency or sur- 
 plus, with equal promptitude. Formerly, it was cus- 
 tomary to claim the deficit, but to say nothing of the 
 excess unless it was called for. If a careless Teller 
 was one or two hundred dollars " over," he reserved 
 the amount from his cash, trusting that it would be 
 claimed by the bank to whom it belonged ; and if not 
 claimed, it made a loose fund without an owner, thus 
 opening the door of temptation. But the explanation 
 of such differences was likely to be forthcoming at 
 any moment within one or six months. 
 
 The customary rule has been, for the sending bank 
 to admit a claim of deficiency on the statement of the 
 receiving bank, if the Teller's proof for the day calls 
 for that precise amount. This gives a dishonest Teller 
 an opportunity to abstract money from the exchanges 
 of another bank. He has only to insist on the deficit, 
 and usage gives him the advantage over the opposite 
 party, who claims with equal obstinacy that the money 
 was correctly counted by him. Such reclamations 
 havs occasionally excited suspicion, and a small
 
 IMPROVED DISCIPLINE. 179 
 
 excess has been made up in the Exchange, as a bait 
 to detect where the supposed dishonesty lay. During 
 the several years, preceding 1855, the number of 
 city banks increased from twenty-five to more than 
 fifty. Tellers were appointed Cashiers, and Book- 
 keepers succeded Tellers. Many new and inexperi- 
 enced clerks were employed, and reclamations for 
 diflferences became so common, and were occasionally 
 so large as to be quite serious. Bank officers con- 
 sulted together, and imposed stricter rules on their 
 Tellers. It was even suggested to make them per- 
 sonally accountable for differences which they could 
 not explain. Frequent disputes arose between banks 
 where the contesting Tellers were equally skillful, 
 honest, and obstinate. The old plan of exchanges by 
 Porters, who were out of sight and knowledge for one 
 or two hours every day with the money in their pos- 
 session, left the door open for suspicion or dishonesty 
 among them also. But the present method of settle- 
 ment by the Clearing House, together with improved 
 bank discipline, and the refusal of some banks who 
 were confident in their own accuracy, to pay claims 
 unaccompanied by proof, have greatly reduced the 
 number of such claims ; and the wonder now is, that 
 such a vast amount of business as is transacted by our 
 city banks, should be carried on with few and unim- 
 portant errors. 
 
 It was suggested, when the Clearing House was first 
 organized, that the packets of money should be sealed 
 up, and the amount indorsed on the outside. This 
 method has been partially adopted. It relieves the 
 transit of suspicion, and reduces the question to one
 
 180 THE DEPOSIT TELLER. 
 
 of honesty and accuracy between the exchanging 
 desks a very desirable issue. There might yet be 
 duplicate envelopes and seals, but with such hazards 
 of detection as few persons would be willing to 
 encounter. 
 
 Differences in the money department of a bank 
 sometimes spring up very mysteriously. A Porter 
 occasionally goes round with an inquiry of each : 
 
 "How did your cash come out on the 24th?" 
 several days after that date. 
 
 " All right. Why ?" 
 
 " Our Receiving Teller is a thousand short, and 
 can't find it. He has looked everywhere, too." 
 
 The next day, a note will be written on each 
 exchange list : " Please send lists of the 24th." 
 
 The Teller makes a general and thorough revision 
 of all his figures, checking them off by the deposit 
 tickets, and going over the additions. If he fails to 
 find it by this method, he sends a personal inquiry to 
 each dealer in whose deposit it may possibly have 
 occurred ; and still failing, he communicates his mis- 
 fortune to the Cashier, by whom it is made known to 
 the directors at their next meeting. The search is 
 not given up as hopeless, perhaps for several weeks. 
 The unfortunate Teller is annoyed by the daily ques- 
 tion of one or other officer of the bank, or by a direc- 
 tor, or fellow clerk : " Have you found your differ- 
 ence ?" It is finally considered as lost, and no more 
 referred to. 
 
 Bank officers are slow to entertain suspicion of a 
 clerk, unless there is some ground for it in his charac-
 
 INFLUEJCCE OF THE DEPOSIT TELLEB. 181 
 
 ter or habits of living, which may then form a subject 
 of conversation in the Board of Directors. 
 
 There is a looseness of practice with some banks 
 as to the deficit or excess of cash in the daily accounts 
 of the Tellers. Small sums accrue, which are thrown 
 together in a box or drawer, and applied to the restor- 
 ation of small deficits, it not being deemed a matter 
 of sufficient consequence to be noted on the face of 
 the day's transactions. The chief objection to this 
 is, that it is a departure from exactness of record 
 a small wedge that might be driven further in. 
 Nothing short of exactitude should be allowed in 
 commercial accounts, and especially in a bank. 
 There should be a ledger account opened with each 
 Teller, in which the surplus, if any, should be cred- 
 ited under its actual date, or. deficiency charged ; and 
 this might be periodically balanced by a transfer to 
 Profit and Loss. 
 
 The Deposit Teller is, to a great extent, the abso- 
 lute judge in his department, as to what measure of 
 confidence may be safely reposed in individual deal- 
 ers. He has therefore much need to study character. 
 He must be able to read the manner, the countenance, 
 the general bearing of men. If he is fully equal to 
 the position, he is the first person, of clerks and offi- 
 cers, to catch indications of trick or weakness in the 
 dealer, which are most likely to appear in his deposit. 
 The Paying Teller, the Book-keepers, or the Officers 
 of the bank, see only the aggregate sum set down to 
 his credit; but the Deposit Teller handles every 
 check and from long experience discriminates be- 
 tween those which are borrowed, and those which
 
 182 THE DEPOSIT TELLER. 
 
 represent the real transactions of trade. He fre- 
 quently asks questions, to satisfy himself of the credi- 
 bility of checks. If a dealer who is apparently hard 
 pressed in a tight market, offers unusual checks, he 
 wants to know who the drawers are, in what business, 
 and so forth. The bank officers depend on him to 
 communicate whatever intelligence he receives that 
 may affect the credit of customers ; and not unfre- 
 quently consult him in reference to discounts. 
 
 " How do the deposits of Sweatem, Sore & Co., 
 look now ?" 
 
 " Rather scaly, sir. Composed of an inferior class 
 of checks, to a considerable extent." 
 
 " "Well, you are careful to have them certified ?" 
 
 " Oh, yes. I have been obliged to hold them up 
 pretty closely on that tack, because I see they are 
 generally in the borrow." 
 
 " Deposits not so good as formerly, eh ?" 
 
 " No. Nothing like it. Very much larger propor- 
 tion of accommodation checks. Mr. Sweatem comes 
 himself, occasionally, and looks annoyed. I can't help 
 feeling sorry for him ; at the same time, it won't do 
 to take his deposits as we used to." 
 
 The Cashier returns to the Directors' room. 
 
 " Gentlemen," says he, " I don't feel satisfied to 
 discount Mr. Sweatem's paper without another name. 
 From what the Deposit Teller informs me, I think 
 that he is becoming embarrassed ; and his line is 
 already higher than it ought to be." 
 
 " "We'll let it slide, then," says the President. 
 
 The Deposit Teller causes dealers to be expelled.
 
 CLOSING ACCOUNTS. 183 
 
 Nathaniel Jones has several times deposited kiting 
 checks, and undertaken some sleight-of-hand tricks 
 inconsistent with fair and honorable dealing. The 
 Tejler communicates this to the Cashier, and expresses 
 his opinion, that Nathaniel is an unsafe customer. 
 " When he comes to make another deposit, send him 
 to me. Or, stay ! Have you examined the Discount 
 Ledger, to see if he owes us anything ?" 
 
 " Yes, sir. His last note runs off in a few days. I 
 concluded to get along without betraying any distrust 
 till that is paid, and then we'd better close him out." 
 
 " Yery well. Refer him to me at the proper time, 
 and I'll put him through.' ; 
 
 The Teller does so. 
 
 " Mr. Jones," says the Cashier, " it appears that 
 you have deposited kiting checks several times lately, 
 and practiced some irregularities which conflict with 
 our rules !" 
 
 Mr. Jones attempts an explanation, which proves 
 altogether unsatisfactory. The Cashier expresses his 
 regret at feeling compelled to advise him to with- 
 draw his account from the bank. 
 
 " I can do that, sir. It has not been so useful to 
 me as to make it much of a hardship to break the 
 connection." 
 
 Mr. Jones takes it in dudgeon, nevertheless. His 
 sensibilities are not so blunt but that he can feel this 
 sharp sting of discredit. The Cashier informs him, 
 that it is both the interest and the duty of the officers 
 to cultivate a good understanding with their dealers ; 
 but it is, likewise, their interest and duty to get rid 
 of dangerous accounts. He politely requests him to
 
 184: THE DEPOSIT TELLER. 
 
 draw a check for his balance of deposit, and to leave 
 his book for settlement. 
 
 An account cannot always be closed immediately 
 when it ceases to be honorable and safe. There are 
 often unniatured discounts, which might be endan- 
 gered by unfriendly terms. The officers and clerks 
 must be patient till these are paid. 
 
 The Deposit Teller is much less liable to interrup- 
 tion than the Paying Teller. When the ticket is 
 properly made out, he receives the deposit, makes the 
 entries, and returns the book to the dealer, without 
 speaking a word. A slight nod of recognition is all 
 that passes between them, and so he may go on by 
 the hour. At other times, the dealer will stop for 
 conversation about the business, or on indifferent sub- 
 jects. One whose office-cash is wrong, calls to ask 
 if any error appeared in the Teller's accounts of the 
 day before. 
 
 " Yes. I was a hundred dollars over, and found it 
 in the addition of your ticket." 
 
 He unrols the packet of tickets, shows the error to 
 the dealer, and either returns the amount or places it 
 to his credit. 
 
 " Don't you keep a copy of your deposit tickets ?" 
 "No." 
 
 " Well, you ought to. It would save time." 
 
 " That's true. This mistake has cost me two hours, 
 and a good deal of anxiety." 
 
 Nobody knows better than a bank teller the value 
 of strict habits in these apparently small points, or is 
 better qualified to give instruction about them. He 
 has a decided advantage over a careless and disin-
 
 MISTAKES OF DEALERS. 185 
 
 genuous customer, who puts his inquiry in the shape 
 of an assertion : 
 
 " Your cash must have come out a hundred dollars 
 over yesterday 1" 
 
 " Why so ?" 
 
 " Because I made a mistake in my deposit." 
 
 " If you had, I think I would have found it. My 
 accounts balanced within two cents." 
 
 The dealer's ticket is produced, and the Teller shows 
 the marks of his pencil, by which he distinguishes the 
 character of every item on it whether it was a 
 foreign check, a city bank check, bills, silver, or gold, 
 and its agreement with the book-entry. 
 
 " You had better examine your own figures a little 
 better before you make such a claim of me !" 
 
 If this dealer should come later in the - day and 
 request the Teller to enter his deposit, while, to save 
 time, he transacted business at another desk, he would 
 get for answer : 
 
 u No, sir. You must wait here till I count it. I 
 will take no such risk from a man who may come 
 to-morrow and claim to have given me a hundred 
 dollars more than I have credited to him !" 
 
 Honorable dealers, whom the Teller knows to be 
 exact, will occasionally leave a large amount of 
 checks and bank bills for him to count at convenience, 
 and return for their books after an hour, or on the 
 following day, which saves them the time that would 
 be lost by falling in at the foot of a long row of depo- 
 sitors and waiting their turn. But the rule, to count 
 the funds in the presence of the dealer, is generally 
 adhered to. It is not unusual to receive packets of
 
 THE DEPOSIT TELLER. 
 
 money at the dealer's mark without opening them ; 
 his name being written upon the strap ; in which case 
 he abides by the Teller's count, and makes up any 
 deficit. Small coin in bags or packets, marked on 
 the outside, are received without opening, subject to 
 the examination of the Specie Clerk, or Porter, at his 
 leisure. Deposits are not unfrequently received with 
 a ticket only, the dealer's book having been mislaid, 
 or left with the book-keeper to be balanced. The 
 omission is supplied by a subsequent entry. There 
 are many careless dealers and illegible writers among 
 bank customers, who find it difficult to count money, 
 or to make the simplest addition correctly. It is 
 generally easier for the Teller to rectify their mistakes, 
 than to require them to do it. Instruction gradually 
 improves them. But some who blunder from sheer 
 carelessness get a veiy short lesson. 
 
 " Here. Take your money and book back. Go to 
 that desk, and make* out a decent list of the checks in 
 proper order, and the bank bills separately, and then 
 I'll receive it not before." 
 
 The Deposit Teller is not liable to be cheated by 
 forged checks. He transacts business with those per- 
 sons only who have been admitted as dealers by the 
 bank officers, and who are therefore presumed to be 
 worthy of some confidence. As they have, mostly, 
 fixed and known residences, any attempt at ordinary 
 fraud would return upon them. 
 
 Towards the latter part of the day, depositors begin 
 to crowd in. upon each other's heels. " First come,
 
 DISTRIBUTING MONEY. 187 
 
 first served," is the rule of reception. Each takes his 
 place in the row, and moves up as those before him 
 complete their deposits. 
 
 The Assistant Teller is generally released from his 
 duties in the department of the Paying Teller, about 
 noon, from which time forth he is an auxiliary to the 
 Deposit Teller. He begins immediately to assort the 
 money and checks as they are deposited. There are 
 near one hundred different kinds to distribute into 
 upwards of fifty boxes, the country bills falling to 
 those banks by which they are redeemed. Long 
 habit gives great facility and rapidity in this process. 
 The Assistant is awake to the detection of counterfeit 
 bills, especially in the unopened packets, the examin- 
 ation of which is transferred to him by the Deposit 
 Teller. He carries forward the " making up" as fast 
 as possible, keeping the counted portion under the 
 slip in each box. 
 
 All the checks on foreign banks are handed over 
 to another clerk, who returns for them a charge-ticket 
 against the bank to which they are to be remitted for 
 collection ; and these tickets, together with the office 
 checks, are charged to their respective accounts, mak- 
 ing the /Second Teller's check-list, of which the item 
 $64,387.92 in the Proof, on page 164, is an example. 
 
 Between two and three o'clock, there is mostly a 
 great pressure of depositors, with apparent hurry and 
 confusion. Every thought of the Teller is fixed in- 
 tently, and he seldom speaks a word, except to give 
 or ask a necessary explanation of things. On tight 
 days his vigilance is exerted with an intensity that
 
 188 THE DEPOSIT TELLER. 
 
 soon becomes painful. The character of the deposits 
 shows him, from day to day, that certain dealers are 
 " hard up," and he looks suspiciously at their checks. 
 Mr. Jones has a list amounting to six or seven thou- 
 sand dollars, in which there is a check of twenty-five 
 hundred. The Teller deducts it from the footing, 
 gives him credit for the balance, and returns it with 
 a significant glance, which that gentleman does not 
 wish to have more publicly explained. Mr. Jones' 
 certifications are proportionably limited at the coun- 
 ter of the Paying Teller. 
 
 The -last deposit is entered, and the Teller before 
 closing his little gate, shakes his head ominously, and 
 not unsympathizingly, at a man who had been stand- 
 ing at the railing for the last hour, holding a check 
 in his hand. To the inquiry of the Cashier, he an- 
 swers': 
 
 " He is a poor shoemaker, with Jacob Screw's check 
 for ninety dollars, and he is watching for a deposit 
 that he may draw the money before anybody else 
 gets it," 
 
 " What ! Is that our Screw who owns so much real 
 estate ?" 
 
 " Yes, sir." 
 
 " "Well, if he makes a deposit, try and save the poor 
 man, and then close his account. I'll have no such 
 scaly fellow in the bank." 
 
 The Exchange slips are all counted up like the 
 example of the Mechanics' Bank, on page 162, and 
 entered on the Proof. "With the Office list, specie, 
 ana checks added, it must agree with the Cash-book. 
 See examples, page 164.
 
 NOTES CLASSIFIED. 189 
 
 CHAPTER VI: 
 
 THE NOTE TELLEE. 
 
 THE Note Teller (or Third Teller) receives the 
 money for all promissory notes liquidated at the bank, 
 and hence his title. This office was formerly included 
 with the duties of the Deposit Teller, and still remains 
 so in banks of small business ; but such has been the 
 growth of commerce, and the consequent increase of 
 financial methods, that the division has been found, 
 in the larger institutions, both convenient and neces- 
 sary. 
 
 There are two classes of notes : those which are 
 discounted by the bank, and those which are merely 
 deposited by the owners, for payment to their credit. 
 They are called Mils discounted, and collection, notes. 
 The book in which the former are entered has the 
 title of General Accounts, and that appropriated to 
 the latter is called the Third Teller's Cash-look, or 
 Note-booh. Both classes of notes are filed in neat 
 packets, each note numbered on the end to correspond 
 with the number in the Tickler.* 
 
 The Teller takes up the Collection Note Tickler, 
 
 * This Is an arbitrary term, derived probably from the practice of ticking qt 
 checking off figures in commercial accounts. A particular description, and a page 
 of the book, is given under the head of the Note department.
 
 190 THE NOTE TELLER. 
 
 and draws out, by the number, the notes due on a 
 particular day. To be sure that they are the right 
 ones, he checks them off by the name of the drawer, 
 and the amount. He enters them on his cash-book 
 in the alphabetical order of the indorsers' names, 
 writing the names of the drawers next, and then the 
 amount, as in the example page. Those which belong 
 to foreign banks are entered in the book of General 
 Accounts, which differs from the individual book in 
 having no extension rulings, as all the postings go 
 into one ledger. 
 
 "When all the notes are entered, they are arranged 
 in the alphabetical order of the names of the drawers, 
 and placed in a pile on the counter, with a weight 
 on one end, so that any particular note called for can 
 be slipped out, leaving the others still in order. 
 
 The discounted notes are drawn from the files in 
 the same manner, and placed alphabetically under 
 another weight. They are not entered separately on 
 the cash-book, as they are to be posted in gross to 
 Sills Discounted; the amount is transferred from the 
 Tickler page at the close of the day. 
 
 The Teller is now prepared to receive payment for 
 the notes as they may be called for. This preparation 
 is always kept one day in advance, to avoid confusion 
 with other duties in the morning. 
 
 The bank notices of the discounted notes are filled 
 op with red ink, and those of the collection notes 
 with black ink, which indicates at once in which pile 
 the note is to be found. 
 
 * 
 
 The Note Teller reaches his desk by half-past eight
 
 PAGE OF THIRD TELLER S NOTE-BOOK. 
 
 191 
 
 
 
 
 
 02 H W M O E-! QQ O O i4 PH < C< OH ^ 
 
 ial
 
 192 
 
 THE NOTE TELLEK. 
 
 o'clock, or in season to make the entries of remit- 
 tances received by the morning's mail. The follow- 
 ing is the usual form of a letter, with abbreviations : 
 
 "PHILADELPHIA BANK. 
 
 " PHILADELPHIA, June 18, 1858. 
 " H. MORSE, ESQ., Cash'r. 
 " DEAR SIR Inclosed, find for our credit : 
 
 Peters, Cash'r. 
 Ruffin, " 
 
 Luther, " 
 
 Simpson, " 
 
 Corse & Co., " 
 Kerr, 
 
 Brown, 
 
 Green, 
 
 Wilson, 
 
 White, 
 
 Kent, 
 
 Mather, 
 
 Gray & Co., 
 
 Roberts, 
 
 " Market tight no change in rates business active, &c. 
 
 " Yours, resp'y, T. BARKER, Cash'r." 
 
 The open letter is given to the Teller, who writes 
 his initial, L., as his receipt for all checks that he 
 takes from it for credit to the remitting bank. In 
 like manner, all letters containing cash documents 
 are passed into his hands, and the proper entries 
 made from them. 
 
 Both the discounted and collection notes are classed 
 into domestic and foreign. The latter are payable in 
 various towns and cities over the country, and those 
 
 Com. 
 
 
 L. 
 
 $9400.00 
 
 Am. 
 
 
 L. 
 
 10000.00 
 
 Am. Ex. 
 
 
 L. 
 
 1575.60 
 
 Met. 
 
 
 L. 
 
 14263-70 
 
 Nat. 
 
 
 L. 
 
 1800.00 
 
 Phi. 
 
 
 L. 
 
 2740.00 
 
 Thompson, 
 Burr & Co. 
 
 3 ds. 
 10 ds. 
 
 P. 
 P. 
 
 1250.00 
 3263.20 
 
 
 8 mos. 
 
 P. 
 
 2249.75 
 
 
 90 ds. 
 
 P. 
 
 242.90 
 
 Alby. 
 Buffo. 
 
 2 mos. 
 45 ds. 
 
 P. 
 P. 
 
 506.00 
 1000.00 
 
 Hartfd. 
 Port. 
 
 Sight, 
 10 ds. 
 
 P. 
 P. 
 
 2600.00 
 1050.00
 
 PAYING NOTES. 193 
 
 which belong to the accounts of the Note Teller, are 
 transferred to him, when paid, from another book. 
 
 The payment of notes begins as soon as the bank- 
 doors are open for public business. Generally the 
 Runner's notice is handed in, with a certified check, 
 or the exact amount in bank bills. It is one of the 
 best habits of a Teller's desk to preserve the notices 
 and memoranda of transactions in the order of their 
 occurrence, until the cash is proved at the end of the 
 day. They serve as hints to the memory, and although 
 apparently trifling, often supply a link in a chain of 
 investigation. Even if the Teller's cash should prove 
 on first trial, it is still better to preserve his old file for 
 several days, until the last probability of error shall 
 have passed. Each bank has its stamp to imprint on 
 notes when paid, of which the following is a common 
 pattern. 
 
 The ink being in oil colors, cannot be readily re- 
 moved from the face of the note, without at the same 
 time obliterating the writing ; and it makes a perma- 
 nent record to the payer, by which the transaction 
 may be traced, if necessary, at any subsequent time. 
 It is also a substitute for the Cashier's indorsement, 
 to which the payment is generally subject. 
 
 Up to one o'clock or later, payments are made
 
 194: THE NOTE TELLER. 
 
 deliberately, and the Teller mostly has time to enter, 
 and prepare his notes for the following day. He is 
 obliged, however, to answer many questions, and to 
 make examinations, which are not always connected 
 with his business. 
 
 A dissatisfied face fills the gate in the railing : 
 
 " Is there a note of J. Freeman, six hundred dollars, 
 due here to-day ?" 
 
 "No, sir." 
 
 ' Won't you look again ? I've been to half the 
 banks in the city, and can't find it." 
 
 " Have you no notice 2" 
 
 " No, sir. I never get any, and always have to 
 run about two or three hours to hunt up my notes." 
 
 On looking over the Tickler, the Teller discovers 
 a record of J. Trueman, $600, due three days later, 
 and on producing the note, Mr. Freeman identifies it 
 as his own. The signature is carelessly written, and 
 hence the error in copying it. Besides, there are ten 
 or a dozen different J. Freemans and J. Truemans in 
 the directory, so that the chances of the Runner find- 
 ing the right man were as twenty to one. Mr. Free- 
 man had himself omitted to allow for the three days' 
 grace, in calculating the maturity of the note, so that 
 he is entirely the author of his own perplexity. The 
 Teller advises him to write his name more distinctly, 
 and to mark his residence under it, by which he will 
 avoid all trouble in future. If he had applied at a 
 later hour, when the Teller could not spare the time 
 to help him out of his trouble, the note would have 
 been protested. 
 
 It is common for tradesmen to count sixty days as
 
 WKONG OEDER. 195 
 
 two months, by which they get a wrong date of 
 maturity for their notes, and often spend hours in 
 searching for them, without success. Many persons 
 keep no record of their notes, depending on the bank 
 to serve them with notices. Some ask for a note or 
 draft by the name of the indorser or drawer, instead 
 of the payer, which is always the distinguishing name 
 in bank records. 
 
 The delivery of a bank notice to a wrong person of 
 the same name, incommodes both. One is obliged to 
 hunt his note from bank to bank till he finds it, and 
 the other is disturbed by a call to pay a note that he 
 doesn't owe. As there is a chance of his having given 
 one without a record, he hurries off to the bank to 
 examine the original. On its being shown he says, 
 angrily : 
 
 " Not mine ! I wish you wouldn't be bothering me 
 with other people's notes. What have I got to do 
 with that ?" 
 
 " An unavoidable mistake, sir, by our Runner. He 
 can't always hit the right man, when there are a dozen 
 of the same name in the directory." 
 
 The customer thinks more angrily still that he 
 "ought to hit the right man. It has cost him an 
 hour's time and interruption to look up the matter, 
 and it isn't the first, nor the twentieth wrong notice 
 that has been served on him by difierent banks within 
 a year." 
 
 He might save himself from all annoyance of this 
 kind by the simple rule, which no merchant or trades- 
 man ought to neglect to record bills payable before 
 signing them. ISTo prejudice can then arise from dis- 
 regarding the mistakes of others.
 
 196 THE MOTE TELLER. 
 
 Mr. Fosforus hands a certified check to the Teller 
 and wants to know " why he can't have notices sent . 
 The Kunner of any bank ought to be kicked out of 
 it head foremost for such willful neglect." 
 
 The Teller calls the Runner to explain. Mr. Fos- 
 forus flashes out again in a general abuse of bank 
 clerks, and " supposes none of 'em ever heard of the 
 old silk house of Fosforus, Pine & Co." 
 
 The Runner declares that he delivered the notice 
 to Mr. Pine in person, as he stood in his store door. 
 " Has a distinct recollection. Knows Mr. Pine per- 
 fectly well. Been in his store a thousand times. 
 Bushy hair wears gold specs. Must 'have put the 
 notice in his pocket instead of giving it to his clerk." 
 
 These altercations assume every phase that can be 
 given by irritable temperaments, and are liberally 
 interspersed with other accidents of the desk. 
 
 A dealer who has collection-paper coming due, and 
 depends on its payment for his own liquidations, 
 applies to know what portion of it is paid. 
 
 Another inquires whether certain protested paper 
 with his indorsement has been taken up. Some want 
 to withdraw paper that will not be paid. 
 
 The counting of bank bills received in remittance 
 from correspondents in the country, is one of the 
 common occupations of the Note Teller. These are 
 to be distributed in his drawer, and recounted in the 
 exchange lists to which they respectively belong. 
 
 An Express-agent brings a bag of gold, or a box of 
 silver, to go to the credit of a country bank. 
 
 The President or Cashier comes along and looks 
 casually at the various books and documents on the
 
 VARIETIES. 
 
 197 
 
 Teller's desk, and inquires whether his payments are 
 going as favorably as usual. 
 
 Many merchants write their notes payable at the 
 bank where they keep their account. The Teller 
 reserves the presentation of these until the latter part 
 of the day, when the deposits are made to meet them, 
 and then sends them by the Porter or other messen- 
 ger, to the different banks for certification. When 
 returned, he stamps the accepted ones paid, and dis- 
 tributes them in his exchange drawer. 
 
 The last half-hour of a busy day is full of excite- 
 ment at the Teller's desk. A line of twenty or more 
 note-payers is formed along the outside of the counter, 
 pressing on each other's heels, and impatient that 
 those before should crowd up. A new face is thrust 
 into the little railing-gate every second. Some of 
 them are in desperate haste, and the moment they 
 receive their notes, rush off to other banks to make 
 other payments. The Teller has not time now to 
 answer questions, or to give explanations of anything. 
 His attention must not be distracted for an instant 
 from the process of receiving, counting, and stamping. 
 
 After the last payer is dismissed, he closes his gate, 
 erases from the Cash-book and Discount Tickler the 
 notes that remain unpaid, and delivers them to a 
 Notary Public for protest. 
 
 The protest consists in presenting the note at the 
 place of business of the drawer, or wherever it is 
 made payable, and demanding the money for it. If 
 still refused, it is attached to a printed legal form 
 which recites the facts, and returned to the bank on 
 the following day. The Notary sends notice of the
 
 198 THE NOTE TELLER. 
 
 protest to all the indorsers, and to the drawer of 
 drafts, which advises them of their liability for the 
 payment, in case of continued default of the first 
 debtor. If the notes should be paid when presented 
 by the Notary, he returns the money to the bank on 
 the next morning. 
 
 The remaining labor of the Note Teller is to com- 
 plete his Proof, which is a list precisely similar to 
 that of the Deposit Teller. His money-drawer is of 
 the same construction, and his manner of distributing 
 the bills and checks the same. On the following 
 morning he transfers the entire receipts of his depart- 
 ment to the Deposit Teller, who incorporates them 
 with his own, in a list called " The Settling Clerk's 
 Statement," of which an example will be given in the 
 account of the Clearing House. The receipts of both 
 desks are then transferred to the Paying Teller, and 
 all the exchangeable portion thereof sent by him to 
 the Clearing House. 
 
 This is the complete theory of the Cash Department 
 of the bank. All the receipts pass every day into 
 the hands of the Paying Teller, leaving no open 
 account with either of the receiving tellers.
 
 INTEEE8T AND DISCOUNT. 199 
 
 CHAPTER 
 
 THE DISCOUNT CLEKK 
 
 THE profit of the banking business consists, in gen- 
 eral terms, of interest on money. Strictly, it is com- 
 posed of interest, discount, and exchange. 
 
 Interest is simply the rent of money. It is payable 
 at intervals, as agreed on between borrower and 
 lender, and is not ordinarily considered due until the 
 principal has been enjoyed. 
 
 The difference between interest and discount in 
 bank practice is, that the former is payable at the 
 end of a given term, while the latter is reserved from 
 the principal at the beginning of the term. 
 
 When a note is discounted at bank, the interest 
 for the period which it has to run before maturity is 
 subtracted immediately, and the merchant receives 
 credit for that much less than the total. This admits, 
 to some extent, of compounding interest. 
 
 One hundred thousand dollars loaned on mortgage 
 for six months, would yield at the end of that time, 
 at the rate of seven per cent, a profit of three thou- 
 sand five hundred dollars to the lender. The same 
 amount discounted according to bank usage, would 
 give the lender the same profit at the beginning of the 
 term, with which he could discount another note of 
 thirty-five hundred dollars for the same period. This
 
 200 THE DISCOUNT CLERK. 
 
 would yield an additional profit of one hundred and 
 twenty-two dollars and fifty cents ; and this sum again 
 loaned for the same time, would give a profit of about 
 forty-three cents more. The difference between the 
 two methods of operation on this amount is one hun- 
 dred and twenty-two dollars and ninety-three cents, 
 for six months. 
 
 The loan on simple interest would give this advan- 
 tage to the borrower. By the method of discount, it 
 is reserved to the lender. 
 
 A bank of several millions of capital derives a pro- 
 portionably large gain by the same process ; and the 
 reduction of the discount period from six to two 
 months, gives the opportunity of compounding the 
 interest more frequently. The average period in our 
 city banks is about forty days, which makes nine 
 compounding terms for the year. 
 
 The general practice of Bank Board Directors in 
 Tew York is, to meet on two stated days of the week, 
 to act on the notes offered for discount. These are 
 called Discount Days. Those immediately preced- 
 ing are called Offering Days, because the notes are 
 then sent in for preliminary record and examination. 
 
 The term Offering is applied either to a single note, 
 or to the aggregate amount offered at a time. When 
 bank officers meet, and wish to ascertain the general 
 current of the market, they ask : " How are your 
 offerings ?" The same expression is used in the news- 
 paper reports to indicate the activity of demand for 
 monej " The offerings at bank are heavy or light." 
 
 In a bank of the first class, the number of dealers
 
 PREPARATION OF NOTES. 201 
 
 who apply for discounts on the stated days is from 
 seventy-five to one hundred. Some offer a single 
 note, and others a dozen. They are usually enclosed 
 in a letter sheet, with a brief description, embracing 
 drawer, date, and amount, with or without special 
 communication. 
 
 FORMS OF LETTERS ENCLOSING OFFERINGS FOR DISCOUNT. 
 
 NEW YORK, June 18, 1857. 
 THOS. BROWN, Esq., Cash'r: 
 
 DEAR SIR We offer for discount notes enclosed, as 
 follows : 
 
 John Snowden, Jan. 10, 6 mos. $1245.60 
 Wm. Wilson, Feb. 25, do. 1400.00 
 S. Cannon, April 4, 4 mos. 2340.75 
 
 $4986.35 
 Yours, respectf 'y> JOHN JONES & Co. 
 
 We beg to say that our account will show a fair 
 running balance, and that our discount line has been 
 materially reduced within the last month. 
 
 J. J. & Co. 
 
 YORK, June 18, 1857. 
 THOS. BROWN, Esq., Cash'r: 
 
 DEAR SIR Enclosed, find our note at sixty days, 
 for $10,000, with fifteen of our business notes as col- 
 lateral. By discounting the same, you will oblige, 
 Yrs., Resp'y. COBB & BRO. 
 
 YORK, June 18, 1857. 
 To PRES., CASH., AND DIRECTORS, COMMERCIAL BANK : 
 
 GENTN Pleas discount My note herein, Jno. Jcnes, 
 $275, it is a one and No mistake. 
 
 Obt. P. STANLEY. 
 
 9*
 
 202 THE DISCOUNT CLERK. 
 
 NEW YOKK, June 18, 1857. 
 THOS. BROWN, Esq., Cash'r : 
 
 DEAR SIR we enclose again our offering for dis 
 count, which you rejected last day. See memo., with 
 particulars. 
 
 Our need is somewhat pressing, and you would do 
 us a great favor to pass the whole. The paper is 
 good beyond casualty. If you desire reference, or 
 further explanation with regard to it, we can satisfy 
 you. The general run of our dealings with the bank 
 entitles us to more liberal consideration than we have 
 yet had. Our balance of account has seldom fallen 
 below $3,000, and our line has not averaged over 
 $8,000. It is now reduced to about half that sum. 
 We therefore make this application with confidence 
 that it will be accepted. 
 
 Tours, respectf 'y, SERGEANT, WILKES & Co. 
 
 YORK, June 18, 1857. 
 CASHIER COMMERCIAL BANK : 
 
 Put to my credit $1800 as inclosed. 
 
 Yrs., &c. M. WESSELLS. 
 
 The Discount Clerk records them in the Offering 
 Book, in the alphabetical order of the dealers' names, 
 and numbered to correspond with the margin. In 
 the first column (see page 203), are the names of the 
 offerers, followed by their average balance of deposits, 
 the amount which they have already under discount, 
 the names of indorsers, if any, or statement of colla- 
 teral securities, the names of the payers, the time to 
 maturity, and lastly the amount. This record pre- 
 sents an abstract of the whole Offering, with the state 
 of each account, enabling the directors to judge of its 
 value and desert. The footing of the column shows 
 the total amount offered.
 
 PAGE OF OFFERING-BOOK. 
 
 8' SSS :S LS IJ8 
 
 203 
 
 AMOUNT 
 
 I M'lT. 
 
 DISCOUNT. 
 
 AVERAGE 
 BALANCE. 
 
 isTrratf 
 
 rr-l O 
 
 2 S SSS 
 
 
 ,, 
 
 I'M 
 
 jiill 
 
 Hi 
 
 iiiJ 
 
 iiift 
 
 t-'i-r i-Tofof O afefxf 
 
 
 rfef-f
 
 204 THE DISCOUNT CLERK. 
 
 The form of the Offering Book is not the same in 
 all banks. Some dispense with the balance column, 
 and some add another, showing the liquidations before 
 the next discount day. Others enter loans also on 
 this book, to the credit of the borrower, on the theory 
 that everything in the nature of a discount ought to 
 be shown in one consecutive history. The Directors 
 have, then, before them when they meet, a statement 
 of every transaction that has taken place, without the 
 necessity of referring to other books. 
 
 The old-fashioned Offering Book was a mere blotter 
 of abbreviated entries, from which the accepted paper 
 was transcribed either to a General Register, and from 
 that to the Discount Books, or direct to the latter. 
 This method is still in use, and in banks which have 
 much paper of an inferior class offered, the transcrip- 
 tion is necessary to a neat record. 
 
 After preparing the Offering Book, the clerk refolds 
 the envelopes, so that the notes can be conveniently 
 examined, without being separated therefrom. 
 
 The preparation of these details occupies consider- 
 able time ; and therefore it is required that the Offer- 
 ings be brought in before two o'clock. They are 
 dropped in a box at the desk of the Discount Clerk. 
 
 Dealers seldom appreciate the value of time to 
 bank clerks. They are apt to say : " That's what he 
 was put there for to wait on customers. He gets a 
 good salary who cares if it is after two ?" 
 
 An addition to the offerings after they are partly 
 recorded deranges their alphabetical order which 
 embarrasses every subsequent use of the book in 
 transcribing or posting. The Ledger accounts are
 
 DISCOUNT BOOKS. 205 
 
 opened in the same order, and not only the facility, 
 but the accuracy of the system is greatly aided by its 
 preservation. Each dealer should reflect how much 
 easier it is for him to observe a stated rule, than it 
 is for the clerk to overcome the inconvenience that 
 results from the concentration of many irregularities 
 on one point. 
 
 The Offering Book and the packet of notes are 
 returned to the Discount Clerk, after being acted 
 upon by the Board of Directors. He finds the letter 
 A (accepted), scored opposite to each offering that is 
 to be discounted, and the letter R (rejected), opposite 
 those which are refused. Any that are otherwise 
 disposed of, are marked accordingly. 
 
 The record of the accepted paper is now transferred 
 to Discount Books, of which there is one for each 
 dealer's ledger, embracing the same letters of the 
 alphabet. The discount and net proceeds of the notes 
 are extended in the additional columns on the Offering 
 Book, of which the footings must agree with the 
 aggregate footings of the Discount Books. From 
 these latter the credits are posted to the accounts in 
 the ledgers. 
 
 Another plan is, to transfer the discounted paper 
 from the Offering Book to a Register, whence it is 
 posted to the personal accounts. 
 
 There are also Discount Ledgers, which are opened 
 in the same manner as the personal ledgers, but em- 
 brace the accounts of those dealers only who get notes 
 discounted. They show each note that has been dis- 
 counted for any dealer, the date of its discount, the 
 indorser or security liable for it, if any, and the time
 
 206 THE DISCOUOT CLERK. 
 
 of its maturity. The whole is kept footed in pencil, 
 being subject to frequent change by the payment of 
 notes as they mature, and the addition of new entries. 
 They exhibit also the liability of each dealer as indor- 
 eer for others on discounted paper ; this being one of 
 the most important points to guard in the banking 
 business. If any two dealers should exchange notes 
 or indorsements, and put them in the same bank, 
 these books would expose the fact. They are placed 
 on the Directors' table on discount days for reference, 
 as may be required. 
 
 It is from these auxiliary Ledgers that the clerk 
 ascertains the amount of discounts set down in the 
 Offering Book. He keeps daily supervision over 
 them, cancelling the paid notes as fast as they mature, 
 by a ruled line across the figures, without obliterating 
 the record. 
 
 The notes are numbered on the back and end 
 with red ink, and filed in neat packets. They are 
 also transcribed on the Discount Ticklers, each under 
 the date of its maturity, with the number, name of 
 the payer, and amount. The Ticklers continue to 
 receive accessions by new discounts, up to within a 
 few days of the transpiring date. They are kept 
 added in pencil until that time, when they are finally 
 closed in ink. 
 
 In some banks, the notes are filed without number- 
 ing, those of each day being kept in a separate packet, 
 and the packets in the consecutive order of the dates. 
 This plan is thought to be more convenient where the 
 number of notes is very large, and it has the advan- 
 tage of easier reference to all that mature on any sin-
 
 CUSTODY OF NOTES. 207 
 
 gle day. It also brings the department more within 
 the reach of an extempore examination without the 
 aid of the clerk himself. 
 
 The Discount Clerk makes a proof of his books at 
 the end of each month. The addition of his Ticklers 
 ought to show the exact amount of bills discounted, 
 corresponding with the balance of this account on 
 the General Ledger. The final and conclusive test 
 is, by checking off the Ticklers with the notes, which 
 proves them to be in actual possession of the bank. 
 
 The Discount Clerk holds in his immediate charge 
 the greater part of the bills receivable, in which the 
 means of the bank are invested. He deposits the 
 trunk containing them in the vault at the close of 
 the day, and resumes the personal care of it on the 
 next morning. The officers may change or regulate 
 this custody, but they do not interfere with it so 
 as to impair his direct responsibility for its con- 
 tents. If they wish to examine particular notes, 
 they do so in his presence, or require him to pro- 
 duce them. Their own meddling, or that of other 
 clerks, would justify the defence that he is no more 
 accountable than they, if any should be lost or 
 stolen; and it might exonerate his bondsmen from 
 their liability. 
 
 Next to the officers, the Discount Clerk shares 
 most in personal intercourse with the customers 
 of the bank ; and in some respects, on terms more 
 favorable to the observation of character, on which 
 so much depends in the business. They apply to him 
 after the adjournment of the Board meetings to know 
 how their Offerings have been disposed of, and he
 
 208 THE DISCOUNT CLEBK. 
 
 witnesses their extemporaneous expressions of anxiety 
 and disappointment when they are rejected. He is 
 the stated medium of communication between the 
 officers and the dealers respecting the business of his 
 desk, and in the majority of cases there is no need of 
 any other. In a season of severe pressure, when per- 
 sonal solicitation with the officers becomes common, 
 a half confidential tone is maintained with the clerk. 
 He is "near the throne," and if not specially in- 
 structed, is supposed to have more or less influence, 
 and to be capable of giving some useful hints. 
 
 The stated meetings of the Board usually begin at 
 nine o'clock, A. M., and occupy from one to two 
 hours. The customers, or their clerks, then call to 
 know the result of their applications. When the 
 market is very stringent, they not unfrequently throng 
 at the desk before the adjournment, taking their 
 places in succession to push forward as soon as the 
 books and notes are given to the clerk. The letter A 
 enables him to answer, either by an affirmative nod, 
 or the monosyllable " done," and the letter R, by 
 reference to the number, to return the rejected notes 
 in the original envelop to the owner. 
 
 The first crowd of the morning is composed of the 
 most anxious dealers. It is important for them to 
 know early, whether they must seek elsewhere the 
 bread of commercial life for the day. They are fol- 
 lowed by the less needy, or the more deliberate, who 
 know the value of " deportment " in a tight market. 
 
 "Notes done, sir?" is asked by the applicants, 
 either verbally, or in pantomime. 
 
 The affirmative causes a bright gleam of sunshine
 
 Consolation. Better fare than at the Discount Board.
 
 DISAPPOINTED DEALEES. "209 
 
 in the face ot the questioner. But a negative to the 
 next comer substitutes a scowl of disappointment. 
 
 " "What is the reason of that, sir ? Has the bank 
 stopped discounting ?" 
 
 " Market tightened up, sir. Deposits down. Offer- 
 ings very heavy." 
 
 The customer departs with an audible growl of 
 indignation at what he conceives to be "a denial of 
 rights." 
 
 Number Twenty. "Good morning, Mr. Smith, 
 what have you to say to me ?" 
 
 " Nothing very encouraging, sir. The Board dis- 
 counted one of your notes." 
 
 " What only one out of ten 2" 
 
 "That's all. Very good proportion, I do assure 
 you." 
 
 " A single thousand ! And I want five to-day ! 
 Where's the President ?" 
 
 " In his room, sir. But I don't believe you'll gain 
 anything by talking to him. Our receipts are very 
 small j ust now, and the Porter brings bad news from 
 the Clearing House." 
 
 Number Twenty-one fills the little gate in the rail- 
 ing with a grum and threatening visage, but does not 
 speak. The clerk knows him as a frequent applicant, 
 and seldom a fortunate one, the character of his 
 account, as well as of his paper, being inferior, and 
 presenting no claims worthy of consideration by the 
 Directors. He receives back his offering without 
 remark, and departs in sullen silence.
 
 210 THE DISCOUNT CLEKK. 
 
 Number Twenty-two. " Well, Smith, don't tell me 
 my notes ain't done ?" 
 
 ""Wouldn't if I could help it, sir. Board did 
 mighty little this morning." 
 
 " Hang the Board ! Isn't there any explanation ? 
 Dont they know the paper ? Is it too long ?" 
 
 " No explanation given to me. Bank's short. 
 Can't help it. Majority in the same boat." 
 
 Twenty-two leaves an oath behind him. 
 
 Nuniber Twenty-three. " My paper done ?" 
 
 " No, sir." 
 
 " What's in the wind now ?" 
 
 " Market tightened up." 
 
 " Don't they do any thing ?" 
 
 "Not much." 
 
 " "Well, they do some ! Why the devil can't they 
 distribute the thing impartially ?" 
 
 " I s'pose they try to do it ; but it's not an easy 
 matter to satisfy an offering of four hundred thousand 
 dollars with about one fourth of that amount of 
 means." 
 
 Number Twenty-four is a man in his shirt-sleeves 
 a carman or laborer, with a small debt on his house 
 to discharge. 
 
 " Mr. Clerk, will you be good enough to hand me 
 the proceeds of that note ?" 
 
 " What name, sir ?" 
 
 " Axletree is my name." 
 
 " Mr. Axletree, I am sorry to return your note. 
 The Board couldn't discount it."
 
 Outside. Two per Cent, a Month.
 
 MB. AXLETBEE. 211 
 
 " What ! Can't give me the money for a note of 
 five hundred dollars 1" 
 
 The explanations of the clerk are nothing to him. 
 He sees only a bank with three millions of capital on 
 one hand, and his trifling call for five hundred dollars 
 on the other. 
 
 "Now, what shall I do?" he asks. "I have no 
 other place to get this money. I've kept an account 
 in this bank for five years and never asked a favor ; 
 and now I want this little accommodation, and can't 
 get it ! Do you call that fair ?" 
 
 The Discount Clerk steps over to the Book-keeper's 
 desk and examines Mr. Axletree's account. He finds 
 that his average balance for several years has seldom 
 fallen below three or four hundred dollars. On com- 
 municating this fact to the Cashier, Mr. Axletree is 
 recalled, and the merits of his application appearing 
 sound, the note is passed to his credit. 
 
 Attention to these small and comparatively obscure 
 accounts is one of the best traits ;n a bank officer or 
 clerk. They are liable to be overlooked in the pres- 
 sure and importunity of more important business. 
 
 "Mr. Gray sent me to ask if his notes are dis- 
 counted." 
 
 " No, my lad, they're not. Tell Mr. Gray that his 
 paper is too long." At the same time, the Clerk 
 hands back the offering, which the boy declines, say- 
 ing that " Mr. Gray told him to leave it, and he 
 would see the President about it. 
 
 Three out of four of all the applicants are disap-
 
 212 THE DISCOUNT CLERK. 
 
 pointed. They leave the bank, knitting their brows 
 into frowns and nervous distortions. Some mutter 
 oaths of indignation at " such infamous treatment." 
 Boys express themselves indifferently by a suppressed 
 whistle, or with a "Pooh! governor won't relish 
 that!" 
 
 The last thought that enters the mind of any, is, 
 that there are twenty applicants for every thousand 
 dollars that the bank has to dispense. 
 
 Number Thirty gets an affirmative nod from the 
 Discount Clerk ; and the smile of satisfaction with 
 which he leaves the bank is like a sunbeam in the 
 midst of winter clouds. He is such a profitable 
 customer, keeping a large balance on deposit, while 
 asking for comparatively moderate accommodations, 
 that the Directors dare not refuse him. 
 
 Number Thirty-one. " What luck !" 
 
 "If you'll make a note for twenty-five hundred 
 dollars instead of five thousand, and put it forty-five 
 days instead of ninety, it'll go through." 
 
 " The deuce ! That will only put me to the neces- 
 sity of coming again next week ; and that's what I 
 wanted to avoid." 
 
 " You are very fortunate to get any, I assure you. 
 The great majority are disappointed entirely." 
 
 "Well, I reckon a fellow must be satisfied with 
 half a loaf." 
 
 These examples of conversation and incident are 
 sufficient to give a general notion of the daily expe- 
 rience of the Discount Clerk.
 
 Inside. The Consequences of Two per Cent, a Month.
 
 A FRAUD. . 213 
 
 The Discount Clerk handles no money. He has 
 no occasion to touch a bank bill or a piece of coin. 
 His business is exclusively with the bills receivable, 
 and with the accounts. The only most obvious 
 method by which he could perpetrate a fraud, would 
 be, by abstracting notes, and negotiating them through 
 other parties an operation in which discoveiy would 
 threaten him at every turn. There was an instance in 
 the old Bank of the United States, of a Clerk abstract- 
 ing notes after they were discounted and filed away. 
 He selected those which in his judgment would 
 be least likely to be called for, or referred to, before 
 maturity, and by the help of a friend outside of the 
 bank, hypothecated them in an obscure channel, for a 
 loan of money. When they were near due, he 
 selected others of longer date to substitute for them, 
 and restored them to their proper place in the files. 
 The trick was discovered by the maker of one of the 
 hypothecated notes calling at the bank to pay it 
 before its maturity. In banks of effective discipline, 
 such abstraction of paper could not long be con- 
 cealed. 
 
 Discounted notes, which are payable in other cities, 
 are transmitted by mail ; and when advice of their 
 payment is received, a Journal entry is made, charg- 
 ing the collecting bank, and crediting bills discounted, 
 in the usual commercial form. A remittance for the 
 balance liquidates the account. 
 
 The same end is answered equally well by other 
 methods of entry.
 
 214 THE NOTE DEPARTMENT. 
 
 CHAPTEK TOE. 
 
 THE NOTE DEPARTMENT. 
 
 COMMEECE, in its broadest sense, is carried on by 
 promissory notes. The multiplication of this form of 
 credit is beyond all control. It loads every depart- 
 ment of trade, from pins and needles up to cargoes of 
 grain and cotton. It represents ships, railroads, 
 manufactories, public and private contracts. The 
 "pass-book" of the housekeeper is balanced by a 
 note at three or six months. The retailer purchases 
 goods of the jobber, and gives his note in settlement. 
 The jobber gives notes to the wholesale merchant, 
 and he in turn to the manufacturer or producer. The 
 manufacturer gives notes for the raw material. The 
 factor is already under acceptance to the grower, and 
 the grower's notes are given to the banks long before 
 his " fields are white unto harvest." The sugar that 
 reaches our wharves from Havanna or New Orleans 
 has two or three sets of notes predicated on it before 
 the first hogshead is discharged from the vessel ; and 
 it continues to accumulate notes as it passes through 
 the hands of the refiner into those of the grocer. 
 Even after it has been swallowed in confections, its 
 notes are still floating, unliquidated, in the market. 
 The market carries millions of notes for what is 
 already consumed, and millions more for what is not
 
 RECEIVING NOTES FOE COLLECTION. 215 
 
 yet sprouted in the furrow. The United States Gov- 
 ernment has lately settled thirty millions of debt by 
 promissory notes, and is rapidly creating the neces- 
 sity for a further indefinite issue. 
 
 The bank is the principal channel of liquidation for 
 all this mass of notes. Those which are not dis- 
 counted are first entered on the Dealers' Book by 
 the clerk, after careful examination. Informality of 
 indorsement, obscurity of date, or other accident,' 
 might make the bank liable to the holder, although 
 it is merely the collecting agent. It is the duty of 
 the Clerk to scrutinize every note narrowly before 
 entering it, and especially to see that the owner is the 
 last indorser, that it may not be placed to a wrong 
 credit, when due. Banks generally will not receive 
 for collection notes which have been disfigured, or 
 changed after issue by the drawer ; nor will they 
 receive them from strangers on any terms, even if 
 they are correctly drawn in every respect. 
 
 Promissory Notes are commercial currency. They 
 are transferred, by indorsement, from one merchant to 
 another, in settlement of debts, the same as bank bills : 
 differing only in this that they mature at a stated 
 subsequent time, and that the other indorsers are 
 liable to the owner, in case of non-payment by the 
 drawer. An owner may transfer a note to another, 
 by special agreement that he is to be held exempt 
 from such liability. This is expressed in the indorse- 
 ment by the words " without recourse, 5 ' above the 
 name of the exempt indorser.
 
 216 THE NOTE DEPARTMENT. 
 
 The Collection Register is a book of record ruled 
 in columns, so as to describe the note in a single line. 
 See form on page 217. 
 
 The Clerk marks on each note the date of its 
 maturity. If he should mark it one day too late, and 
 the drawer fail to pay, the bank would be liable to 
 the owner, because the notice of protest to the indors- 
 ers would be out of legal time. Hence the import- 
 ance of accuracy in this record. A careful clerk is 
 not satisfied without such revision of his "timinfg" 
 of notes as to give every possible guarantee against 
 error. 
 
 Tricky dealers have been known to mark a wrong 
 date of maturity on notes, for the purpose of " catch- 
 ing" the bank in this liability. The bank could not 
 escape by showing the wrong date to be that of the 
 dealer, unless it could prove the intent. It is bound 
 to be exact in its own business, and can urge no legal 
 excuse for adopting the errors of others. 
 
 After the notes are " timed," they are numbered 
 consecutively on the back and end, and recorded in 
 the Register, from which they are copied into the 
 Ticklers. 
 
 A Tickler is a book which exhibits, when complete, 
 all the notes maturing within the month, each under 
 its proper date of payment. Those which fall due on 
 the first, are transcribed under that date ; and those 
 that fall due on the second, under that ; and so on, 
 until the book presents a consecutive date record for 
 the month. There are twelve Ticklers for each year, 
 and two sets one for the collection, and one for the 
 discounted notes. They are designated by the name
 
 FORMS OF NOTE KFXJISTEE8. 
 
 217 
 
 5* 
 
 .. 
 
 l 
 
 o o'o 
 
 ass 
 
 Hi 
 
 Ss : ! 
 
 s.sJ 
 
 : :d 
 
 111 
 
 10 
 
 * o.- ^ a. 
 
 "o'o o o'o o o 
 SS8SSSS 
 
 J33IIIJ 
 
 li 
 
 ^rf
 
 218 
 
 THE NOTE DEPARTMENT. 
 
 of the month the January Tickler, the February 
 Tickler, and so forth. There is an auxiliary set in the 
 Discount Department, for the foreign notes. 
 
 O:F 
 
 MONDAT, June 1st, 1857. 
 
 53 W. 
 
 62 S. 
 
 63 T 
 
 Stimson .................................. 
 
 . Ackley & Co ................ , ............... 
 
 Watson .................... Merchants' Bank.. 
 
 1 10 E. Sickles .................................... 
 
 240 Bell & T ...................................... 
 
 241 Corse & N ..................... Merchants' Bank.. 
 
 245 T. Thomas .................................... 
 
 Wilson .................... 14 Pearl street ____ 
 
 4000. Jones ...................... Leather Bank. .. . 
 
 570 G. Roberts .................................... 
 
 860 L. Jackson. . ... ...... Notice to L. J. . . . 
 
 240 
 1,650 
 1,000 
 
 500 
 5,240 
 1,320 
 
 750 
 2,250 
 
 110 
 
 48 
 
 10,050 
 
 c. 
 
 00 
 75 
 00 
 20 
 75 
 00 
 00 
 00 
 10 
 75 
 14 
 
 One of the chief uses of the Tickler is, to facilitate 
 the drawing of notes from the packages, as the days 
 of maturity come round. The record consists merely 
 of the number of the note, the name of the payer, 
 and the amount. The residence of parties whose 
 names are not in the directory is given, to aid the 
 Runner in serving notices. When notes are made 
 payable at banks, that also is set down in the Tickler, 
 to indicate that notice to the drawers is not necessary. 
 
 Application is frequent for notes due at a future 
 day, out of the regular routine of business, either for 
 payment, examination of indorsements, or other pur- 
 pose. Reference to the Tickler gives the number, 
 and they can be produced in a second. 
 
 It is a general rule of banks, that collection-notes 
 should be deposited not later than ten days or a fort-
 
 CUSTODY OF NOTES. 219 
 
 night before their maturity, that there may be ample 
 time to pass them through the various books, and to 
 serve seasonable notice on the payers. But this regu- 
 lation cannot be strictly enforced, since merchants are 
 in constant receipt of short-time drafts. Their col- 
 lection-paper is often hypothecated for temporary 
 loans, or attached as collateral to discounted paper ; 
 and various other circumstances interfere with their 
 observance of the rule. When notes are deposited 
 too near their maturity to admit of notice being served 
 without unreasonable trespass on the time of the 
 Runner, it is either dispensed with, or the depositor 
 himself serves it. 
 
 The Clerk of this department is responsible for the 
 safe keeping and production, at an instant's call, of 
 any note or draft deposited in the bank. If payable 
 in the city, he can exhibit it ; if in the country, he 
 can show the course of transmission by which it has 
 passed out of his custody. 
 
 The Foreign Note Register is a book which differs 
 from the Domestic Register, only in having one 
 additional column for the name of the place where 
 the note is payable, and another for that of the bank, 
 to which it is sent for collection (p. 217). 
 
 It is the practice of the banks in New York to 
 make their collections for a district of country 
 through some one bank, which has an established 
 correspondence with all parts of it. For instance, a 
 bank in Albany or Troy will collect notes in all the 
 adjacent counties more promptly and cheaply than it
 
 220 THE NOTE DEPARTMENT. 
 
 could be done by separate correspondence of the city 
 bank with each town. 
 
 On this plan the Clerk opens another book, and 
 records on a page appropriated to the Bank of Albany, 
 all notes that fall within that collection circuit. He 
 writes or stamps on the back of each, below all other 
 indorsements : 
 
 PAY 
 
 BANK 
 
 OF 
 
 ALBANY. 
 
 Under this the Cashier signs his name; and the 
 letter enclosing the notes, after being copied, is sent 
 to its address by mail.
 
 THV. BOOK-KEEPEE. 221 
 
 CHAPTER IX. 
 
 THE BOOK-KEEPER. 
 
 AT first sight, nothing is more simple than the keep- 
 ing of a bank-ledger of personal accounts. All that 
 is to be done is, to post the deposits of a dealer to his 
 credit, and the checks to his debit. His Bank-book 
 must be " written up" to correspond with the Ledger, 
 and balanced from time to time, as a mutual test 
 between them. 
 
 The first requisite of a bank Book-keeper is, a fair 
 style of writing. It is more essential to write plainly 
 than elegantly. To a bank officer, the flourishes and 
 fine hair-strokes of an accomplished penman are like 
 foppery. He wants to see full, strong figures, that 
 can be distinguished from each other at a glance : 
 add to this, that they must be set down in columns 
 units under units, and tens under tens and the most 
 important requisitions for bank book-keeping are 
 answered. The Clerk must be ready at addition and 
 subtraction, with a habit of prompt and accurate 
 transcription. 
 
 Moderate as these requirements are, our city banks 
 have frequent cause to complain of inefficiency in 
 their book-keepers. Ledgers are not regularly bal- 
 anced. They gradually fall behind, and it is extreme- 
 ly difficult to bring them up again; for the accu-
 
 222 THE BOOK-EEEPEB. 
 
 mulation of figures never ceases. An account cannot 
 be stopped short, subject to the convenience or tardi- 
 ness of the Clerk. The whole Ledger, with its five 
 hundred accounts, has hundreds of postings added to 
 it every day. The reason why so many Book-keepers 
 fail, is not for want of capacity, but because of ppor 
 system, or no system at all. 
 
 The number of Book-keepers in a bank is in pro- 
 portion with the number of its dealers. Three or 
 four hundred accounts may be kept in a single ledger ; 
 but where there are twelve or fifteen hundred, as in 
 the Metropolitan Bank, and others of the same rank, 
 four ledgers are necessary, and a clerk to each. The 
 dealers are classed alphabetically. All names begin- 
 ning with the letters from A to F are assigned to the 
 first ledger ; those from G to L, to the second ; those 
 from M to R, to the third, and those from S to Z, to 
 the fourth. 
 
 A ledger of the usual size contains twelve hundred 
 pages. On the supposition that four hundred accounts 
 are to be opened in it, it would be very easy to 
 arrange them alphabetically, assigning three pages to 
 each. But the result of this would be, total disorder, 
 after the ledger has been in use a short time. Some 
 accounts will show but one deposit and three or four 
 checks in a week, while others have twice that many 
 for every day which would soon make it necessary 
 to transfer them from page to page, and so destroy 
 the arrangement. There is another difficulty to be 
 provided against : when a ledger is begun in a new 
 business, the clerk has no prepared list of names in 
 an index to apportion ; these will come in the pro-
 
 THE BOOK-KEEPEB. 223 
 
 gress of the business. To meet this case, and also the 
 fact that the letters of the alphabet are not equally 
 fruitful in proper names, a complete system of appor- 
 tionment has been devised, which shows, that in a 
 ledger of 1200 pages, 68 shonld be appropriated to 
 names beginning with A, 88 to B, 136 to C, 52 to D, 
 only 8 to Q, 6 to Y, and but one to the letter X ; 
 that is to say, that the number of proper names 
 beginning with C is about double the number begin- 
 ning with A, and seventeen times greater than those 
 with Q. This apportionment is based on a careful 
 examination of directories, encyclopedias, dictionaries, 
 library catalogues, gazetteers, and other alphabetical 
 works ; and although it embraces the names of objects 
 and places, it may be assumed as correct for all prac- 
 tical uses in book-keeping. 
 
 The " vowel order" is generally adopted in the dis- 
 tribution of accounts, and the apportionment under 
 this also has been determined with great accuracy. 
 For example, the 136 pages in C must be appro- 
 priated as follows : 
 
 To Ca, Ce, Ci, Co, Cu, Cy, 
 
 48, 12, 12, 48, 12, 4, pages. 
 
 This is the order in which every ledger should be 
 opened, to obtain the full aid of classification to the 
 memory. It gives the following result : 
 
 <z, 0, i, o, u, y, 
 
 Charlton, Cresson, Chisholm, Corwin, Cruden, Clymer, 
 Candy, Crewel, Crisp, Crowell, Church, Cryder, 
 
 Carter, Creamer, Clifford, Corning, Cludius, Clyde.
 
 THE BOOK-KEEPER. 
 
 If all the accounts in all the ledgers of a bank are 
 opened in this order, the economy of time must be 
 very sensibly felt in conducting the business ; and it 
 is not too much to say, that neglect of such arrange- 
 ment will inevitably expose it to errors, inaccuracies, 
 and greater expenses. 
 
 The continual changes arising from the discon- 
 tinuance of old, and the accession of new accounts, 
 make it impossible to preserve a stricter alphabetical 
 order than is obtained by following the inflecting 
 vowel. 
 
 The number of blank pages to be left for each 
 account depends on .the frequency of transactions, and 
 must be left to the judgment of the Book-keeper. 
 The time occupied in laying out his plans, and reduc- 
 ing everything to a regular system, will return to him 
 a thousand-fold in the general economy of his work. 
 
 The Certification Check-list, on page 115, being 
 the same in its rulings and forms of entry, may repre- 
 sent equally well the Second Teller's Cash-book, sup- 
 posing the entries to be deposits instead of checks. 
 The Book-keeper who has the Ledger from S to Z, 
 extends into his column the deposits of Slater & Co., 
 E. "West & Co., and "Wood & Carpenter ; and in like 
 manner, each other Book-keeper makes the extensions 
 which belong to his column, and the amounts are 
 posted to the credit of the depositors in the Ledgers. 
 At the close of the day, the footings of the several 
 columns are brought together, as in the example, and 
 their sum must agree with the addition of the main 
 column. This process of receiving and posting goes
 
 BALANCING ACCOUNTS. 225 
 
 on with short intervals until three o'clock, the alter- 
 nate Cash-book being substituted on the Teller's desk, 
 while the Book-keepers use the other. In the same 
 way precisely the proceeds of collection notes are 
 posted to the Ledger. See page 191. 
 
 It appears by their Bank-book, on page 161, that 
 Slater & Co. have deposited at various dates the 
 sums that are attested by the initial of the Teller's 
 name, A. They have received credit also for bills 
 discounted, $22,363.18, and for the notes of Jones, and 
 Brown, from the former of which $12.50 is deducted 
 for exchange or expenses of collection. This is all 
 the variety there is in bank credits. It exemplifies 
 all the entries that are made on every dealer's book 
 to his credit. The checks drawn by Slater & Co., 
 from June 19 to July 16, are charged on the opposite 
 page, and the balance $18,819.84 is carried down as 
 a new starting-point in their dealings, corresponding 
 with the statement of their account in the Ledger. 
 
 The transposition of the columns of figures, and of 
 the heading of the Bank-book, so as to read "Slater 
 & Co. in a/c with the Commercial Sank" would 
 make an exact copy of the account of Slater & Co., as 
 it appears in the Ledger. 
 
 All checks paid by the Paying Teller, and all that 
 are received in deposit, or for notes at the desks of the 
 Second and Third Tellers, are cancelled by them, 
 and handed over to the Check Clerk, by whom they 
 are recorded in books, called Check-lists, from which 
 they are posted to their proper ledger accounts by the 
 Book-keepers. The cancelling of checks consists in 
 passing them on to a wire over a blade, which cuts 
 
 10*
 
 226 THE BOOK-KEEPEB. 
 
 them, so that if they should be lost and presented a 
 second time, they would be known as old checks 
 already paid. Eadh Teller has a distinctive cancel- 
 ling cut, which at any future time indicates the desk 
 at which the check was paid. 
 
 Many dealers draw twenty or thirty checks almost 
 every day. These are entered singly on the Check- 
 list in an inner column, extended in one sum into a 
 main column, and posted to the Ledger in one sum, 
 to economize the page. "When the Book-keeper 
 " writes up" a dealer's account, he copies the amount 
 of each check from the list into his Bank-book, and 
 if no mistake has been made, the book-balance and 
 the ledger-balance will agree. Then he compares the 
 cancelled checks with the record on the dealer's book, 
 and thus arrives at a double test of the accuracy of 
 the account. 
 
 Connected with each Book-keeper's desk is a 
 drawer, divided into boxes like the money-drawers, 
 in which the checks are kept distributed, those of 
 each dealer separate from all others. If a dealer 
 should come in at any moment, in the apprehension 
 that a forged check had been paid against his account, 
 the Book-keeper can produce all his checks, instantly, 
 for examination. , 
 
 It is of the first importance, that the Book-keeper 
 post the deposits and checks (more particularly the 
 latter) as fast as they come in ; and keep both sides 
 of every account in the Ledger added up in pencil, 
 that, if he should be absent, either of the Tellers may 
 ascertain at a glance whether a check is good. If
 
 THE BOOK-KEEPER'S MEMORY. 227 
 
 present, he can answer from memory as to the condi- 
 tion of the active accounts. It is not necessary that 
 he shall always know the exact balance of an account, 
 to tell whether checks against it may be safely paid 
 or certified. Long familiarity with it enables him to 
 answer on the instant, without interrupting even the 
 additions in which he may be engaged. The Paying 
 Teller asks : 
 
 " Is Edward Wilson's account good for ten thou- 
 sand dollars ?" 
 
 " Yes for twenty on top of it." 
 
 " Can I certify Peter Smith's check for five hun- 
 dred dolls?" 
 
 " No not for five hundred cents !" 
 
 " How does Kobert Taylor's account stand ?" 
 " He has about sixteen hundred dollars here." 
 
 The Book-keeper may not have seen either of these 
 
 accounts for a week ; but he knows them by heart. 
 One of the officers requests him to open the Ledger 
 
 to John Brown's page. 
 
 " What sort of an account does he keep ?" 
 
 " Very poor a mere tax on the bank." 
 
 " How's that ? He seems to make large deposits !" 
 
 " Yes, sir ; but the Exchange checks consume them 
 
 every morning, almost to the last dollar." 
 " Does he ever overdraw ?" 
 " No, sir ; but always lean." 
 John Brown does not succeed in getting the loan 
 
 he applied for. Neither does he know how com-
 
 228 THE BOOK-KEEPEB. 
 
 pletely the Book-keeper has destroyed his chances foi 
 the future. 
 
 Many accounts appear on the Ledger with a run- 
 ning balance of thousands of dollars, when, in fact, 
 nearly every thing is drawn out by the Exchange 
 checks a very important point to be watched by the 
 Book-keeper, In stating balances, the Exchange 
 checks are always deducted from the apparent bal- 
 ance at the close of the previous day. Thus, if John 
 Brown had a balance of twelve thousand dollars on 
 the Ledger at night, and his checks for eleven thou- 
 sand five hundred dollars should come in through the 
 Clearing House on the next morning, his balance of 
 account would be reported at five hundred dollars. 
 
 The statement of balances made on the Offering 
 Book is generally an average for the previous month. 
 Heavy deposits, which dealers sometimes borrow to 
 swell their account on the day or two before offering 
 notes for discount, go for nothing. 
 
 The freedom of the Book-keeper's accounts from 
 all complexity leaves him without excuse for errors. 
 He has no original entries to make, and there is no 
 variety of transactions, as in mercantile affairs. There 
 are no different currencies, and there is no mixing of 
 work between different ledgers. Each Book-keeper 
 has exclusive control of his own, with such division 
 of labor and susceptibility of proof, at every step,, as 
 ought to assure positive correctness. The officers, 
 therefore, hold him to very strict account. Their 
 presumption is, that errors can come about only by 
 inattention not by want of capacity ; and tho con-
 
 ALEXANDER JONES. 229 
 
 sequences of inattention may be too serious to admit 
 that as an excuse. For example : the posting of 
 John Brown's deposit of one thousand dollars to the 
 credit of Alexander Jones, would give the latter a 
 chance to draw it out ; and Brown may not want to 
 use any money for a month. His check then appears 
 as an overdraft, and the Book-keeper sends him a 
 note: 
 
 " COMMERCIAL BANK, June 18th, 1857. 
 " JOHN BROWN, Esq. : 
 
 " Your account appears overdrawn $1,000. Please 
 deposit that amount, and send your book to be writ- 
 ten up. 
 
 " For the Cashier, "W. GREEN, 
 
 , Book-keeper" 
 
 This is a printed form, which the clerk fills up 
 with the name of the delinquent, and the amount. 
 
 Mr. Brown very promptly appears, with his Bank- 
 book, to prove that he had the money in bank ; and 
 the Book-keeper then discovers his error. The post- 
 ing is immediately corrected, and the overdraft 
 thrown upon Jones, who is unable to pay, and the 
 bank loses. The rule of revision is, that after the 
 credits have been posted, they shall be checked off 
 between the Ledger and the Cash-Books, either after 
 banking hours on the same day, or before the begin- 
 ning of business on the next day. 
 
 The balancing of the dealers' books is one of the 
 most laborious parts of the Book-keeper's duty. It is 
 the practice to "rule off" the Ledgers on the last 
 day of every month, for the purpose of making the 
 monthly Proof-sheet. The additions of the account,
 
 230 THE BOOK-KEEPER. 
 
 and the balance carried down, are commonlj left in 
 pencil, until their accuracy is tested by agreement 
 with the dealer's book. Dealers are requested to 
 leave their books, at the end of every month, for 
 this test. 
 
 The monthly Proof-sheet of the Book-keeper is 
 simply a list of all the balances on his Ledger, which, 
 added together, must agree with the amount of 
 deposits posted in gross to the General Ledger. A 
 skillful and accurate Book-keeper will generally lay 
 this Proof complete on the Cashier's table, on the 
 first or second day of each month. Otherwise, the 
 Cashier calls on him to know the reason of delay. 
 
 The Book-keeper, like every other clerk, has his 
 share of interruptions and annoyances. A dealer, 
 whose own carelessness has led to an overdraft of his 
 account, takes fire at the notice thereof, and throws 
 his book on to the open Ledger, demanding that it 
 shall be immediately balanced. Others want omitted 
 deposits entered, or bills discounted, and collection 
 notes written in at unseasonable times. Many call to 
 know what the balance of their account is ; and are 
 surprised to learn that it is less than one hundred 
 dollars, when it ought to be over a thousand. " Hav'n't 
 you made some mistake in the additions? Is that 
 last discount of mine entered ? Hav'n't you charged 
 me with a wrong check ? "Won't you be good enough 
 to get out my checks, and let me examine them," &c. 
 
 The Book-keepers have no direct connection with 
 the money department ; but they may be accessory 
 to fraud, and successfully conceal it for a long time.
 
 A FRAUD. 231 
 
 A recent case occurred, in a city bank, of collusion 
 with a dealer, in which, by altering figures on the 
 various books, nearly a hundred and thirty thousand 
 dollars were embezzled. Such a daring act of forgery 
 as this, is fortunately beyond the reach of common 
 hardihood; and therein consists a better security 
 against it, than can result from any degree of vigi- 
 lance by bank officers. Where one attempt of the 
 kind would succeed, forty would fail from lack of 
 impudence in the guilty person, if not from some weak- 
 ness of a less disgraceful character. It is, neverthe- 
 less, the duty of bank managers to adopt precautions 
 against the most unlikely frauds; and it has been 
 proposed that the Clerks should serve in rotation at 
 the respective desks, so as to increase the chances of 
 detection, or to shorten the term of its possible con- 
 cealment, if collusion should be attempted between 
 the clerk and the dealer. 
 
 The Book-keeper is generally employed about seven 
 or eight hours a day. In that time, with diligence 
 and economy of minutes, he may keep a Ledger of 
 twelve hundred pages and four hundred accounts in 
 perfect order. 
 
 For a Ledger of three hundred pages, the following 
 scale is to be divided by 4 ; for one of six hundred 
 pages, by 2 ; and so by any number that leaves no 
 remainder.
 
 232 THE BOOK-KEEPER. 
 
 /Scale of Apportionment for a Ledger of 1200 pages. 
 From "GOULD'S Universal Index" 
 
 
 a, 
 
 * 
 
 I, 
 
 o, 
 
 V, 
 
 y- 
 
 A, 
 
 i 
 
 16 
 
 32 
 
 52 
 
 64 
 
 68 
 
 B, 
 
 72 
 
 96 
 
 116 
 
 124 
 
 144 
 
 156 
 
 c, 
 
 160 
 
 208 
 
 220 
 
 232 
 
 280 
 
 292 
 
 D, 
 
 296 
 
 308 
 
 320 
 
 328 
 
 336 
 
 844 
 
 E, 
 
 348 
 
 368 
 
 384 
 
 396 
 
 400 
 
 400 
 
 F, 
 
 404 
 
 412 
 
 424 
 
 436 
 
 456 
 
 456 
 
 G, 
 
 460 
 
 472 
 
 480 
 
 488 
 
 492 
 
 492 
 
 H 
 
 496 
 
 508 
 
 516 
 
 524 
 
 536 
 
 540 
 
 I, 
 
 544 
 
 548 
 
 556 
 
 560 
 
 560 
 
 560 
 
 J, 
 
 664 
 
 568 
 
 568 
 
 572 
 
 580 
 
 580 
 
 K, 
 
 584 
 
 588 
 
 596 
 
 600 
 
 600 
 
 600 
 
 ^ 
 
 604 
 
 612 
 
 620 
 
 628 
 
 636 
 
 636 
 
 M, 
 
 640 
 
 672 
 
 676 
 
 684 
 
 700 
 
 704 
 
 N, 
 
 708 
 
 712 
 
 720 
 
 728 
 
 736 
 
 736 
 
 o, 
 
 740 
 
 744 
 
 752 
 
 756 
 
 756 
 
 756 
 
 P, 
 
 760 
 
 788 
 
 808 
 
 824 . 
 
 836 
 
 844 
 
 R, 
 
 848 
 
 856 
 
 868 
 
 876 
 
 896 
 
 900 
 
 s, 
 
 904 
 
 924 
 
 956 
 
 996 
 
 1016 
 
 1016 
 
 T, 
 
 1020 
 
 1036 
 
 1044 
 
 1056 
 
 1084 
 
 1092 
 
 u, 
 
 1096 
 
 1100 
 
 1104 
 
 1104 
 
 1104 
 
 1104 
 
 v, 
 
 1108 
 
 1120 
 
 1120 
 
 1124 
 
 1124 
 
 1124 
 
 w 
 
 1128 
 
 1140 
 
 1152 
 
 1172 
 
 1180 
 
 1180 
 
 x, 
 
 1184 
 
 1184 
 
 1184 
 
 1184 
 
 1184 
 
 1184 
 
 Y, 
 
 1184 
 
 1184 
 
 1188 
 
 1188 
 
 1188 
 
 1188 
 
 z, 
 
 1192 to 
 
 1196 
 
 Q, 
 
 1196 to 
 
 1200. 

 
 METHOD OF ACCOUNTS. 233 
 
 CHAPTEE X. 
 
 THE GENERAL B O OK-KE EPEB. 
 
 THIS Clerk derives his title from the character of 
 the accounts in his Ledger, which are general, in dis- 
 tinction from individual or personal' and also, from 
 the fact that he brings together the general results of 
 the business, which appear in the Sank Statement. 
 
 In rank, the General Book-keeper stands at the 
 head of the department of accounts. He takes pre- 
 cedence of the Discount Clerk, and is often regarded 
 as equal with the Tellers, rather than below them. 
 The object of describing in advance several of the 
 inferior desks, is to show the origin of all the different 
 entries which are posted to his Ledger. 
 
 The books of a bank are kept by double entry, 
 though this is not always apparent in one book, but 
 in the whole, as one set. Thus, the footings 'of the 
 Discount Books, and of the extension columns of the 
 Cash Books of the Second and Third Tellers, are posted 
 in gross on the General Ledger to the debit of the 
 respective ledgers to which the personal credits are 
 carried, and the footings of the several check-lists 
 are posted in gross to the credit of those ledgers ; con- 
 sequently 2 the balance must show what amount of 
 deposits there is on the personal ledgers, respectively.
 
 234: THE GENERAL BOOK-KEEPER. 
 
 This method furnishes the test of accuracy in the 
 monthly Proof sheets. 
 
 "When a bank begins business, the General Book- 
 keeper debits Cash to Capital. The cash is transferred 
 to the Paying Teller, and the corresponding entries 
 are then found in the General Ledger and in the 
 Paying Teller's Proof. The entire check-list of the 
 bank continues to be credited daily to the Paying 
 Teller, and all the receipts, including those from the 
 Clearing House, charged to him. It follows that the 
 Teller's daily Proof, if correct, must agree with the 
 balance of the Cash account on the Ledger. 
 
 A separate account is kept of the different denomi- 
 nations of circulating bills which are issued by the 
 bank ; also of the securities pledged with the Bank 
 Department for their redemption. 
 
 The General Book-keeper posts daily the liquida- 
 tions and the accessions of Bills Discounted to that 
 account, and the balance shows what the addition of 
 the Ticklers should be, and precisely what amount 
 of bills receivable should be on hand. The Certifica- 
 tion account shows the balance of outstanding certi- 
 fied checks. 
 
 He posts to Expense account all salaries, rents, and 
 expenditures ; likewise the debits and credits to Inter- 
 est, Exchange, and other accounts of this class. These 
 are finally absorbed in Profit and Loss, when the 
 books are made up for a dividend. 
 
 He keeps all the accounts with foreign banks, 
 charging them with notes sent for collection, and cre- 
 diting remittances ; and renders to them a monthly 
 account current, or receives one, as the case may
 
 .- THE BANK STATEMENT. 235 
 
 be. In some banks this is too heavy a service for 
 one clerk, especially where interest is allowed on 
 balances : the duties are then divided. 
 
 From the footings or balances of these various 
 accounts is composed the Sank Statement (see pages 
 236-237), designed to show at a single view the con- 
 dition of the business. Unimportant details are omit- 
 ted in the example, as they would serve rather to 
 confuse than to inform the general reader. 
 
 Most of the items are sufficiently explained in the 
 record. The "Commercial Bank notes," $102,524, 
 is the unused portion of the circulation, which the 
 Paying Teller retains in his drawer. " Cash items" 
 are unexchangeable funds, such as uncurrent bills, 
 foreign or informal checks, and memoranda which 
 represent money. The item, $1,127,205.33 is the pre- 
 pared Exchange for the Clearing House. All the 
 sums on this side are actual resources which would 
 be available in liquidating the debts, excepting that 
 set down to Expenses, which stands as an offset to the 
 profits on the other side. 
 
 The liabilities are due either to the stockholders, to 
 individuals, or to other banks. To the former belong 
 the capital, and the profits including the unpaid 
 dividends. The circulating bills, $358,248, are 
 covered by the securities on the other side of the 
 account, $416,490.66. The remainder of the column, 
 amounting to $6,839,396.63, is the debt due to depo- 
 sitors, the certified checks and the certificates of 
 deposit, being substantially a part thereof. 
 
 "Profit and loss in reserve," $301,378.20, is the 
 surplus of profits left after declaring the previous
 
 THE GENERAL BOOK-KEEPEE. 
 
 fsrr A 
 
 ^ ZFEB. IS, 1857, 
 
 
 RESOURCES : 
 
 $ 
 
 c. 
 
 $ 
 
 7,382,812 
 400,000 
 1,640 
 
 416,490 
 
 4,051,833 
 179,916 
 181,403 
 
 c. 
 
 96 
 00 
 00 
 
 66 
 
 73 
 
 81 
 07 
 
 
 
 
 
 
 
 Securities deposited with the 
 Bank Department, consisting 
 of Stocks of the U. S. and of 
 the State of New York 
 
 
 
 Cash on hand : 
 
 102,524 
 
 30,605 
 1,127,205 
 2,791,499 
 
 00 
 
 33 
 33 
 07 
 
 Cash items 1st Teller, 8,423.10 
 2d " 14,200.00 
 3d " 7,982.23 
 
 Bills and checks of city banks. . . 
 
 
 
 
 
 
 
 
 
 
 12,614,097 
 
 23 
 
 dividend. The several items composing the sum of 
 $109,797.90, constitute the profits of the current divi- 
 dend period up to the date of the statement. These 
 profits will be increased by the end of that period 
 (June 30), and form a fund sufficient to pay the 
 expenses of the bank, and the usual semi-annual divi- 
 dend, leaving a remainder to be added to the reserved 
 profits. In this way, the reserve is increased every 
 half year, by whatever excess of profits may be realized. 
 
 To ascertain the exact profits of the bank at any 
 time, interest on the umnatured bills discounted, must 
 be subtracted from the apparent profits in the State- 
 ment. 
 
 This Statement, for practical purposes, may be
 
 THE BANK STATEMENT. 
 
 237 
 
 ODE* '.L'-bi-B CO3VdVHBR,CI-<fta^ 
 
 
 LIABILITIES : 
 
 $ 
 
 c. 
 
 $ 
 
 6,000,000 
 301,878 
 
 109,797 
 
 358,248 
 6,276 
 
 6,696,769 
 142,627 
 
 0. 
 
 00 
 20 
 
 90 
 
 00 
 50 
 
 16 
 47 
 
 
 
 
 
 1,260 
 1,500 
 107,047 
 
 16 
 00 
 74 
 
 
 
 Circulation : 
 Bills on band (see opposite) ..... 
 
 102,524 
 255,724 
 
 00 
 00 
 
 
 
 
 
 Due depositors : 
 City depositors. 
 
 3,989,059 
 2,262,710 
 444,999 
 
 23 
 22 
 71 
 
 
 Certified checks outstanding. . . . 
 
 
 
 
 12,614,097 
 
 23 
 
 reduced to fewer terms. The entire debt of the 
 bank is : 
 
 To stockholders, the capital and 
 
 profits ".' $5,416,4:52.60 
 
 To depositors, including bill-holders 7,197,644.63 
 
 $12,614,097.23 
 To pay which the bank has : 
 
 Bills discounted . . . $7,782,812.96 
 Exchangeable funds . 1,260,334.66 
 
 Specie 3,389,392.80 
 
 Real estate 179,916.81 
 
 Expenses (chargeable 
 
 against profits) .. 1,640.00 $12,614,097,23
 
 THE GENERAL BOOK-KEEPEE. 
 
 The point from which the Directors regard the 
 Statement, and which governs the discount of paper, 
 is, the ability of the bank to redeem that portion of 
 its debt which is demandable by the creditors. In 
 this case, it is $7,197,644,63 ; for the stockholders 
 cannot demand back the capital or profits, until all 
 other debts are paid. They are, corporately, the bank 
 itself. The bank has specie $3,389,392.80, by which 
 it could reduce its debt to $3,808,251,83 ; and to pro- 
 vide for this, it has more than twice that amount of 
 bills discounted, in current maturity, to say nothing 
 of its real estate. This would be called a very strong 
 position. Allowing that one million of dollars is a 
 sufficient average of specie to hold in reserve with a 
 deposit of seven millions, the bank might safely 
 increase its discount line very materially. The only 
 question then left for the Directors to determine is, 
 whether the deposits of the bank are likely to be 
 maintained ; and to judge of this contingency, they 
 have the successive statements of the business, run- 
 ning back for years, showing the average on which 
 they can depend. The general condition of com- 
 merce must also be considered. 
 
 These are the principal views that govern the 
 councils tf. bank directors. 
 
 The certificates of deposit specified in the Bank 
 Statement are issued to persons who keep no regular 
 account in a bank, and who merely deposit their funds 
 for safe-keeping. This document is frequently used 
 as a bank check in remittance, and is of equal credi- 
 bility, though subject to a slight discount when nego- 
 tiated at a distance from the redeeming bank.
 
 THE STOCK LEDGER. 239 
 
 The General Book-keeper mostly has the Stock- 
 ledger and Transfer-books in his custody. The former 
 is opened in alphabetical order like other ledgers, 
 and each stockholder is credited with the shares 
 standing in his name. When he sells them, he fills 
 up a form in the book of printed transfers in favor 
 of the buyer, whose credit for the same is balanced 
 by the debit of the seller. No transfer of stock is 
 allowed without the surrender of the old certificate. 
 It is cancelled, and a new one issued in the name of 
 the new holder. 
 
 From time to time, the ledger is proved by making 
 out a list of the stockholders with the number of 
 shares held by each, which multiplied by their par 
 value, should give the exact capital of the bank. This 
 proof is necessarily made three times in a year twice 
 to ascertain who is entitled to receive dividends, and 
 once to know who has a right to vote for directors. 
 The transfer books are closed for a short time previous 
 to the payment of the dividend, to prevent wrong 
 payments by an inaccurate list. 
 
 The Officers and Directors of the bank repose much 
 confidence in the General Book-keeper. He is con- 
 stantly referring to all the different books and desks, 
 to get postings for his own ledger, and is so familiar 
 with their theory, and also with the various methods 
 by which an account may be mystified, that even his 
 casual supervision is regarded as of great value to 
 the institution. He is generally employed akout 
 seven or eight hours a day.
 
 240 THE ASSISTANT TELLER. 
 
 CHAPTER XL 
 
 THE ASSISTANT TELLER. 
 
 THE chief duty of this clerk is to assist the Paying 
 Teller in counting the Exchanges from the Clearing 
 House, and the Deposit Teller in distributing and 
 counting the money received by him. He is also 
 regarded as a pupil in the money department of the 
 bank, and is required to fill the place of the Second 
 or Third Teller, if either should be absent. There 
 would be hazard in employing a clerk in this capacity 
 who is not familiar with bank bills. 
 
 When the Exchanges are brought in from the 
 Clearing House, the Assistant Teller immediately 
 begins to examine and count them on a separate 
 table. The items are checked by a pencil-mark, 
 which distinguishes the bank bills from the checks. 
 He marks each check with the number of the sending 
 bank, so that if a question should arise subsequently 
 as to the channel through which it was received, the 
 number would indicate it. Thus all checks received 
 from the Bank of America, would be found to have 
 the figure 6 upon them ; and all received from the 
 Irving Bank would be known by the number 34r.* 
 Those which are paid at the counter by the Tellers, 
 
 * See the Numerical List, on pages 168, lt
 
 EXAMINING THE EXCHANGES. 241 
 
 have no number marked on them, but are distin- 
 guished by the peculiarity of the cancelling cut. As 
 the Assistant completes the examination of each list, 
 the addition included, he lays the checks and bank 
 bills in separate piles ; and every list is thus proved 
 by itself. The bank bills are then counted into 
 packets, and the checks entered on the Check-list by 
 another clerk. The sum of the two must agree with 
 the total of the Exchanges. 
 
 Before the checks are passed over to the clerk who 
 enters them on the list, they undergo inspection by 
 the Paying Teller, as already described in the duties 
 of his desk. 
 
 The Assistant Teller transfers his services to the 
 Deposit Teller about twelve o'clock, and is his aid for 
 the remainder of the day. 
 
 An accurate, skillful, and faithful clerk in this place, 
 is sure to be promoted. The officers observe his 
 habits of business, and regard him as a very important 
 aid in the money department. He is frequently 
 obliged to act as Deposit Teller, and gradually 
 acquires all the tact and self-possession necessary to 
 the office. He is the acting Third Teller also, when 
 that clerk is absent, and succeeds him in the scale of 
 promotion. 
 
 In some of the larger banks, the examination of the 
 Exchanges from the Clearing House, is kept in its 
 details entirely separate from the Paying Teller's 
 department. A book of printed forms like the follow- 
 ing, is used ; 
 
 11
 
 242 
 
 THE ASSISTA1H 1 TELLER. 
 
 h 
 
 
 
 
 ft 
 
 CQ 
 
 
 M 
 
 H 
 
 o 
 
 OS 
 
 - co 
 
 
 
 cr 
 
 X 
 
 OQ 
 
 t- 
 
 Ot- 
 
 '. 
 
 
 
 c- 
 
 : i 
 
 5 
 
 ."6 
 
 1 10 
 
 
 
 
 
 re 
 
 > 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 I 
 
 
 
 
 
 
 d 
 
 
 
 
 
 
 o 
 
 
 
 
 
 
 -.3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 V 
 
 
 
 
 c. 
 
 
 E 
 
 
 
 
 5 
 
 
 
 
 
 
 
 
 
 
 
 
 * 
 
 
 * 
 
 II 
 
 2 
 
 
 
 
 e 
 
 > 
 
 r& 
 
 
 
 
 -*- 
 
 
 
 
 
 
 
 
 a 
 
 3 
 
 
 ^ 
 
 c 
 
 c 
 I 
 
 
 
 1 
 
 1 
 
 i 
 
 g 
 
 i 
 
 = "= 
 
 1 
 
 I 
 
 a 
 
 fe 
 
 c 
 
 - 
 
 i 
 > 
 
 
 
 3^ 
 
 
 
 1 
 
 J 
 
 i 
 < 
 
 i 
 
 u 
 
 1 1 
 
 j! ill = ii 
 
 '- o 8 o * d fl 
 
 o t<H on O 
 
 3 
 
 
 
 4 n 
 
 Sag 
 
 6 |1 
 
 o gj 
 
 g ; 
 
 ?-; I 
 
 d _ 
 
 n 
 
 og 
 
 a 
 
 V 
 
 o 
 
 O bfl g d 
 
 . * 00 o O 
 
 fc O o u J5 
 
 o d d sp
 
 EXAMINING THE EXCHANGES. 24:3 
 
 By this method the Paying Teller has nothing to 
 do with the details, excepting in examining the 
 checks before they are charged on the ledgers. He 
 adopts the total, $907,658.02, as a receipt, and the 
 amount of checks, $873,206.43, as a voucher for that 
 portion of it. The bank bills, $10,210, are incorpo- 
 rated with his cash, and the foreign bills are sealed 
 up and charged by memorandum checks to the 
 issuing banks. The irregularities of the returned 
 checks are corrected as far as possible and sent back 
 in a subsequent exchange.
 
 244 THE CHECK CLERK. 
 
 CHAPTER 5H. 
 
 THE CHECK C L E K K. 
 
 IT is the duty of the Check Clerk to make out a 
 Beparate list of the checks, paid by each Teller, to 
 enable him to make his Cash proof. For this purpose 
 they are assorted alphabetically, and their amounts 
 only, transcribed and added together. 
 
 Then, as each Teller has checks to be charged in all 
 the Ledgers, they must be transcribed in the list of 
 each Ledger, for the postings and proof of each. This 
 is a full record, embracing the name of the drawer as 
 well as the amount. It is from these lists, that the 
 checks are posted to the Ledgers, and they are there- 
 fore called, also, Debit Cash Books. 
 
 The agreement of the footings in this different 
 division of the checks, proves the work to be correct. 
 
 The Exchange Checks, belonging to the Paying 
 Teller's cash, are the first copied into the Debit Cash 
 Books, and they are added up before any others are 
 entered. These several footings must correspond with 
 the amount of checks in the original list, made up for 
 the Assistant Teller. 
 
 It is indispensable that the Check Clerk should be 
 an accurate and rapid copyist, and quick at addition. 
 This is the most of what he has to do. But he acts 
 as a general assistant, when not occupied with his spe-
 
 CHANCES OF PKOMOTION. 245 
 
 cific duties. This is a course of preparation for the 
 higher desks which he is unwise to neglect ; for if 
 well qualified, his chances of promotion are better 
 than if he were nearer the top of the scale. The 
 retirement of any one of the ten or twelve clerks 
 above him will be sure to advance him ; whereas, the 
 Note Teller, for example, has but two chances before 
 him, and the Deposit Teller but one. 
 
 The Check Clerk is generally a young man, receiv- 
 ing a salary of from five to eight hundred dollars. 
 
 Many of the higher Clerks and Tellers, and not a 
 few of the Cashiers of our city banks began their 
 career as Check Clerks. They have advanced step 
 by step, according to their merits, and are among 
 those who possess the best practical knowledge of the 
 banking business.
 
 24:6 THE KUNNER. 
 
 CHAPTER Xin. 
 
 THE BUNNER. 
 
 THE Runner is so called, because he does the run- 
 ning of the bank, to serve notices, collect drafts, and 
 so forth. He is the bank's courier its local mail ; and 
 for the note-paying part of the community, its ser- 
 geant-at-arms. 
 
 His distinctive office is, to prepare and deliver notices 
 of all payments due at the bank counter. The usual 
 form of the notice is placed at the end of this chap- 
 ter the italicized portion being that which he fills up 
 with his pen. 
 
 The duties of the Runner are not the same in all 
 the banks. In those of very extensive and active 
 business, he has enough to do to keep up the delivery 
 of his notices, which may average from two to three 
 hundred for every day in the year. In some of 
 the smaller institutions, he " ticklerizes " the notes 
 from the Collection Register, or acts as an assistant 
 to the Tellers. In most of the banks, the collection 
 of the sight drafts which are received by the morning 
 mail is an important part of his service. 
 
 The preparation of the bank notices is a work of 
 considerable labor. They are printed in sheets, all 
 on the same sheet with the title of the same month. 
 The Runner takes a sheet for May, and from the
 
 THE RUNNER GIVING CREDIT. 247 
 
 Tickler fills up the blanks with the name of the payer, 
 and the amount, of all notes due on the first day of the 
 month; and so with each subsequent date. They 
 are then cut apart, and arranged alphabetically. By 
 the aid of the directory, he marks on each the resi- 
 dence of the payer. He then assorts them by streets, 
 for the most convenient route of service. After long 
 practice, his memory becomes itself a directory of 
 names and places, and saves him much writing and 
 trouble of reference. 
 
 Having arranged his notices for the delivery of the 
 day, the Kunner stands ready to receive the drafts, 
 of which there may be from twenty to fifty, to be 
 collected at various points through the city. These 
 are briefly copied in his Memorandum Book, and he 
 sets out on his tour. He returns their proceeds in 
 the course of the day to the Note Teller, who tests 
 their accuracy by comparison with his own record. 
 In an active market, the amount of the sight-drafts 
 collected in a single day often exceeds one hundred 
 thousand dollars. It is very necessary that a bank 
 Runner should possess good judgment and knowledge 
 of men ; for he is measurably trusted with the power 
 of credit. The drafts are commonly paid by checks, 
 which, in his discretion, he takes without being certi- 
 fied. But he has often to deal with strangers and 
 new firms, when he insists on certification, or on bank 
 bills. If any refuse to pay in satisfactory funds, he 
 returns the draft to the Note Teller, where it remains 
 till three o'clock, and then, if still unpaid, it is given 
 to the Notary for protest. 
 
 The Runner experiences more difficulty when the
 
 248 THE BUNNEE. 
 
 market is growing stringent than at other times, fle 
 withdraws his credit, and alleging the instruction of 
 the bank officers, declines to take uncertified checks. 
 The payers generally acquiesce in the propriety of 
 the rule, though not always with good grace. Occa- 
 sionally one refuses to pay except by his check, as 
 usual, which the Runner will not receive. The draft 
 is handed over to the Notary, by whom it is either 
 collected or protested, at a later hour in the day. 
 
 The Runner has many short-time drafts, payable 
 after date, or sight, which, if not immediately ac- 
 cepted, are left with the drawee, who agrees to return 
 them to the bank. If declined, they are protested 
 for non-acceptance, and again for non-payment at the 
 due date. Sight drafts must be accepted or protested 
 under the date of presentation, for that is the date on 
 which they are first seen, by the drawee. It is legal 
 " sight" if the presentation is made at the store or 
 domicil of a man, though he may be absent from both ; 
 otherwise, a messenger or notary might pursue the 
 drawee for a week or a month, without effecting a 
 proper demand. If the Runner is not satisfied to 
 trust a draft with the drawee, as above stated, he 
 informs him that he can call at the bank in the course 
 of that or the following day, and accept it. One day 
 is allowed, by custom, for examination of the account 
 on which it is drawn. 
 
 In the distribution of notices, the Runner has the 
 advantage of not being confined to particular hours. 
 He can serve them while enjoying an evening ramble, 
 and he can walk in no direction that does not give 
 him the opportunity of dropping some by the way.
 
 The Runner at a Loss.
 
 SERVING NOTICES. 249 
 
 His pockets are always full of them. Every shop, 
 trade, sign, and finally, every man, seems to his ima- 
 gination to invite a bank notice. A very intelligent 
 Kunner once stated to the author, that he seldom met 
 an acquaintance or friend, without being annoyed by 
 an involuntary feeling that his first duty was to serve 
 him with a bank notice. 
 
 Frequent complaints are made at the Note Teller's 
 desk that the payer received no notice. Mr. Spitfire 
 flies into a passion, and wants to know " what in the 
 devil a Runner is good for if he can't find where people 
 live, even if their names are not in the directory !" 
 Mr. Short takes some satisfaction in abusing the 
 Runner for not sending him a notice, although there 
 might be a better reason for his not paying promptly. 
 Mr. St. Yitus asks " why that notice was sent to him? 
 He didn't owe it, and wouldn't pay it, and considered 
 it an insult to have other people's debts poked in his 
 face." 
 
 The Runner sometimes attempts an explanation. 
 He cannot follow all the removals, nor be advised of 
 the new-comers in a large city. Changes of residence 
 take place from many causes : the pulling down of old 
 stores to rebuild ; the destruction of property by fire ; 
 the dissolution of old partnerships, and the formation 
 of new firms. Death takes names out of the Direc- 
 tory, though he does not always foil the Runner ; for 
 law says that a man shall not die until his notes are 
 paid. 
 
 The Runner is embarrassed also by the repetition 
 of names. He may be excused for serving a notice 
 on the wrong John in some families, especially among 
 
 11*
 
 250 THE RUNNER. 
 
 the Smiths and Browns. These gentlemen, if they 
 are anxious to pay their notes, write their residence 
 as a part of the signature. Again, the number of a 
 store is changed or defaced by accident or design. 
 There are some people who prefer retirement to pub- 
 licity, and refuse their names to the canvasser. Bank- 
 ruptcy drives men from the great thoroughfares into 
 alleys and attics. " The Panic" tears down gilt block- 
 letters from plate-glass fronts, and sends the Kunner 
 to look after their old owners in upper stories, behind 
 a strip of tin with characters in white paint. One or 
 other of these accidents explains most of his omissions. 
 
 The Runner picks up a good deal of information 
 in his jostling intercourse with men, and the bank 
 officers are not above asking him for the results of 
 his observation. He hears the gossip of loungers in 
 stores and along the streets. If a great house is shak- 
 ing in the wind, he is told of it. He inquires what 
 other great houses are likely to be implicated, or how 
 many smaller are to be drawn into the vortex. He 
 is regarded as an official confidential person, familiar 
 with financial secrets, always answering less than he 
 knows, and therefore subject to many questions. 
 "When any extraordinary excitement prevails, he 
 seldom returns from his daily tour without a consider- 
 able budget of news. 
 
 ""Well, Mr. Foote, what do you hear to-day?" 
 asks the President or Cashier. 
 
 " Things look pretty black, sir. Bigg & Co. have 
 failed 1" 
 
 "What! Bigg & Co?' 
 
 " Yes, sir. That's the talk of the street."
 
 GIVING NEWS. 
 
 251 
 
 " Anything more ?" 
 
 " Yes, sir. Trouble among the flour men. Sweatem, 
 Sore & Go's paper is offered at three per cent a 
 month." 
 
 " You don't say BO !" 
 
 " It's a fact, sir ; and no buyers even at that." 
 
 "What else?" 
 
 " I heard a good many rumors, but only two names 
 mentioned, besides Bigg and Sweatem. Hawk & 
 Hawkins, and Blue & Co. There's a rumor about a 
 large shipping-house on South Street, but nothing 
 definite. Sort of apprehension all round." 
 
 " Mr. Foote, didn't I hear you say something about 
 Sturgeon, the oil-man, the other day ?" 
 
 " Yes, sir. I took a sight draft there, and he got 
 mad, because I refused his check without being certi- 
 fied. I took his check once before, and they refused 
 to certify it at bank until his deposit was made." 
 
 The Cashier returns to the Directors' room with this 
 information. 
 
 Like every other clerk, the Runner is sometimes 
 called in as talesman, to make up a short jury in com- 
 mercial trials. 
 
 -~Sf CORNEB OF GREENWICH AND WARREN STREETS. 
 
 %b'ne<i 
 
 Your Note for j$P 3 , ? .- Dollars, 
 
 is payable td AUGUST.
 
 THE PORTEE. 
 
 CHAPTER XIV. 
 
 THE POBTEK. 
 
 THE Porter of a bank, though at the lower end of 
 the line, is by no means least among its servants. The 
 authority of the President is exerted from the head 
 to the foot that of the Porter runs from the foot 
 towards the head ; and in this direction it bears con- 
 siderable analogy to that of his great coadjutor. 
 
 His situation is one of high responsibility and trust. 
 Like his associates he gives bonds generally to the 
 amount of five or ten thousand dollars. 
 
 The key of the outer door of the building is placed 
 in his custody. Consequently, he must be at the bank 
 first in the morning, and last at night. In some 
 instances, he takes charge also of the key of the book- 
 vault, that the clerks may have as early and as late 
 access to the account-books as they desire. 
 
 It must be an extraordinary and well-authenticated 
 order, that would induce one of the New York City 
 Bank Porters to open the doors of the building, or to 
 surrender the key for a moment, to clerk or officer, 
 during the night-hours, or on Sunday. Yet he might 
 visit it in person, alone, without other authority than 
 his right of ofiice ; it is his duty to do so, and to search 
 the premises, if he has any suspicion of danger from 
 ourglars, fire, or other cause. Some porters make it
 
 GENERAL DUTIES. 
 
 a rule to visit the bank once at least on every holi- 
 day. 
 
 The modern plan of bank bnilding includes under 
 the same roof other apartments for hire ; and a Janitor 
 is employed to take charge of the property, which 
 makes the Porter's watch less necessary. 
 
 The first work of the Porter in the morning is, to 
 open the bank, and to prepare it for the comfortable 
 possession of the officers and clerks. He unlocks the 
 book-vault, and carries the various account-books to 
 their respective desks. As soon as any of the clerks 
 arrive to relieve his watch, he goes to the Post-office 
 for the letters. He is the only accredited messenger 
 to whom they would be delivered without a special 
 order. Any other would be required, also, to give 
 proof of his identity. 
 
 The Porter is regarded as a general assistant to the 
 clerks ; but his principal duties are closely connected 
 with the department of the Paying Teller. He counts 
 all the gold that is received, and ties it up in bags, 
 with the bank seal, and a label of the amount affixed, 
 ready to be paid out in quantity on demand. This is 
 done immediately under the eye of the Teller ; and 
 the bags are then carried into the vault. The Porter 
 keeps a record, so that he can tell, at any moment, the 
 number of bags on hand, the denomination of the 
 com, and the total amount. 
 
 If two hundred thousand dollars of specie is needed 
 to pay a balance due to the Clearing House, the Pay- 
 ing Teller goes into the vault, and designates the bags 
 which are to be carried out ; or if pressed with other 
 duties, he intrusts this service to the Porter, being
 
 254 THE PORTER. 
 
 careful to count the bags before they are taken from 
 the bank. 
 
 Every bag is labelled with the name of the sealing 
 bank. Claims for deficiency by miscount, abrasion, 
 or counterfeit pieces, must be made " within a reason- 
 able time," or they lose their validity. The rule of 
 every well-regulated bank is, to count or weigh all 
 coin as soon as possible after receiving it, even if it 
 should be a return of its own bags with unbroken 
 seals. The two hundred thousand dollars paid by the 
 Metropolitan Bank at the Clearing House may be 
 distributed among ten other banks, each of which 
 counts its portion, affixes its own seals and labels, and 
 holds it ready to be paid back through the same 
 channel. The following day may bring some of the 
 same bags again to the Metropolitan, where it is again 
 counted, and sealed as before. 
 
 Gold suffers abrasion by long use. It is first 
 counted by hand, and the pieces slip on each other. 
 It is then taken up in iron scoops and poured into 
 bags. These are handled roughly in carriage from 
 place to place, and thrown heavily from the counter 
 to the floor. As often as the bags are opened for 
 counting, the contents are turned out in bulk, and the 
 uneven surfaces grind against each other. It is fre- 
 quently poured into metallic scales to be tested by 
 weight, or spread out on a table for inspection 'to 
 detect false pieces. It undergoes no trifling friction 
 in the pocket against other coin. Although this does 
 not for a long time sensibly affect the value of the 
 pieces separately, it is very perceptible when a thou- 
 sand of them are taken together, especially of the
 
 DETECTING BAD COIN. 255 
 
 smaller denominations. It is rarely that a bag of five 
 thousand dollars by count, of what is in current use, 
 of the quarter-eagles and of the one-dollar pieces, 
 holds out full value in weight. The deficiency on 
 that sum is very commonly from seven to ten dollars. 
 The ten and twenty dollar pieces of our oldest coinage 
 are not yet sensibly reduced from this cause. The 
 fraudulent process of "sweating" consists in putting 
 the coin into revolving cylinders with sand, after the 
 manner of polishing steel pens, by which it is worn 
 away evenly and imperceptibly. It is also reduced 
 by filing, and by having small holes drilled through 
 it, which are concealed by hammering. The one- 
 dollar pieces are sometimes cut in two with a saw, 
 and the parts are then ingeniously joined together. 
 This last device may be detected by an irregularity 
 in the " milling," or little cross furrows on the edge. 
 
 The Porter is watchful against these various pro- 
 cesses, and rejects every piece that is impaired by 
 them. It seldom happens that they are brought to 
 the bank for deposit in any quantity, but they slip in 
 singly. When but slightly injured, they are received 
 and paid, over the counter, but are kept out of the 
 bags put up for the Clearing House. If they collect 
 in considerable amount, they are sold by weight to 
 the jewellers, or sent to the mint for recoinage. 
 
 The Porter acquires a very delicate skill in the 
 detection of false or light coin. Peculiarities of color 
 attract his eye as it wanders over the table where the 
 pieces are spread out, or as they slide in bulk from the 
 bags. He weighs even the lighter coin with almost 
 unfailing accuracy, on the end of his finger. Both
 
 256 THE PORTER. 
 
 by touch and smell he can distinguish the genuine 
 from the base, of silver or gold and also by the sense 
 of hearing, as he twirls the piece in the air, or throws 
 it upon the counter to catch its " ring." 
 
 Foreign gold is not current in the bank settlements. 
 What is offered on deposit, is received at a fixed rate, 
 a trifle below its value ; and when it accumulates, it 
 is sold to the brokers at a small profit 
 
 A very large amount of foreign gold is brought into 
 the United States by emigrants and travellers from 
 Europe. It is mostly taken to the West, either to 
 buy land or to be kept for emergencies. Gradually 
 it finds its way into the shops, and thence either to 
 the banks or private exchange dealers, who ship it to 
 their correspondents in New York. It is quite usual 
 for our city banks to receive from some thriving town 
 beyond the Mississippi River a well-ironed box of fifty 
 pounds' weight, filled with an indiscriminate mixture 
 of half the coinages of Europe, to the value of nearly 
 ten thousand dollars. The Porter assorts the pieces 
 with the interest of a connoisseur in numismatology ; 
 and after making a complete invoice, sells them to a 
 specie broker, by whom they are again sold for ship- 
 ment, generally to France or England. 
 
 The amount of coin counted daily by the Porter 
 depends on the activity of the market. It has been 
 much reduced by the adoption of specie certificates 
 for the Clearing House settlements ; but still reaches, 
 occasionally, perhaps two hundred thousand dollars, 
 from which it varies to the one-tenth part of that 
 sum. Large amounts are frequently drawn from 
 Philadelphia and Boston to pay balances ; and lesser
 
 THE PORTER'S POUCH. 257 
 
 remittances flow in from other places. A Porter in 
 one of our active city banks counts, in the course of 
 a year, from twenty to twenty-five millions of dollars. 
 
 The time occupied in counting depends on the 
 denomination of the coin. Twenty bags, or one hun- 
 dred thousand dollars in "Washingtons (twenty-dollar 
 pieces) may be counted within one hour. The ten- 
 dollar pieces require near double the time, and the 
 smaller coin still more in proportion. The one-dollar 
 pieces are put up for counter use in rolls of one hun- 
 dred dollars each. 
 
 Silver is not used in the bank settlements. The 
 immense supply of gold from California and Australia 
 has superseded it in the general exchanges of com- 
 merce. As it is not legal tender for sums over five 
 dollars, our banks decline receiving it on deposit in 
 large quantity. 
 
 It is impossible for the Paying Teller to satisfy 
 himself, by personal oversight, of the accuracy of the 
 Porter's work in detail, or even to observe him always 
 in the movement of large amounts of coin ; and it 
 follows, that there is a divided responsibility between 
 them. This is provided for in their separate relation- 
 to the bank. If the Porter should abstract any gold, 
 it would be in his capacity as an assistant ; and his 
 bondsmen would be liable. The various expedients 
 by which he could perpetrate a fraud are obvious 
 enough ; but his chances of carrying it over from day 
 to day, without detection, are very narrow. 
 
 When the Exchanges are fully prepared in the 
 morning, the Porter packs them neatly in his Pouch,
 
 258 THE PORTER. 
 
 in their numerical order, and sets out for the Clearing 
 House, which he reaches a few minutes before ten 
 o'clock. By half past ten, he is back with the return 
 Exchanges. 
 
 The Porter's Pouch was formerly made to sling 
 over the shoulder, so that it would rest within the 
 fold of the left arm, leaving the right at liberty. A 
 chain was enclosed within the strap, to foil any 
 attempt that might be made to cut it. Such precau- 
 tions were regarded as necessary when a large pro- 
 portion of the Exchanges consisted of bank bills a 
 single Porter often carrying more than fifty thousand 
 dollars. Several of the banks were in the habit of 
 sending a guard with the Porter and in one or two 
 instances, he was armed with a loaded pistol ; but, 
 happily, no case occurred requiring its use. The 
 route of the Porter was then very long, and through 
 many crowded streets. There has been, however, as 
 the writer is informed, but a solitary instance of per- 
 sonal attack on a bank messenger within the last 
 twenty years, and that was unsuccessful. 
 
 The Porter of the present day might readily be 
 mistaken for a traveller, with his valise or carpet-bag 
 in hand ; but, more likely still, he may pass along on 
 foot, or in the omnibus, without attracting other than 
 casual notice. 
 
 The Porter's Table, with the scales for weighing 
 gold, stands within the enclosure of the desks, near 
 the Paying Teller ; and when not occupied with out- 
 door duties, he sits there awaiting orders. In a busy 
 season, these are not long coming. The Paying 
 Teller requests him to make up a tray of gold
 
 THE POBTEK'S TEOUBLES. 259 
 
 pieces that is, to count them into piles of fifty, 
 twenty, or ten each, as may be required ; and, also, 
 to prepare several trays of silver coin the half-dol- 
 lars and the quarters, in piles of twenty ; the dimes, 
 commonly in paper rolls of two dollars each ; and the 
 half-dimes, in rolls of one dollar, with a quantity open 
 for convenient use. This is hardly done, before one 
 of the Book-keepers asks him to " step down to Jones 
 & Brass, and get their bank-book. Those fellows 
 haye got credit for a note that belongs to another 
 dealer, and they've drawn against it." 
 
 The Deposit Teller requests him, at the same time, 
 to " get that check of Peter Johnson's indorsed by 
 Powell & Company." 
 
 The Cashier inquires where Donaldson has gone ! 
 " It is very singular," he says, " that he is so apt 
 to be out of the way, just when I most want him! 
 Mr. Crook, send him to me as soon as he comes back 
 will you?" 
 
 " Yes, sir." 
 
 Donaldson reports himself to the Cashier, and 
 returns from another errand just in time to get fifty 
 thousand dollars out of the vault in exchange for that 
 amount of specie certificates, to accommodate a neigh- 
 boring bank ; and, also, to take part in an altercation 
 between the Receiving Teller and a dealer's clerk, on 
 a claim for ten dollars deficiency in a bag of mixed 
 coin, which the latter had deposited the day before. 
 The clerk is swearing that he counted it himself, and 
 knows that it was correct ; and the Teller maintains, 
 with equal obstinacy, that the bank is right. The
 
 260 THE POKTEE. 
 
 Porter affirms that he " counted it three times over, 
 and could not be mistaken." Such differences cannot 
 always be adjusted to mutual satisfaction. They 
 sometimes give rise to petty quarrels, and to suspi- 
 cions of dishonesty between the disputants ; but 
 dealers generally admit that the Porter is the more 
 likely to be correct; and there is little room for 
 doubt, if the accuracy of his reckoning is confirmed 
 by the proof of the Teller's cash at the close of the 
 day. OccasioDally, Mr. Donaldson is gratified by an 
 acknowledgment from the depositor : 
 
 " You were right in your count of that specie. "We 
 discovered the error in our own books." 
 
 He is seldom wrong. Old customers, who know 
 how careful he is, what various tests he employs, and 
 how he values his reputation for accuracy, very com- 
 monly prefer his count to their own. They do not 
 hesitate to take from him bags of gold without exam- 
 ination, and pay them over at the Custom House for 
 duties. 
 
 One of the habitual tests of correctness in counting 
 is, to observe that the tops of piles containing the 
 same number of pieces, of the same coinage, are on an 
 exact level. Each piece being precisely of the same 
 thickness, one more or less in any pile is seen at a 
 glance. The application of a straight-edge to pieces 
 as thin even as the quarter eagle or the silver dime, 
 is an almost infallible test. The Porter has also the 
 test of agreement with the previous count by another 
 person ; and finally, that of weight, in scales which 
 sensibly show the difference of a single grain.
 
 MESSAGES TO OTHER BANKS. 261 
 
 The Note Teller seizes the first favorable moment, 
 towards the middle of the day, to dispatch the Porter 
 with notes for certification. There may be thirty, 
 fifty, or a hundred of these, payable at twenty differ- 
 ent banks ; and at each he is obliged to fall in at the 
 tail of the column that waits at the Paying Teller's 
 counter. This column is always longer and slower in 
 its movements when business is most hurried, and 
 consequently when the Porter's minutes are most 
 precious. If he does not at the same time present 
 the overdrafts and informal checks which have been 
 received through the Exchanges, he must make a 
 second journey for that purpose ; and a third to col- 
 lect from the dealers of his own bank the amount of 
 checks returned from their deposits for similar defects. 
 Within the half hour after one o'clock, he must be at 
 the Clearing house with coin or specie certificates to 
 liquidate the debit to the other banks ; or during, the 
 subsequent half hour, to receive his credit balance. 
 He is expected to know the earliest moment at which 
 the Southern mail arrives, and to get the letters. The 
 delivery of letters by a foreign steamer may be going 
 on at the same time, and he is subject to the delay 
 of waiting his turn in a long row of applicants. He 
 is the Cashier's authority for the hours at which the 
 departing mails close, and for all changes of rule in 
 the Post-office which* may affect the convenience of 
 the bank. 
 
 In his various walks and contacts, the Porter gains 
 much knowledge of men and things, which, discretion- 
 ally, or in answer to questions, he communicates to 
 the bank officers between whom and himself there is
 
 262 THE POKTEB. 
 
 free and often confidential intercourse. " What news 
 at the Clearing House to-day, Mr. Donaldson?" asks 
 the President. 
 
 " I didn't hear any thing particular, sir. It looks 
 as if things might be a little excited and uncomfort- 
 able, that's all." 
 
 " Ah ! "Well, that's a good deal. What makes you 
 think so ?" 
 
 " A little sort of snap, sir. Some of the Porters 
 came in late, as if they'd been holding back for morn- 
 ing checks." 
 
 " Did you hear any thing in the street 2" 
 
 " I heard some talk about a failure among the 
 brokers, but no name." 
 
 " To steamer in ?" 
 
 " Well, yes, sir ; but the boys ain't crying an extra 
 yet. They've got a notice on the bulletins ' Delhi 
 not taken /' " 
 
 The President catches a valuable hint from many 
 a conversation, of which this is an example. 
 
 " Delhi not taken ! Then, Mr. Cashier, I think you 
 may answer Mr. Borrow that we can't give him any 
 privilege of overdraft, nor re-discount his paper. 
 These country banks must learn to take care of them- 
 selves." 
 
 An application for a credit of fifty thousand dollars, 
 which had been lying in suspense, is thus decided by 
 the state of things in India. 
 
 It is not unlikely that the Porter will carry notices 
 to parties within the next half hour, calling in one or 
 two hundred thousand dollars of demand loans, so 
 sensitive are bank officers to imaginary effects that
 
 ASSISTS THE PAYING TELLER. 263 
 
 may follow an announcement that some " Delhi " or 
 other is " not yet taken." 
 
 During the last half hour before the closing of the 
 bank, the assistance of the Porter becomes indispen- 
 sable to the Paying Teller. He must replenish the 
 specie trays as they are exhausted of their contents. 
 If large amounts of gold not corresponding with the 
 prepared bags are called for, he counts them up in 
 separate trays to the Teller's hand. He conveys 
 checks to the Book-keepers to see if they are good, 
 before certification. The great brokers, Nimble, Rig 
 & Co. have already obtained advance certifications 
 to the amount of one hundred thousand dollars, and 
 another single check is presented for seventy thousand 
 dollars. The Teller is unwilling to risk certifying 
 such a large additional amount before their deposit is 
 made. He says to the Porter in an undertone : "Ask 
 the Book-keeper if that is good ?" and to the customer : 
 " I will answer you in a minute." 
 
 The clerk of Nimble, Rig & Co. has just joined the 
 string of depositors outside of the counter, and the 
 holder of the check waits for his certification until the 
 Book-keeper announces that their account is good. 
 
 At three o'clock, the Porter carries the letters to 
 the Post Office. He then counts the coin in the trays 
 of the Paying Teller, and makes an exact statement 
 of it. He renders the same service to the other Tel- 
 lers, if required, and assists them in the carriage of 
 their trunks into the vault. 
 
 The Porter's salary ranges from seven to fifteen 
 hundred dollars a year. He enjoys some perquisites 
 for taking charge of the trunks of dealers who are not
 
 264: THE rORTEB. 
 
 willing to trust their valuable papers in a common 
 office safe. 
 
 The remaining duties of the day consist in seeing 
 that the ledgers and various account-books are con- 
 veyed into the book-vault, and that the banking-room 
 is thoroughly swept and cleaned. It is the duty of 
 each clerk to put away his own papers ; but the Por- 
 ter examines the fragments that are scattered about 
 the floor, that nothing of consequence may be de- 
 stroyed. His last care is to look into all the corners 
 and closets, and under the counters, to see that no 
 thief has made a lodgment for the night. Every win- 
 dow-bar and bolt undergoes his personal inspection ; 
 and when he locks the outer door, and puts the key 
 in his pocket, he has more authority over the build- 
 ing than any other person. 
 
 " Did I lock that door ?" It is not surprising that 
 the habit of twenty years has taught him to do it so 
 mechanically, that he cannot always remember to 
 have heard the bolt shoot when he turned the key. 
 To verify the fact, he returns to try the fastenings, 
 and he may sleep soundly after removing the last 
 doubt of having performed his last duty. 
 
 All the services described under this head are gen- 
 erally considered as belonging to the place of Porter. 
 But they are very much varied in different institu- 
 tions. For instance, in some of the larger banks, an 
 extra hand is employed to do the drudgery, and in 
 some of the smaller, the Porter acts as Runner, or as 
 assistant to the Receiving Teller. He is often com- 
 petent to discharge the duties of check-clerk or book- 
 keeper ; and with a little practice, might enter some 
 of the higher clerkships.
 
 Manilla*.
 
 THE SPECIE CLERK. 265 
 
 Many of the principal banks in New York have 
 found it necessary, from the great increase of business, 
 to separate the higher duties of the Porter from the 
 the more laborious, and to institute another office, to 
 which the old and faithful incumbent has fallen heir, 
 under the title of Specie Clerk. In truth, the respon- 
 sibility attached to the counting and partial custody 
 of the coin, the daily contact with confidential affairs, 
 the many grave services rendered, and especially the 
 importance of an intelligent and trustworthy messen- 
 ger to attend the Clearing House, make altogether a 
 charge that deserves to rank with the higher offices 
 of the bank, both for dignity and compensation. 
 Where the office remains undivided, the Porter, as 
 well as the Specie Clerk, is practically an Assistant 
 Teller ; and on many occasions, he has a larger amount 
 of the bank funds within his unsupervised personal 
 control than any other clerk.* 
 
 The Bank Porters of the City of New York have 
 singularly maintained their character for integrity 
 and fidelity. But a solitary instance of fraud has 
 occurred amongst them in twenty-five years ; and 
 that originated in the bank allowing one of its most 
 important rules to be disregarded. The defaulter 
 was conducting a mercantile business with an exten- 
 sive correspondence, and numerous agents through the 
 country, while at the same time he was intrusted 
 with an unusual custody of the specie vault. The sum 
 abstracted was small, and repaid by his bondsmen. 
 
 In some instances, the specie vault has been taken from the custody of the 
 Paying Teller, and given to the Specie Clerk, -who alone is held responsible for its 
 contents. He makes a daily report of its condition to the officers. 
 
 12
 
 266 THE POKTER. 
 
 In the mean time, however, Book-keepers, Tellers, 
 Cashiers, Presidents, and Directors, have been impli- 
 cated in the dishonest use of bank funds, by which 
 successive dividends have been lost to the stock- 
 holders, and in a number of cases, the institutions com- 
 pletely wrecked. They have not been able to resist the 
 example and the rage of speculation, which at certain 
 periods has overrun the popular mind, and for a 
 season apparently destroyed the sense of common 
 honesty. 
 
 It is no credit to a man that he shall abstain from 
 theft, and that he shall fulfill his solemn engagements 
 although costly services of plate testify that such 
 an extent of virtue is highly esteemed by some very 
 respectable people; yet there is positive and rare 
 merit in a persistent, faithful discharge of duty, where 
 the desire of personal gain, the strongest and most 
 constant that possesses the human mind, is tempted 
 by the immediate control of the means to gratify it. 
 Contentment with a moderate, but sure income, and 
 resolutely shutting out of view all thoughts of " grow- 
 ing rich" by lucky adventures, has been the safe- 
 guard of the Bank Porter in his long and creditable 
 career. 
 
 While there are many instances of the Porter 
 advancing by the usual steps of promotion to the 
 higher clerkships, and even of their "jumping over 
 the heads" of Book-keepers into the place of Teller, 
 there are more of their remaining stationary, through 
 a continuous term of years, than in any other grade 
 of bank clerks. This comes from no want of natural 
 ability, but partly from want of cultivation in early
 
 LONG SERVICE. 267 
 
 life, especially in mercantile practice ; partly, because 
 their ambition is satisfied with having secured a more 
 fortunate service than the majority of their class, and 
 partly from a true appreciation of certain advantages 
 of their position over ' most of the inferior clerk 
 ships in the bank. It is less monotonous in its rou- 
 tine, and it imposes less personal confinement It 
 requires more character than the employment of an 
 ordinary book-keeper. It is more in contact with 
 the general history and the extraordinary excite- 
 ments of the bank. There are many Book-keepers 
 whom the officers would reject as Porter; but 
 there are few Porters who would not be accepted 
 as Book-keepers, so far as substantial character goes. 
 In every valuable quality that constitutes the true 
 man of business, saving the mere practice as clerk, 
 and the cultivation of manner that makes the ac- 
 complished officer, the experienced Bank Porter of 
 New York is not second to any class of his associates ; 
 and as it relates to knowledge and capacity, it is not 
 extravagant to say, that the interests of the stock- 
 holders and the convenience of the dealers, of a pro- 
 portion no less than one-fifth of our city banks, might 
 be improved by transposition of office between the 
 Porter and the President or Cashier. 
 
 The Porter has the same right as any other servant 
 of the bank, and it is equally his duty to exert an 
 independent watchfulness over its interests. It would 
 not excuse him to allege, that it was i( none of his 
 business," if he should become acquainted with any 
 abuse of trust in clerk or officer, and fail to report 
 it if of the former, to the President or Cashier ; and
 
 268 THE PORTEE 
 
 if of either of these, then to the other, or to some 
 proper person connected with the institution. A case 
 is known to the writer, in which a Porter, of his own 
 accord, prevented a Cashier entering the vault, when 
 he suspected the honesty of his purpose ; and his con- 
 duct was warmly approved by the Board of Directors. 
 
 The Porter has, comparatively, little direct inter- 
 course with the dealers. The care of the bank 
 checks is commonly assigned to him ; and he enjoys, 
 in some cases, a small perquisite in the sale of 
 different varieties of check-books, which are fur- 
 nished by a stationer. He comes into contact with 
 the specie-shipping houses receiving and preparing 
 large amounts for disbursement. What is known 
 as a cross-grained disposition, is frequently con- 
 nected with diligent habits and faithful service. It 
 would be singular, if among the sixty Porters of 
 our city banks, most of whom have had but little 
 chance of education and social refinement, there 
 were not some to adopt the conceit, and to imitate 
 the manners of their superiors. 
 
 Of the fifty-three banks now in existence in the 
 city of New York, about one-half have been organ- 
 ized since 1850. Among the older, there have been 
 many instances of Porters holding office from fifteen 
 to twenty-five years ; and several have " died in the 
 harness," after faithful service for a longer period. 
 
 Mr. JAMES CORKEEY, at present the Specie Clerk of 
 the Union Bank, is now in the seventy-fourth year of 
 his age. He has served the institution as Porter for 
 thirty years, outliving three Presidents, two Cashiers, 
 and several successive companies of clerks. For the
 
 Father Cole.'
 
 THE GOLD SPECTACLES. 269 
 
 last twenty years, he has been the Receiving Specie 
 Clerk of the New York Savings' Institution (now 
 located in Bleecker street), attending there on the 
 afternoon of two days in the week, in addition to his 
 regular duties at the Union Bank. The specie that 
 he has counted and weighed would be tedious to 
 measure by tons or ship-loads. The amount of money 
 trusted to his charge, in one shape or another, if it 
 could be brought together, would exceed the entire 
 wealth of New York ; and of all, he has rendered a 
 true account. 
 
 The frontispiece to the volume represents him, sur- 
 rounded by the implements of his office. 
 
 " Father COLE " entered the service of the Ocean 
 Bank, as Porter, when that institution was organized. 
 He was already past the prime of life ; but retained 
 his full intellectual vigor, and apparently a good 
 reserve of bodily strength. The faithfulness with 
 which he performed his duty, gained for him a high 
 place in the esteem of officers, clerks, and dealers. 
 He possessed, in a remarkable degree, the qualities 
 that are most valuable in a confidential Porter. But 
 he soon had to contend with failing sight. This mark 
 of age was not acknowledged by the old man, until 
 the clerks, to whom it was apparent, presented him 
 with a pair of gold spectacles, as a proof of the 
 .respect and affection with which they regarded him. 
 He unwillingly retired from the service. At a later 
 period, he submitted to. a surgical operation for cata- 
 ract, which was only partially successful. His physi- 
 cal strength gradually declined, and he died on the 
 8th of March, 1858, in the 74th year of his age.
 
 270 PRESENTS. 
 
 CHAPTER XY. 
 
 PRESENTS. 
 
 THE strict theory of banking is, " an eye for an eye, 
 and a tooth for a tooth." The bank, at least, gives no 
 favors. If the note offered for discount is not safe, it 
 is rejected. If securities are deficient, they must be 
 increased. And the bank lends only for its own 
 interest. It may be obliged to discount paper for an 
 undeserving dealer who keeps no balance on deposit ; 
 but that is to save a running debt, and the motive is 
 still, to serve the bank, and not to gratify the dealer. 
 If ever a loan is granted as a favor, it is dishonestly 
 granted. The officers, even with a full Board of 
 Directors acting in concert, have no right to discount 
 a note as a favor. The money or the credit which 
 they are dispensing is not their own. It belongs to 
 the stockholders, and they are trustees merely, 
 appointed to invest it. Whenever they have departed 
 from this rule, it has been a violation of duty and 
 integrity which ought justly to involve personal 
 responsibility, if the debtor should fail. 
 
 The object of stating the case so fully is, to show 
 that there is no ground for the supposition by mer- 
 chants, that bank officers confer favors when they 
 discount paper for them ; or if there is such ground, 
 that it is dishonest. The box of " Black Dragon," or
 
 PBESENTS. 271 
 
 the caddies of "the veritable tears of Confucius," 
 which Mr. Fum sent to the President or Cashier after 
 the discount of his bills receivable last week, there- 
 fore, had better been bestowed on the convales- 
 cents at a hospital, where the gift would be a thou- 
 sand times more appreciated, and whence it would 
 never be followed by repentance. The market which 
 cannot be conciliated by a cup of tea, will get into 
 spells of tightness; and if Mr. Fum's balance of account 
 is less, or if his paper is not quite so good as that of 
 Mr. Smith, who never made the officers any present, 
 it will be rejected, as it should be. There is not a 
 market in the world where a merchant is less likely 
 to get two for one, than at the bank counter. 
 
 If there is any favor between the dealer and the 
 bank, it is conferred by the former, and by direct 
 solicitation of the latter. The bank seeks deposits. 
 It is dependent on depositors for its ability to declare 
 dividends. The measure of favor that it receives is 
 partly indicated by its willingness to pay interest on 
 balances, where it is demanded. But the mass of 
 personal depositors do not ask interest, and so far as 
 they receive no return in the shape of loans, they 
 confer on the bank a very solid favor, from which 
 great profit is realized. Substantially, deposits are 
 capital a discounting basis, not subject to dividends, 
 and therein, for the bank, better capital than its own 
 stock. 
 
 Notwithstanding these facts, banks are commonly 
 regarded, with respect to commerce, as the holders and 
 granters of favor / and hence comes the habit of 
 dealers making presents in return. Mr. Fum sends
 
 272 PRESENTS. 
 
 choice tea ; Mr. Raisin, a sample of new wine from 
 Hungary ; and Mr. Plumb, a barrel of fine pippins. 
 It would seem ungracious to refuse such gifts, as they 
 need not draw after them any bad consequences to 
 the bank. But where or how to stop when once 
 begun, is more difficult than to resist the beginning ; 
 and the influence of example in the chief officers is 
 not lost on the clerks, who may withhold conveniences, 
 if they cannot grant favors. The notion that banks 
 are superior to commerce, extends to their minor 
 employments. A bank clerk is better than a mer- 
 chant's clerk. He is treated with more deference; 
 and it is conceded that his position is surrounded with 
 more dignity. In addition to this, he holds some 
 powers which, rightly or not, he may make discretion- 
 ary. The Book-keeper may not be too strict in report- 
 ing occasional overdrafts ; or, what is very natural, 
 he may be so impressed with the generous and honor- 
 able character of a man as to believe him incapable 
 of taking advantage of his relaxed vigilance. It is, 
 therefore, desirable to conciliate him, and this is done 
 by presents. Such is the circumstantial origin of some 
 of the worst frauds in bank history. 
 
 The author vouches for the authenticity of the fol- 
 lowing anecdotes. Most of the incidents related came 
 under his personal observation. 
 
 A Cashier asked a Director of the same bank, if he 
 could advise him where to purchase a certain descrip- 
 tion of tea. The latter engaged to find the article. 
 On the same evening, a " quarter-chest " was left at 
 the Cashier's house without a bill, and the matter was
 
 PRESENTS. 273 
 
 not again alluded to. The director was subsequently 
 indebted to the officer for some favors, which, how- 
 ever, did not keep him solvent. 
 
 A dealer in fancy goods asked the same Cashier for 
 his adress, without specifying any object. On going 
 home, the latter found his parlor mantel furnished 
 with some elegant ornaments. 
 
 A Bank President inquired of a dealer in foreign 
 porcelain, where he could best get an English dinner- 
 set at a cost not over one hundred dollars. The latter 
 answered that his acquaintance with wholesale 
 importers would enable him to purchase it at a con- 
 siderable discount, and he did so. The President 
 never asked for the bill, but he discounted his friend's 
 paper liberally " between the Boards." 
 
 A Bank Officer said carelessly to a jeweller, after 
 serving him with a loan : 
 
 " By the way where is that gold-headed cane that 
 you promised me ?" 
 
 The jeweller smiled, but said nothing. In a week, 
 the cane was sent ; and when the donor called at the 
 bank subsequently, he was accosted with an expres- 
 sion of great surprise : 
 
 " Why, Mr. D., you didn't suppose I was in earnest 
 the other day, did you ?" 
 
 Another Officer called at the store of a dry-goods 
 merchant, after assisting the latter to a liberal dis- 
 count of paper. While walking along the aisle, his 
 eye was attracted by some ladies' kid gloves, of 
 
 12*
 
 274 PRESENTS. 
 
 superior quality. " Ah !" said he, " you keep these 
 articles, do you? They are really very soft and 
 beautiful !" 
 
 " Yes, sir," answered the proprietor, at the same 
 time wrapping up a dozen in some fine tissue-paper 
 "put those in your pocket. Yes, yes, do!" over- 
 coming the apparent reluctance of his visitor, by 
 unaffected earnestness. 
 
 The same scene was acted over again on the next 
 occasion, when the merchant had paper discounted. 
 A third rehearsal taught him to add a dozen of the 
 finest kid gloves to the legal rate of seven per cent, 
 whenever he obtained an accommodation at that 
 bank. 
 
 A Clerk took lodgings at a hotel during the absence 
 of his family in the country, which led to the land- 
 lord opening an account with the bank. In the 
 " progress of human events," baskets of brown stout 
 were left at the residence of one of the officers, and 
 dining privileges were enjoyed without cost. The 
 result in this case was a loan of over twenty thousand 
 dollars on inferior securities ; and although it was 
 finally paid, the process involved transactions of 
 questionable propriety. 
 
 A Dealer, who was impatient to rectify his accounts, 
 urged a Book-keeper to balance his bank-book. After 
 waiting several days, the request was repeated, and 
 the clerk promised that it should be done. " But," 
 he added, " you haven't sent me that umbrella yet !" 
 It was added to his wardrobe.
 
 PRESENTS. 275 
 
 It was formerly the practice, in some banks, for the 
 clerks to order from the stationers the articles neces- 
 sary to their convenience, such as pencils, rules, 
 erasers, blotting-paper, and other things. And it 
 was not considered improper for the stationer to dis- 
 tribute small presents among them occasionally. A 
 better system of economy has been established in 
 later years. 
 
 Bank clerks receive presents thoughtlessly, and 
 mostly, perhaps, without committing themselves to 
 an improper understanding with dealers. They are 
 not alive to the danger of being made accessory to 
 fraud, and to the consequent destruction of character. 
 The officers have no alternative, but to dismiss 
 immediately a clerk who allows himself, even by acci- 
 dent, to be brought into collusion with .a dealer. The 
 collusion of silence only, if a fellow-clerk is in fault, 
 would be fatal to him. In a bank of strict discipline, 
 the discovery that a clerk had received presents from 
 a dealer would lead to the expulsion, both of himself 
 and the donor, from all connection with the institu- 
 tion so important and critical is the point of this 
 most pernicious practice. Every dealer should know 
 that a bank clerk has no favors to bestow. His duty 
 covers every requisition that can be made of him 
 with respect to the business. 
 
 In every case where a bank clerk has been 
 betrayed into collusion, the worst consequences have 
 fallen on himself. Whatever advantages have resulted 
 to others, he has reaped none; for, from the first 
 moment, he has been in the power of his betrayer, 
 who takes all the gain, and leaves to him the shame
 
 276 PRESENTS. 
 
 and the disgrace. Can any trifling gift compensate 
 for such a risk ? 
 
 Presents from a dealer are always annoying to a 
 high-minded bank officer. They may be interpreted 
 to imply that he can be influenced by them to do 
 what is opposed to his sense of duty or justice. In 
 such case, the donor must sink in his esteem, and 
 their effect be precisely opposite to what is expected. 
 
 Mr. GEORGE CURTIS, the first Cashier of the Bank 
 of Commerce, and late President of the Continental 
 Bank, was occasionally the unwilling recipient of " a 
 present." His well-known high sense of honor and 
 propriety would have protected him against all suspi- 
 cion of improper influence in the administration of 
 his trust ; but so sensitive and scrupulous was he on 
 the subject, that he uniformly placed the article, 
 whatever it was, in the discount-room, and related its 
 history at the next meeting of the Board of Directors. 
 
 Mr. CURTIS was one of our most accomplished and 
 intelligent bankers. He took an active part in the 
 organization of the Clearing House, and was one of 
 the few persons in New York, connected with finance, 
 who made it a matter of serious study.
 
 BANK DISCIPLINE. 277 
 
 CHAPTER XVI. 
 
 BANK DISCIPLINE. 
 
 THE foregoing chapters contain a description of the 
 different departments of a bank, of the duties of the 
 officers and clerks, and of their daily experience. 
 
 It will occur to the reader, that there is one pecu- 
 liar feature running through the whole system ; and 
 that is, tlie apprehension of fraud. It is suggested 
 with every clerk, in the beginning, by the requisition 
 of a bond of indemnity against it ; and it is never lost 
 sight of for an instant. The constant purpose of the 
 managers is, to devise a system of accounts to prevent 
 it. Every thing else is easy enough. But that has, 
 hitherto, been the one thing that no vigilance could 
 forestall. 
 
 The same idea exists in the public mind. Although 
 there is not an equal amount of any other business in 
 the world transacted with so little fraud, yet the com- 
 mon suspicion is much more alive with respect to it 
 in this business, than in any other. It is certain that 
 there are fifty-three dry-goods, jewellers, and fancy 
 stores in the city of New York from which more 
 money or property is stolen every year than from the 
 fifty-three banks, and the fact is hardly recognized. 
 In this view, the presentment is a very strong testi- 
 mony to the integrity of bank clerks.
 
 278 BANK DISCIPLINE. 
 
 The anxiety of officers is, after all, induced by the 
 possibility, rather than the suspicion of dishonesty in 
 the clerks. It would be most unfortunate for both 
 parties, if the governing sentiment of the former were 
 not one of thorough confidence. The moment that it 
 ceases to be so, the clerk is dismissed ; and dismissal 
 on this ground is very rare, although the number of 
 clerks in the city banks is near one thousand. On 
 the other hand, the cases are also rare, in which a 
 clerk, seeking promotion in another bank, is not 
 cheerfully assisted by the officers with whom he has 
 been employed. It is recognized as his right to refer 
 to them for testimony of capacity and character ; and 
 no petty considerations of inconvenience from loss of 
 valuable services are allowed to have influence. The 
 terms of intercourse between them are uniformly and 
 mutually respectful and polite. No insulting supe- 
 riority is assumed, nor mean servility manifested ; 
 but the common feeling is rather that of partners in 
 the same interest. 
 
 Neither is the possibility of fraud suggested by 
 reflection on the personal character of the clerk, but 
 by outside circumstances. The embezzlement of 
 bank funds, in most cases, has either had its origin in, 
 or been greatly aggravated by the vice of gambling ; 
 and this has generally been brought about by the 
 persuasion, or the acts of persons connected with 
 gambling-houses. The bank clerk or the bank officer 
 is a promising victim, if he can be induced to make a 
 first experiment in this direction ; and a single victim 
 will reward many plans. The author will cite but 
 one instance of several that have come to his know-
 
 PLANS OF GAMBLEES. 279 
 
 ledge within a few years past. A Paying Teller 
 accepted the invitation of a friend to take a ride into 
 the country. The further end of the ride proved to 
 be a house frequented by sporting characters. He 
 believed this to be accidental, until a subsequent pro- 
 position, after an interval of several weeks, revealed 
 the true character and design of his polite friend. 
 That plans are deliberately laid to entrap the unwary 
 into the practice of gambling, is well known. It is, 
 unfortunately, a very common vice, and easily con- 
 cealed. A masonic honor makes one gambler safe 
 with another ; but what is more difficult to explain, 
 men who have no interest but to expose a vice which 
 destroys all integrity of character, aid in its conceal- 
 ment. After the development of the fraud described 
 on page 155, several respectable dealers of the bank 
 came forward and said : 
 
 " Didn't you know that that fellow was a gambler ? 
 Why, I've known it for more than a year." 
 
 " Why didn't you tell us of it ?" 
 
 " Because it wasn't my business." 
 
 The moral of this anecdote might have been appre- 
 ciated, if the informant's house had been burned 
 down ; and a friend had called at the ruins on the 
 next morning to say : " I saw a man in the act of 
 setting fire to it." 
 
 The knowledge of such facts as these is the root 
 of the bank officer's anxiety on behalf of his clerks. It 
 induces a more attentive study of their character, and 
 a desire to know something of their habits and asso- 
 ciations. Their hours of leisure are many, compared 
 with those of commercial clerks, affording time either
 
 280 BANK DISCIPLINE. 
 
 for idle dissipation or mental improvement ; and the 
 manifestation of these opposite dispositions cannot be 
 concealed, nor fail to command respect, or to excite 
 distrust. However uncultivated may be the officer 
 himself, he appreciates the fact that the mental habit 
 is a better safeguard against embezzlement than can 
 be put into a legal instrument. The author is ac- 
 quainted with a Paying Teller whose healthful ram- 
 bles before and after bank hours have made him an 
 accomplished botanist ; with another, who is a diligent 
 student in political economy ; and with a third, who 
 is devoted to natural philosophy. It is almost need- 
 less to say, that these gentlemen enjoy, in an unusual 
 degree, the respect and confidence of their superiors, 
 and that their chances of promotion are greatly im- 
 proved by their habits. 
 
 Finally, however, the real safeguard of a bank 
 against collusion and fraud from without, as well as 
 from embezzlement within, is to be found in the gen- 
 eral organization of its accounts, and in its discipline. 
 
 Nothing short of daily personal supervision of all 
 the postings, additions, and transfers in the work of 
 ten or fifteen desks, could give to the bank officers a 
 positive assurance that there is no error or fraud con- 
 cealed in the accounts. This being impossible, the 
 next best thing is to prove the accuracy of results. 
 "When a dealer's book is balanced, and the balance 
 agrees with his own cash-book, the presumption is, 
 that the account is correct in its details, because the 
 same result is attained by two persons, each inde- 
 pendently of the other, and by different processes. 
 On this theory, one of our city banks has adopted a
 
 REPORTS. 
 
 281 
 
 system of daily reports of the reciprocal departments, 
 the separate entries of which are checked off against 
 each other. The following are the principal of these 
 reports for one day : 
 
 PAYING TELLER'S DAILY REPORT. 
 
 Balance of cash from previous day 
 
 4 
 
 1 
 
 000 
 500 
 
 000 
 000 
 
 1 
 2 
 
 3 
 4 
 
 5 
 
 6 
 
 7 
 
 S 
 
 9 
 10 
 11 
 
 12 
 13 
 
 U 
 
 5 
 
 1 
 
 7 
 
 ^= 
 
 1 
 2 
 
 3 
 3 
 
 7 
 
 500 
 700 
 200 
 
 400 
 
 IJ-.IJT 
 
 300 
 
 060 
 .25 
 10 
 15 
 
 410 
 990 
 
 400 
 
 000 
 000 
 000 
 
 000 
 
 >f,0 
 
 000 
 000 
 000 
 000 
 
 000 
 000 
 
 000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 400 
 660 
 
 000 
 000 
 
 Checks at counter in specie 10,000 
 
 1 
 
 " " bills 50,000 
 
 " in Exchanges 1,600,000 
 
 
 
 
 
 Note Teller 
 
 
 
 
 
 
 
 
 
 
 
 
 Completed, 3J o'clock. Difference in cash, 
 
 0. 
 
 
 
 RECEIVING TELLER'S DAILY REPORT. 
 
 Number of deposits 275 amount 
 
 1 
 
 000 
 25 
 
 000 
 000 
 
 15 
 16 
 17 
 
 1 
 
 025 
 120 
 
 905 
 906 
 
 000 
 000 
 
 000 
 000 
 
 
 Deduct checks on this bank charged ..... 
 
 
 
 
 
 
 Consisting of: 
 
 
 5 
 875 
 5 
 
 19 
 
 
 
 000 
 000 
 600 
 
 
 IS 
 19 
 20 
 
 
 
 
 
 
 Office matter 
 
 
 
 
 
 
 
 Completed, 4 o'clock. Difference in cash, 0.
 
 282 
 
 BANK DISCIPLINE. 
 
 NOTE TELLER'S DAILY REPORT. 
 
 
 
 900 
 10 
 60 
 
 000 
 000 
 000 
 
 22 
 23 
 
 24 
 
 25 
 
 2G 
 
 
 960 
 350 
 
 000 
 000 
 
 " received from Paying Teller 
 " " " Uncurrent TeUer. . 
 
 Deduct checks on this bank charged 
 " am't added to morning Exchanges 
 
 
 150 
 200 
 
 000 
 000 
 
 
 
 
 610 
 fiin 
 
 000 
 nnn 
 
 Consisting of: 
 
 
 40 
 560 
 9 
 
 500 
 000 
 500 
 
 27 
 28, 
 29 
 
 
 
 
 
 Completed 3.40 o'clock. Difference in cash, 0. 
 
 Number of notes paid, 350 protested, 12 of discounted, none. 
 
 EXCHANGES SENT TO CLEARING HOUSE. 
 
 
 
 750 
 350 
 
 000 
 000 
 
 
 1 
 
 100 
 200 
 
 000 
 000 
 
 
 Added by Note Teller 
 
 
 
 
 Total. . 
 
 
 
 
 30 
 
 1 
 
 300 
 
 000 
 
 EXCHANGES RECEIVED FROM CLEARING HOUSE. 
 
 Number of checks, 2,500. 
 Am't of checks on Commercial Bank 
 
 1 
 
 450 
 
 000 
 
 
 Bills of " " " 
 
 
 45 
 
 000 
 
 
 Redemptions for other banks in bills .... 
 " " in checks. . . 
 
 
 65 
 124 
 
 000 
 000 
 
 
 
 
 
 
 
 Total.. 
 
 
 
 
 31 
 
 495 
 
 189 
 16 
 
 700 
 
 000 
 
 000 
 000 
 
 000 
 
 Completed o'clock. Difference in cash, 0.
 
 REPORTS. 
 
 283 
 
 UNCURRENT NOTE TELLER'S DAILY REPORT. 
 
 Received from Paying Teller. 32 .. 15 000 
 
 Correspondents SOiOOO 
 
 City depositors 15 000 
 
 " other banks, redemptions 50|000 
 
 33 160000 
 Deduct redemptions charged J34 . . 86000 
 
 75000 
 
 Paid Note Teller 5000035 
 
 Office matter 25000 36 
 
 75000 
 
 Amount rec'd for credit on the following day 25 000 
 
 Completed, o'clock. Difference in cash, 0. 
 
 CHECK CLERK'S DAILY REPORT. 
 
 Amount of Paying Teller's checks : 
 
 In Exchanges domestic 1 400000 
 
 foreign 200 000 
 
 Checks paid at counter 60000 
 
 37 1660000 
 
 Receiving Teller's checks domestic 38 . . 120 000 
 
 " foreign 39.. 19400 
 
 Note Teller's checks domestic 40 .. 150 000 
 
 General Ledger checks, redemptions charged 41 .. 35 000 
 
 Completed, o'clock. 
 
 PORTER'S DAILY REPORT. 
 
 Specie received by Receiving Teller 42 .. 5 000 
 
 Note Teller |] 43 .. 40 500 
 
 GENERAL BOOK-KEEPER'S DAILY REPORT. 
 
 Balance of cash 44 3 990 000 
 
 Amount of Receiving Teller's credits 45 1 000 000 
 
 " Note Teller's credits 46 . . 900 000 
 
 " certifications .. 47 ..700000
 
 284: BANK DISCIPLINE. 
 
 CERTIFICATION CLERK'S DAILY REPORT. 
 
 .185 
 
 Number of checks certified, 250. 
 
 Amount [48J $700,000 
 
 Completed, 3J o'clock. 
 
 COMMERCIAL BANK. 
 
 No. Letters received from Post Office, A. M 225 
 
 " " P. M 15 
 
 300 
 
 No. Letters sent, 295. 
 
 185 Amount of Postage, $11.50. 
 
 COLLECTION CLERK'S DAILY REPORT. 
 
 .185 
 
 No. of Sight Drafts sent out for payment 160 
 
 " Time Drafts sent out for acceptance 50 
 
 " City Notes and Acceptances registered 270 
 
 " Drafts protested 3 
 
 " Foreign Notes and Drafts registered 150 
 
 Time completed, 3i o'clock. 
 
 These reports are laid on the Cashier's desk every- 
 day, after the close of business, by the respective 
 clerks. For brevity of explanation, the items will be 
 designated by the number opposite to each. 
 
 Number 1 is the balance of cash brought forward 
 from the previous day. It is verified by the report 
 of the General Book-keeper for that date. Number 
 2 is the sum of the several Tellers' receipts, also for the 
 previous day, including the exchanges, the office
 
 REPORTS. 285 
 
 matter, and the specie. Number 3 is verified by num- 
 ber 31 ; 4, by 26 ; 5 is the entire amount of cash from 
 which the payments are to be made. Number 6 is 
 verified by 30 ; 7, by subtracting the amount sent to 
 the Clearing House (6) from that received (3) ; 8, by 
 37 ; 9, by 16 ; 10, by 23 ; 11, by 32 ; 12, by addition; 
 13, by the balance test and by 44 ; 14, by 5 ; 15, 
 by 45 ; 17, by 38 ; 18, by 42 ; 19, 20, 28, and 29, by 
 the reports of the succeeding day ; 21, by 39 ; 22, by 
 46 ; 24, by 35 ; 25, by 40 ; 27, by 43 ; 34, by 41 ; 
 36, by the Paying Teller's report of the next day ; and 
 47, by 48. 
 
 The report of every clerk is thus proved by the 
 report of another clerk ; and mostly the proof of one 
 is established by comparison with the items of several 
 others, each distinct. The Cashier is enabled by this 
 system to check off the results of each day's business 
 in all the departments, in the space of fifteen minutes. 
 
 "When a report shows extraordinary results, an 
 explanation is required on the back of the ticket. 
 For example, if the Paying Teller should pay out an 
 unusual amount of coin, a memorandum on the back 
 of the report would give the names of the drawers, 
 and for what purpose it was required perhaps to 
 pay duties, or for shipment. If any discounted notes 
 are protested, the Note Teller writes on the back of 
 his reports the amounts, with the names of the 
 indorsers and drawers. The Certification Clerk com- 
 monly notes the names of the dealers who have 
 obtained the largest certifications. 
 
 The protection gained by these reports is measur- 
 ably secured by other methods of supervision in many
 
 286 BANK DISCIPLINE. 
 
 of our city banks. It cannot be said that they pre- 
 clude the possibility of fraud; but they make an 
 incredible extent of collusion necessary to carry it 
 on continuously and successfully. 
 
 In the same institution, the record of certified checks 
 has been given to a separate clerk ; which, in connec- 
 tion with the separate counting of the Exchanges, is 
 an effectual bar to abuse by the Paying Teller, of the 
 power of certification. The check is first recorded 
 by the Certification Clerk, who writes his initials upon 
 it, and it is then certified by the Paying Teller. When 
 it returns through the Clearing House for redemp- 
 tion, it comes to the Assistant or Exchange Teller, 
 by whom it is checked off on the Certification List, 
 before it passes into the hands of the Paying Teller. 
 
 Under this plan, a fraudulent certification, to be 
 carried over a single day, must have the collusion of 
 at least four persons three clerks in the bank, and a 
 confederate outside. If this is not guard enough 
 against the dishonest issue of certified checks, it is 
 hardly to be secured by human vigilanco.
 
 HOW TO TRANSACT BUSINESS WITH A BANK. 287 
 
 CHAPTEK XVII. 
 
 HOW TO TRANSACT BUSINESS WITH A BANK. 
 
 IF you are a stranger to the officers, and wish to 
 open an account, get some respectable person who is 
 known to them to introduce you, either to the Presi- 
 dent or Cashier. Do not ask him to vouch for any- 
 thing beyond your integrity and fairness in dealing. 
 Tell your own story about capital, business, property, 
 and other matters which pertain to your commercial 
 prospects and exaggerate nothing. There is no 
 humbug that will recoil upon yourself so surely as an 
 attempt to palm off big tales on a bank officer. Your 
 deposit-tickets, your checks, your bills receivable, 
 your indorsements, and your ledger account, make 
 together a history that dispels all shams, and leaves 
 little to say. A man who begins with an exaggerated 
 account of himself is measured by it afterwards, and 
 appears relatively small. 
 
 Borrow no money of your neighbors to swell your 
 first deposits. This is a common practice, with the 
 idea that it will make a favorable impression on the 
 officers. They see through it at once, and take it as 
 a proof of weakness. 
 
 Never try to bargain for special indulgences, such 
 as the certification of your checks before your deposit 
 is made or the discount of your paper by the officers
 
 288 HOW TO TRANSACT BUSINESS WITH A BANK. 
 
 without its submission to the Board of Directors. The 
 character of your account will settle these matters 
 much more satisfactorily to all parties. 
 
 Let your intercourse with the officers be candid and 
 respectful, and be sparing in your personal solicita- 
 tion for discounts. Choose the earlier hours of the 
 day for your interviews, and especially avoid the last 
 hour before three o'clock. 
 
 "Write your signature with the same freedom that 
 you do in your own office, and never vary the style 
 of it. 
 
 Teach your clerks to use always the deposit-tickets 
 furnished by the bank, to examine the date and 
 indorsement of every check, and also to see that the 
 writing of the amount corresponds with the figures. 
 Instruct them to learn and to follow the rules of the 
 bank with respect to getting checks certified before 
 deposit. 
 
 Make your deposit as early in the day as possible. 
 If you are accustomed to have many checks, or large 
 packages of bank bills, it is better to make two de- 
 posits one at an early hour than to hand in all at 
 once just at three o'clock. Never change checks with 
 other people merely to make larger figures. It causes 
 needless labor to the bank clerks, makes you respon- 
 sible for the debts of others, and is a real prejudice 
 to your credit. 
 
 Never try to put in your deposit before those in 
 advance of you, but take your place in the line, and 
 wait your turn patiently. Never make deposits with- 
 out your bank-book, if you can help it. Avoid all 
 unnecessary conversation with the clerks, especially 
 with the tellers.
 
 PRACTICAL RULES. 289 
 
 Never get angry if the Paying Teller examines 
 your account before certifying your check ; nor if he 
 keeps you waiting a few seconds before he can pay it. 
 
 Make it an invariable rule to give checks only out 
 of your own check-book, and at your own office ; and 
 never write a check payable to order, when you can 
 as well do it to " the bearer" When you want the 
 indorsement of the person to whom you give it, let 
 him indorse it in your presence, and write your own 
 name below, to assure the Teller that it is right. 
 
 Never give out checks dated ahead. When you 
 have need to cut checks out of the end of your check- 
 book, mark in the margin what they are for to 
 supply duplicates, or otherwise. Keep your check- 
 books out of sight and reach of strangers. Never give 
 a stranger a check unless you have some evidence 
 that he is not seeking it for fraudulent purposes. 
 Never draw checks against your account, on the 
 ground that you have sent some abroad that will not 
 return immediately. Always consider a check paid 
 when you give it out. 
 
 Never attempt to pay a note with an uncertified 
 check, at a bank where you keep no account. If you 
 make your promissory notes payable at bank, give 
 the Paying Teller a list of them on Monday morning 
 for the current week, or send him. your bank-notices 
 on the day of their maturity. 
 
 When you want notes discounted, offer them on the 
 regular days, and in good season for the clerk's con- 
 venience. Never call on bank officers to discount 
 notes between the Board meetings, if you can wait 
 until the following discount day. Do not put off the 
 
 13
 
 290 HOW TO TRANSACT BUSINESS WITH A BANK. 
 
 offering of notes for discount until the last day of 
 your need. It is better to keep from ten days to a 
 fortnight ahead, and to let your balances remain in 
 the bank until you require them. The loss of interest 
 is very trifling at best. You lose more by anxiety 
 and unfitness for business. 
 
 When you want your bank-book balanced, or 
 entries made in it, apply to the Book-keeper early in 
 the day. Never ask a service of him later than one 
 o'clock if you can wait till the next morning. Do 
 not allow your book to run too long without being 
 balanced, and when balanced, examine your cancelled 
 checks without delay. 
 
 If the bank ledger shows a larger balance in your 
 favor at any time, than your own check-book, 
 acquaint the Book-keeper with it immediately. As 
 you value your credit with the bank, never take 
 advantage of deposits wrongly entered to your account, 
 but let your dealings be strictly honorable. 
 
 If you have any cause of complaint against the 
 clerks, state it directly to the officers. The clerks 
 act under their instructions, which they dare not dis- 
 obey. 
 
 The Book-keeper is the proper person to apply 
 to, to know if collection notes are passed to your 
 credit. 
 
 The Note Clerk will inform you of the maturity of 
 notes for a future time. In the case of discounted 
 notes apply to the Discount Clerk. The Discount 
 Clerk, or the Note Clerk, will commonly tell the 
 exchange or charges for collecting foreign paper. 
 
 When you have notes to send abroad for collection,
 
 PRACTICAL BULES. 291 
 
 deposit them in ample time for deliberate record and 
 transmission by the bank. 
 
 If the drawers of any notes lodged as collateral to 
 loans or discounts should fail, do not wait for the 
 bank officers to discover it, but substitute good notes 
 for them without delay. 
 
 The observance of these rules, and such others as 
 may be suggested by your own observation, will be 
 a great economy of time to yourself as well as to the 
 bank clerks, and promote your real credit with the 
 institution. 
 
 Dealers should always instruct inexperienced clerks 
 not to transact business with strangers outside of the 
 counter. If they want advice how to proceed, let 
 them ask any clerk who is not too busy to answer, or 
 go direct to the officers. There are often well-dressed 
 persons in the lobby, or about the counters, watching 
 for those who appear at a loss, and ready to assist 
 them very politely. An old merchant sent his car- 
 man to draw a check for two hundred dollars. It 
 was his first message to a bank. A gentleman, observ- 
 ing him to be a little gawky, said very kindly : " You 
 want the money for that check this is the place 1" 
 and took him to the proper teller, who paid him in 
 large bills. " Now," he added, " you want some of 
 this in small notes. Come with me." He took him 
 into a broker's office in the same building, changed 
 the bills, and managed to retain thirty dollars in his 
 own possession. The teller and broker supposed the 
 two to be friends, and the carman thought that the 
 bank was very accommodating, to keep a clerk only 
 to help strangers !
 
 THE NEW YORK CLEARING HOUSE. 
 
 CHAPTEE XYHI. 
 
 THE NEW YORK CLEARING HOUSE. 
 
 AN account of the Clearing House may very pro- 
 perly be introduced by a sketch of the old plan of 
 exchange and settlement between the banks. 
 
 During the few years following 1849, the number 
 of banks in New York was increased from twenty- 
 four to sixty. To make the daily exchange, one-half 
 of them must necessarily send to the other half. But 
 this plain division of 'the service was not convenient 
 or economical. It was found better for all of them 
 to do a part of the distribution, and thus the whole 
 sixty Porters were in motion at the same time. Each 
 carried a book of entry, and the money, for every 
 bank on which he called. The Paying Teller of the 
 receiving bank took the exchange and entered it on 
 the credit side of the book ; then he entered on the 
 debit side the return exchange, and gave it with the 
 book to the Porter, who hastened to the next bank in 
 his circuit. The Porters crossed and recrossed each 
 others' footsteps constantly ; they often met in com- 
 panies of five or six at the same counter, and retarded 
 each other; and they were fortunate to reach their 
 respective banks at the end of one or two hours. This 
 threw the counting of the exchanges into the middle
 
 THE NEW YORK CLEARING HOUSE. 293 
 
 and after part of the day, when the other business of 
 the bank was becoming urgent. 
 
 Instead of attempting a daily adjustment of accounts, 
 which would have consumed several hours, and caused 
 much annoyance, it became a tacit agreement, that a 
 weekly settlement of balances should be made after 
 the exchange of Friday morning, and that inter- 
 mediate draft-drawing should be suspended. The 
 weaker and more speculative banks took advantage 
 of this by borrowing money on Thursday, which 
 restored their accounts for Friday ; and its return on 
 Saturday threw them again into the debit column. In 
 this way, the banks distant from Wall street managed 
 to carry an inflated line of discounts, based on debts 
 due to other institutions. It became an affair of 
 cunning management by some to run a small credit of 
 two or three thousand dollars each with thirty or 
 more banks, making a total of one hundred thousand 
 dollars, on which they discounted bills. Conse- 
 quently, the Friday settlements proved to be no settle- 
 ments at all, but a prodigious annoyance. As soon 
 as the Paying Teller or his Assistant completed the 
 Exchange Balance List, the Cashier of each bank would 
 draw checks for every debt due to him by other 
 banks, and send out the Porters to collect them. A 
 draft on one in favor of another might settle two 
 accounts at once, but there was no understanding that 
 made it possible to secure that small economy ; or if 
 there was, it was disregarded. The sixty Porters 
 were out all at once, with an aggregate of two or 
 three hundred bank-drafts in their pockets, balking 
 each other, drawing specie at some places, and
 
 294. THE NEW YORK CLEARING HOUSE. 
 
 depositing it in others; and the whole process was 
 one of confusion, disputes, and unavoidable blunders, 
 of which no description could give an exact impres- 
 sion. 
 
 After all the draft-drawing was over, came the 
 settlement of the Wall street Porters among them- 
 selves. A Porters' Exchange was held on the steps 
 of one of the Wall street banks, at which they 
 accounted to each other for what had been done 
 during the day. Thomas had left a bag of specie at 
 John's bank to settle a balance, which was due from 
 William's bank to Robert's ; but Robert's bank owed 
 twice as much to John's. What had become of that ! 
 Then Alexander owed Robert also, and William was 
 indebted to Alexander. Peter then said, that he had 
 paid Robert by a draft from James, which he, James, 
 had received from Alfred on Alexander's account. 
 That, however, had settled only half the debt. A 
 quarter of the remainder was cancelled by a bag of 
 coin, which Samuel had handed over to Joseph, and 
 he had transferred to David. It is entirely safe to 
 say, that the Presidents and Cashiers of the banks 
 themselves could not have untangled this medley. 
 Each Porter had his tally, and by checking off and 
 liberating, first one whose account was least com- 
 plicated, and then another, they finally achieved a 
 settlement. 
 
 This scene was re-enacted on every Friday. In 
 consequence of the Porters being withdrawn from 
 their regular service in the bank, extra labor was 
 imposed on others, responsibilities became mingled 
 together, and the officers were kept for the whole day
 
 I
 
 THE NEW YORK CLEARING HOUSE. 295 
 
 in a state of distraction and anxiety. The Paying 
 Tellers were subject to frequent interruption, as they 
 were obliged to receive and deliver all specie. 
 Not the least irritating feature of the case was, that 
 a single small draft by any one bank on any other 
 induced a general drawing, and all became involved 
 in commotion, and " war" upon each other. If time 
 were allowed, the debtor banks would finally be 
 obliged to pay the liquidating balance ; but three 
 o'clock arrested the process, and the banks where 
 the demand was then in force were obliged to dis- 
 burse the coin. It was not unusual for a debtor bank 
 to add fifty thousand dollars to its specie at the close 
 of the day, with its debt doubled, while a creditor 
 bank to half a million in the general account, would 
 find itself, at three o'clock, depleted of one or two 
 hundred thousand dollars in coin. 
 
 The question had been occasionally discussed 
 whether these difficulties might not be obviated by 
 some other mode of exchange ; but without approach- 
 ing a practical issue. It began now to be more 
 seriously entertained. 
 
 The subject was discussed in all its bearings, at 
 informal meetings of bank officers, and steps were 
 taken to obtain general co-operation in some partial 
 and experimental plans. Such, however, was the 
 diversity of opinions, even among those who were 
 most anxious to promote the object, that nearly a 
 year passed before it was thought expedient to issue 
 notices for a meeting to take decisive action upon it. 
 Then, it encountered much silent and determined 
 opposition. Those banks which had profited most
 
 296 THE NEW YORK CLEARING HOUSE. 
 
 by enforced credit balances, feared the restraint and 
 domination of the others ; and these had prejudices 
 to overcome, and a long score of annoyances to forget; 
 but it was manifest that the subject could be deferred- 
 no longer. A plan was finally adopted, and went into 
 effect on the first of October, 1853. Its complete 
 success soon banished all feelings but those of grati- 
 fication and common interest. 
 
 The operations of the Clearing House were carried 
 on for nearly one year without a Constitution. Some 
 opposition was manifested, on the ground that it was 
 not needed, and might favor a dangerous concentra- 
 tion of power in the hands of a few managers ; but 
 the necessity of fixed rules soon became apparent, 
 and the following Constitution, prepared by GEORGE 
 CURTIS, Esq., was adopted on 6th of June, 1854 : 
 
 CONSTITUTION. 
 
 1. THE name of this Association shall be, " THE 
 NEW YORK CLEARING HOUSE ASSOCIATION." 
 
 2. The objects of the Association shall be, the effec- 
 ting at one place of the daily exchanges between the 
 several Associated Banks, and the payment at the same 
 place of the balances resulting from such exchanges. 
 But the Association shall be in nowise responsible in 
 regard to such exchanges, nor in regard to the bal- 
 ances resulting therefrom, except so far as such 
 balances shall be actually paid into the hands of the 
 Manager. The responsibility of the Association is 
 strictly limited to the faithful distribution by the 
 Manager among the Creditor Banks, for the time 
 being, of the sums actually received by him ; and 
 should any loss occur whilst the said balances are in 
 the custody of the Manager, they shall be borne and
 
 CONSTITUTION. 297 
 
 paid by the Associated Banks, in the same proportion 
 as the other expenses of the Clearing House, as here- 
 inafter provided for. 
 
 3. The Association at present consists of the fol- 
 lowing Members : [The same as the Proof-lists.] 
 
 4. Each Bank belonging to the Association shall 
 be represented at all meetings thereof, by one or 
 more of its principal officers, and shall be entitled to 
 one vote. 
 
 5. A general meeting of the Association shall be 
 holden at the Clearing House, on the first Tuesday in 
 October, in each year, at 12 o'clock, M. At every 
 annual meeting, a Chairman shall be elected, by bal- 
 lot, to preside at that meeting, and all subsequent 
 meetings during the year. Whenever he shall be 
 absent, a Chairman pro tern, shall be appointed. At 
 the same meeting, a Secretary shall also be elected 
 by ballot. 
 
 6. Special meetings shall be called by the Clear- 
 ing House Committee whenever they may deem it 
 expedient, or whenever they shall be thereto requested 
 by any seven of the Associated Banks. 
 
 7. At all meetings of the Association, a quorum 
 for the transaction of business shall consist of a 
 majority of the whole number of Associated Banks. 
 
 8. At every annual meeting, a Standing Com- 
 mittee of Five Bank Officers shall be elected by the 
 majority and by ballot, to be called the Clearing 
 House Committee, whose duty it shall be to procure, 
 from time to time, a suitable room or rooms for the 
 Clearing House ; to provide proper books, stationery, 
 furniture, fuel, and whatever else may be necessary 
 for the convenient transaction of business thereat ; to 
 appoint a Manager annually, and such Clerks as may 
 be necessary ; to establish rules and regulations to be 
 observed at the Clearing House in cases not provided 
 for in this Constitution, subject to the approval of the 
 Association ; and generally to supervise the Clearing 
 House affairs. This Committee shall have charge of 
 
 13*
 
 298 THE NEW YOKE CLEABING HOUSE. 
 
 the funds belonging to the Association ; shall draw 
 on each Bank for its quota of the expenses ; and shall 
 also, at the first meeting of the Association after their 
 election, submit detailed estimates of the expenditures 
 that will be required for the Clearing House during 
 the current year. 
 
 9. The salary of the Manager shall always be 
 fixed by the Association. The salaries of the Clerks 
 shall be fixed by the Clearing House Committee. 
 The Manager shall give a bond, with sureties in the 
 sum of ten thousand dollars, and each Clerk* in the 
 sum of five thousand dollars, to be approved by said 
 Committee. 
 
 10. The Manager, under control of the Clearing 
 House Committee, shall have immediate charge of all 
 business at the Clearing House, so far as relates to the 
 manner in which it shall be transacted ; and the 
 Clerks of the establishment, as well as the Settling 
 Clerks and Porters of the several Associated Banks, 
 while at the Clearing House, shall be under his direc- 
 tion. 
 
 11. The Clearing House Committee shall have 
 power to remove the Manager, or any of the Clerks, 
 whenever, in the opinion of the Committee, the inter- 
 est of the Association shall require. 
 
 12. The hour for making exchanges at the Clear- 
 ing House shall be 10 o'clock A. M., precisely. At 
 one o'clock P. M., the Debtor Banks shall pay to the 
 Manager, at the Clearing House, the balances against 
 them, either in actual coin, or in the certificates here- 
 inafter mentioned, except fractional amounts. At 
 li o'clock P. M., the Creditor Banks shall receive 
 from the Manager, at the same place, the respective 
 balances due to them, provided the balances due from 
 the Debtor Banks shall then have been paid. 
 
 13. Should any one of the Associated Banks fail 
 to appear at the Clearing House at the proper hour, 
 prepared to pay the balance against it, the amount of 
 that balance shall be immediately furnished to the
 
 CONSTITUTION. 299 
 
 Clearing House by the several Banks exchanging at 
 that establishment with the defaulting Bank, in pro- 
 portion to their respective balances against that Bank 
 resulting from the exchanges of the day ; and the 
 Manager shall make requisitions accordingly, so that 
 the general settlement may be accomplished with as 
 little delay as possible. The respective amounts so 
 furnished the Clearing House, on account of the 
 defaulting Bank, will, of course, constitute claims on 
 the part of the several responding Banks against that 
 Bank : "but, as before stated, the Association shall in 
 nowise be responsible therefor. 
 
 14. Errors in the exchanges, and claims arising 
 from the return of checks, or from any other cause, 
 are to be adjusted directly between tne Banks who 
 are parties to them, and not through the Clearing 
 House, the Association being in no way responsible 
 in respect to them. 
 
 15. Reclamations for errors and deficiencies in 
 specie received at the Clearing House, contained in 
 bags or other packages, sealed and marked in con- 
 formity with any rules established upon that subject 
 by the Clearing House Committee, should be made 
 within a reasonable time by the receiving Bank 
 directly against the Bank whose mark the sealed bag 
 or package bears, the Association not being responsi- 
 ble for the contents of such sealed bags or other 
 packages. 
 
 16. The Associated Banks shall, from time to 
 time, appoint one of their own number to be a Depos- 
 itory to receive, in special trust, such coin as any of 
 the Associated Banks may choose to send to it for 
 safe keeping. The Depository shall issue certificates 
 in exchange for such coin, in proper form, and for 
 convenient amounts. Such certificates shall be nego- 
 tiable only among the Associated Banks, and shall be 
 received by them in payment of balances at the 
 Clearing House. Such special deposits of coin are to 
 be entirely voluntary, each Bank being left perfectly
 
 300 THE NEW YORK CLEARING HOUSE. 
 
 free to make them or not, at its own discretion. The 
 coin thus placed in special deposit is to be the abso- 
 lute property of such of the Associated Banks as 
 shall, from time to time, be the holders of the certifi- 
 cates, and is to be held by the Depository, subject to 
 withdrawal, on the presentation of the proper certifi- 
 cates, at any time during banking hours. 
 
 17. New members may be admitted into the 
 Association at any meeting thereof. Such new mem- 
 bers shall pay an admission fee of one thousand dol- 
 lars, and shall signify their assent to this Constitution, 
 in the same manner as the original members. But no 
 new member shall be admitted except by a vote of 
 three-fourths of those present. 
 
 18. A Standing Committee of Five Bank Offi- 
 cers shall be appointed at every annual meeting, to 
 whom all applications for admission into the Associa- 
 tion shall be referred for examination. 
 
 19. For cause deemed sufficient by the Asso- 
 ciated Banks, at any meeting thereof, any Bank may 
 be expelled from the Association, and debarred from 
 all the privileges of the Clearing House, provided a 
 majority of the whole number of Associated Banks 
 vote in favor thereof. 
 
 20. A Standing Committee of Five Officers of 
 Banks shall be elected at every annual meeting, who, 
 acting in concurrence with the Clearing House Com- 
 mittee, shall have power, in case of extreme emer- 
 gency, to suspend any Bank from the privileges of 
 the Clearing House until the pleasure of the Associa- 
 tion thereupon shall be ascertained. But no such 
 suspension shall take place, unless a majority, at 
 least, of each of these two Committees, shall be pre- 
 sent at the ordering thereof, nor unless the vote be 
 unanimous. In case of such suspension, the Clearing 
 House Committee shall forthwith call a general meet- 
 ing of the Association, to take the matter into con- 
 sideration. 
 
 21. Any member of the Association may with-
 
 CONSTITUTION. 301 
 
 draw thereirora at pleasure, first paying its due 
 proportion of all expenses incurred, and signifying its 
 intention to withdraw, to the Clearing House Com- 
 mittee. 
 
 22. The expenses of the Clearing House, not 
 including the expense of printing for the several 
 Banks (which last-mentioned expense shall be appor- 
 tioned equally), shall be borne and paid by the sev- 
 eral Banks belonging to the Association, according to 
 their respective capitak, as follows : 
 
 Banks having capitals of less than $500,000, shall 
 pay $100 each, annually. 
 
 Banks having capitals of less than $1,000,000, and 
 not less than $500,000, shall pay $200 each, annually. 
 
 Banks having capitals of $1,000,000, and over, shall 
 shall pay $300 each, annually. 
 
 And in the same proportion, if more funds become 
 necessary. 
 
 23. This Constitution, when agreed to by the 
 Association, at any general meeting thereof, by a 
 majority of votes, shall be submitted to the respective 
 Boards of Directors of the several Banks herein 
 named as members of the Association, for their adop- 
 tion. When adopted by a majority of the whole 
 number of Banks, it shall be deemed and taken to be 
 in full force and operation. Adoption shall be signi- 
 fied by the signature of the proper officer of the Bank 
 to two 'copies hereof one to be kept by the Chair- 
 man of the Clearing House Committee, and the other 
 by the Secretary of the Association. A copy of the 
 vote or resolution of the Board, authorizing such sig- 
 nature, shall be deposited with the Secretary. Such 
 Banks as shall not adopt this Constitution within two 
 months from the time it is agreed to in general meet- 
 ing, as above mentioned, shall, at the expiration of 
 such two months, cease to be members of the Associa- 
 tion, provided the Constitution shall then be in ope- 
 ration. 
 
 24:. Amendments of this Constitution may be
 
 302 THE NEW YORK CLEARING HOUSE. 
 
 made at any meeting of the Association, by the vote 
 of a majority of all the members thereof, notice of the 
 proposed amendments having been given at a pre- 
 vious meeting. 
 
 The following amendments, proposed by GEORGE 
 CURTIS, Esq., January 11, 1855, were subsequently 
 adopted : 
 
 At every annual meeting, a Standing Commit- 
 tee of Five Bank Officers shall be appointed, to be 
 called the Committee of Arbitration, whose duty it 
 shall be, to hear and determine all disputes that 
 may be submitted to them by both parties thereto ; 
 any member of the Association being one: such 
 Committee shall record a brief abstract of each case 
 referred to them, together with their decision therein, 
 in a book to be provided for that purpose, which 
 book shall be kept at the Clearing House, open to 
 the inspection of all members of the Association. 
 The first Committee shall be appointed immediately 
 upon the adoption of this amendment, and shall serve 
 until the next annual meeting. 
 
 "Whenever exchanges shall have been made at 
 the Clearing House, by previous arrangement be- 
 tween members of the Association through one of 
 their own number, and Banks in the city and vicinity 
 who are not members, the Receiving Bank at the 
 Clearing House shall in no case discontinue the 
 arrangement without giving previous notice, which 
 notice shall not take effect until the exchanges of the 
 morning following the receipt of such notice shall 
 have been completed.
 
 MANAGERS AHO MEETING SOOM 
 
 c 
 
 CZD
 
 DIAGRAM. 303 
 
 THE CLEARING HOUSE ROOMS. 
 
 The opposite diagram represents the ground plan 
 of the rooms of the Clearing House Association-. 
 They occupy the fourth floor of the new building 
 recently erected by the Bank of New York on the 
 north-east corner of Wall and "William streets. 
 
 The Manager's Room has a front of thirty-six feet on 
 Wall street, and is twenty-four feet in depth. It has 
 a slightly raised platform at E, with a desk and chair, 
 suited for the occupancy of the President in the meet- 
 ings of the Association. 
 
 D is a solid centre table, on which are usually kept 
 files of the daily papers and financial periodicals. 
 The Ledgers are laid upon it for examination by the 
 members. 
 
 C is the Manager's desk, facing the middle of the 
 room. A book-case with the nucleus of a financial 
 library stands against the northern wall. The apart- 
 ment is carpeted, and every arrangement speaks of 
 taste, order and discipline. 
 
 A door near William street communicates with the 
 Clerks' Room, twenty-four feet by seventeen feet in 
 size, neatly furnished with desks and drawers for the 
 books and papers. B, in this room, is the settling 
 counter at which the Bank messengers transact their 
 business. On one end of it is placed the Specie Clerks' 
 Receipt Book for balances paid to them. An iron 
 railing and wire net-work protects the other part from 
 intrusion by visitors. The vestibule on the outside,
 
 304: THE NEW YOKK CLEARING HOUSE. 
 
 at the head of the stairway, communicates with the 
 Manager's Room on one side, and the Exchange Room 
 on the other. 
 
 The Exchange Room is eighty feet long by twenty- 
 four feet wide. It is well lighted on both sides ; that 
 opposite to the street looking out into a spacious area 
 with a glass roof, which ventilates the building. The 
 black spots inside of the counter, on which the desks 
 are placed, represent stools for the use of the Settling 
 Clerks. The desks are numbered from one to fifty- 
 four, beginning at the left hand of the entrance. The 
 name, also, of each bank is engraved on a plate on the 
 outside. 
 
 A is the Manager's pulpit, in . a raised doorway 
 which opens from the Clerks' apartment, and over- 
 looks the Exchange Room. The floor of this room is 
 covered with a stout rug, to deaden the noise of feet 
 while the Clerks are in movement. 
 
 The desks on the counter are separated by a light 
 iron railing, and each one is furnished with pigeon- 
 holes and drawers for the necessary papers and imple- 
 ments of writing. Closets under the counter afford 
 convenience for hats, coats, &c. 
 
 THE DAILY ROUTINE. 
 
 EACH bank sends to the Clearing House a mes- 
 senger or Specie Clerk, and a Settling Clerk; the 
 former to distribute the packets of money of which 
 his exchange is composed ? and the latter to receive 
 the return packets from the other messengers. They 
 begin to arrive about fifteen minutes before ten
 
 THE DAILY ROUTINE. 305 
 
 o'clock, A. M., that being the hour at which the Man- 
 ager gives the signal for the distribution to begin. 
 
 Each Specie Clerk leaves at the settling-desk B, as 
 he passes into the long room, a printed form, the blank 
 of which is filled with the gross amount of money 
 that he has brought to exchange. For example, the 
 Clerk of the Bank of New York leaves the following : 
 
 No. 1.] NEW YORK CLEARING HOUSE, 
 
 March 20th, 1857. 
 
 Credit BANK OF NEW YORK, <$ 8^2 ,3 3 <? . 
 
 .Settling Clerk. 
 
 The Assistant Manager is thus furnished with the 
 amounts composing the right-hand main column of 
 the Clearing House Proof (page 310), which he 
 transcribes under the head of " Banks Cr.," and adds 
 together, making in the example $40,515,703.66. 
 This is the total sum sent in by all the banks, and it 
 is called the Credit Exchange. If each Messenger has 
 a packet of money for every bank in the House 
 (excepting his own), there are of course twenty-five 
 hundred and fifty packets to be distributed. The 
 manner of effecting this distribution is the distinctive 
 feature of the Clearing House system, as compared 
 with the old plan of separate exchange.
 
 306 THE NEW YOKK CLEARING HOUSE. 
 
 The Manager appears on his stand under the door 
 way (A) at two or three minutes before ten o'clock, 
 and giving a stroke on his bell, calls out : " Take your 
 places." 
 
 The Settling Clerks immediately occupy their 
 respective desks on the inside of the counter, and the 
 Specie Clerks, standing, on the outside. Each of the 
 latter carries on his left arm an open box of some 
 light material, containing his packets of money 
 arranged in the consecutive desk-order for delivery 
 as he passes round the counter. He has also a 
 Receipt List,* called " The Specie Clerks' Statement," 
 with the amount designed for each bank, set down in 
 the same order. 
 
 A fine is imposed for absence or late attendance. 
 
 There are now in the room one hundred and two 
 Clerks, besides those who are attached to the House, 
 and the scene is not always free from confusion by 
 loud conversation, which the Manager corrects by a 
 call: 
 
 " Order, gentlemen, order 1" 
 
 Occasionally there are notices to be given of change 
 of rules, or other matter relating to the business. The 
 Manager calls the attention of the Clerks to any vio- 
 lation of rules that may have come to his knowledge, 
 and perhaps enforces in a few words the necessity of 
 strict discipline. Some one bank may have a com- 
 munication on a subject of common interest. A dis- 
 crepancy in the cash of any one, on a previous date, 
 
 * This IB a copy of the Receiving Teller's Proof List, with a blank column for 
 the Settling Clerks to sign their initials as a receipt
 
 The Manager in his Pulpit.
 
 THE DAILY ROUTINE. 307 
 
 is notified, and perhaps discovered by a corresponding 
 error in some other. New counterfeits or altered 
 bills may be reported. 
 
 When the minute-hand of the clock reaches the 
 stroke of ten, a second ring of the Manager's bell 
 gives the signal for the distribution of the exchanges 
 to begin. 
 
 Each Specie Clerk advances one step forward, and 
 is brought opposite to the first desk, at which his 
 delivery is to be made. He hands over the packet 
 of money designed for it, and also the " Statement," 
 on which the Settling Clerk writes his initials against 
 the amount as a receipt, being careful to observe that 
 the record is correct. The Statement is then returned 
 to the Specie Clerk, who goes through the delivery 
 at each desk in like manner. The whole line ad- 
 vances at the same time, resembling in its movement 
 a military company in lock-step. While this is going 
 on, the Manager walks round the interior of the desks, 
 and silently identifies every Specie Clerk with the 
 bank which he represents. It is rarely that a sub- 
 stitute is employed in this service ; and if not already 
 known to the Manager, he must be officially intro- 
 duced. 
 
 In about six minutes the circuit is made, bringing 
 each Messenger round to the starting-point, opposite 
 his own desk. His Statement, signed by every Set- 
 tling Clerk, is the voucher to his bank that he has 
 delivered all the money intrusted to his care. 
 
 There is no part of the Clearing House routine that 
 exhibits such striking results in economy and safety, 
 compared with the old plan of exchange, as this move-
 
 308 THE NEW YORK CLEARING HOUSE. 
 
 ment of six minutes. Two thousand five hundred and 
 fifty packages of money have been distributed and 
 receipted for in this short space of time, by a method 
 that excludes almost the last possibility of loss or 
 error. The same work, on the old plan, occupied 
 each messenger an average of not less than two hours, 
 and was attended by great exposure in passing 
 through jostling streets from one bank to another. 
 Supposing the whole service to be performed by one 
 person, the relative time occupied would be as five 
 hours is to eight days of twelve hours each, or a clean 
 saving of ninety-seven out of one hundred and two 
 hours ! 
 
 Each Settling Clerk has now on his desk the packets 
 of money which constitute his Debit Exchange. He 
 copies them in his Statement,* under the head of 
 "Banks Cr.," and the accuracy of the copy is tested 
 by the Specie Clerks calling back the amounts from 
 the packets. The footing of this column furnishes 
 the debit of his bank in the Clearing House Proof. 
 
 The Specie Clerks are now at liberty to leave the 
 House with their return exchanges, which they do 
 generally within fifteen minutes of the time that the 
 distribution begins; and although not able to state 
 the precise balance of their banks with the House, 
 they can report it in round numbers. The Settling 
 Clerks are obliged to remain until the Manager 
 announces an exact proof. 
 
 * "The Settling Clerks' Statement" Is the original of the "Specie Clerks' State- 
 ment," with a blank column In which to copy the return exchange ; and when 
 complete, the difference between the two columns is the debit or credit balance 
 V>r the day.
 
 THE DAILY ROUTINE. 309 
 
 The rapidity and accuracy with which the more 
 skillful of the Settling Clerks accomplish their work, 
 is almost incredible. The distribution occupies six 
 minutes. At the end of two minutes more, they have 
 copied and footed their column. But they must then 
 make a deliberate revision of it, to be assured against 
 errors. 
 
 The two footings of the Settling Clerks' Statement, 
 and their difference, debit or credit, are written in the 
 following form, which is sent to the Assistant Manager, 
 to make up " the Clearing House Proof" (page 310). 
 
 The examples given will enable the reader to trace 
 the figures in the course of their transfer. 
 
 ^ Debit BANK OF NEW YORK, Am't received, $?80,0'70.Y6 
 
 < 
 
 No. 1.] NEW YORK CLEARING HOUSE. 
 
 March ZQth, 1857. 
 
 Credit " " " " " brought, $842,539.19 
 
 $ Debit balance due Clearing House, 
 
 Credit balance due BANK OF NEW YORK $62,468.43 
 
 .Settling Clerk. 
 
 While the Proof is in preparation from these forms, 
 the Settling Clerk of each bank fills up a set of blanks 
 with the amount credited on his list from every other. 
 For example, the Clerk of the Bank of New York 
 sends to the Clerk of the Manhattan Bank the 
 following :
 
 310 
 
 THE NEW YORK CLEARING HOUSE. 
 
 O L E -A. H, I IT GJ- H O TJ S E IP IB, O O F . 
 
 March 20th, 1857. 
 
 No. 
 
 1 
 2 
 8 
 4 
 5 
 6 
 7 
 8 
 9 
 10 
 11 
 12 
 18 
 14 
 15 
 16 
 17 
 18 
 19 
 20 
 21 
 22 
 23 
 24 
 25 
 26 
 27 
 28 
 29 
 30 
 31 
 82 
 83 
 84 
 85 
 86 
 88 
 40 
 41 
 42 
 43 
 44 
 45 
 47 
 48 
 49 
 50 
 52 
 53 
 54 
 56 
 
 BAKES. 
 
 Balances 
 due to 
 Clearing 
 House. 
 
 BANKS Dr. 
 
 BANKS Cr. 
 
 Balances 
 due to 
 Banks. 
 
 1 
 
 2 
 3 
 4 
 5 
 6 
 7 
 8 
 9 
 10 
 11 
 12 
 13 
 14 
 15 
 16 
 17 
 IS 
 19 
 20 
 21 
 22 
 23 
 24 
 25 
 20 
 27 
 28 
 29 
 10 
 31 
 M 
 33 
 34 
 !5 
 36 
 
 40 
 41 
 49 
 
 j 
 
 Bank of New York 
 
 
 
 
 
 780 
 19s 
 4*1 
 
 070 
 412 
 091 
 
 992 
 Hi': 
 72: 
 09s 
 
 i;oi 
 720 
 139 
 717 
 007 
 632 
 994 
 719 
 Is2 
 404 
 
 g 
 
 96 
 94 
 
 22 
 77 
 63 
 42 
 56 
 94 
 73 
 85 
 27 
 22 
 22 
 75 
 48 
 
 'i 
 
 3 
 1 
 
 2 
 2 
 1 
 
 842 
 377 
 732 
 413 
 800 
 315 
 133 
 54. r 
 196 
 107 
 254 
 197 
 52 i 
 413 
 131 
 29 
 
 539 
 768 
 778 
 515 
 094 
 419 
 51 .' 
 164 
 283 
 791 
 
 4ir 
 
 51< 
 873 
 77( 
 771 
 Mr 
 
 | 
 55 
 77 
 86 
 34 
 30 
 35 
 37 
 59 
 84 
 12 
 47 
 22 
 20 
 06 
 26 
 
 62'468 
 179855 
 248 686 
 
 43 
 
 59 
 
 83 
 
 Manhattan Company. . . 
 
 
 
 
 1 
 3 
 1 
 2 
 2 
 1 
 
 
 
 
 
 
 179 
 12 
 285 
 
 47686 
 92943 
 30433 
 
 592 
 Si: 
 600 
 115 
 5si 
 172 
 104 
 241 
 197 
 410 
 452 
 129 
 41 
 
 8t 
 
 Union 
 
 
 
 
 Bank of America 
 
 
 
 
 Phenix 
 
 18 
 
 416 
 
 93 
 
 City . 
 
 85 
 
 502 
 
 19 
 
 North Kiver 
 
 28 
 8 
 12 
 
 'iie 
 
 562 
 052 
 727 
 
 809 
 241 
 
 05 
 11 
 27 
 20 
 
 Fulton 
 
 
 
 
 
 Chemical 
 
 
 
 
 
 
 
 
 
 
 National 
 
 39 
 
 217 
 
 90 
 
 
 
 2 
 
 05191 
 
 Mechanics' & Traders' . . . 
 
 11 
 
 5S7 
 
 23 
 
 
 
 37 
 053 
 243 
 035 
 109 
 251 
 977 
 77 
 213 
 358 
 r >7' 
 
 (,82 
 651 
 770 
 902 
 16s 
 257 
 42: 
 OOl 
 549 
 516 
 107 
 ,s94 
 979 
 167 
 111 
 620 
 800 
 237 
 260 
 304 
 092 
 -53 
 32- 
 691 
 .123 
 104 
 S25 
 103 
 !S6 
 745 
 ,)04 
 J92 
 GDI 
 471 
 
 50 
 
 OS 
 
 93 
 27 
 05 
 34 
 OS 
 39 
 03 
 92 
 40 
 51 
 13 
 76 
 78 
 52 
 48 
 05 
 17 
 58 
 04 
 
 ss 
 
 45 
 39 
 .53 
 34 
 39 
 48 
 32 
 54 
 02 
 47 
 74 
 
 247856 
 62 186 01 
 63 197 63 
 142 063 66 
 82695 .. 
 6667 99 
 
 Leather Manufacturers'. 
 Seventh Ward 
 
 
 
 
 
 991 
 18( 
 S93 
 07t 
 247 
 272 
 72 
 21s 
 !34 
 440 
 92 
 2 
 79 
 94 
 
 M; 
 
 152 
 117 
 700 
 
 8s 
 112 
 !31 
 52 
 207 
 295 
 
 too 
 
 03S 
 390 
 S47 
 33 
 
 217 
 310 
 579 
 
 46407 
 57237 
 89927 
 473 27, 
 589 06 
 05033 
 33036 
 40241 
 53977 
 97309 
 84583! 
 
 50503; 
 
 36782 
 50705 
 
 92286 
 35264 
 44273 
 56296 
 98455 
 190. ss 
 S72 15 
 J96 92 
 143 25 
 36685 
 90155 
 123 09 
 183 S3 
 10834 
 "32 03 
 
 1 
 
 '4 
 I 
 
 *i 
 
 '2 
 
 'i 
 
 
 
 
 
 Bk. of the State ofN. Y. 
 American Exchange. 
 
 
 
 
 8 
 1 
 
 
 
 
 
 
 
 
 Bank of Commerce 
 Bowery 
 
 294 
 
 620 
 
 99 
 
 3 
 
 467572 
 
 Broadway 
 
 4 
 
 553 
 
 02 
 
 
 Ocean 
 
 23 
 132 
 
 97686 
 13488 
 
 Pacific 
 
 1 
 
 164 
 
 J51 
 525 
 
 43 
 52 
 
 '2 
 
 90 
 187 
 SO 
 90 
 724 
 120 
 115 
 103 
 101 
 112 
 314 
 67 
 198 
 145 
 263 
 035 
 327 
 790 
 40 
 308 
 199 
 360 
 053 
 
 Bank of the Republic.. . 
 Chatham 
 
 
 
 i 
 
 87 
 68 
 
 7993i 
 60471 
 69792 
 
 44788 
 
 
 
 
 
 
 Bank of North America. 
 
 
 
 
 
 
 
 
 
 Irving 
 
 2 
 97 
 
 205 
 302 
 
 25 
 91 
 
 'i 
 
 
 
 
 
 12 
 
 31962 
 170 
 
 
 
 
 
 
 Nassau 
 
 17 
 
 019 
 
 11 
 
 
 
 East River 
 
 4 
 
 33196 
 
 Market 
 
 8 
 
 451 
 
 80 
 
 
 Saint Nicholas 
 
 50 
 
 55654' 
 
 Shoe and Leather 
 
 108 
 2 
 63 
 50 
 
 59702 
 49835 
 020 44 
 72186 
 
 'i 
 i 
 
 44 
 r , 
 
 Corn Exchange 
 
 i 
 
 i 
 
 
 I 
 
 
 Continental 
 
 
 
 17 
 1 
 
 49 
 
 1 
 58 
 
 A 
 * 
 
 Bank of Commonwealth 
 Oriental 
 
 
 
 7 
 
 01329 
 
 Marine 
 
 21 
 47 
 
 788 TO! 
 
 839,89 
 
 
 i93 54 
 53191 
 !24 45 
 S5008 
 
 Atlantic 
 
 
 
 Importers' <fc Traders'. . . 
 Park 
 
 49 
 73 
 
 97702i 
 62166 
 
 Artisans'. 
 
 
 
 
 
 1444 
 
 
 40 I 515 
 
 dsj 
 
 40 
 
 515 
 
 703 : 66 
 
 1444 
 
 419 79'
 
 THE DAILY ROUTINE. 
 
 311 
 
 No. 2. 
 
 From No. 1, 
 
 BANK OF NEW YOEK. 
 
 The words : "From No. 1, Bank of New York," run 
 through the whole set ; and in like manner, the num- 
 ber and name of each bank runs through the set 
 belonging to it. The other number and name is the 
 address of the particular bank to which the ticket is 
 sent. 
 
 This ticket ought to correct all errors of transcrip- 
 tion, although the money has been carried away. It 
 is to'be remembered that the Specie Clerks' Statement 
 is a transcript of the "total debit" column in the 
 Settling Clerks' Statement. If any Settling Clerk 
 copies a wrong amount from his list in one of these 
 tickets, the Clerk, to whom it is sent, discovers the 
 mistake by comparison with the original Statement 
 in his hands. So perfect is this plan of direct and 
 alternate revision, that the Clearing House Exchanges 
 have been made for nearly five years without the 
 error of a single cent. 
 
 If no mistake is made, the Assistant Manager an- 
 nounces a proof in thirty minutes from the beginning 
 of the movement. But the first trial is rarely so
 
 312 THE NEW YORK CLEAKING HOUSE. 
 
 fortunate. Fifty-one clerks make over twenty thou- 
 sand figures in less than ten minutes, and a single one 
 faulty or obscure vitiates the result. 
 
 The accuracy of the General Proof consists in the 
 agreement of the debit and credit columns with each 
 other, and in that of the balance columns. Such is 
 the regularity and discipline of the House, that the 
 Assistant Manager seldom varies a minute from the 
 half-hour in announcing his first trial. 
 
 "The difference is $7,643.22" or it may be but a 
 few cents. 
 
 The writing and distribution of the small tickets 
 has been going on in the meantime, and it frequently 
 happens that the error is discovered almost simulta- 
 neously with its announcement. At other times, the 
 whole corps of Settling Clerks may be detained an 
 hour or more by further revision. 
 
 If the tickets fail to expose an error promptly, the 
 Manager requires the Clerk at either end to pass down 
 the line with his Statement, whilst the others call 
 back, each the amount charged as delivered by the 
 Specie Clerk. The second Clerk follows the track of 
 the first, and the third that of the second, as they 
 successively pass. This is the final method of revi- 
 sion ; and if the additions are correct, it must make 
 the proof. 
 
 Errors discovered within forty-five minutes from the 
 beginning of the distribution incur no penalty ; but 
 after that, they are chargeable with a fine, payable 
 by the bank in whose figures they occur. The banks 
 are therefore careful to send accurate and skillful 
 clerks. It is, moreover, a matter of pride and econ-
 
 THE DAILY KOUTINE. 313 
 
 omy with themselves to avoid errors, as they involve 
 detention from home duties. 
 
 SCALE OF FINES. 
 
 Per all errors remaining uncorrected at the expiration of one hour 
 and a quarter from commencing, the Fine8 in this list will be doubled 
 and at the expiration of two hours, the Fines will be quadrupled. 
 
 1st All errors on the Credit side of the 
 Settling Clerk's Statement (i. e. in the 
 amount brought) whether of footing or 
 entry, and all errors causing disagree- 
 ment between the credit entries, the 
 check tickets, and the exchange slips 
 each $3.00 
 
 2d Errors in making the Debit (i. e. amount 
 
 received) entries each 2 00 
 
 3d Errors in the Tickets reported to the Clear- 
 ing House, causing disagreement be- 
 tween the balances and aggregates 
 each 2.00 
 
 4th All other errors 1.00 
 
 5th Disorderly conduct of Clerk or Porter at 
 the Clearing House ; or disregard of the 
 Manager's instructions each offence . 1.00 
 
 6th Clerk or Porter, failing to attend punc- 
 tually at the morning exchanges each 2.00 
 
 7th Debtor Banks, failing to appear to pay 
 
 their balances by 1^ o'clock, P. M. . . 3.00 
 
 The Clearing House Proof exhibits in one view the 
 total amount of the exchange, the amount received 
 from each bank, the amount taken away again by 
 each, and the balance due to or from each ; also the 
 total balance of the Clearings. 
 
 Up to this point, the Clearing House has nothing 
 to do with the money. None of its employes toucli 
 it, and neither does the Manager. It has been during 
 14
 
 314: THE NEW YOKE CLEAEmO HOUSE. 
 
 the whole process entirely within the custody of the 
 Clerks and Messengers the representatives of their 
 respective banks ; and every package has been re- 
 ceipted for, immediately on delivery. The exchange 
 is effected independently of the House, the authority 
 of the Manager being limited to the preservation of 
 order, and to the enforcement of the rules of the 
 Association. 
 
 The column on the left hand of the Clearing House 
 Proof shows the balance due from each debtor bank 
 to the Bouse, which here stands for all the other 
 banks ; and that on the right, the amount due to each 
 creditor bank from all the others both in the aggre- 
 gate. This is another remarkable economy over the 
 old system, by which settlement was effected only by 
 the drawing of as many different drafts as there are 
 banks. For example : the balance of $179,476.36, 
 due by the Mechanics' Bank to the House, can now 
 be paid in one sum, and by coin certificates, in the 
 time necessary for a single messenger to walk over 
 the ground between the two places ; whereas, for- 
 merly, it involved the drawing of a separate draft by 
 the Mechanics' Bank for every debit balance, and the 
 liquidation of another for every credit balance ; be- 
 sides, the frequent carriage of gold by hand or in 
 carts, and the time of one or more messengers for the 
 entire day to say nothing of the interdrawing and 
 confusion growing out of cross-errands and disar- 
 rangement of original balances. 
 
 At one o'clock, the debtor banks begin to send in 
 their balances, for which the Manager's receipt is 
 returned :
 
 Paying out a Ton of Gold in the old Clearing House on Broadway.
 
 THE DAILY ROUTINE. 315 
 
 2To. 4.] NEW YOKE CLEARING HOUSE. 
 
 March 20*A, 1857. 
 
 Received from the MECHANICS' BANK One hundred and 
 seventy-nine thousand four hundred and seventy-six ^^ Dollars, 
 in full for balance due the Associated Banks. 
 
 [Signed by the Manager.] 
 
 Each bank keeps a current ledger-account with the 
 House, charging it with all money sent, and crediting 
 it with all that is returned; and this receipt is 
 charged, as a voucher, on the books of the paying 
 bank. 
 
 The Specie Clerks of the creditor banks come in 
 from half-past one to two o'clock, to get the balances 
 due to them, for which they give receipts in a book 
 prepared with suitable forms for that purpose. The 
 settlement is completed by two o'clock. It is for this 
 period of one hour only, that the Clearing House has 
 any money in actual possession, and then simply as 
 trustee receiving from one to pay to another. 
 
 Default in payment, on the part of any bank, leads 
 to its immediate suspension from the Exchange. The 
 balance due from it to the House is assessed on the 
 other banks in the proportion of their respective 
 claims against the defaulting member, and the settle- 
 ment is not deranged, so far as the House is con- 
 cerned. In effect, the several claims revert to the 
 condition in which they stood before the exchange
 
 316 THE NEW YORK CLEARING HOUSE. 
 
 was made, and become open accounts between the 
 banks and the defaulting member, with which the 
 Clearing House has thereafter nothing to do. [See 
 section 13 of the Constitution, page 298.] 
 
 The amount of coin required in the settlement of 
 March 20th, 1857, when the exchanges were heavier 
 than on any other day since the establishment of the 
 Clearing House, was $1,444,419.79 equal in gross 
 weight to about three tons avoirdupois, or six thou- 
 sand five hundred pounds, which would make nearly 
 three hundred bags of gold of five thousand pounds 
 each. The daily movement of such a weight, first 
 from the debtor banks to the House, and thence to 
 the respective creditor banks, would be attended with 
 considerable expense and risk. To avoid this, the 
 Association constituted the Bank of America a com- 
 mon-coin depository, to hold in trust, and to issue 
 certificates, for such sums of gold as the other banks 
 might place therein. The form of the Certificate is 
 as follows : 
 
 No. 246.] NEW YORK, May Uh, 1858. 
 
 BANK OF AMERICA. [$5,000. 
 
 This certifies that the Bank of New York has 
 deposited in this bank Five Thousand Dollars, in 
 coin, to be held in trust as a special deposit, payable 
 in coin, on demand, to any bank member of the New 
 York Clearing House Association, only on presenta- 
 tion of this Certificate, indorsed by the bank demand- 
 ing payment of the same. 
 
 [Signed by the Cashier and Receiving Teller of the Bank.]
 
 The New-Fashioned Way of Bank Settlement. The Specie Clerk has $500,000 
 of Co n Certificates in his pocket.
 
 THE DAILY KOUTINE. 317 
 
 These certificates are issued for the several amounts 
 of $1,000, $5,000, and $10,000, in the option of the 
 depositing bank. They are numbered, registered, 
 and countersigned on the back, bj the General Book- 
 keeper of the Bank of America. When paid in at 
 the House, they are indorsed by the paying bank 
 and when paid out, charged to the receiving bank ; 
 so that they can always be traced by the records. 
 They are valid only in the Clearing House settle- 
 ments, or directly between the banks. 
 
 Any of the Associated Banks that may have these 
 certificates on hand, and a deficiency of ready coin, 
 can obtain the latter in exchange with any other that 
 has an excess. 
 
 The bills of the several banks are admitted in settle- 
 ment of balances under one thousand dollars. 
 
 The Clearing House is not responsible for any mis- 
 takes, overdrafts, or other irregularities that may 
 occur in the exchanges. These are corrected by the 
 banks between themselves. 
 
 Reclamations for differences, resulting from the 
 miscount of money, or the omission of entries on 
 the exchange slips, have always furnished cause 
 for dispute between the banks. The open exchange 
 is in the exclusive personal charge of the messen- 
 ger, between the bank and the Clearing House, 
 either way. He might abstract bills without being 
 discovered. Claims for deficiency have frequently 
 been resisted on this ground. To remove it, some of 
 the banks seal up their exchanges in large envelopes, 
 and thus relieve the transit of all suspicion. For rea- 
 sons not apparent, the practice is far from general.
 
 318 THE NEW YORK CLEARING HOUSE. 
 
 The economy of time and labor effected by the 
 Clearing House system is stated by the Manager, Mr. 
 GEORGE D. LYMAN, in an appendix to " CLEVELAND'S 
 Banking Laws of New York," as follows : 
 
 " On the day when the Clearing House began 
 business, about twenty-seven hundred open, active 
 accounts on the ledgers of the associated banks were 
 balanced the most of them for the first time,* and 
 all of .them finally. The business which had rendered 
 necessary this large number of accounts was thence- 
 forth accomplished more quickly, with less annoyance 
 to bank officers, and with greater safety to all con- 
 cerned. The results may be briefly enumerated as 
 follows : 
 
 "First The condensation for each bank of forty- 
 eight balances into one, and the settlement of that 
 balance without a movement of specie. 
 
 " Secondly The avoidance of numerous accounts, 
 entries, and postings. 
 
 "Thirdly Great saving of time to the Porters, and 
 of risk in making exchanges and settlements from 
 bank to bank. 
 
 "Fourthly Relief from a vast amount of labor and 
 annoyance to which the great army of Cashiers, 
 Tellers, and Book-keepers were subjected under the 
 old system. 
 
 "Fifthly The liberation of the Associated Banks 
 from all injurious dependence on each other. 
 
 "Sixthly The absolute facility afforded by the 
 books of the Clearing House for knowing at all times 
 the management and standing of every bank in the 
 Association." 
 
 * The practice of the banks had been to draw settlement-checks on each other 
 for even thou sands of dollars near the balance due, and the account was never settled 
 to a point The accuracy thereof was frequently tested by comparison of the books.
 
 THE CLEARING HOUSE RECORDS. 319 
 
 OF THE CLEARING HOUSE RECORDS, 
 
 The daily footings of the General Proof are posted 
 to the Ledger, exhibiting a continuous history of the 
 aggregate dealings of the banks. 
 
 In like manner, the daily debit and credit exchange 
 of each bank is posted to its account, and shows not 
 only the extent of its business, but measurably its 
 character also. This is the most essential of all the 
 records. It is that which brings the banks separately 
 within the supervision and control of the Clearing 
 House a necessary complement of the joint respon- 
 sibility created by the organization. 
 
 The twentieth section of the Constitution empowers 
 a Committee to suspend any bank from the privileges 
 of the Clearing House, " in case of extreme emerg- 
 ency." This emergency is indicated by the daily 
 course of the exchanges ; and there is no possibility of 
 concealing it. For example : The sworn weekly 
 statements of a bank may show that it held up to a 
 certain date an average reserve of coin of three hun- 
 dred thousand dollars. The records show that its debit 
 balances of the three following days reach that sum. 
 It must then be entirely exhausted of its coin. If, on 
 the fourth day, it is again brought into debt sixty 
 thousand dollars, it must either borrow or buy coin 
 to pay it both extreme resorts, and hurtful to the 
 character of the institution. With the knowledge of 
 these facts, the Committee visit the bank, and inves- 
 tigate its affairs. If they are found to be hopelessly 
 involved, it is suspended from the exchange at the
 
 320 THE NEW YORK CLEARING HOUSE. 
 
 Clearing House a last blow to its credit. If, on the 
 the other hand, the embarrassment is temporary, and 
 does not impair the solvency of the bank, it receives 
 assistance, and is preserved in line. This action of 
 the House has been exemplified in several instances, 
 with most satisfactory results. If the restrictive 
 power has brought unwisely-expanded, but otherwise 
 well-conducted banks to the bar of examination, the 
 preservative power has given relief, and saved them 
 from public discredit. If the insolvency of a badly- 
 conducted bank has been hastened by the require- 
 ment of prompt and full daily liquidation, no mischief 
 or injustice has been done thereby ; and the general 
 credit of our banking system has been improved by 
 the excision of a bad member. 
 
 A bank which receives frequent remittances of 
 specie from abroad is an exception to the supposed 
 case. With such an explanation, its debit balances 
 at the House may exceed its credit, without injury to 
 its standing. 
 
 A Summary-book is made up from the daily post- 
 ings, showing the total receipts and payments of specie 
 by each bank for the week, and also for the month 
 and year. The adverse balances of one period may 
 be compensated by the favorable balances of the 
 succeeding period ; and thus the specie history of each, 
 and of the whole, is followed up with unfailing preci- 
 sion. If, at the end of a month, it appears that a 
 bank has paid in to the House one million of dollars 
 more than it has received, and if it has no foreign 
 sources of replenishment, the conclusion is, that it has 
 supplied itself by purchase. If the same result should
 
 THE CLEARING HOUSE EECOKD8. 323 
 
 be shown at the end of another month, without signs 
 of recuperation, and so on continuously, it becomes 
 evident that the institution is carrying a forced aver- 
 age of loans, and it will receive a call from the Com- 
 mittee, under the twentieth section of the Constitution. 
 But this extreme case is most unlikely to happen. 
 The credit that every member derives from the Asso- 
 ciation is too valuable to be cast off or treated with 
 lightness. The action. of the Association is too im- 
 partial and just to give offence, or to admit excuse 
 for disregarding its advice. 
 
 A positive principle, or rule of financial govern- 
 ment, has been demonstrated by this action of the 
 Clearing House on the city banks that is, the restric- 
 tion of loans, by the necessity of maintaining a cer- 
 tain average of com from resources within the bank. 
 Borrowing from day to day will no longer do. It 
 cannot be concealed. The records will show conclu- 
 sively whether the average is kept up by a healthy 
 business, or by a forcing process. 
 
 The limitation imposed does not stop at the bank 
 loans, but passes through them into the commercial 
 system. The loans rest on the coin average, this 
 rests on the deposits, and the deposits rest on the 
 means of trade. The Clearing House has not created 
 any new dependence of this kind, but it has brought 
 the facts into a manageable shape, and established 
 something like an axiom in the banking business. It 
 is not a mere arbitrary requirement that a specific 
 average of coin must be maintained, but it is in the 
 constitution of that average as a result, and the con- 
 trol of it by an organization which permits no escape, 
 
 14*
 
 322 THE MEW YORK CLEAKING HOUSE. 
 
 and works no injustice, and what that organization 
 is for the city of New York, the city is for the country ; 
 a restrictive power over the general currency of 
 trade must be exerted through this channel to its 
 remotest sections. 
 
 Each bank in the city of New York is required by 
 law to publish, "on the morning of every Tuesday, in 
 a newspaper printed in the said city, a statement 
 under the oath of the President or Cashier, showing 
 the average amount of loans and discounts, specie, 
 deposits, and circulation, for the next preceding week." 
 The object of this law, which went into effect on the 
 1st of August 1853 (two months before the organization 
 of the Clearing House), was to check the tendency to 
 a dangerous expansion of bank loans. While it 
 answered the purpose measurably, it proved the 
 inadequacy of legislative action of itself to correct 
 the evil. The law was satisfied with the publication, 
 merely, of the statement. It neither imposed penal- 
 ties nor indicated any relation to be preserved between 
 the amount of loans and that of specie. It did not 
 compel banks to liquidate between themselves. A 
 bank might show a creditable average of coin, whilst 
 carrying a discreditable average of debt enough, if 
 paid, to exhaust the last dime in its vaults. In reality, 
 nearly all the force and value of the "Weekly State- 
 ment is due to its incorporation with the records of the 
 Clearing House. Thes^ have given it the stamp ot 
 truth, which it had not before. There is no longer a 
 possibility of " fixing it up " so as to give a false show 
 of the condition of a bank. It must tell " the truth, 
 the whole truth, and nothing but the truth."
 
 THE CLEARING HOUSE KECORD8. 323 
 
 Every bank in the State of New York is required 
 by law to publish, in a local newspaper, under the 
 oath of the President and Cashier, a quarterly state- 
 ment of its condition, and to transmit a manuscript 
 and a printed copy thereof to the Bank Department 
 at Albany, where a synopsis of the whole is prepared 
 and published by the General Superintendent, for 
 presentation to the Legislature. The original law 
 specified a certain day near the end of each quarter, 
 on which this statement should be made up. It was 
 supposed that this would be sufficient to restrict the 
 business of the banks within safe limits; but it proved 
 wholly ineffective. To show how the purpose of the 
 law was defeated, the form of a Quarterly Statement 
 is given on page 324. 
 
 The date on which the Statement was to be called 
 for, being known, nothing was easier than to prepare 
 for it. Some of the new banks especially, whose 
 loans were generally stretched beyond prudence, 
 found it difficult to make a creditable show by the 
 side of the older institutions. Deposits were borrowed 
 for a single day. The loans to directors were reduced 
 for a few hours, or jumped over by transit checks 
 through other banks. Any desirable changes, to 
 make a good show out of bad facts, could be carried 
 long enough for a commissioner to administer the 
 oath ; and the purpose of the law was so effectually 
 defeated, in the very spots where it was chiefly 
 intended to apply that the Legislature amended it by 
 authorizing the Superintendent to specify, after the 
 expiration of the quarter, an antecedent date, under 
 which the Statement should be made. But ev<m this
 
 324 THE NEW TOKK CLEARING HOUSE. 
 
 IREIPORT OIF - 
 
 RESOURCES. 
 
 Loans and discounts ............................... $1,225,419 42 
 
 Overdrafts ........................................ 663 86 
 
 Due from Banks .................................. 70,86778 
 
 Due from the Directors of the Bank ............ $56,500 
 
 Real estate ........................................ 178,074 16 
 
 Specie ............................................ 154,862 22 
 
 Cash Items, viz : Checks and sight drafts on solvent 
 
 Banks, taken in the course of the day previous ...... 109,001 93 
 
 Stocks .......................................... 146,398 90 
 
 Bills of solvent Banks ............................. 19,54400 
 
 Loss and expense account ........................... 3,931 42 
 
 $1,908,763 69 
 
 LIABILITIES. 
 
 Capital $979,200 00 
 
 Circulation registered $125,802 00 
 
 Less notes on hand 28,080 00 97,722 00 
 
 Profits 41,042 91 
 
 DuetoBanks 175,080 77 
 
 Due to Individuals and Corporations other than Banks. . 16,780 87 
 
 Due Depositors on demand 597,749 14 
 
 Amount due, not included under either of the above 
 
 heads, for dividends unclaimed 1,188 00 
 
 $1,908,763 69 
 
 STATE OF NEW YORK, COUNTY or NEW YORK, ss. : 
 
 President, and , Cashier of the Bank, an Associated 
 
 Bank, located and doing business at New York City, in said county, 
 being duly and severally sworn, each for himself, saiih, that the fore- 
 going is, in all respects, a true statement of the condition of the said 
 Bank, before the transaction of any business, on the morning of Satur- 
 day, the 26th day of September, in the year one thousand eight 
 hundred and fifty-seven, in respect to each and every of the items and 
 particulars above specified, according to the best of his knowledge and 
 belief ; and that the business of the said Bank has been and is trans- 
 acted at the location aforesaid. 
 
 (Signed) , President. 
 
 , Cashier. 
 
 Severally subscribed and sworn by both deponents, the 10th day of 
 October, 1857. 
 
 (Signed) J. VAV NAME, Commissioner of Deeds.
 
 BAD PRACTICES CORRECTED. 325 
 
 was not beyond the constructive ingenuity of dis- 
 honest bankers. The accounts could be so kept as to 
 justify, technically, a different analysis from that 
 contemplated by the law, and the result could be 
 shaped accordingly. 
 
 It was not until the Clearing House was organized 
 that the Quarterly Statements of our city banks could 
 be depended on for general accuracy. It was only 
 when the Clearing House records were brought to 
 such perfection as to give the means of analysis and 
 test beyond dispute, that the positive integrity of 
 those statements could be guaranteed to the public. 
 That concealment can yet be practiced, in some 
 details, is true ; but the main fact of truth is assured 
 to the public. 
 
 It has been shown, that the moment a bank 
 increases its loans imprudently, it begins to feel the 
 check of depletion in its specie ; and if it does not 
 return immediately within the common average, it is 
 subject to discipline, from which there is no escape. 
 But what is to prevent a bank from making bad 
 loans, and becoming gradually insolvent ? What is 
 to prevent the absorption of the funds by a few per- 
 sons by the directors, and a " startling develop- 
 ment" some day when it is least expected? This 
 question brings into view a cause of jealousy that 
 was manifested by opposition to a Constitution, on 
 the first organization of the Clearing House. It was 
 feared that an inquisitorial power might grow up, and 
 find pretexts for arbitrary supervision ; and even for 
 inspection into personal accounts. While the practi- 
 cal action of the House has developed no such ten-
 
 326 THE NEW YORK CLEARING HOUSE. 
 
 dency, it has wrought a healthful change in the 
 business of each bank, enforced better judgment over 
 its internal affairs, improved the character of its 
 loans, and started anew the subject of bank disci- 
 pline; so that, not only is all jealousy dispelled, but 
 every member of the Association has come to regard 
 it as a necessary auxiliary to his own prosperity ! 
 
 The improvement in the character of its loans is 
 consequent upon the fact, that if a bank becomes 
 embarrassed by their imprudent extension, it can get 
 a good class of paper rediscounted, and thus obtain 
 immediate relief; whereas, if its discounted paper is 
 of a low grade, or if the assistance required is to help 
 the directors only, and not its dealers generally, it 
 loses sympathy and reputation. The character of its 
 discounted bills is, therefore, its sheet-anchor in a 
 storm. In fact, the credit of the Clearing House 
 Association would itself be impaired, if it should 
 allow one of its members to fail from inability to con- 
 vert good assets into cash funds. 
 
 Before the establishment of the Clearing House, a 
 bank might have maintained specie payments with 
 the other banks almost to the entire exhaustion of its 
 means of liquidation with the public. It could have 
 borrowed or bought specie continuously for a long 
 period, without exposure. It cannot now borrow or 
 buy a dollar, without the knowledge of the House. 
 It is arrested immediately, in the first steps towards 
 insolvency. 
 
 There is one fact stated in the foregoing description 
 which deserves repetition, for the testimony that it
 
 WHOLESOME RESULTS. 327 
 
 bears to the admirable working of the system in its 
 practical details. It is, that the exchanges have been 
 made, and the liquidations effected, for Jive years, 
 without an error or loss of one cent. 
 
 The whole amount of bank funds that passed 
 through the House, up to August 31, 1858 was 
 thirty thousand six hundred and seventy-Jive MIL- 
 LIONS, nine hundred and thirty-three thousand, Jive 
 hundred and fifty-six dollars, and fifty-six cents 
 $30,675,933,556.56. 
 
 The amount of specie or its representative certifi- 
 cates received and paid out, during the same period, 
 was fifteen hundred and seventy-four MILLIONS, four 
 hundred and thirty thousand, three hundred and 
 thirty dollars and forty-six cents $1,574,430,330.46. 
 
 The specie is counted four times, twice when 
 received, and twice when paid. 
 
 To avoid carrying bags of coin up to the rooms, a 
 clerk is stationed in the Bank of New York on the 
 first floor, who gives receipts for it, which receipts are 
 presented at the settling desk. A speaking-tube 
 enables the Manager to communicate with the Clerk 
 below, and thus to verify such transactions. 
 
 The expense of conducting this vast amount of 
 business does not exceed eight thousand dollars a 
 year. This covers salaries, clerk hire, and the pay of 
 a detective police officer, who is always in attendance 
 while the rooms are open. Stationery bills and rent 
 amount to about eight thousand dollars a year ; but 
 these are not strictly chargeable to the conduct of 
 the business. In fact, the stationery bills of the
 
 328 THE NEW TOKK CLEABING HOUSE. 
 
 several banks are much less for being executed under 
 one order, and the House acts merely as an agent to 
 get the printing done. Instead of the old paper 
 labels to bags of coin, it furnishes strips of leather, 
 printed with the several amounts that are sealed up. 
 
 In this account of the Clearing House, the author 
 has, doubtless, overlooked some of its bearings. The 
 original idea of its founders was, simply to facilitate 
 the exchanges between the banks. It has already 
 added to this many other advantages and uses which 
 were not contemplated ; and more are suggested. It 
 has put an end to speculative banking in New York. 
 It has exerted a powerful influence to arrest specula- 
 tive commerce. It has set the example of positive 
 liquidation, which henceforth must spread and in- 
 crease. Especially, in the organization of accounts, it 
 has gained results which were before thought to be 
 out of reach. There is probability, at least, that the 
 New York Clearing House leads the way, in a prac- 
 tical use of statistics and commercial facts, far beyond 
 our present attainments, and for which there has long 
 been great need. 
 
 To Mr. GEOKGE D. LYMAN, the Manager of the 
 Clearing House, belongs chiefly the credit of system- 
 atizing its details, planning its records, and bringing 
 them to their present state of efficiency and perfec- 
 tion. His practical acquaintance with the banking 
 business, gained as Clerk and Teller in several insti- 
 tutions of high standing, have well qualified him to 
 discharge the duties of his responsible office ; while 
 the intelligence, zeal, and perseverance with which 
 he follows up every suggestion that occurs in the
 
 TABLES. 329 
 
 working of the system, is a guarantee for any improve- 
 ments that may be required, or of which it is sus- 
 ceptible. 
 
 To Mr. WILLIAM A. CAMP, the Assistant Man- 
 ager, to whom is intrusted the principal labor of 
 details, is due the merit of unusual accuracy and 
 promptness in the daily proofs, on which directly 
 depends the convenience of fifty settling clerks, and 
 of hundreds, if not thousands of bank dealers. 
 
 The following tables, copied from the Clearing 
 House records, exhibit the rise and fall of bank 
 credits, in the City of New York, from the first of 
 August 1853, to the 31st of August 1858. 
 
 The accompanying diagram illustrates these tables 
 in fluctuations from week to week of the loans, 
 specie, and deposits. The scale is constructed on the 
 actual averages of the year ending on the 29th of 
 July 1855, which were ninety millions of loans, fifty- 
 five millions of deposits, and fourteen millions of 
 specie. 
 
 Each line across the diagram represents one million 
 of dollars in the loans and the deposits ; and half a 
 million in the specie. The lines up and down repre- 
 sent the weeks. The scale for loans is on the left 
 hand; that for deposits, on the right; and that for 
 specie, in the middle. By following the line for any 
 week of the year to its intersection with the other 
 lines, and thence referring to the respective scales, 
 the relative amount of loans, deposits, and specie, is 
 ascertained.
 
 330 
 
 THE NEW YORK CLEARING HOUSE. 
 
 OF 'J.'iiJ 
 
 FROM AUGUST, 1858, TO AUGUST, 1858. 
 
 1854. 
 
 LOANS. 
 
 SPECIE. 
 
 CIRCULATION. 
 
 DEPOSITS. 
 
 Aug. 6 .... 
 
 97,889,617 .... 
 
 9,746,452 
 
 9,5io,465 . 
 
 . .. 39,410,756 
 
 13 .... 
 
 05,562,277 .... 
 
 io,654,6i8 
 
 9,45i,945 . 
 
 . .. 39,166,712 
 
 20 .... 
 
 98,866,970 
 
 11,092,552 
 
 9,414,696 . 
 
 ... 39,817,718 
 
 27 .... 
 
 92,386,954 
 
 j 1, 3 1 9,049 
 
 .... 9,427,191 ., 
 
 , .. 38,43 1, 808 
 
 Sept. 8 
 
 9i,74i,338 
 
 11,268,049 
 
 9,554,294 . 
 
 . . . 38,502,970 
 
 10 .... 
 
 91,108,347 .... 
 
 11,380,693 
 
 .... 9,597,336 ., 
 
 ... 38,545,i64 
 
 17 .... 
 
 90.190,589 .... 
 
 n,86o,235 
 
 9,566,723 ., 
 
 , .. 38,6i2,3oi 
 
 24 .... 
 
 90,092,765 .... 
 
 11,340,925 
 
 .... 9,477,541 . 
 
 . .. 39,312,334 
 
 Oct, 1 .... 
 
 90,149,540 .... 
 
 11,231,912 
 
 .... 9,521,665 . 
 
 ... 38,968,661 
 
 8 .... 
 
 89,128,998 .... 
 
 10,266,602 
 
 .... 9,673,458 ., 
 
 , .. 38,980,760 
 
 15 .... 
 
 87,837,273 .... 
 
 11,330,172 
 
 9,464,714 - 
 
 ... 37,435,499 
 
 22 .... 
 
 85,367,981 .... 
 
 io,3o3,254 
 
 9,388,543 ., 
 
 , .. 36,i86,864 
 
 29 .... 
 
 83, 400,321 
 
 10,866,672 
 
 .... 9,3oo,35o ., 
 
 . . 35,73i,o38 
 
 Nov. 5 .... 
 
 83,092,630 .... 
 
 11,771,880 
 
 9,492, i58 . 
 
 , .. 36,241,623 
 
 12 .... 
 
 82,882,409 
 
 12,823,575 
 
 .... 9,287,629 . 
 
 ... 37,970,796 
 
 19 .... 
 
 83,717,622 
 
 13,691,324 
 
 9,i5i,443 ., 
 
 , . . 39,047,016 
 
 26 .... 
 
 84,8o2,53o 
 
 13,343,196 
 
 .... 9,082,769 ., 
 
 , .. 42,099,942 
 
 Dec. 3 
 
 85,824,756 .... 
 
 12,830,772 
 
 .... 9,i33,586 .. 
 
 .. 39,121,739 
 
 10 .... 
 
 86,708,028 
 
 12,493,760 
 
 .... 9, 75,704 .. 
 
 . . 39,600,092 
 
 17 .... 
 
 87,865,073 
 
 12,166,020 
 
 .... 8,939,830 . 
 
 . .. 39,243,5oi 
 
 24 .... 
 
 88,760,623 
 
 11,981,270 
 
 8,867,261 .. 
 
 .. 40,262,979 
 
 81 .... 
 
 90,162,106 
 
 11,058,478 
 
 8,927,018 ., 
 
 ,.. 41,372,382 
 
 1854. 
 
 
 
 
 
 Jan. 7 .... 
 
 90,133,887 
 
 n,5o6,i24 
 
 .... 9,075,926 .. 
 
 . .. 38,55i,290 
 
 14 .... 
 
 90,010,012 
 
 11,894,453 
 
 8,668,344 ., 
 
 , .. 40,516,717 
 
 21 .... 
 
 90,068,738 
 
 ii,455,i56 
 
 8,6o5,235 .. 
 
 .. 41,311,989 
 
 28 .... 
 
 89,759,465 
 
 11,117,958 
 
 .... 8,642,677 .. 
 
 .. 41,405,422 
 
 Feb. 4 
 
 90549,577 .... 
 
 n,634,653 
 
 .... 8,996,675 .. 
 
 .. 41,476,160 
 
 11 .... 
 
 91.434,022 
 
 11,872,126 
 
 .... 8,994,o83 .. 
 
 .. 42, 983, 1 38 
 
 18 .... 
 
 92,698,086 
 
 11,742,384 
 
 .... 8,954,464 .. 
 
 ... 43,257,792 
 
 25 .... 
 
 93,529,716 .... 
 
 11,212,693 
 
 .... 8,929,314 ., 
 
 , .. 42,965,270 
 
 March 4 .... 
 
 94,558,421 .... 
 
 io,56o,4oo 
 
 .... 9,209,880 ., 
 
 ... 41,655,792 
 
 11 .... 
 
 94,279.994 .... 
 
 9,832,483 
 
 9,i37,555 .. 
 
 .. 40,955,635 
 
 18 .... 
 
 93,418,929 .... 
 
 1 0,0 1 8,456 
 
 9,255,781 .. 
 
 . . 40,278,250 
 
 25 .... 
 
 92,972,711 .... 
 
 10,132,246 
 
 .... 9,209,406 ., 
 
 , .. 40,124,736 
 
 April 1 .... 
 
 92,825,014 .... 
 
 10,264,009 
 
 .... 9,395,820 ., 
 
 . . 39,861,920
 
 TABLES. 
 
 331 
 
 1854. 
 
 LOAMS. 
 
 SPECIE. 
 
 ClBCTTLATIOIT. 
 
 DEPOSIT*. 
 
 April 8 .... 
 
 92,55i,8o8 .. 
 
 .. 10,188,141 . 
 
 ... 9,7l3,2l5 . 
 
 .. 38-993,744 
 
 15 .... 
 
 91,686,274 .. 
 
 .. 11,044,044 . 
 
 ... 9 ,533,9 9 8 . 
 
 ... 39,729.730 
 
 22 .... 
 
 90,876,340 .. 
 
 . . 10,526,976 . 
 
 ... 9,353,854 . 
 
 ... 39,153,964 
 
 29 .... 
 
 90,245,049 .. 
 
 .. 10,951, i53 . 
 
 ... 9,377,687 . 
 
 . .. 40,270,391 
 
 May 6 .... 
 
 90,739,721 .. 
 
 . . 11,437,040 ., 
 
 , .. 9,823,008 ., 
 
 . . 40,625,232 
 
 13 .... 
 
 90,245,928 .. 
 
 .. 12,382,068 .. 
 
 9,5o7,797 
 
 ... 42,212,552 
 
 20 .... 
 
 90,886,728 .. 
 
 .. 12,118,043 . 
 
 ... 9,480,018 . 
 
 , .. 42,59I,85l 
 
 27 .... 
 
 90,981,974 .. 
 
 .. lo,98l,53l . 
 
 . .. 9,284,807 . 
 
 . .. 41,114,763 
 
 June 8 
 
 91,916,710 .. 
 
 .. 10,281,969 . 
 
 ... 9,381,714 . 
 
 . .. 50,775,744 
 
 10 .... 
 
 91,015,171 .. 
 
 .. 9,617,180 . 
 
 ... 9,307,889 . 
 
 . .. 5l,87I,9OO 
 
 17 .... 
 
 90,063,573 .. 
 
 .. io,oi3,i57 . 
 
 ... 9,144,284 . 
 
 . .. 51,243,245 
 
 24 .... 
 
 88,75i, 9 52 .. 
 
 .. 9,628,375 . 
 
 ... 9,009,726 . 
 
 . .. 49-938,638 
 
 July 1 .... 
 
 88,608, 5g i .. 
 
 .. u,i3o,8oo . 
 
 . .. 9,o68,253 . 
 
 ... 5i,865, 9 28 
 
 8 .... 
 
 88,347,281 .. 
 
 . . 12,267,318 .. 
 
 ,.. 9,'9 5 ,757 
 
 .. 54,803,679 
 
 15 .... 
 
 90.437,004 . . 
 
 .. 15,074,093 . 
 
 ... 8,837,681 . 
 
 . .. 56,549,703 
 
 22 .... 
 
 92,011,870 .. 
 
 .. 1 5,720,309 . 
 
 ... 8,768,289 . 
 
 , .. 58,871,544 
 
 29 .... 
 
 92.588.579 .. 
 
 .. i5.386.864 . 
 
 ... 8.756.777 ., 
 
 . .. 58,925,i5i 
 
 Aug. 5 .... 
 
 93,723,141 .. 
 
 .. 14,468,981 . 
 
 . .. 9,124,648 . 
 
 . .. 58,271,954 
 
 12 .... 
 
 93,435,o57 . . 
 
 .. i3, 522,023 . 
 
 ... 8,917,179 .. 
 
 ... 57,582,455 
 
 19 .... 
 
 92,880,103 .. 
 
 .. 14,253,972 . 
 
 ... 8,855,523 ., 
 
 ... 57,037,727 
 
 26 .... 
 
 91,447,075 .. 
 
 . . 14,395,072 . 
 
 . .. 8,811,369 . 
 
 ... 57,o55,5o5 
 
 Sept. 2 
 
 91,391,188 .. 
 
 .. I4,74,6i8 . 
 
 . .. 8,934.632 . 
 
 . .. 58, n 4,408 
 
 9 .... 
 
 91,528,244 .. 
 
 .. 14,446,317 . 
 
 ... 8,068,707 . 
 
 . . . 56,o8o,4oo 
 
 16 .... 
 
 91,639,782 .. 
 
 .. 14,484,259 ., 
 
 . .. 8,820,609 . 
 
 . .. 56,439,iio 
 
 28 .... 
 
 92,095,911 .. 
 
 .. 12,932,386 . 
 
 . .. 8,802,623 . 
 
 . .. 55,221,762 
 
 80 .... 
 
 92,102,018 .. 
 
 .. 12,043,244 . 
 
 ... 8,712, i36 ., 
 
 ... 54,3o8,5i2 
 
 Oct. 7 .... 
 
 9i,38o,525 .. 
 
 . . io,63o,5i7 . 
 
 ... 8,918,492 .. 
 
 . . 51,480,375 
 
 14 .... 
 
 88,618,936-.. 
 
 .. n,i3o,377 . 
 
 ... 8,534,i88 .. 
 
 ... 5o,352,3o6 
 
 21 .... 
 
 87,092,810 .. 
 
 .. io,32o,i63 . 
 
 ... 8,497,556 . 
 
 ... 47,781,224 
 
 28 .... 
 
 84,709,236 .. 
 
 .. 9,826,763 . 
 
 . .. 8,i3i,933 ., 
 
 ... 45,o58,78i 
 
 Nov. 4 .... 
 
 83,369,101 .. 
 
 . . 10,004,686 . 
 
 . .. 8,238,126 . 
 
 . .. 43,504,964 
 
 11 .... 
 
 82,717,052 .. 
 
 . . 10,472,538 . 
 
 ... 8,197,444 . 
 
 . .. 43,619,326 
 
 18 .... 
 
 82,191,994 .. 
 
 .. io,8oi,532 . 
 
 ... 7,877,604 . 
 
 ... 44,100,821 
 
 25 .... 
 
 81,699,705 .. 
 
 .. 10,200,983 . 
 
 ... 7,7i8,i58 . 
 
 . .. 43,409,843 
 
 Dec. 2 
 
 81,678,423 .. 
 
 .. 10,488,383 . 
 
 ... 7,849,289 ., 
 
 , .. 43,491,999 
 
 9 .... 
 
 8o,593,636 .. 
 
 . . io,484,5oi . 
 
 . .. 7,48o,833 . 
 
 ... 43,n8,595 
 
 16 .... 
 
 80,946,663 .. 
 
 .. 11,471,841 . 
 
 ... 7,261,111 . 
 
 ... 44,334,684 
 
 23 .... 
 
 80,721,224 .. 
 
 .. 11,490,495 . 
 
 . .. 6,914,866 . 
 
 ... 44,877,723 
 
 80 .... 
 
 8i,653,637 .. 
 
 .. 12,076,147 . 
 
 ... 7,075,880 . 
 
 ... 45,402,377 
 
 1855. 
 
 
 
 
 
 Jan. 6 
 
 82,244,706 .. 
 
 . . 18,596,963 . 
 
 ... 7,049,982 . 
 
 ... 47,740,767 
 
 13 .... 
 
 83,976,081 .. 
 
 .. 15,488,525 . 
 
 ... 6,686,461 . 
 
 . .. 60,614,846 
 
 20 .... 
 
 85,447,998 .. 
 
 .. 16,372,127 . 
 
 ... 6,68i,355 . 
 
 ... 53,290,317
 
 332 
 
 THE NEW TOKK CLEAKING HOUSE. 
 
 1856. 
 
 LOANS. 
 
 SPECIE. 
 
 CIRCULATION. 
 
 DEPOSITS. 
 
 Jan. 7 .... 
 
 86,654,657 ..., 
 
 . 16,697,260 
 
 6,639,823 . . . 
 
 . 55,127,933 
 
 Feb. 8 .... 
 
 88,145,697 .... 
 
 , 17,439,196 
 
 7,000,766 . . . 
 
 . 56,712,546 
 
 10 .... 
 
 89,862,170 
 
 . 17,124,391 
 
 .... 6,969,111 ... 
 
 . 58,i24,4i5 
 
 17 .... 
 
 90,85o,o3i ... 
 
 . 17,339,086 
 
 6,941,606 ... 
 
 . 59,186,888 
 
 24 .... 
 
 91,690,505 
 
 . 16,370,875 
 
 6,963,562 ... 
 
 . 58,992,863 
 
 March 3 
 
 92,386,125 .... 
 
 . 16,531,279 
 
 .... 7,106,710 ... 
 
 . 59,100,643 
 
 10 .... 
 
 92,331,789 ... 
 
 . 16,870,669 
 
 .... 7> 1 3 1, 998 ... 
 
 . 59,543,221 
 
 17 .... 
 
 92,447,345 ... 
 
 . 16,933,933 
 
 7,061,018 ... 
 
 .. 59,688,io5 
 
 24 ...: 
 
 93,050,773 ... 
 
 . 16,602,729 
 
 .... 7,452,23i ... 
 
 . . 59,620,122 
 
 31 .... 
 
 93,634,041 
 
 . i6,oi8,io5 
 
 7,337,633 ... 
 
 . . 59,948,549 
 
 April 7 .... 
 
 94,499,394 ... 
 
 . 14,968,004 
 
 7,771,534 ... 
 
 , . 69,283,096 
 
 14 .... 
 
 94,140,399 ... 
 
 . 14,890,979 
 
 .... 7,523,528 ... 
 
 . . 59,478,598 
 
 21 .... 
 
 9 3,632,8 9 3 ... 
 
 . 14,355,041 
 
 7,5io,i24 ... 
 
 . 59,o25,6i5 
 
 28 .... 
 
 92,5o5,95i ... 
 
 . 14,282,424 
 
 .... 7,610,985 ... 
 
 . 58,345,546 
 
 May 5 .... 
 
 93,093,243 ... 
 
 . U,325,o5o 
 
 8,087,609 . . , 
 
 , . 58,4o3,227 
 
 12 .... 
 
 91,642,498 ... 
 
 . 14,585,626 
 
 .... 7,804,977 ... 
 
 . 58,365,766 
 
 19 .... 
 
 91,675,500 
 
 . i5,225,o56 
 
 .... 7,638,63o ... 
 
 . 58,999,522 
 
 26 .... 
 
 91,160,518 .... 
 
 . i5,3i4,53i 
 
 .... 7,489,637 ... 
 
 . 58,687,274 
 
 Jane 2 .... 
 
 9 i,i 9 7,652 ... 
 
 . 15,397,674 
 
 7,555,609 . . , 
 
 , . 59,034,612 
 
 9 .... 
 
 92,109,097 ... 
 
 . i5,oo5,i55 
 
 7,502,568 ... 
 
 ,. 59,042,817 
 
 16 .... 
 
 93,ioo,385 ... 
 
 . 14,978,559 
 
 7,452,i6i ... 
 
 , . 60,092,068 
 
 23 .... 
 
 94,029,425 ... 
 
 . 14.705,629 
 
 .... 7,335,653 ... 
 
 , . 60,661,862 
 
 80 .... 
 
 95,586,424 ... 
 
 . i5,64o,i46 
 
 .... 7,396,119 
 
 .. 63,553,44o 
 
 July 7 .... 
 
 97,852,491 ... 
 
 . i5,38i,093 
 
 .... 7,743,o69 ... 
 
 ,. 68,45 9 ,5 9 i 
 
 14 .... 
 
 98,521,002 ... 
 
 . 16,576,506 
 
 .... 7,5i5,724 ... 
 
 . . 67,770,124 
 
 21 .... 
 
 99,029,147 ... 
 
 1 5,9' 8 ,999 
 
 .... 7,407,086 . v 
 
 , . 66,006, 1 3 1 
 
 28 .... 
 
 99,083,799 . . . 
 
 . 15,920,976 
 
 7,409,498 ... 
 
 . 66,070,296 
 
 Aug. 4 .... 
 
 100,118,569 
 
 . 15,298,358 
 
 .... 7,642,903 . . , 
 
 . 65,846,924 
 
 11 .... 
 
 100,774,209 ... 
 
 , 15,280,669 
 
 .... 7,714,401 ... 
 
 . 64,583,266 
 
 18 .... 
 
 ioi,i54,o6o ... 
 
 . 14,649,245 
 
 7,610,106 ... 
 
 . 66,128,237 
 
 25 .... 
 
 100,604,604 ... 
 
 . 13,326,378 
 
 .... 7 ,582,o 9 5 ... 
 
 . 64,009,067 
 
 Sept. 1 
 
 100,436,970 ... 
 
 . 12,852,823 
 
 .... 7,620,178 ... 
 
 . 63,900,757 
 
 8 .... 
 
 100,273,733 ... 
 
 . 12.006,625 
 
 7,861, i53 ... 
 
 . 62,340,942 
 
 15 .... 
 
 99,397,009 
 
 , 12,213,240 
 
 .... 7,721,825 ... 
 
 . 61,963,872 
 
 22 .... 
 
 98,581,734 ... 
 
 . 11,655,391 
 
 .... 7,7i7,86o ... 
 
 . 60,729,518 
 
 29 .... 
 
 97,385,225 ... 
 
 9,9 I 9,24 
 
 .... 7,724,970 ... 
 
 . 57,908,647 
 
 Oct. 6 .... 
 
 95,5i5,o2i ... 
 
 . 11,110,687 
 
 7,853,217 ... 
 
 . 56,527,490 
 
 13 .... 
 
 95,059,420 . . . . 
 
 11,138,878 
 
 7,840,114 ... 
 
 . 56,632, 069 
 
 20 .... 
 
 95,103,376 
 
 12,461,723 
 
 7,888,164 ... 
 
 . 57,372,644 
 
 27 .... 
 
 94,216,373 ... 
 
 , n,i63,52i 
 
 .... 7,828,489 ... 
 
 . 56,o38,975 
 
 Nov., 3 .... 
 
 93,369,079 ... 
 
 . 11,106,298 
 
 8,071,508 ... 
 
 . 54,785,463 
 
 10 .... 
 
 92,454,290 
 
 io,855,526 
 
 8,088,608 ... 
 
 . 53,538, 9 66 
 
 17 .... 
 
 98,029,930 ... 
 
 . 11,302,917 
 
 .... 7,941,579 
 
 . 53,617,740
 
 TABLES. 
 
 333 
 
 18B& 
 
 Lours. 
 
 SPECIE. 
 
 CIRCULATION. 
 
 DEPOSITS. 
 
 Nov. 24 
 
 .... 92,812,408 .. 
 
 ... 11,715,239 .. 
 
 7,779,56? ... 
 
 . 54,6i2,2il 
 
 Dec. 1 
 
 .... 92,526,921 .. 
 
 .. 11,227,134 .. 
 
 .. 7,841,654 ... 
 
 . 58,663,668 
 
 8 
 
 98,189,803 . 
 
 ... 11,844,625 .. 
 
 .. 7,86i,74i ... 
 
 . 55,474,u6 
 
 15 
 
 93,8oo,i38 ., 
 
 , .. 11,584,075 .. 
 
 .. 7,701,052 ... 
 
 . 56,ui,334 
 
 22 
 
 .... 94,880,487 .. 
 
 .. 12,088,359 .. 
 
 .. 7,778,893 ... 
 
 . 56,555, 999 
 
 29 
 
 95,114,060 ., 
 
 ... 10,788,098 .. 
 
 .. 7,841,946 ... 
 
 . 56, 7 36,7 7 5 
 
 1856. 
 
 
 
 
 
 Jan. 5 
 
 .... 95,863,390 .. 
 
 .. 11,687,209 .. 
 
 .. 7,903,656 ... 
 
 . 58,320,328 
 
 12 
 
 96,145,408 .. 
 
 ... 11,777,7" 
 
 7,6i2,5o7 ... 
 
 . 58,575,652 
 
 19 
 
 96,382,968 .. 
 
 ... i3,385,26o .. 
 
 . 7,462,706 ... 
 
 . 60,161,127 
 
 26 
 
 .... 96,887,221 ., 
 
 . .. 12,733,059 .. 
 
 .. 7,406,986 ... 
 
 . 60,430,978 
 
 Feb. 2 
 
 .... 97,970,6'! 
 
 . .. i3,64o,437 . 
 
 . . 7,622,826 .. . 
 
 . 61,622,874 
 
 9 
 
 98,344,077 .. 
 
 ... 14,233,329 .. 
 
 .. 7,819,1" ... 
 
 . 62,128,682 
 
 16 
 
 99,4oi,3i5 ., 
 
 , .. 15,678,736 .. 
 
 .. 7,693,441 ... 
 
 . 64,34i,9o3 
 
 23 
 
 100,745,448 ., 
 
 ... 15,835,874 .. 
 
 .. 7,664,688 ., 
 
 . 66,329,670 
 
 March 1 
 
 .... 102,632,235 . . 
 
 .. 15,640,687 .. 
 
 .. 7,754,392 ... 
 
 . 67,237,728 
 
 8 
 
 .... 103,909,688 . 
 
 . .. 15,170,946 .. 
 
 .. 7,888,176 ... 
 
 ,. 67,881,084 
 
 15 
 
 104,528,298 ., 
 
 , .. 14,045,024 .. 
 
 .. 7,863,148 ... 
 
 , . 67,020,460 
 
 22 
 
 .... 104,533,576 .. 
 
 . . 14,369,556 .. 
 
 .. 7,9' 2,58 1 ... 
 
 . 67,153,493 
 
 29 
 
 104,745,307 .. 
 
 . . 14,216,841 .. 
 
 .. 7,943,253 .., 
 
 . 67,661,944 
 
 April 5 
 
 .... 106,962,618 . 
 
 ... i3,38i,455 .. 
 
 .. 8,347,498 ... 
 
 .. 67,985,678 
 
 12 
 
 107,840,435 . 
 
 . .. 12,626,094 .. 
 
 .. 8,28i,525 ... 
 
 .. 68,3oo,783 
 
 19 
 
 io6,765,o85 . 
 
 , .. 12,958,132 .. 
 
 .. 8,22i,5i8 ... 
 
 . 66,83 9 ,625 
 
 26 
 
 .... io5,538,864 . 
 
 . .. i3, 102,858 .. 
 
 . . 8,246,121 ... 
 
 .. 66,285,88o 
 
 May 3 
 
 .... 106,325,962 . 
 
 . .. 12,850,228 .. 
 
 . . 8,7i5,i63 ... 
 
 , . 65,025,870 
 
 10 
 
 .... io3,8o3,793 . 
 
 . .. i3,3i7,365 .. 
 
 .. 8,662,485 ... 
 
 ,. 64,854,416 
 
 17 
 
 .... 1O3,OO2,32O . 
 
 ... 12,796,541 .. 
 
 . . 8,488,i5a ... 
 
 ,. 63,9o5,5i2 
 
 24 
 
 .... 102,207,767 . 
 
 . .. i3,85o,333 .. 
 
 . . 8,335,097 ... 
 
 ,. 63,8 7 4,i 9 5 
 
 81 
 
 102,451,275 . 
 
 . .. 14,021,289 .. 
 
 . . 8,269,151 ... 
 
 ,. 64,527,837 
 
 Jane 7 
 
 103,474,921 ., 
 
 . .. 16,166,180 .. 
 
 . . 8,43o,25a ... 
 
 . . 67,033,708 
 
 14 
 
 104,168,881 ., 
 
 , .. 17,414,680 .. 
 
 .. 8,36o,735 ... 
 
 .. 69,586,695 
 
 21 
 
 105,626,995 ., 
 
 , .. 17,871,955 .. 
 
 . . 8,278,002 ... 
 
 . . 70,381,210 
 
 28 
 
 107,087,525 ., 
 
 . .. 17,069,688 .. 
 
 .. 8,250,289 
 
 .. 71,349,933 
 
 July 5 
 
 109,267,683 .. 
 
 , .. 16,829,236 .. 
 
 .. 8,637,471 .. 
 
 ,. 77,318,825 
 
 12 
 
 109,748,042 . 
 
 . .. 14,793,409 .. 
 
 .. 8,4o5,576 .., 
 
 .. 71,522,716 
 
 19 
 
 110,873,494 . 
 
 ... i5,326,i3i .. 
 
 . 8,346,243 ... 
 
 ,. 72,744,569 
 
 26 
 
 111,346,589 . 
 
 . .. 13,910,848 .. 
 
 .. 8,386,285 ... 
 
 .. 72,381,621 
 
 Aug. 2 
 
 ... . 112,221,563 .. 
 
 . . 14,328,253 .. 
 
 . . 8,646,043 ... 
 
 .. 73,075,328 
 
 9 
 
 .... 112,192,322 . 
 
 . .. 13,270,602 .. 
 
 .. 8,676,759 ... 
 
 .. 71,377,871 
 
 16 
 
 III ,406,755 . 
 
 . .. 12,806,673 .. 
 
 .. 8,584,499 .. 
 
 .. 70,357,736 
 
 23 
 
 .... 110,188,004 . 
 
 . .. 12,914,732 .. 
 
 . . 8,588,4i 3 .. 
 
 . . 69,022,984 
 
 80 
 
 .... 109,373,911 . 
 
 . .. 12,965,287 .. 
 
 .. 8,58 9 ,745 .. 
 
 . . 67,606,118 
 
 Sept. 6 
 
 109,560,943 . 
 
 . .. 13,098,876 .. 
 
 .. 8,887,860 ... 
 
 .. 67,725,34*
 
 334 
 
 THE NEW YORK CLEARING HOUSE. 
 
 1856. 
 
 LOANS. 
 
 SPECIE. 
 
 ClRCTJXATION. 
 
 DEPOSITS. 
 
 Sept. 13 
 
 .... 109,679,775 .... 
 
 12,281,387 ... 
 
 . 8,741,064 ... 
 
 . . 66,o49,4u 
 
 20 
 
 109,715,435 
 
 12,270,685 ... 
 
 . 8,760,383 .. 
 
 . . 65,866,423 
 
 27 
 
 108,992,20? 
 
 10,873,220 ... 
 
 . 8,665,194 .. 
 
 . . 63,661,171 
 
 Oct. 4 
 
 .... 107,931,707 .... 
 
 n,oi5,i84 ... 
 
 . 8,83o,628 .. 
 
 . . 62,o52,545 
 
 11 
 
 .... 107,147,392 .... 
 
 io,382,75i ... 
 
 . 8,748,930 .. 
 
 . . 60,978,200 
 
 18 
 
 105,929,265 
 
 10,846,857 ... 
 
 . 8,6o6, 7 36 ... 
 
 . . 60,319,718 
 
 25 
 
 io4,i56,483 
 
 10,580,795 ... 
 
 . 8,649,802 .. 
 
 ,. 58,696,456 
 
 Nov. 1 
 
 103,142,093 .... 
 
 11,057,675 ... 
 
 . 8,686,835 ... 
 
 . . 58,024,128 
 
 8 
 
 I02,5o8,639 .... 
 
 n,5i6,42o ... 
 
 . 8,946,721 .. 
 
 . . 56,933,387 
 
 15 
 
 io3,554,45o 
 
 12,253,737 ... 
 
 . 8,856,977 ... 
 
 ,. 58,942,049 
 
 22 
 
 104,504,919 
 
 12,971,868 ... 
 
 . 8,8i8,323 .. 
 
 .. 65,362,520 
 
 29 
 
 io5,483,o53 
 
 12,123,887 
 
 . 8,608,228 .. 
 
 . . 61,570,260 
 
 Dec. 6 
 
 106,898,534 
 
 12,278,347 ... 
 
 . 8,671,758 .. 
 
 ,. 62,923,969 
 
 13 
 
 .... 108,336,586 .... 
 
 io,832,543 ... 
 
 . 8,5i6,854 ... 
 
 .. 62,854,773 
 
 20 
 
 108,334,593 
 
 n,i5i,3i7 ... 
 
 . 8,397,440 .., 
 
 . 6z,265,i55 
 
 27 
 
 108,527,429 
 
 10,392,428 ... 
 
 . 8,387,167 ... 
 
 . . 62,269,390 
 
 1857. 
 
 
 
 
 
 Jan. 3 
 
 109,149,153 .... 
 
 11,172,244 ... 
 
 . 8,602, ii3 ... 
 
 , . 63,677,829 
 
 10 
 
 .... no,i5o,234 .... 
 
 11,090,109 ... 
 
 . 8,328,394 .., 
 
 , . 64,3i6,552 
 
 17 
 
 .... 110,860,401 
 
 u,955,o54 ... 
 
 . 8,o47,o65 .. 
 
 , . 66,076,987 
 
 24 
 
 111,094,415 
 
 11,633,924 ... 
 
 . 7,879,026 . . 
 
 .. 66,877,981 
 
 81 
 
 iu,785,332 
 
 12,191,825 ... 
 
 . 8,024,948 .. 
 
 . . 67,241,670 
 
 Feb. 7 
 
 .... 112,876,712 .... 
 
 11,143,894 ... 
 
 . 8,426,817 .. 
 
 , . 65,997, 161 
 
 14 
 
 .... 112,722,799 .... 
 
 10,497,382 . . . 
 
 8,151,799 
 
 . . 65,943,495 
 
 21 
 
 .... 111,773,571 .... 
 
 io,432, i58 ... 
 
 . 8,106,074 ... 
 
 ,. 65,098,896 
 
 28 
 
 .... 111,137,717 .... 
 
 io,645,254 ... 
 
 . 8,i5 9 ,275 ... 
 
 , . 64,627,068 
 
 March 7 
 
 111,899,649 
 
 11,707,346 ... 
 
 . 8,465,697 ... 
 
 - 64,894,959 
 
 14 
 
 113,250,988 
 
 11,077,732 ... 
 
 . 8,452,540 . . , 
 
 , . 66,694,524 
 
 21 
 
 .... 113,448,692 .... 
 
 11,291,373 ... 
 
 . 8,494,238 .., 
 
 ,. 65,975,949 
 
 28 
 
 112,884,024 
 
 n,325,733 ... 
 
 . 8,473,829 ... 
 
 . 66,228,4i5 
 
 April 4 
 
 .... 114,833,902 
 
 ii,538,732 ... 
 
 . 8,812,328 ... 
 
 . 66,884,088 
 
 11 
 
 .... 115,374,717 
 
 10,884,490 ... 
 
 . 8,787,344 ... 
 
 ,. 67,042,866 
 
 18 
 
 114,398,174 
 
 12,061,372 ... 
 
 . 8,770,828 ... 
 
 ,. 67,547,241 
 
 25 
 
 .. .. 113,391,910 
 
 11,827,862 ... 
 
 . 8,736,768 . . . 
 
 . 67,068,424 
 
 May 2 
 
 114,409,275 
 
 12,009,910 ... 
 
 . 9,006, 566 . . . 
 
 , . 68,078,676 
 
 9 
 
 .... ii5,o68,322 
 
 12,011,491 ... 
 
 . 9,182,783 ... 
 
 , . 67,954,460 
 
 16 
 
 ... . 114,620,042 
 
 12,543,693 ... 
 
 . 8,935,297 .. 
 
 . 68,5 9 5,i68 
 
 23 
 
 ... . 114,049,102 
 
 i3,i26,735 ... 
 
 . 8,738,025 ... 
 
 . 68,517,240 
 
 80 
 
 .... Ii4,o49,633 
 
 I2,8i5,5i5 ... 
 
 . 8,696,693 ... 
 
 . 68,565,909 
 
 Jane 6 
 
 .... n5,338,5 9 2 .... 
 
 i3, i34,7U ... 
 
 . 8,838,575 ... 
 
 . 69,233,090 
 
 13 
 
 n5,4i2,54i 
 
 11,974,879 ... 
 
 . 8,696,893 ... 
 
 . 68,in,324 
 
 20 
 
 Ii5,n4,765 
 
 12,790,701 ... 
 
 . 8,590,132 ... 
 
 .. 68,791,049 
 
 27 
 
 .... Ii5,oi5,5o4 
 
 10,901,091 ... 
 
 . 8,5o5,o65 ... 
 
 , . 67,212,278
 
 TABLES. 
 
 335 
 
 186T. 
 
 LoAira. 
 
 BrKcns. 
 
 CISCUIATIOIC. 
 
 DEPOSITS. 
 
 July 4 
 
 Ii5,o44,3o3 .... 
 
 . 12,837,346 
 
 .... 8,901,690 .. 
 
 .. 65,391,582 
 
 11 
 
 116,028,617 
 
 , 12,666,146 
 
 .... 8,693,678 .. 
 
 .. 65,702,5 97 
 
 18 
 
 117,365,321 
 
 13,694,606 
 
 .... 8,448,833 .. 
 
 .. 67,006,688 
 
 25 
 
 .... Ii8,848,i3i .... 
 
 , 12, 9 56,855 
 
 8,628,814 .. 
 
 .. 67,377,066 
 
 Aug. 1 
 
 I2o,5g7,o5o 
 
 12,918,014 
 
 8,666,422 .. 
 
 .. 68,682,088 
 
 8 
 
 122,077,252 
 
 11,737,367 
 
 .... 8,981,740 .. 
 
 .. 67,372,941 
 
 15 
 
 .... 121,241,472 
 
 Ii,36o,645 
 
 .... 8,780,012 .. 
 
 .. 66,814,929 
 
 22 
 
 .... 120,139,682 
 
 10,097,178 
 
 8,694,011 .. 
 
 .. 64,241,471 
 
 29 
 
 116,688,919 
 
 9,241,376 
 
 .... 8,671,060 .. 
 
 .. 60,860,801 
 
 Sept 5 
 
 112,221,365 
 
 10,227,964 
 
 8,673,192 .. 
 
 . . 67,260,609 
 
 12 
 
 .... 109,986,673 
 
 12,181,867 
 
 8,322,3i6 .. 
 
 .. 57,334,121 
 
 19 
 
 .... 108,777,421 .... 
 
 i3,556,i86 
 
 8,073,801 .. 
 
 .. 67,861,966 
 
 26 
 
 107,791,433 
 
 13,327,096 
 
 .... 7,838,3o8 .. 
 
 .. 66,918,863 
 
 Oct. 3 
 
 106,935,499 
 
 1 1, 400,4 1 3 
 
 .... 7,916,102 .. 
 
 .. 62,798,366 
 
 10 
 
 101,917,670 
 
 11,476,294 
 
 .... 7,523,699 .. 
 
 .. 49,745,n6 
 
 17 
 
 97,246,826 
 
 7,843,23i 
 
 .... 8,087,441 .. 
 
 .. 42,696,012 
 
 24 
 
 96,693,618 
 
 10,411,643 
 
 .... 6,884,739 .. 
 
 .. 47,873,9i 
 
 81 
 
 .... 96,317,764 .... 
 
 12,883,441 
 
 .... 6,334,748 .. 
 
 .. 61,863,169 
 
 Nov. 7 
 
 .... 96,866,241 .... 
 
 16,492,163 
 
 .... 6,434,3i2 .. 
 
 .. 66,424,807 
 
 14 
 
 .... 96,239,247 .... 
 
 19,461,967 
 
 .... 6,268,662 .. 
 
 .. 60,601,666 
 
 21 
 
 96,376,432 . . . . 
 
 23,167,980 
 
 6,283,417 .. 
 
 .. 64,917,932 
 
 28 
 
 94,963, i3o 
 
 24,3o3,i44 
 
 .... 6,620,783 .. 
 
 .. 64,3o7,38o 
 
 Deo. 5 
 
 .... 96,333,687 .... 
 
 26,069,833 
 
 .... 6,555,000 .. 
 
 .. 64,444,375 
 
 12 
 
 96,626,037 
 
 26,068,877 
 
 .... 6,348,494 .. 
 
 .. 62,907,099 
 
 19 
 
 .... 97,211,690 ..:. 
 
 27,967,326 
 
 .... 6,309,466 .. 
 
 .. 63,710,106 
 
 26 
 
 .... 97,002,035 .... 
 
 27,142,098 
 
 .... 6,352,187 .. 
 
 .. 65,23 9 ,3 7 4 
 
 1858, 
 
 
 
 
 
 Jan. 2 
 
 98,649,983 
 
 28,661,946 
 
 .... 6,490,403 .. 
 
 . . 67,300,760 
 
 9 
 
 .... 98,792,768 .... 
 
 29,176,838 
 
 6,616,464 .. 
 
 .. 66,942,282 
 
 16 
 
 .... 99,473,762 .... 
 
 30,211,266 
 
 6,349,325 .. 
 
 .. 67,723,909 
 
 23 
 
 101,172,642 
 
 30,829,161 
 
 6,336,042 .. 
 
 .. 69,623,686 
 
 80 
 
 102,180,089 
 
 31,273,022 
 
 .... 6,869,678 .. 
 
 .. 70,467,784 
 
 Feb. 6 
 
 . ... Io3,6o2,932 
 
 30,662,948 
 
 .... 6,8 7 3, 9 3i .. 
 
 .. 70,544,737 
 
 13 
 
 io3,783,3o6 
 
 30,226,274 
 
 6,607,270 .. 
 
 .. 70,426,906 
 
 20 
 
 103,706,735 
 
 31,416,077 
 
 6,642,618 .. 
 
 .. 72,003,667 
 
 27 
 
 .... 103,769,127 .... 
 
 31,668,694 
 
 .... 6,530,769 .. 
 
 .. 71,728,972 
 
 March 6 
 
 .... io5,o2i,863 .... 
 
 32,739,731 
 
 6,864,624 .. 
 
 .. 72,379,748 
 
 13 
 
 .... 106,293,631 
 
 32,691,076 
 
 .... 6,766,968 .. 
 
 .. 73,662,929 
 
 20 
 
 .... 107,440,360 .... 
 
 3 i, 902, 656 
 
 .... 6,853,852 .. 
 
 .. 74,173,918 
 
 27 
 
 .... 109,096,412 
 
 30,929,472 
 
 6,892,231 .. 
 
 .. 73,606,709 
 
 April 8 
 
 .... 110,588,354 .... 
 
 3i,53o,ooo 
 
 7,232,332 .. 
 
 .. 76,023,176 
 
 10 
 
 110,847,617 
 
 32,o36,436 
 
 .... 7,246,809 .. 
 
 .. 76,790,864 
 
 17 
 
 .... 111,344,891 .... 
 
 33,196,449 
 
 .... 7,>90,i70 
 
 .. 78,121,026
 
 336 
 
 THE NEW YORK CLEARING HOUSE. 
 
 1868. 
 
 . LOANS. 
 
 SPECIE. 
 
 ClBCTTLATIOlT. 
 
 DEPOSITS, 
 
 April 24 . . . 
 
 . 111,008,476 . 
 
 . .. 34,113,891 .. 
 
 . . 7,i4o,85i .. 
 
 79, 198,893 
 
 May 1 ... 
 
 . 111,868,406 ., 
 
 , .. 35,o64,2l4 .. 
 
 .. 7,43i,8i4 .. 
 
 .. 8o,563,3o3 
 
 8 ... 
 
 . 112,741,955 ., 
 
 , .. 35,453,146 .. 
 
 . . 7,735,o56 . . 
 
 .. 81,727,146 
 
 15 ... 
 
 . 114,119,2^8 ., 
 
 ,.. 34,73o,728 .. 
 
 .. 7^02,975 .. 
 
 .. 83,599,295 
 
 22 ... 
 
 . ii5,658,o82 .. 
 
 , .. 34,047,446 .. 
 
 .. 7,307,445 .. 
 
 .. 84,297,738 
 
 29 ... 
 
 . n6,65o,943 . . 
 
 . . 3i,496,i44 .. 
 
 . . 7,252,616 .. 
 
 .. 83,i52,244 
 
 June 5 . . . 
 
 . 116,424,597 ., 
 
 . .. 32,790,332 .. 
 
 .. 7,548,83o .. 
 
 .. 83,5o6,886 
 
 12 ... 
 
 . 1 16,022, 1 52 .. 
 
 ,.. 33,367,253 .. 
 
 .. 7,367,725 .. 
 
 .. 84,283,194 
 
 19 ... 
 
 . 117,797,047 ., 
 
 , .. 32,396,456 .. 
 
 .. 7,297,63i .. 
 
 .. 85,280,949 
 
 24 ... 
 
 . 118,823,401 .. 
 
 , .. 31,948,089 .. 
 
 .. 7,2 1 5,689 
 
 .. 85,960,307 
 
 July 8 ... 
 
 . 119,812,407 . 
 
 , .. 33,83o,232 .. 
 
 .. 7,458,i 9 o .. 
 
 .. 88,337,184 
 
 10 ... 
 
 . 118,863,937 .. 
 
 .. 34,705,593 .. 
 
 .. 7,571,373 .. 
 
 . . 92,337,042 
 
 17 ... 
 
 . 119,165,731 .. 
 
 ,.. 35,329,988 .. 
 
 . . 7,346,2i3 .. 
 
 .. 90,064,144 
 
 24 ... 
 
 . 118,940,482 .. 
 
 ,.. 35,5i5,243 .. 
 
 .. 7,35i,o45 .. 
 
 .. 90,105,690 
 
 81 ... 
 
 . ii9,85o,456 ., 
 
 , .. 35,712,107 .. 
 
 .. 7,4o8,365 .. 
 
 .. 91,145,874 
 
 Aug. 1 ... 
 
 . 120,892,857 ., 
 
 ... 35,145,844 .. 
 
 .. 7,784,415 .. 
 
 . . 90,339,478 
 
 14 ... 
 
 . 123,374,459 .. 
 
 .. 3i,i5o,473 .. 
 
 .. 7,588, 9 3 9 .. 
 
 . . 89,826,080 
 
 21 ... 
 
 . 126,341,827 .. 
 
 .. 28,343,998 .. 
 
 .. 7,484,306 .. 
 
 . . 8 9 ,i5 9 ,34i 
 
 28 ... 
 
 . 126,084,424 .. 
 
 ... 27,817,006 .. 
 
 .. 7,466,846 .. 
 
 87,719,139 
 
 Totals and Averages of the foregoing Tables, for the 
 Years ending at the given Dates : 
 
 LOANS. SPECIE. DEPOSITS. 
 
 July 81, 1854 Total, 4,690,181,881 596,813,662 3,199,800,399 
 
 Average, 90,195,805 11,477,185 42,287,491 
 
 July 31, 1855 Total, 4,683,097,192 735,515,384 3,775,339,284 
 
 Average, 90,059,561 14,144,526 55,377,224 
 
 July 81, 1856 Total, 5,225,378,400 696,290,025 4,400,980,965 
 
 Average, 100,488,046 13,890,192 63,208,919 
 
 July 31, 1857 Total, 5,781,082,592 618,053,639 4,809,971,107 
 
 Average, 111,174,665 11,885,646 65,195,290 
 
 July 81, 1858 Total, 5,607,403,139 1,823,896,873 4,496,592,884 
 
 Average, 107,834,676 25,449,940 71,898,419
 
 FINANCIAL CHAKT. 337 
 
 The average of circulation was, for the year ending July 81 : 
 
 1864 $9,228,388 
 
 1855 7,738,839 
 
 1856 7,975,405 
 
 1857... 8,604,582 
 
 1858 7,226,475 
 
 The diagram exhibits a remarkable coincidence, 
 or parallelism of movement, in the several years. The 
 loans reach their highest point on the first week of 
 August in 1853, 1854, and 1856 ; on the third week 
 of August in 1855, and on the second week of 
 August in 1857. They begin to fall at these dates, 
 and reach their lowest point on the second week of 
 November, in 1853, 1856, and 1857 ; on the third 
 week of November in 1855, and on the second 
 week of December in 1854 the year uniformly 
 going out with an ascending average. Another 
 decline takes place from the early part of March or 
 April, previous to the uniform ascent to August. 
 There is a general concurrence of movement with the 
 loans, in the deposits and specie. The year 1857 is 
 exceptional only in the violence of fluctuation after 
 August. 
 
 The adoption of some scale of relation between the 
 several movements which compose the volume of 
 bank transactions, will be a great help in forming a 
 judgment of its condition within itself, at any given 
 period. The averages of the year, ending with July 
 1855, are more " conservative " for this purpose than 
 those of any other year in the record. They exhibit 
 a remarkable correspondence of movement, perfect 
 
 15
 
 338 THE NEW YOKK CLEARING HOUSE. 
 
 agreement with the periodical currents, which are 
 demonstrated in the commercial system, and the full 
 amount of depression in the autumn, which is always 
 our most important and critical season. The average 
 line in the chart represents this scale. When the 
 other lines recede from it above, proportionate expan- 
 sion is indicated; when they recede below, propor- 
 tionate contraction or depression. When the lines 
 recede from each other, and from the scale also, there 
 is a proportionate destruction of the equilibrium. 
 Beginning with August 1854, it is apparent that 
 the relation of the loans, specie, and deposits, is not 
 materially changed with respect to the scale, or to 
 each other, up to August 1855. The lines are in close 
 contact, and mingle witli each other. But an extraordi- 
 nary fact is developed after that date. The propor- 
 tion of specie with the loans and deposits, on the 
 adopted scale, is lost. It separates from them in the 
 second week of June ; in the third week of August, it 
 falls below the scale, and instead of returning again 
 to cross and recross the other lines, it continues per- 
 manently below them ; and only for two short periods, 
 about February and June, does it re-ascend above the 
 scale, until the chasm is closed on the first of Novem- 
 ber 1857. The gradual widening of the gulf between 
 the specie and the liabilities after June 1855 is shown 
 with singular clearness and force. There is not a 
 more significant demonstration in the whole record 
 than at this precise point. It does not appear that 
 the specie line sinks even so far 'below the scale as it 
 had done at former periods; but the deposits and 
 loans ascend rapidly above the scale, In July, 1856,
 
 ORIGIN OF THE CLEARING HOUSE. 339 
 
 the loans separated from the deposits in a gradual 
 rise, and did not return to the scale of 1854 until the 
 panic of 1857. As it will be necessary to refer again 
 to the chart, in the history of that event, a further 
 illustration of it here would be superfluous. 
 
 The first proposition to establish a Clearing House 
 in New York, was made by the late ALBERT GALLATIN. 
 In a pamphlet of 124 pages, entitled : " Suggestions 
 on the Banks and Currency of the several United 
 States, in reference principally to the suspension of 
 specie payments," published by WILEY & PUTNAM, in 
 the year 1841, occur the following paragraphs, on pp. 
 63 and 64 : 
 
 "There is a measure which, though belonging to 
 the administration of banks, rather than to legal 
 enactments, is suggested on account of its great 
 importance. Few regulations would be more useful 
 in preventing dangerous expansions of discounts and 
 issues on the part of the city banks, than a regular 
 exchange of notes and checks, and an actual daily or 
 semi-weekly payment of the balances. It must be 
 recollected, that it is by this process alone that a 
 Bank of the United States has ever acted or been 
 supposed to act as a regulator of the currency. Its 
 action would not in that respect be wanted in any 
 city, the banks of which would, by adopting the pro- 
 cess, regulate themselves. It is one of the principal 
 ingredients of the system of the banks of Scotland. 
 The bankers of London, by the daily exchange of 
 drafts at the Clearing House, reduce the ultimate 
 balance to a very small sum ; and that balance is 
 immediately paid in notes of the Bank of England. 
 The want of a similar arrangement among the banks
 
 340 THE NEW YOKK CLEARING HOUSE. 
 
 of this city, produces relaxation, favors improper 
 expansions, and is attended with s'erious inconveni- 
 ences. The principal difficulty in the way of an 
 arrangement for that purpose, is the want of a com- 
 mon medium other than specie for effecting the pay- 
 ment of balances. These are daily fluctuating ; and 
 a perpetual drawing and re-drawing of specie from 
 and into the banks is unpopular and inconvenient. 
 
 " In order to remedy this, it has been suggested, 
 that a gimeral Cash office might be established, in 
 which each bank should place a sum in specie, pro- 
 portionate to its capital, which would be carried to 
 its credit in the books of the office. Each bank would 
 be daily debited or credited in those books for the 
 balance of its account with all the other banks. Each 
 bank might at any time draw for specie on the office 
 for the excess of its credit beyond its quota; and 
 each bank should be obliged to replenish its quota, 
 whenever it was diminished one-half, or in any other 
 proportion agreed on. 
 
 "It may be that some similar arrangement might 
 be made in every other county, or larger convenient 
 district of the State. It would not be necessary to 
 establish there a general cash office. Each of the 
 banks of Scotland has an agent at Edinburgh, and the 
 balances are there settled twice a week, and paid 
 generally by drafts on London. In the same manner, 
 the balances due by the banks in each district might 
 be paid by drafts on New York, or any other place 
 agreed on." 
 
 These extracts contain the whole germ of the Clear- 
 ing House system. They comprehend, essentially, 
 the manner of its action, by the establishment of a 
 " cash office" (the coin depository) ; and also, the 
 effect to prevent " relaxation and improper expan- 
 sions ;" and they even suggest, negatively, the coin
 
 ORIGIN OF THE CLEARING HOUSE. 34:1 
 
 certificates, in the " commom medium other than 
 specie, for effecting the payment of balances," the 
 want of which was " the principal difficulty in the 
 way" of a Clearing House at that time. The merit of 
 removing this difficulty belongs to Mr. FRANCIS "W. 
 EDMONDS, late Cashier of the Mechanics' Bank. A 
 year before the organization of the Clearing House, 
 he induced the Bank of America, the Merchants', the 
 American Exchange, and the Metropolitan Banks to 
 join with the Mechanics' Bank, and to make up an 
 aggregate sum of one million of dollars in coin, for 
 which the last named institution issued its certificates. 
 These were received by the other banks in payment 
 of balances, and when the depositing banks were 
 creditors, they were entitled to a preference in their 
 payment back, and were thus saved the trouble of 
 counting, and the risk and burden of carrying coin. 
 These certificates were held as more desirable than 
 coin, on account of the greater facility, expedition, 
 and safety of their transfer. 
 
 Mr. EDMONDS was chairman of the committee, under 
 whose directions the Clearing House was organized, 
 his associates being Mr. JAMES PUNNETT, Cashier of 
 the Bank of America, and Mr. AUGUSTUS E. SILLJMAN, 
 Cashier of the Merchants' Bank now Presidents of 
 those institutions. The names of these gentlemen, 
 and also that of Mr. LYMAN, the Manager, are inse- 
 parably connected with the origin and early history 
 of the New York Clearing House. But to Mr. GEORGE 
 CURTIS, the author of its Constitution, was conceded 
 by the common voice of his associates, the precedence, 
 as it regards intelligence and ability, in regulating
 
 342 THE NEW YORK CLEARING HOUSE. 
 
 and administering its powers. Though not publicly 
 connected with the first movements in favor of its 
 establishment, he made it the subject of attentive 
 study, and prepared a plan for its organization at a 
 very early period. His personal influence was par- 
 ticularly exerted in removing objections, and in 
 bringing the discordant elements of the Association 
 into harmony with its general purpose. Like Mr. 
 GALLATIN, he appreciated from the outset all the 
 advantages that would accrue from it to our financial 
 system ; and he was unanimously chosen as Chairman 
 of the Committee on Suspensions, which made it his 
 duty to take cognizance of all short-comings on the 
 part of the different banks. This was at the same 
 time, the least popular, most important, and critical 
 post in the Association. It exposed him to the jea- 
 lousy of the weaker members on one hand, and to 
 censures for a dangerous indulgence on the other; 
 but he exercised his powers with such strict justice 
 and impartiality, that no instance of appeal from his 
 judgment is on record.
 
 THE PANIC. 343 
 
 CHAPTEE XIX. 
 
 THE PANIC. 
 
 UP to August 1857, our commercial affairs were 
 generally prosperous. The local journals throughout 
 the country represented business as in a wholesome 
 condition. High prices were said to have enriched 
 the farmer, the stockgrower, and the planter. Trade 
 and mechanical industry flourished with correspond- 
 ing success. 
 
 In estimating probabilities for the future, great 
 stress was laid on the fact, that the madness of rail- 
 road building was arrested. The bond market, and 
 with it improvement securities generally, had fallen 
 into disrepute. Stock companies could no longer 
 send an agent to Europe with five millions of credit 
 tokens, and receive the money for them within sixty 
 days from the engraver's press. Heavy financial 
 negotiations in this direction were suspended ; and 
 although the country had several hundred millions of 
 foreign capital in use, there was no danger of any 
 considerable portion of it being recalled, since our 
 home market would reject the bonds which represent 
 it, at half the par cost. We might, therefore, con- 
 tinue to enjoy the use of this large capital, and avoid 
 the disaster consequent on a further accumulation of
 
 344 THE PANIC. 
 
 foreign debt. The common sentiment was, that WG 
 had passed the dangerous point in railway credits, 
 and with the immense productions of the year at our 
 doors, there was little probability of serious financial 
 disturbance. The most sagacious of our city bank 
 officers saw no indications of an unusual storm in the 
 commercial skies. "WTien the loans reached the 
 unprecedented height of one hundred and twenty-two 
 millions of dollars, on the eighth of August, they 
 pointed to the annual reduction of ten or twelve 
 millions in the autumn months, as one of the regular 
 ebbs to which the market is subject; but they had no 
 foresight of extraordinary pressure, and no dreams of 
 panic. Credit was extended, but " the country never 
 was so rich." 
 
 The banks began to contract their loans about the 
 eighth of August. Securities immediately fell in price 
 at the Stock Board. The failure of a heavy produce 
 house was explained by the depression of that par- 
 ticular interest in the market. A report of dishonest 
 jobbing, and of the misuse of funds in a leading Rail- 
 way Company, caused partial excitement, without 
 seriously disturbing confidence in mercantile credit. 
 
 On the twenty-fourth of August, the suspension of 
 the Ohio Life Insurance and Trust Company was 
 announced. It struck on the public mind like a 
 cannon shot. An intense excitement was manifested 
 in all financial circles, in which bank officers partici- 
 pated with unusual sensitiveness and want of self- 
 possession. Flying rumors were exaggerated at every 
 corner. The holders of stock and of commercial paper 
 hurried to the broker, and wei e eager to make, what
 
 GENERAL OUTLINE. 345 
 
 a week before they would have shunned as a ruinous 
 sacrifice. 
 
 Several stock and money dealers failed, and the 
 daily meetings of the Board of Brokers were charac- 
 terized by intense excitement. 
 
 Every individual misfortune was announced on the 
 news bulletins in large letters, and attracted a curious 
 crowd, which was constantly fed from the passing 
 throng. 
 
 The Clearing House report for the twenty-ninth of 
 August the first after the suspension of the Ohio 
 Life Insurance and Trust Company showed a reduc- 
 tion of four millions of dollars in the bank loans 
 during the previous week. 
 
 The most substantial securities of the market fell 
 rapidly in price at public sale. 
 
 The safety of bank notes in circulation was sus- 
 pected or denied. The publishers of counterfeit 
 detectors spread alarm among the shopkeepers and 
 laborers, by selling handbills with lists of broken 
 banks, which were cried about the streets by boys, at 
 " a penny a piece." 
 
 One of the Associated Banks fell into default at 
 the end of August, and a fraud of seventy thousand 
 dollars by the Paying Teller, roused suspicion of 
 similar misconduct in other institutions. 
 
 The regular discount of bills by the banks had 
 mostly been suspended, and the street rates for money, 
 even on unquestionable securities, rose to three, four 
 and five per cent a month. On the ordinary securi- 
 ties of merchants, such as promissory notes and bills 
 of exchange, money was not to be had at any rate. 
 
 15*
 
 346 THE FAinc. 
 
 House after house of high commercial repute sue 
 cumbed to the panic, and several heavy banking firms 
 were added to the list of failures. 
 
 The settlements of the Clearing House were watched 
 with the expectation of new defaults ; and their suc- 
 cessful accomplishment, each day, was a subject of 
 mutual congratulation among bank officers. 
 
 The statement of the city banks for the week ending 
 September 5th, showed a further reduction in the loans 
 of more than four millions of dollars. 
 
 Commercial embarrassments and suspension became 
 the chief staple of news in all the papers of town and 
 country. The purchase and transportation of produce 
 almost entirely ceased. 
 
 From this period, there was nothing wanting to 
 aggravate the common distress for money. The failure 
 of the Baiik of Pennsylvania, in Philadelphia, was 
 followed by that of the other banks of that city, and 
 by those of Baltimore, and of the Southern Atlantic 
 States generally. Commercial business was every- 
 where suspended. The avalanche of discredit swept 
 down merchants, bankers, moneyed corporations, and 
 manufacturing companies, without distinction. Old 
 houses, of accumulated capital, which had withstood 
 the violence of all former panics, were prostrated in a 
 day ; and when they believed themselves to be 
 perfectly safe against misfortune. 
 
 The bank suspension of New York and New 
 England, in the middle of October, was the climax of 
 this commercial hurricane. 
 
 Such is the outline of the most extraordinary, 
 violent, and destructive financial panic ever experi-

 
 CONCEALED CAUSES. 34:7 
 
 enced in this country. What caused it? To what 
 source or sources can it be traced ? Where lies the 
 responsibility of it? What lessons does it teach? 
 What preventives are indicated against the recurrence 
 of similar disaster? These are questions which 
 agitate the public mind, and which ought to be 
 answered, if possible, for our instruction and future 
 guidance. 
 
 A financial panic has been likened to a malignant 
 epidemic, which kills more by terror than by real 
 disease. If its exact causes could be ascertained, they 
 would doubtless be found in minor proportion with 
 the imaginary and the accidental ; but so many terms 
 enter into the case, which, from their character, are 
 beyond our grasp, and equally beyond estimate, that 
 a clear, practical analysis is impossible. For example : 
 Who can tell how much gold is hoarded how much 
 of what has been supposed to be real capital, is 
 nominal or mortgaged how much insolvency has been 
 buoyed up for years on the general tides of credit and 
 to what extent dishonest people take advantage of the 
 common distress, to repudiate debts which they are 
 able to pay ? Who can tell what frauds are carried 
 along in stock companies, or what speculations in land, 
 mines, and railways are mixed up in the mass of 
 trade? On these points, the sharpest scrutiny is 
 wholly at a loss. In truth, the egg of the crisis of 
 1857 was buried where it could not be seen in the 
 private and household accounts of individuals. The 
 relation of the exports and imports of a country is 
 comparatively of little consequence, so long as its 
 home trade and labor is in a sound condition. It
 
 348 
 
 THE PANIC. 
 
 signally failed in this instance, to give warning of the 
 approaching storm, if it did not sadly mislead those 
 who most relied on it for instruction. 
 
 A state of crisis, or severe financial pressure, is not 
 necessarily destructive of all confidence. We have 
 been accustomed to its frequent recurrence, and found 
 it to be manageable without excessive straining of our 
 financial means. The loans have uniformly declined 
 from the highest point, in August, to their lowest, in 
 November or December, and the stringency has then 
 gradually relaxed. This annual pressure may be 
 compared to a high Spring wind, which breaks the 
 superfluous growth of vegetation, and gives stronger 
 development to the uninjured mass. The following 
 table shows that stringency in the market, more or 
 less severe, is not inconsistent with a prosperous state 
 of commerce. 
 
 
 ! 
 
 *s 
 
 1 
 
 84 
 100 
 
 78 
 84 
 
 EKDUCTION OP 
 
 Increase ol 
 Specie 
 
 Loans. 
 
 Deposits & 
 Circulation. 
 
 Specie. 
 
 1853, Aug. 6 to Nov. 12, 
 1864, " 6 " Dec. 9, 
 1855, " 18 " Nov. 17, 
 1856, " 2 " Nov. 8, 
 
 15,000,000 
 13,000,000 
 9,000,000 
 9,700,000 
 
 1,600,000 
 16,800,000 
 12,200,000 
 15,800,000 
 
 4,000,000 
 3,300,000 
 2,800,000 
 
 3,000,000 
 
 
 
 
 The rate of reduction in loans was very gradual in 
 each of the four years preceding 1857. The greatest 
 fall for any week during the entire period was 
 $2,800,000, from October 7 to October 14, 1854, and 
 for the several previous weeks it was hardly appreci- 
 able. The characteristic feature of this annual 
 contraction w r as an almost insensible ebb ; and this
 
 OHIO LIFE AND TEUST OO. 349 
 
 was frequently relaxed to suit the convenience 01 
 dealers, as is manifest from an examination of the 
 weekly tables. 
 
 It is clearly shown that a reduction of loans of from 
 ten to fifteen millions of dollars may take place in an 
 average term of ninety days without serious injury to 
 commerce. 
 
 Is there sufficient reason for assuming that this scale 
 of contraction might not have been as successfully- 
 applied in 1857, as it was in 1853 or that it might 
 not have been extended several millions of dollars 
 beyond that of the latter year, if the emergency 
 had required it ? This is the point about which 
 opinions clash. The best evidence bearing upon it is 
 to be found in the same tables. 
 
 The bank contraction began on the eighth of August, 
 and continued for two weeks on the gradual scale of 
 former years. This brings us to the twenty-third of 
 the month, on which day the commercial interest was 
 undisturbed by any extraordinary accidents or appre- 
 hensions. 
 
 On the twenty-fourth of August, the Ohio Life 
 Insurance and Trust Company a chartered institu- 
 tion with banking privileges closed the doors of its 
 branch office in New York. It was not a bank of 
 issue, nor, to any considerable extent, of deposit, in 
 this city. Its principal business was to receive remit- 
 tances from the home office in Cincinnati, and numer- 
 ous correspondents in the "West, and to hold them 
 subject to draft. It was not a discounter of bills 
 receivable ; but on the contrary, a large borrower from 
 other institutions. The consequences of its stoppage,
 
 350 THE PANIC. 
 
 therefore, did not fall directly on our merchants, as 
 in the case of a bank on which they are depending 
 for continuous loans. The capital of the company 
 was two millions of dollars. 
 
 The general circumstances of this failure, so far as 
 they were published, were not in themselves very 
 alarming. The home office was reported, by tele- 
 graph, to have its doors open as usual, with its affairs 
 apparently unembarrassed, notwithstanding the stop- 
 page of the Kew York branch. It was soon known, 
 however, that the entire capital of the institution had 
 been virtually embezzled, and serious alarm was 
 immediately manifested in banking circles. 
 
 On the day after the failure, our merchants found 
 that the terms of business between them and the 
 banks were changed. The discounting of commercial 
 paper was stopped. The certification of checks was 
 imposed with unaccustomed rigor. It suddenly 
 dawned on financial managers, that the city loans 
 were ten millions of dollars higher than ever before 
 a very gratifying fact during their accession, but now 
 inspiring only fear and distrust, which in a few hours, 
 comparatively, ripened into symptoms of alarm. 
 
 The Weekly Statement of August 29th showed a 
 reduction in the loans of four millions of dollars, and 
 that of September 5th as much more. This unmistak- 
 able indication of the course of bank policy was every 
 where accepted as evidence of existing panic. Who 
 should know better than bank managers how much 
 consequence to give to the failure of the Ohio Life 
 and Trust Company ? They were terrified by the 
 stupendous fraud. They saw no safety, but in com-
 
 OHIO LIFE AND TRUST CO. 351 
 
 pelling the payment of their loans at maturity, and 
 denying all indulgence. The gradual scale of reduc- 
 tion was abandoned at once. Instead of ten millions 
 of dollars in eighty-four days, it was ten millions in 
 fourteen days. Whether this was forced on the banks 
 by the withdrawal of deposits, or whether it was the 
 result of a common understanding, or of the want 
 of such understanding on the part of bank officers, is 
 of little importance, so far as relates to its effect on 
 the public mind. Its immediate sequence to the 
 collapse of the Trust Company gave to that event the 
 distinction of the first act in the panic of 1857. The 
 institution had stood high in the public esteem for a 
 number of years. It was regarded as the more safe, 
 because it was not a bank of issue, and because its 
 affairs were supposed to be conducted on the con- 
 servative plan of our Trust Companies, avoiding the 
 active and changeable risks of commerce, or touch- 
 ing them only with extreme caution. The bankers 
 and exchange dealers of Ohio bought its drafts for 
 remittance very extensively; and the immediate 
 injuries caused by its failure arose from these being 
 dishonored at New York, where, for several successive 
 days, they accumulated in the hands of many parties, 
 to the extent of several hundred thousand dollars. 
 There was not a bank in the city, with a Western cor- 
 respondence, that had not these drafts sent to them in 
 payment for collections, or for deposit, to be drawn 
 against by the remitters. The sensible consequences 
 of the failure were, therefore, widely distributed, 
 especially among the city banks, several of which 
 were large lenders to the Company. The Company
 
 352 THE PANIC. 
 
 had borrowed, also, of individual bankers, exchange 
 dealers, and stock brokers, hypothecating not only its 
 own collaterals, but the property of its dealers, for 
 whom it was merely a collecting agent. Most per- 
 sons who held claims against it were persuaded that 
 they would be lessened in value by an untimely 
 exposure of its affairs, and a curtain of mystery wag 
 thus drawn before them. 
 
 The quick apprehension, by bank managers, of the 
 dangers to which our financial system is exposed by 
 the loss of public confidence, their knowledge of the 
 facility with which frauds may be concealed and 
 propagated in large institutions, and the immediate 
 reflection of the consequences upon the banks, explain 
 why they so promptly take the alarm when any mate- 
 rial part of the fabric of credit gives way. They 
 were the first to seize and to act upon the sugges- 
 tions which were provoked by the sudden collapse 
 of the Ohio Trust Company. If its entire capital of 
 two millions of dollars could be dissipated if its 
 means could be employed in desperate stock-gam- 
 bling in the public market, with all the usual hypoth- 
 ecation of securities, and transfers, and extensive bank 
 loans, of which the records of the Company must 
 have given some evidence all this without discovery, 
 and even without exciting suspicion in the minds of 
 the trustees why might not similar transactions be 
 concealed in other institutions of which the trustees 
 are equally well accomplished and esteemed ? Under 
 the fears instigated by such thoughts, the manifesta- 
 tions of distrust were more open from day to day. 
 The notes of houses in high standing were rejected
 
 BANK STRICTURE. 353 
 
 when presented for payment in the usual manner, 
 unless the deposit to cover them was already made. 
 The most trivial accommodations were denied, with a 
 positiveness that sent the applicant away dissatisfied 
 and indignant. All the forms of suspicion were 
 thrust out into a prominence that was not unfre- 
 quently insulting. The honor of the best dealers, 
 who had never committed an impropriety in their 
 accounts, was totally ignored. Good faith and confi- 
 dence disappeared from the bank counters, under the 
 rigid instruction of the officers ; and personal inter- 
 course with them be-came difficult, without such delays 
 and exposures as were offensive to high-minded and 
 honorable men. Stocks held as collateral security 
 were marked down in value from ten to thirty per 
 cent ; and successive instalments on loans were 
 required to restore the continuous depreciation caused 
 by this process. All these hard points were pushed 
 out with such disregard of the trying necessities of the 
 dealer, that a common feeling of indifference to obli- 
 gations began to spring up as their counterpart. 
 
 It is remarkable that there was no interval of pres- 
 sure between the plentiful money-market, which 
 lasted until the twenty-second of August, and the 
 panic with which the month closed. There was no 
 treaty between commerce and money as to the com- 
 mon interest. The panic was an explosion without 
 notice or premonition. It was not, as in former cases, 
 the result of gradually increasing embarrassment 
 after vain struggles to prevent it. This is demon- 
 strated by the following figures :
 
 354 
 
 THE PANIC. 
 
 Weekly Fluctuation of Loans, Deposits, Circulation-, 
 and Specie, from Aug. 22^ to Sept. 26z!A, 1857. 
 
 
 LOANS. 
 
 DEPOSITS. 
 
 CIRCULATION. 
 
 SPECIE. 
 
 Aug. 
 
 Sept. 
 it 
 
 
 it 
 
 29 
 5 
 
 12 
 19 
 20 
 
 dec. 
 dec. 
 dec. 
 dec. 
 dec. 
 
 $3,550,663 
 4,367,554 
 2,235,792 
 1,208,152 
 985,988 
 
 dec. 
 dec. 
 inc. 
 inc. 
 dec. 
 
 3,380,670 
 3,600,192 
 73,512 
 517,844 
 933,102 
 
 dec. 
 inc. 
 dec. 
 dec. 
 dec. 
 
 22,951 
 2,132 
 350,876 
 248,515 
 235,493 
 
 dec. 
 inc. 
 inc. 
 inc. 
 dec. 
 
 855,802 
 986,588 
 1,953,893 
 1,374,329 
 229,091 
 
 dec. 
 
 12,348,149 
 
 dec. 
 
 7,322,608 
 
 dec. 
 
 855,703 inc. 
 
 3,229,917 
 
 The deposits and circulation are the basis of the 
 loans and specie. 
 
 The exact loss of basis, during this term, was 
 $8,178,311, while the loans were reduced $12,348,14:9. 
 The increase of specie reserved from the liquidations 
 makes the true relative decrease $15,578,066. The most 
 violent action was between September 5th and Sep- 
 tember 19th, when the loans were reduced $3,443,944, 
 in the face of an increase of deposits of nearly six 
 hundred thousand dollars. In the latter period, the 
 true relative change is represented by a reduction of 
 $6,172,775 in the loans, while the deposits actually 
 increased $591,356. 
 
 There can be no escape from these figures. They 
 show, beyond cavil, that the lanks, not the depositors, 
 took the lead in forcing liquidation. In the twenty 
 days prior to the 26th of September, the deposits fell 
 off but $341,746, while the resources of the banks 
 were increased $6,694,179. 
 
 An important fact must be stated in connection 
 with the fall of deposits between August 22d and
 
 BANK STRICTURE. 355 
 
 September 26th, viz., that of the $7,322,608, full 
 three-fourths was drawn out by the country banks ; 
 so that the amount withdrawn by the individual 
 dealers was, at most, not above two millions of dol- 
 lars. Thus, the consequences of holding a treacherous 
 country fund on interest, and treating it as bank 
 capital, fell ultimately on our city merchants. 
 
 When dealers are denied the usual facilities by 
 discount, they have no recourse for their payments but 
 to their deposits ; but they did not use these to the full 
 extent of their loan reduction in any single week 
 from the 22d of August to the 19th of September. 
 
 The fluctuating part of the basis of bank loans is 
 composed of deposits and circulation the capital 
 being a permanent investment by the stockholders. 
 The force of reduction is, therefore, measurable by 
 the proportion between this fluctuating basis, and the 
 amount of loans above the capital. It is this proper-, 
 tion which constitutes, at the same time, the profit 
 and the danger of our banking system. For example : 
 the capital of the banks was $65,000,000 on the 22d 
 of August. Deducting this from the loans of that 
 date, $120,139,582, gives $60,139,582 as the propor- 
 tion resting on the deposits and circulation, which 
 then amounted to $72,935,482. The proportion of 
 loans on this fluctuating, or pure credit basis, was 
 eighty per cent. The same percentage on the deposits 
 and circulation of September 26th, would have given 
 the dealers an aggregate loan of $51,805,737 ; whereas, 
 they had but $42,791,433 a deficiency of $9,014,304, 
 relatively, with the resources of the banks. The loss 
 of basis, by the decrease of circulation and the dimk.
 
 356 THE PANIC. 
 
 nution of deposits, was but eleven per cent, while the 
 reduction -of loans was twenty-nine per cent. 
 
 This method of estimating the force of a financial 
 contraction, by taking into view the fluctuating basis 
 only, exposes the real danger of extending loans on 
 that basis beyond the point which experience has 
 determined as safe. It is the true scale of measure- 
 ment for the guidance of the Bank Board. 
 
 " The sudden withdrawal of country balances" has 
 been assumed as the chief cause of the panic, by some 
 of our principal bank officers. The Clearing House 
 tables give no support to this assumption. No fea- 
 ture of our financial system is more remarkable than 
 the stability of its deposit line. The monthly average 
 for 1857 is directly to the point. It is as follows : 
 
 January $65,638,204 
 
 February 65,416,635 
 
 March i \ m *s\ 65,948,462 
 
 April ^ l . 67,135,655 
 
 May 68,342,291 
 
 June . 68,336,935 
 
 July 66,369,206 
 
 August 1st to August 22d . . 66,777,857 
 
 This brings us to the exact date of the panic, with 
 BO little fluctuation of deposits, that the loans were 
 not more affected, from week to week, than is usual 
 in the best condition of our market. 
 
 But we have direct testimony, on this part of the 
 subject, in the Report of the Clearing House Com-
 
 COURSE OF THE MARKET. 357 
 
 mittee, to whom was referred the proposition to 
 abolish the payment of interest on deposits. 
 
 They say, on page 17 : "During the week of finan- 
 cial excitement, in October last, the exaggerated 
 reports of which were carried with the speed of light- 
 ning to every part of the land, this new medium of 
 communication (the telegraph) filled our banks with 
 imperative orders for the immediate return of their 
 deposits, in specie." 
 
 It was not, then, until October, that the with- 
 drawal of deposits operated so fatally ! 
 
 The point implied by the Committee is, that the 
 panic occurred in October ; and the purpose of the 
 implication is, to shift the responsibility of having 
 caused it, from the banks to the depositors. There is 
 no evidence to sustain this presumption. The Bank 
 Superintendent says, in his report to the Legislature, 
 " that about the first of October, a list of more than 
 thirty failed banks, in the State of New York, was to 
 be seen daily in our newspapers." He says, also, 
 that the interior banks began to return their circula- 
 tion, and to withdraw their securities, for sale, about 
 the 20th of September an extremity of action that 
 does not characterize a state of ordinary pressure. 
 The weaker banks began to fail near the first of Sep- 
 tember ; and the commercial failures of the early part 
 of that month, were largely of a class that had with- 
 stood all former panics. 
 
 A comparison of the stock sales from August 22d to 
 September 30th, with those of the " week of financial 
 excitement in October," further refutes the theory of 
 the panic set up by the Clearing House Committee.
 
 358 
 
 THE PANIC. 
 
 BELATIVE DECLINE IN BONDS AND STOCKS. 
 
 
 FBOM AUG. 22 
 TO OCT. 1. 
 
 FROM OCT. 1 
 TO GOT. 18. 
 
 Virginia State Sixes 
 
 13J per cent 
 
 10 per cent. 
 
 Missouri State Sixes 
 
 11 do 
 
 8 do. 
 
 Illinois Central Railroad Bonds 
 
 32 do 
 
 16 do. 
 
 
 18 do 
 
 4 do. 
 
 do do Stock 
 
 19J do 
 
 5 do. 
 
 Delaware & Hudson Canal Company 
 
 16 do 
 
 24 do. 
 
 Bank of America 
 
 15 do. 
 
 19 do. 
 
 Bank of Commerce 
 
 22J do 
 
 13 do. 
 
 American Exchange Bank 
 
 40J do 
 
 15$ do. 
 
 Metropolitan Bank 
 
 33 do. 
 
 17 do. 
 
 Park Bank 
 
 26 do. 
 
 18 do. 
 
 Panama Railroad 
 
 20 do 
 
 10 do. 
 
 
 36 fc do. 
 
 3i do. 
 
 Michigan Central Railroad 
 
 37 do. 
 
 6 do. 
 
 Michigan Preferred Railroad 
 
 21f do. 
 
 do. 
 
 
 32 do. 
 
 9$ do. 
 
 
 17 do. 
 
 3 do. 
 
 Galena & Chicago Railroad 
 
 25 do. 
 
 9 do. 
 
 
 3H do. 
 
 3i do. 
 
 
 15J do. 
 
 7i do. 
 
 
 36 do. 
 
 do. 
 
 Cleveland & Pittsburgh Railroad 
 
 20f do. 
 
 1 do. 
 
 Pennsylvania Coal 
 
 11J do. 
 
 15i do. 
 
 
 
 
 The foregoing list includes a wide range of securi- 
 ties, from the best, down to what are called " fancy." 
 The general decline of the market was from three to 
 thirty-six per cent more between August 22d and 
 October 1st, than it was during " the week of finan- 
 cial excitement in October." It is apparent that 
 the latter period was but the sequence of the former 
 the breaking away of the dykes, when the pressure 
 of the flood became irresistible. The ball had been 
 set in motion, and it was impossible to stop it on the 
 Bide of a hill.
 
 CATJ, LOANS. 
 
 Although the assumption that the panic was catsed 
 by the sudden withdrawal of country balances is not 
 borne out by the tables, it is true that those balances 
 constituted a bad element in the market, and that 
 they contributed to the common wreck. The pre- 
 sence in our financial system of a borrowed fund, 
 payable on demand, of fifteen millions of dollars, on 
 which loans were predicated, was a disturbing fact, 
 even with the probability that it was not likely to be 
 withdrawn suddenly, or all at a time. But the con- 
 ditions on which it was held prohibited that state of 
 preparation, which alone could protect the market 
 from the injuries of a requisition for immediate 
 payment. It carried interest ; it was reloaned on 
 interest, and doubtless re-reloaned to various parties, 
 who had invested it, perhaps mostly in the hazard- 
 ous speculations of the stock market. If the coun- 
 try banks, which were borrowers No. 1, were called 
 on by their depositors, they called on the city 
 banks, which were borrowers No. 2 ; and these 
 called on the large broker, who was borrower 
 No. 3 ; and he again on the small brokers, who were 
 borrowers No. 4, in whose hands the money spread 
 out into various channels of fluctuating investment, 
 if it was not further loaned to a fifth series of borrow- 
 ers. The difficulty of collecting loans is in propor- 
 tion to the number of borrowers between the first and 
 the last. The city banks do not commonly " call in," 
 until they have paid drafts against the fund, and they 
 are likely to be left a day or two in the lurch before 
 they can restore themselves meanwhile falling 
 behind at the Clearing House, or denying usual
 
 360 THE PANIC. 
 
 accommodation to their commercial dealers. This is 
 the literal history of the "call loans" of the city 
 banks, and the only management by which they can 
 reimburse themselves for the interest which they pay 
 on borrowed money. The committee justly denounce 
 the practice as " a departure from sound principles." 
 They show that it reflects injury on the whole com- 
 munity, while the profit is confined to a few banks, 
 and is inconsiderable at best ; also that it accumulates 
 balances beyond the necessities of a healthy exchange, 
 and withdraws capital from productive employment 
 in the country. 
 
 It is not to be doubted, that the " imperative 
 orders" from the country banks, together with the 
 action of the home depositors, did cause, directly, the 
 suspension of specie payments. It is impossible to 
 ascertain how much they contributed, separately, to 
 the final result, though appearances indicate that 
 country depositors had less to do with it than the 
 resident dealers. 
 
 The balances of the foreign bankers had accumu- 
 lated, in consequence of the stoppage of specie ship- 
 ments, and the non-sale of bills of exchange. These 
 were understood to be specialized by agreement with 
 the bank officers. That is, they were either to be 
 reserved in coin, or the owners were to be advised in 
 season, that they might withdraw them before the 
 suspension of specie payments. The tables show that 
 seven millions were withdrawn between the tenth and 
 the seventeenth of October the greater part of it, 
 probably, on the morning of the suspension. The
 
 THE FINAL BLOW. 361 
 
 next week brought it all back again. The restoration 
 of the specie line was even more remarkable than its 
 depletion. A single glance at the diagram will 
 excite astonishment at the resources that were found 
 immediately available ; and still more astonishment, 
 that suspension could have occurred while they were 
 within such speedy grasp. 
 
 The relative decline in loans and deposits, from 
 September 26th to October 17th, covering the period 
 referred to by the Committee, was as follows : 
 
 Oct. 3 
 
 " 10 
 " IT 
 
 Loans. 
 
 Depositt. 
 
 $1,855,934 
 
 $4,120,498 
 
 4,017,929 
 
 3,053,189 
 
 4,671,744 
 
 7,049,164 
 
 $10,545,607 $14,222,851 
 
 Besides this loss in deposits, the banks suffered 
 depletion in coin to the amount of $5,483,864. They 
 could not withstand such an onslaught. In twenty-one 
 days, the deposits fell twenty-five per cent, while the 
 loans were reduced but eleven per cent a complete 
 transposition of the movement following the 22d of 
 August, when they fell but eleven, while the loans 
 decreased twenty-nine per cent. 
 
 The history of the panic is clearly divisible into 
 these two periods : the former, when the banks took 
 the initiative in forcing down their loans ; and the 
 latter, in which the depositors seized it and brought 
 on the closing act of suspension. 
 
 16
 
 THK PANIC. 
 
 The depositors were not alarmed, up to the 26th of 
 September. For five successive weeks, preceding, 
 they withdrew less from the banks each week than 
 the banks withdrew from them by the depression of 
 loans. So far from exhibiting distrust, there is every 
 appearance of striving against it on their part, with 
 the hope that the storm might pass its crisis, and sub- 
 side. The united community will testify to the 
 anxiety with which the Clearing House Reports were 
 watched, for signs of relaxation in the forced contrac- 
 tion ; but no such signs were given. At length, the 
 third of October exhibits a sudden and marked 
 change. Over four millions of deposits are withdrawn 
 during a single week, and in twenty days, over four- 
 teen millions. It is probable that a much larger 
 amount was withdrawn up to the fourteenth (the day 
 of suspension) than is indicated by the statements ; 
 for these do not show the restoration which began on 
 the fifteenth, and which materially lessened the 
 average of withdrawal for the week ending on the 
 seventeenth. The report of the Clearing House Com- 
 mittee confirms the fact that the depositors did not 
 become alarmed before this period. 
 
 The gradual expansion of bank credits through the 
 several previous years, not only on a fictitious home 
 basis, but on country deposits which had been 
 allured by competing rates of interest, made suffi- 
 cient ground for an extraordinary pressure, when a 
 reduction was to be effected ; and thus the banks 
 were doubly responsible for the pending issue. There 
 is no evidence, however, in the records of the Clear- 
 ing House, nor in the experience of past years, nor in
 
 THE CAUSE. 363 
 
 any events which have transpired since the suspension, 
 to prove that a panic was inevitable. The foregoing 
 facts indicate that it was directly caused by the vio- 
 lent contraction of bank loans immediately after the 
 twenty-fourth of August. 
 
 . The beginning of the contraction on the twenty- 
 fifth of August, marks the precise point at which the 
 panic was started on its destructive course. From 
 that date, distrust grew rapidly. The telegraph 
 spread it throughout the country. Every latent 
 cause of embarrassment sprung into activity. Trifling 
 causes were a thousand-fold magnified. False alarms 
 were created, and public apprehension kept up by 
 successive disasters. Unusual accidents were added 
 to excite the popular mind. For the first time since 
 the establishment of regular intercourse with Cali- 
 fornia, the steamers were delayed with their remit- 
 tances of gold ; and one of them was lost. 
 
 In this state of things, the Clearing House daily 
 settlements in coin, exerted a crushing influence on 
 the commercial interest, and became a new source 
 of terror. What in ordinary times was a safe-guard 
 against the unwise expansion of bank-credits, was 
 now a remorseless power compelling the smaller 
 banks the majority of the whole to a violent con- 
 traction of their loans to dealers, forcing them into 
 the sacrifice of property, and finally into bankruptcy; 
 thus sending out through a thousand channels daily, 
 new streams of misfortune. Default at the Clearing 
 Souse, was the presiding spectre at every Bank Board 
 of the smaller institutions. It was forgotten that the
 
 364 THE PANIC. 
 
 whole of a thing is composed of its parts that public 
 credit is made up of the credit of individuals that 
 if the parts of a thing are broken and scattered, there 
 is no longer a whole.* 
 
 It did not occur to the managing committees of 
 the Clearing House to relax its destructive energy, 
 whilst there was yet a chance of preserving the last 
 stronghold and pledge of commercial integrity specie 
 payments. They thought of it afterwards, and found 
 in it a wholesome alleviation for themselves ; but the 
 time had passed for it to be of any material service 
 to our merchants. The admission of the State debt 
 of New York, and of the debt of the United States, 
 represented by the bank currency, as a substitute for 
 coin in the daily settlements, was of great service in 
 preventing further depreciation, and in repairing the 
 mischief that had been done. 
 
 It is often the case, that things good in themselves 
 become hurtful by a change of circumstances which 
 destroys their fitness. This may be said of the Clear- 
 ing House, without detracting from its real value to 
 our financial interests. 
 
 There are always operating causes in commercial 
 and financial affairs, of which any violent disturbance 
 may be made to appear as the consequence, after the 
 issue is over ; but which, nevertheless, may have had 
 no actual share in its production. Thus, the advocates 
 of a protective tariff see in low duties on foreign 
 
 * "All community of interest, all concert of action, as the crisis approached, was 
 apparently, if not actually abandoned." Report of Sank Superintendent, p. 7. 
 
 " The suspension was preceded by a desperate struggle between all the banki 
 themselves ; and distrust and fear of currency was more apparent among them than 
 with the public generally." Ibid., p. 17.
 
 THE CHAET. 365 
 
 merchandise a primary and sufficient cause for the 
 panic of 1857; and the "hard currency" theorists 
 find its explanation in the use of paper money. For- 
 tunately, the figures of the Clearing House afford 
 such a palpable demonstration of a direct and simple 
 cause in this instance, that all complicated questions 
 of political economy may be left out of view. Yet, 
 it is often important as well as interesting to look 
 back over the history of things, and to discover, if 
 possible, the exact point where judgment was lacking, 
 and where a slight turn of the rudder would have 
 saved the vessel from destruction. The chart con- 
 structed from the Weekly Statements is instructive 
 on this point. 
 
 In August, 1853, commenced the publication of the 
 Weekly Statements; and in October following, the 
 Clearing House was organized. The lines of the chart 
 of that year begin in a straggling, and apparently 
 dubious manner, as if engaged in an uncertain experi- 
 ment ; but they are brought into complete harmony 
 in July, 1854, when the influence of the Clearing 
 House is perfectly established ; and from this point 
 they rise and fall together. During the year ending 
 with July, 1855, the specie was kept at twenty-five 
 per cent of the deposits. The evil of disproportionate 
 expansion by the banks separately, which was so 
 grievous before the organization of the House, was 
 effectually cured ; but afterwards came the evil of 
 harmonious expansion, which was something quite 
 new, and not contemplated. The balance-wheel was 
 perfect so far as to prevent individual members going 
 astray ; but for want of a fixed scale, it did not pre-
 
 366 THE PANIC. 
 
 vent the whole from going astray together. In 
 August, 1855, the specie line fell below the scale, arid 
 did not again ascend to it before the suspension in 
 October, 1857. The transient recovery in February, 
 and in June, 1856, was extraneous from the market, 
 being caused by the payment of a State loan at the 
 former, and of a city loan at the latter date. The 
 average of specie with respect to the deposits, sftnk 
 from twenty-five per cent in 1854-5, to twenty-one 
 per cent in 1855-6, and to eighteen per cent in 1856-7, 
 while the loans were steadily on the increase. 
 
 It is held that a fair proportion of the resources 
 of a bank should be reserved in coin, to meet im- 
 mediate liabilities. The market is uneasy with high 
 loans and low specie. Tried by this measurement, the 
 force of our bank expansion after August, 1855, is 
 exhibited in a most striking manner. The proportion 
 of coin with the whole resources for the year, ending 
 July 31. 1855, being preserved in the subsequent 
 years, would have given but eighty-five millions of 
 loans on the actual coin of 1855-6, whereas they were 
 $100,488,046 ; and it would have admitted but seventy- 
 six millions of loans on the actual coin of 1856-7, 
 whereas they were $111,174,665. That is to say, that 
 the loans of 1855-6 were fifteen millions of dollars in 
 excess of the scale, and the loans of 1856-7 were 
 thirty-five millions in excess ! These results are 
 astounding. If such a departure from equilibrium 
 does not foreshadow the suspension of specie pay- 
 ments as inevitable, it lessens our surprise that it 
 should have occurred (to borrow the words of the 
 Bank-Superintendent) " with overflowing granaries,
 
 BANK EXPANSION. 367 
 
 exemption from pestilence, neither internal insur- 
 rection nor foreign invasion, and our country at peace 
 with every nation of the earth." * 
 
 The chart shows that, in July 1856, a new gap was 
 opened between the loans and their basis. The depos- 
 its receded, but "bank expansion went on, in defiance 
 of this significant change of current, and the contin- 
 ued depression of specie ; until on the 8th of August, 
 1857, it reached its highest point. The loans, then, 
 with respect to the specie reserve, were in excess 
 forty-jive millions of dollars ! 
 
 All these movements are shown on the reduced 
 diagram, on which the point of departure from the 
 scale is indicated by sTraight lines. It is manifest 
 that the rules of sound discretion in our bank manage- 
 ment were lost sight of as far back as July, 1855 ; and 
 since the expansion was not arsested at any subse- 
 quent period, when it was possible, but one result 
 could follow. In fact, it appears that the escape from 
 panic in the two previous years was remarkable, 
 since the excess of loans, with respect to the specie, 
 reached, on the 29th of September, 1855, thirty-three 
 millions of dollars, and on the 27th of September, 1856, 
 thirty-eight millions .of dollars ! 
 
 The relative condition of our city banks at the 
 different periods named, with their condition on the 
 31st of July, 1858, is strikingly shown by the amount 
 of loans that their average reserve of specie would 
 have admitted, in the same proportion, viz. : two 
 hundred and thirty-five millions of dollars ! 
 
 * Report of 1867, page 4.
 
 368 THE PANIC. 
 
 It is, doubtless, the examination of the whole ground 
 here set forth, that has induced a majority of our 
 bank officers to name arbitrarily a proportion of 
 specie, as proper to be kept in reserve from the 
 resources.* The Bank Superintendent, also, has recom- 
 mended to the Legislature, that the banks be obliged 
 to maintain an average of twenty per cent of their 
 deposits in coin ; though for want of a more practical 
 acquaintance with bank figures, he quotes their depos- 
 its in gross at $72,602,678, instead of $55,377,224, 
 omitting to deduct the clearings. It may rather be 
 doubted whether the proportion of twenty per cent 
 is sufficient to assure a steady equilibrium. That of 
 the years ending with July in 1854 and 1855, was 
 over twenty-five per cent of the net deposits, while 
 that of 1856 was but little below twenty, and that of 
 1857, eighteen per cent. 
 
 The circulating bills may safely be left out of view 
 in this provision, as their independent security has 
 been abundantly tested. 
 
 AN EXCEPTION. 
 
 A very important exception remains to be noticed, 
 as to a portion of our city banks, in connection with 
 
 * At a meeting, March 16th, 1858, where forty-two banks were represented, the 
 following resolution was adopted : 
 
 Resolved, That in furtherance of the end proposed by our agreement, to discon- 
 tinue the payment of interest on deposits, and in accordance with the recommend- 
 ations of the Report of the Committee on that subject, we also agree, each to keep 
 on hand, at all times, an amount of coin equivalent to not less than twenty per 
 cent of our net deposits of every kind, which shall be made to include certified 
 checks and all other liabilities (except circulating notfs), deducting the daily 
 exchanges received from the Clearing House.
 
 BANKS NOT WANTED. 
 
 the expansion of credit which prepared the conditiong 
 of the panic. 
 
 From 1839 to 1850, our banking capital was in- 
 creased but little over three hundred thousand dol- 
 lars ; and during these eleven years, more than thirty 
 per cent had been added to our commerce and popu- 
 lation. Unquestionably, there was room for some 
 additional banks. Several were organized, and soon 
 acquired such a prosperous business, that bank stock 
 became a favorite investment. It was so easy to 
 " get up " a bank, and its offices were so respectable, 
 that Tellers and Clerks, who were ambitious to 
 become Cashiers, called their friends together, and 
 began subscription-lists. A retired capitalist was 
 flattered with an offer of the Presidency ; mechanics 
 and merchants were pleased at the idea of becoming 
 Bank Directors, with the enjoyment of unrestricted 
 " facilities ;" lawyers and notaries were flattered with 
 the hope of counsel and protest fees ; and all joined 
 together to get stock taken. Scores, if not hundreds, 
 of small subscription-books were in circulation at the 
 same time, in all trades and professions. Under- 
 clerks in old banks, who were desirous of promotion, 
 aimed at tellerships in the new institutions, and 
 sought to make claims by soliciting stock ; sub- 
 scribers became solicitors, on condition of having 
 their friends appointed to clerkships ; brokers became 
 solicitors, in view of large commissions for the pur- 
 chase of securities ; stationers were actively engaged, 
 under a promise of furnishing the ledgers and account- 
 books ; engravers were set to work, by the promise 
 of employment in their art ; and people in particular 
 
 16*
 
 370 THE PANIC. 
 
 sections were stimulated by the prospect of increased 
 value to their real estate, by the near location of a 
 bank. In 1851, a new bank was started for every 
 month in the year ; in 1852, one for every two 
 months ; nine were added for 1853 making twenty- 
 seven in three years, with an aggregate capital of 
 over sixteen millions of dollars. If this had been 
 real capital, the case had been better ; but it was 
 mostly fictitious merely paper capital nothing, in 
 fact, but the creation of a book debt, with hypothe- 
 cated stock certificates as collateral security. More 
 than half of it was of this character and at least 
 another fourth was in excess of the commercial want ; 
 but it was legally organized, and it attracted, or hired 
 deposits, and so created a larger basis for more credit 
 in the shape of loans, which, in August, 1857, were 
 extended to over forty millions of dollars. It is safe 
 to say, that two-thirds of this prodigious debt was a 
 grievous burden, super-imposed on the legitimate 
 debt of the community ; and that, instead of benefit, 
 it brought embarrassment and injury to the trade and 
 labor of the city. 
 
 This was the expansion that prepared the crisis of 
 1857. It was an overgrowth of banks, and an over- 
 toppling of credit on the overgrowth. It does not 
 alter the case, that many of the new institutions have 
 since become entirely successful and well managed ; 
 but it furnishes the ground of an important exception 
 in favor of the older banks, as to exact responsibility 
 for the panic. These, almost without an exception, 
 maintained their discount lines nearly unchanged, 
 while the panic was created by other institutions.
 
 AN EXCEPTION. 371 
 
 The affairs of some of the new banks, also, had been 
 so judiciously managed as to rank them with the 
 exceptional part of the system. 
 
 The author does not pretend to find a complete 
 apology for the older banks, in the fact here stated. 
 If their managers were more experienced, they might 
 have furnished counsel, and ability, to guard the 
 system against the calamity which the figures of the 
 Clearing House prognosticated as far back as August 
 1855. 
 
 Bank government, as it relates to the whole system 
 in the City of New York, is made difficult by the 
 composition of its management. The twenty old 
 banks, with their established machinery, worked 
 together with comparatively little difficulty ; but 
 when forty others were added, making an aggregate 
 Board, of directors and bank officers, of over eight 
 hundred persons, without any representative body to 
 deliberate upon common interests, the whole system 
 was out of control. To this fact, must be added 
 another, before the difficulties of the case can be fairly 
 appreciated. A very large proportion of the new 
 bank managers were without experience in the busi- 
 ness. Presidents were chosen with no reference what- 
 ever to their knowledge or capacity. One had 
 acquired wealth by selling dry-goods, and therefore 
 he was fit for a bank president ; another had been 
 equally successful in making shoes ; another had 
 been a ship-chandler, and fortunate in the schooner 
 coasting-trade ; another had been a stage-driver : not 
 a few were men of the narrowest minds, wholly lack-
 
 372 THE PANIC. 
 
 ing in mercantile education, and without the ability 
 to conduct the simplest commercial correspondence. 
 It is due to some of these gentlemen to say, that if 
 they were ignorant in the beginning, they have im- 
 proved by close attention to practical duties, and that 
 for general intelligence they are not far below the 
 average of their cotemporaries in office. They have 
 yet to learn, however, that it is one thing to be a bill 
 broker and a shrewd calculator of balances, and quite 
 another to understand the principles of true economy 
 in finance. 
 
 The natural consequences of placing incompetent 
 men in the responsible office of bank president, could 
 not in all cases be averted. Several instances of gross 
 mismanagement occurred, in which institutions were 
 saved from insolvency, either by a change of officers, 
 or by the help of the Associated Banks. Several others 
 maintained a feeble existence for a short time, and 
 sunk into final discredit ; and in five or six cases, at 
 least, there were such serious deficiencies, as to justify 
 suspicions of dishonesty and collusion among the Di- 
 rectors. How the legal weekly and quarterly state- 
 ments could be sworn to, up to the time when the entire 
 stock of a bank was lost or squandered, is a question 
 for the parties concerned to settle with themselves. 
 
 It is not necessary to clog this sketch with the 
 numerous accidents that were added from day to day, 
 to increase the popular excitement, and to multiply 
 its terrors. The embarrassment of the exchanges 
 between different parts of the country, and the conse- 
 quent stoppage of remittances ; the depreciation of
 
 THE INDEPENDENT. 373 
 
 the bank currency, which the farmer refused to take 
 in payment for produce ; the failure of individuals and 
 corporations, including the Illinois Central Railroad 
 Company ; the run on the Savings' Banks all these 
 were but the gathering wrecks that fell in as the tor- 
 rent rushed on. 
 
 There was one cause of aggravation, however, that 
 cannot be called an accident. The weekly publica- 
 tion of failures, in The Independent, a religious paper 
 of wide circulation, spread dismay over the country. 
 This frightful record was copied by all the principal 
 journals, from Boston to New Orleans. It sharpened 
 and fed the common appetite for calamities. It cut 
 off remittances from debtors who were too ready to 
 adopt the plea, that " money would be of no use to 
 broken merchants," and to follow it up by assuming 
 that "all were as good as broken" a pretext that 
 found some color of support, in a record that em- 
 braced, by the middle of October, more than twelve 
 hundred merchants of all classes, incorporated stock 
 companies, and banks. It became a reproducing 
 cause of embarrassment, and one of the chief agencies 
 in propagating that moral insolvency which consti- 
 tuted a prominent feature of the panic. The sanctity 
 of engagements was openly repudiated, under the 
 pretext of universal bankruptcy. The authors of 
 this commercial necrology could urge nothing in its 
 defence, but the improved sale of a newspaper! 
 Their excuse might be thoughtlessness, or incapacity 
 to see that any rule of decency is broken by holding 
 up the misfortunes of individuals to gratify a morbid 
 public curiosity.
 
 374: THE PANIC. 
 
 The disclosures of the panic show, measurably 
 what was the state of things before it commenced, 
 Notwithstanding the appearances of prosperity, there 
 existed all the conditions of extraordinary financial 
 disturbance. 
 
 A prodigious weight of insolvency had been car- 
 ried along for years in the volume of trade. Extrav- 
 agance of living had already sapped the. foundations 
 of commercial success, in hundreds of instances where 
 credit supplied the place of lost capital. Mismanage- 
 ment and fraud had gained footing in public compa- 
 nies to an incredible degree. Hundreds of millions 
 of bonds were issued with little regard to the validity 
 of their basis, and pressed upon the market by dis- 
 honest agents, at any price, from sixty down to thirty 
 cents on the dollar. False quotations were obtained 
 by sham auction sales. The Press, in particular 
 instances, was bribed into silence, or became a part- 
 ner in the profits to be derived from the various 
 schemes which it commended to general confidence.- 
 The land grants by Congress to railway companies 
 gave renewed activity to speculation, and State Legis- 
 latures were bribed to locate roads to serve indi- 
 vidual interests. Public, as well as private credit, 
 was compromised. The example of corruption in 
 Government commissions and contracts, and of bad 
 faith witli neighboring nations, was an extreme, but 
 a faithful expression of the tone of popular feeling 
 with respect to the sacredness of trusts and obligations. 
 
 The general mass of credit in the United States 
 rested on these facts ; and the strictly commercial 
 part of it was involved in the common risk. There
 
 CAUSE OF FLUCTUATION. 375 
 
 were few merchants whose secret drawers did not 
 contain sore evidences of capital sunk or withdrawn 
 from legitimate use, to be invested in some dazzling 
 speculation. The deficiency of means to carry on 
 business could be supplied only by an increase of the 
 personal credit. 
 
 It is this personal credit that prepares all the 
 extreme fluctuations of our commercial or financial 
 system. The bills payable of the merchant represent 
 not only his merchandise debt, but his debt for sunken 
 capital, his debt for railway bonds, his debt for 
 extravagant living, for real estate, and for fancy 
 stocks. The one hundred and twenty-two millions of 
 bills payable that constituted the bank loans in 
 August, was probably less than one-fourth of the 
 personal debt then current in the city of New York. 
 Three times that amount besides, floated in other 
 channels, in the hands of private capitalists, in trust 
 and insurance companies, in open book account, and 
 in foreign banks. Immediately on the accession of a 
 financial pressure, this entire mass of debt starts into 
 new activity. It presses on every bank, and through 
 every channel, for negotiation, renewal, or compro- 
 mise. That which is least entitled to consideration 
 the extra-commercial portion is most pressing, and 
 leads the market in paying high interest; while 
 that which represents real trade, is reluctant to go 
 above the bank rates. Speculative rates are thus 
 imposed on the whole market. 
 
 There are no positive limitations to the expansion 
 of individual credit. A pernicious practice* prevails 
 
 * This practice originated with the commission merchants.
 
 376 THE PANIC. 
 
 of making promissory notes payable to the order of 
 the drawer, and thus negotiable without indorsement. 
 When the seller finds that his customer has reached 
 the line of credit that he is willing to allow, instead 
 of refusing to sell more, and thus offering a prudential 
 restriction to the extent of his business, he goes on 
 selling, and disposes of the accumulating excess of 
 the buyer's paper in "the street." In this way he 
 overstocks the market with goods, and gives a credit 
 of thirty thousand dollars to a man whom he considers 
 it unsafe to trust for more than three thousand ; and 
 the risk of twenty-seven thousand is scattered broad- 
 cast in the community ! The buyer knows that his 
 creditor gets rid of his notes, and what does he care 
 if strangers lose by him ? This should be regarded 
 as a commercial offence of the gravest character. It 
 is impossible to have an honest money-market while 
 it is tolerated. What better is it, than a trick of the 
 manufacturer and wholesale merchant to reap the 
 profits of trade while throwing off his risks upon inno- 
 cent people ? It corrupts credit, and turns commerce 
 into mere headlong chances. 
 
 OF BANK CURRENCY. 
 
 Of all theories intended to explain our financial 
 fluctuations, that which attributes them to the Tjank 
 currency has least foundation in fact. A confusion 
 of terms is probably the chief source of the misunder- 
 standing that prevails on this point. 
 
 In common parlance, lank currency means circulat- 
 ing bank notes " paper money." Yet, it would seem
 
 BANK CURRENCY. 377 
 
 that some writers include under the same head, 
 checks and promissory notes, if not also loans and 
 deposits ; considering them all to belong to the 
 volume of the business, and to be subject to expan- 
 sion or contraction at the will of bank managers. 
 Thence comes the general idea, that whatever is not 
 specie, in bank transactions, is lank currency. 
 
 WEBSTER defines currency to be that which " con- 
 tinually passes from hand to hand, as coin or bills of 
 credit; circulation, as the currency of cents, or of 
 English crowns ; the currency of bank bills or Trea- 
 sury notes." 
 
 That which " continually passes from hand to hand," 
 in buying or selling, is the primary idea of currency. 
 Bank currency can properly refer only to that which 
 emanates from banks ; and circulating notes, or 
 " paper money," is the only form of credit which they 
 are authorized by law to issue, or which practically 
 answers the function of currency in their trans- 
 actions. 
 
 Again, lank currency is something that it is in the 
 power of the banks to control to increase, or to 
 diminish ; and above all, which they are bound to 
 redeem on presentation. 
 
 If this definition is correct, it cannot include 
 checks and promissory notes ; because, in the first 
 place, these are not issued by the banks ; in the 
 second, they do not continually pass from hand to 
 hand ; and thirdly, they are not redeemable by the 
 banks. 
 
 In reality, the several terms employed represent 
 but one thing. Checks, promissory notes, and loans
 
 378 THE PANIC. 
 
 are mere accessories of the deposit. The first are 
 issued by the individual dealer in his discretion, and 
 the bank pays them out of his deposit ; promissory 
 notes are a dormant security during the continuance 
 of the loan, which itself is made available to the 
 dealer in the character of a deposit. The only ques- 
 tion to be answered is, therefore, whether deposits 
 can be called bank currency. The only approach to 
 circulation by any document which represents the 
 deposit, is in the check, when it is certified and sent 
 abroad to pay a debt, or when it is deposited in 
 another bank and redeemed through the exchanges. 
 The "certificate of deposit" is the same thing in 
 another form. The promissory note, when it is dis- 
 counted, is filed away in the vault, and is rather with- 
 drawn from, than put into circulation. 
 
 Banks cannot govern the amount of deposit by the 
 dealers, otherwise than by discounting paper, and 
 giving them credit in account for the proceeds. They 
 cannot govern the issue of promissory notes in the 
 market, this being the act of individuals. It would 
 be a solecism, to apply the term bank currency to 
 documents which are issued by every merchant in 
 the community without the knowledge of bank 
 managers. 
 
 Finally : banks do not send out, for circulation, a 
 single document in any shape, excepting the bank 
 note "paper money." 
 
 Whatever terms may be employed to distinguish 
 the different evidences of debt which are circulated 
 in the market whether individual currency or com- 
 t \ercial currency it seems proper to confine the
 
 PLANS AND CUEKENCY. 
 
 379 
 
 application of bank currency to bank notes. It is 
 certain that this is what the advocates of " hard cur- 
 rency" aim at, when they urge their theory as the 
 only preventive of excessive financial fluctuations. 
 
 The following table shows the relative movement 
 of loans and circulation in our city banks, from 
 August, 1853, to September, 1858, excepting periods 
 which exhibit no remarkable fluctuation : 
 
 Aug. 
 
 6 to Nov. 5, 
 
 dec. 
 
 $14,796,987 
 
 dec. 
 
 18,307 
 
 Nov. 
 
 12 to Mar. 4, 
 
 inc. 
 
 11,676,012 
 
 dec. 
 
 77,799 
 
 March 4 to July 8, 
 
 dec. 
 
 6,211,140 
 
 dec. 
 
 14,073 
 
 July 
 
 8 to Aug. 5, 
 
 inc. 
 
 5,373,860 
 
 dec. 
 
 71,109 
 
 Aug. 
 
 5 to Dec. 9, 
 
 dec. 
 
 13,129,505 
 
 dec. 
 
 1,640,815 
 
 Dec. 
 
 9 to April 7, 
 
 inc. 
 
 13,905,758 
 
 inc. 
 
 290,701 
 
 June 
 
 2 to July 28, 
 
 inc. 
 
 7,886,147 
 
 dec. 
 
 146,111 
 
 Aug. 
 
 25 to Nov. 10, 
 
 dec. 
 
 8,150,314 
 
 inc. 
 
 506,513 
 
 Dec. 
 
 8 to Mar. 15, inc. 
 
 11,338,495 
 
 inc. 
 
 1,407 
 
 April 
 
 12 to May 31, 
 
 dec. 
 
 5,389,160 
 
 dec. 
 
 12,374 
 
 May 
 
 10 to Aug. 2, 
 
 inc. 
 
 8,417,770 
 
 dec. 
 
 16,442 
 
 Nov. 
 
 8 to Aug. 1, 
 
 inc. 
 
 18,088,411 
 
 dec. 
 
 281,299 
 
 Aug. 
 
 1 to Oct. 17, 
 
 dec. 
 
 23,351,224 
 
 dec. 
 
 577,981 
 
 1853-4 
 
 1854 
 
 1854 
 
 1854 
 
 1854-5 
 
 1855 
 
 1855 
 
 1855-6 
 
 1856 
 
 1856 
 
 1856-7 
 
 1857.. 
 
 In six of the thirteen periods cited, the movement 
 of the currency was adversely to that of the loans ; 
 and in the other seven, though in the same direction, 
 it is manifest that there was no governing sympathy 
 between them. In one case, the loans were reduced 
 fifteen millions of dollars, while the circulation dimin- 
 ished but eighteen thousand they were then increased 
 twelve millions, while the circulation continued to fall, 
 but in four times greater ratio. In two instances, the 
 loans increased eleven millions of dollars : in one of 
 them, the currency was diminished seventy-eight thou- 
 sand, and in the other it was augmented one thousand.
 
 380 THE PANIC. 
 
 In one case, the circulation increased five hundred thou 
 sand dollars, and in another it diminished six hundred 
 thousand, with a coincident reduction in the loans of 
 eight and twenty-three millions. Only once in the 
 table is there an appearance of sympathy when the 
 loans fell thirteen millions, and the circulation one 
 million six hundred thousand dollars ; and in this case, 
 the withdrawal of deposits fully accounted for the 
 reduction of loans, leaving that of the circulation to 
 be otherwise explained. The scarcity of exchange at 
 points in debt to New York will, at any time, cause 
 our city currency to be rapidly returned from all parts 
 of the country. 
 
 The annexed diagram shows the relative fluctuation 
 of the currency and the loans from August, 1853, to 
 December, 1857. The extreme range of the former 
 was about one and a half millions of dollars, while 
 that of the latter was over forty millions. 
 
 The opinion that bank loans are governed by the 
 currency was justified under the old laws, which 
 allowed an issue of bills equal to twice the amount 
 of capital, without a pledge of securities, and without 
 personal liability for the debts ; but it is groundless 
 under our State system. The old laws would have 
 given an issue of one hundred and twenty millions of 
 bills to our present city capital ; whereas, we have but 
 ten millions, and but three-fourths of that in circula- 
 tion.* 
 
 * The Superintendent of the Banking Department, in his report for 1867, in 
 view of the fact that the New York City bank currency was contracted but a 
 million and a half during the panic, says : " This would seem clearly to demon- 
 strate, that whatever may lead to a suspension of specie payments, the currency 
 of our banks, properly secured, is not an element in its production."
 
 ; 
 
 T~ 
 
 *?.-
 
 BANK CURRENCY. 381 
 
 A proposition, that the issue of bank bills, of a less 
 denomination than twenty dollars, shall be prohibited 
 by law, has met with a good deal of public com- 
 mendation. It is not easy to see how this could add 
 any security to our bank currency, nor how it would 
 guard our financial system from the dangerous fluctu- 
 ations consequent on excessive commercial credit. 
 It might restrict loans, by making it necessary for 
 banks to keep on hand a larger reserve of coin, and 
 therefore lessen the profits of the business. One of two 
 things must then follow : either banking capital will 
 be surreptitiously employed to make up the deficiency 
 of profit, or it will seek more productive methods of 
 organization. Another result might be expected : 
 credit suppressed in one form will find another, beyond 
 the reach of legislation. The personal check, or order, 
 would take the place of the bank bill in all remit- 
 tances under twenty dollars, involving delays and 
 expenses of collection that would fall most heavily 
 on small dealers or laborers, who can least afford them. 
 Men who keep no bank account, women, and minors, 
 would be obliged to pay a broker's commission for 
 the most trifling remittance. The amount of this 
 small check credit would be infinitely greater than 
 the decrease of bank currency, without its convenience 
 or security. 
 
 In the midst of the late panic, everybody felt the 
 necessity of doing something to prevent its recur- 
 rence ; and under the weight of its consequences, 
 various legislative restrictions have been proposed, 
 with a view to render our banking system less unsta- 
 ble in future. But it may well be questioned, whether
 
 382 THE PANIC. 
 
 more mischief is not to be apprehended from the con- 
 stant tinkering of politicians than from any other 
 source not excepting the errors of past legislation, 
 which we are gradually correcting by experience, and 
 by voluntary action, without the aid of law. 
 
 BANK-NOTE REDEMPTION. 
 
 The diversion of bank currency from its legitimate 
 channels, and the establishment of a trade in it be- 
 tween the banks themselves, has had a share in the 
 general derangement of credit, and in the misapplica- 
 tion of banking capital. 
 
 The only proper use of currency is, circulation to 
 pay wages, to buy commodities in store or market, 
 and to answer the convenience of daily expenditure 
 by the people. The privilege of issue is given by 
 law for this purpose, and for no other. The advant- 
 age to the bank consists in the currency fulfilling this 
 function of circulation in its passing from hand to 
 hand, giving life to industry, and forming the basis 
 of the larger operations of commerce. The bank 
 pays it out for notes discounted or for deposits, and 
 realizes interest upon it until it is returned for redemp- 
 tion. The more circulation, the more profit. Itis, 
 therefore, an object for banks to keep out their bills 
 as long as possible. They resort to various expedients 
 for this purpose, such as discounting notes, on con- 
 dition that the bills shall be taken to a distance, and 
 paid out for purchases of wool, for wages on a rail- 
 road, or other service. A large aggregate of cur- 
 rency is thus forced out upon the country, to find its
 
 THE REDEMPTION SYSTEM. 383 
 
 way back for redemption through the usual channels 
 of exchange. The city merchants who received this 
 currency in remittance for debt, formerly sold it to the 
 money-broker at a certain rate of discount, which 
 varied more or less from one per cent. It might be 
 resold by the broker at a smaller rate to manufactur- 
 ers, who could save by this process a certain per 
 centage on their entire disbursements, and it would 
 then start out on a new tour of circulation through 
 the shops. Banks could often better afford to divide 
 with brokers the profits of a perpetual circulation than 
 to redeem it in gold. Those banks which were least 
 able to redeem, and whose bills were, therefore, least 
 entitled to credit, were most persevering and ingen- 
 ious in keeping the community supplied with their cur- 
 rency. This was a debased paper currency. Accord- 
 ingly, as it supplied the market, the bills of better 
 banks, which would not stoop to competition in such 
 business, were kept out of circulation. The result, 
 so far as our city banks are concerned, is, that their 
 circulation hardly pays the cost of maintaining it. 
 
 A new source of profit was suggested to some of 
 our city banks. If the redemption that was distri- 
 buted among the money-brokers could be monopolized 
 by one or two institutions, it would yield a rich 
 revenue ; and it could easily be attracted by reducing 
 the rates of redemption so low as to exclude indi- 
 vidual competition. This was the origin of the New 
 York redemption system, copied from the Suffolk 
 Bank of Boston. Coupled with the payment of 
 interest on country deposits, it had grown into aston- 
 ishing activity before the panic of 1857. It worked
 
 384 THE PANIC. 
 
 admirably as a piece of machinery, with the popular 
 commendation that it restricted the bank currency 
 by enforcing prompt redemption, and saved our mer- 
 chants a heavy brokerage. It was a great conve- 
 nience in the first days of the panic, when private 
 capital was withdrawn from the purchase of currency, 
 and when our merchants, but for the redeeming banks, 
 would have been overburdened with unavailable 
 notes. 
 
 But the Redemption System, like everything else 
 that was susceptible of abuse, was turned aside from 
 its legitimate purpose, and made to answer a mis- 
 chievous end. The low rate at which the bills were 
 taken in New York accelerated their return in bulk, 
 as a basis of exchange, or for credit in account, and 
 thus their distinctive character as circulation was in 
 a great measure destroyed. This is plainly illustrated 
 by the diagram on the opposite page. 
 
 The natural course of the circulation is represented 
 by the curved lines a, a, a. It is paid out by the 
 banks at Buffalo, Syracuse and Whitehall, and after 
 performing its function in the service of trade, it 
 reaches the common point of liquidation New York. 
 Here, it is assorted, charged in account to the issuing 
 banks, and sent home by express, to be again issued, 
 circulated, and redeemed, in the same manner. This 
 is our bank currency in legitimate use as contem- 
 plated by law. 
 
 But the cheap redemption, so desirable in a com- 
 mon state of the market, became, virtually, a pre- 
 mium, on the currency, at New York. The tendency 
 was then to take it out of the curved lines of a health-
 
 BANK-NOTE REDEMPTION. 385 
 
 fill circulation, and to throw it into the elliptical lines 
 5, J, in which it profited nobody so much as the stock- 
 holders of the Express Companies. The country 
 banks might keep their own bills in a perpetual cir- 
 cuit by exchanging them with each other, and thus 
 creating a trade in them. The same packages were 
 not unfrequently kept unopened in the circuit, and 
 reissued in bulk as often as they were needed to 
 supply balances. 
 
 "When, from having been to much expanded, there 
 arises necessity for a general contraction of credits, 
 if then a portion of the circulation is withheld by the 
 banks, as it should be, the redemption of the other 
 portion would go on quietly, and no apprehension 
 would be excited in the public mind as to the safety 
 of bills. The proportion of capital appropriated to 
 this special service would keep in harmony with the 
 diminishing volume of commercial credit. But this 
 does not commonly happen. To keep out the circu- 
 lation, and to increase it, gives relief to the bank. If 
 it cannot enforce the liquidation of its loans, it is still 
 more urgent to keep its bills in circulation to throw 
 out more, and to stave off actual redemption. The 
 redeeming banks are then likely to be required 
 to do one of two things : either to appropriate more 
 capital to this service, or to reject the bills. In the 
 former case, its commercial loans must bear the brunt, 
 and in the latter, it would spread alarm among bill 
 holders, and aggravate the evil that it wants to ward 
 off. 
 
 Precisely this state of things occurred in the sum- 
 mer of 1857, In spite of the best management by 
 
 17
 
 386 THE PANIC. 
 
 the redeeming banks, the circuit of currency credit 
 was kept up, and relatively, if not positively, in- 
 creased. Currency was made to redeem currency ; 
 that is, the bills of one bank were paid for by the 
 bills of all others which it remitted for credit in 
 account ; and thus there was no actual redemption. 
 
 Another fact, which was claimed to be beneficial 
 in an ordinary state of things, now proved a source 
 ^of apprehension and real danger. The credit given 
 to an unsecured currency by the indorsement of the 
 redeeming banks had obtained for it a wide circula- 
 tion, to the displacement of bills that were based on 
 State and United States stocks. It was now seen 
 that this credit had no other dependence than a cur- 
 rent deposit by the issuing bank, which deposit \vas 
 in very small proportion to its outstanding bills, and 
 that the redeeming bank was prompt to the hour in 
 repudiating those bills, if the deposit was not main- 
 tained. This was a fallacious credit, entirely inde- 
 pendent of the separate ability of the issuing banks. 
 The general result was, that bills were likely to fail 
 while in transit, and they would not then be admitted 
 as a deposit, which would involve the rejection of 
 other bills ; and so the row of bricks began to tumble 
 in both directions. 
 
 There was no incident of the panic, that spread its 
 terrors abroad with such sure and rapid steps, as the 
 rejection, by the redeeming banks, of bills which they 
 had been accustomed to receive on deposit. If it had 
 been possible to remove all other causes of excite- 
 ment, that alone would, probably, have involved the 
 suspension of specie payments. It filled all the shope
 
 WILL SUSPENSION OCCUR AGAIN? 387 
 
 in the country with alarm. It created mobs in our 
 savings' banks, and pushed forward the panic by 
 exciting the fears of the multitude. 
 
 WILL SUSPENSION OCCUR AGAIN? 
 
 "Well," says a judicious bank President, "this 
 will be a warning to our merchants! It is to be 
 hoped that such experience will burn into them some 
 lessons about their long and excessively-extended 
 credits." 
 
 Yes, Mr. President; and we hope it will be a 
 warning to you, also ! It was not our long credits 
 only, that threw us into embarrassment, but your 
 expansion, and then your repudiation of all credits ! 
 Shall we not profit by both of these " experiences ?" 
 
 Our bank officers are invested with a controlling 
 power over the market. They can positively command 
 the ship of commerce, and guide it through the storm, 
 or they can dash it upon the rocks. 
 
 It is a false notion, that panic comes from myste- 
 rious and unmanageable causes. So long as we give 
 credence to this commercial fatalism, and accept it as 
 an excuse for the incapacity of financial managers, we 
 shall be liable to a recurrence of panic whenever an 
 adverse wind sweeps the ocean. 
 
 " If there had only been an able man among bank 
 officers, in whom the others had confidence, to take 
 the lead, the panic might have been crushed in the 
 bud." 
 
 This was a common and freely-expressed opinion 
 among all classes of merchants. It is a singular fact,
 
 388 THE PAKIO. 
 
 that must occupy the foreground in any history of the 
 suspension of 1857, whatever part different writers 
 may assign to accessory causes. In the fright and 
 confusion which succeeded the failure of the Ohio 
 Life Insurance and Trust Company, our bank officers 
 fell back, each to his separate place, to " fortify" his 
 institution, though at the expense of every private 
 and common interest of the market. They did not 
 recognize, in any one of their number, that superiority 
 of intelligence and capacity in management, which 
 in times of anarchy and doubt never fails to be felt 
 never fails (where it is known to exist) to be called on 
 to lead. Never, in the whole course of our commer- 
 cial history, did the public distress cry louder for the 
 ability that can unite separate interests for a common 
 purpose ; and for the want of it, no common purpose 
 was created. Every thing went by chance, or by 
 necessity. 
 
 As the recurrence of financial pressure is only less 
 certain than the tides , of the ocean, and as our com- 
 mercial dealings are annually becoming more ex- 
 tended and complicated, we may look for the damage 
 resulting from the mismanagement of banks to be 
 more and more serious, unless measures are adopted to 
 prevent it. 
 
 Efforts have been made, occasionally, during the 
 last ten years, to organize something like a College 
 of Finance, in which the general interests of the 
 market should be kept in revision but without suc- 
 cess. This result, however, is now foreshadowed by 
 the Clearing House. Its records are the theme of
 
 A COLLEGE OF FINANCE. 
 
 daily conversation in financial circles. They form 
 the basis of our city bank administration. A nucleus 
 is thus already created, to attract the ideas which 
 have heretofore floated loosely in the minds of men 
 without object. 
 
 A college composed of intelligent merchants and 
 bankers practical men would combine individual 
 experience and research. By elucidating the causes 
 of financial fluctuation, and its bearings on the gen- 
 eral enterprise of the country, and therefore on labor, 
 they might aid materially to correct popular errors 
 with respect to our banking system, whilst securing 
 needful instruction to themselves. At present, all the 
 statistics of finance, excepting only those of the Clear- 
 ing House, are gathered up by the industry of the 
 newspaper press. "The commercial editor" is the 
 principal collator, analyzer, and elucidator of finan- 
 cial data in the city of New York ; while the profes- 
 sional banker conceives his duty to be confined to the 
 mere accidents of the business during five hours of 
 each day ! 
 
 "With a deliberative body in existence (such as is 
 here suggested) the suspension of specie payments 
 could not have occurred in 1857 ; because the violent, 
 separate, and destructive action of the banks, which 
 started the panic must have been overruled by sober 
 counsel. 
 
 There are certain anomalies in force, as applied to 
 banks, by which they are exposed to extreme liabili- 
 ties, not only in seasons of pressure, but at all times. 
 By a strange absurdity of law, the deposits of a bank
 
 390 THE PANIC. 
 
 are held to be payable in specie, on demand, although 
 the amount of specie in the whole country is not suf- 
 ficient to pay the one-twentieth part of them. It is, 
 therefore, plain, that the banks might be forced into 
 suspension by the depositors at any moment, without 
 regard to the state of the market. 
 
 The actual relation between the bank and the dealer 
 gives no color of right to the latter to demand specie 
 for his deposit. He is fully aware that the bank does 
 not consider itself holden for the coin. He does not 
 give coin ; and why should he take it ? He deposits 
 a form of credit^ or individual currency checks. 
 "When this form of credit sinks in the general depre- 
 ciation, by what rule of consistency or justice can he 
 require the bank to fill up the deficit ? The deprecia- 
 tion originates with the dealer, in the excess of trade, 
 and not with the bank : it may encourage the excess 
 by loaning too freely, but the dealer is not obliged to 
 borrow. There is obviously no propriety in his load- 
 ing the bank with the ill consequences of his own 
 action. Yet such is the accepted rule. 
 
 This is the bull goring the ox. If the ox attempts 
 to gore the bull, the case is changed. Debts owing 
 by the bank are held payable in coin on the instant ; 
 but debts due to the bank, by the very same party, 
 are held to be negotiable and renewable', consistently 
 with commercial honor and usage. In one case, the 
 failing debtor is declared " broken," while in the other, 
 his credit continues unimpaired. 
 
 As a general fact, the depositors of a bank are also 
 its borrowers ; and if they demand their deposits 
 in specie, they ought to pay their loans in specie.
 
 PKACTICAL ABSUBDITEES. 391 
 
 But no written agreement could be made less equivo- 
 cal than the understanding between the bank and the 
 dealer, that the deposit will be held payable by check, 
 or in bank bills ; and that its demand in coin out of 
 the usual practice, or its final withdrawal as a current 
 account, before the payment of the loan, will be a 
 breach of honor and good faith. No bank officer 
 would permit an account to be opened on his books 
 specifically subject to these contingencies. 
 
 The relation between the Savings' Banks and their 
 depositors is an example of still greater absurdity, 
 both in law and practice. These institutions are or- 
 ganized to encourage economy among the laboring 
 classes, by paying interest on small amounts. They 
 are conducted mostly by benevolent men, and gra- 
 tuitously, excepting necessary clerk hire. The law 
 does not leave the investment of the funds discretion- 
 ary with the managers, but defines the securities that 
 may be taken one of the chief of which is the 
 mortgage on real estate. The depositor is a party to 
 this mortgage, and is cognizant of the fact, that it is 
 not immediately convertible into money. The process 
 of foreclosure involves a delay of three months, which 
 cannot be shortened by law ; and yet, when a panic 
 occurs, the law sustains the depositor in his right to 
 demand immediate payment; and 'because the bank 
 does not pay immediately, it is declared " broken." 
 This is equivalent to a legal requisition, that the bank 
 shall keep the money of its depositors on hand in 
 gold, and at the same time have it out on mortgage 
 earning interest ! Because this cannot be done, the 
 whole country is to be loaded with the discredit of
 
 392 THE PANIC. 
 
 bankruptcy, of which the suspension of the Savings 
 Banks is regarded as the least doubtful evidence. 
 
 Neither is this all. If the Savings' Banks had been 
 forced to pay off their depositors in October, 1857, 
 immeasurable wrong must have been done to the 
 mortgagors, by selling their property at less than half 
 its value; and the laborer also must have been in- 
 volved in the common misfortune, by legal expenses 
 and delay of payments. 
 
 Finally, this demand of the bank depositors can 
 reach but one result. If the deposits in the Com- 
 mercial and Savings' Banks of New York amount to one 
 hundred millions of dollars, and the amount of specie 
 on hand to twenty millions, those who apply for it first 
 will get their money, and the eighty millions will go 
 unpaid, or be liquidated by some form of credit. 
 
 The practice of holding tokens of pure credit as 
 legally liable to immediate redemption in coin is here 
 carried to the extremest practical absurdity ; and it 
 is so deeply imbedded in popular opinion, as to con- 
 stitute a dangerous, if not an insuperable anomaly in 
 our financial system. 
 
 The true office of gold, in commerce, is an unset- 
 tled question. It may be a question, also, whether, 
 if once determined, it can remain so among all the 
 changes of commerce, production, and ideas which 
 are going on. It is hardly supposable that any com- 
 mercial relations can be the same before and after such 
 improvements as those which govern the present age. 
 The establishment of ocean steam navigation, the 
 construction of railroads, and of the magnetic tele-
 
 TKUE OFFICE OF GOLD. 393 
 
 graph, have practically ignored two of the principal 
 elements in exchange distance and time. The 
 markets of the world have already been stimulated 
 in an excessive degree by the opening of gold mines 
 in California and Australia. Notwithstanding the 
 extent to which discovery and explorations have been 
 pushed, the scope for human energy is still enlarging. 
 Is it likely that questions of economy alone shall not 
 change their terms in this general growth and expan- 
 sion of aifairs ? 
 
 The popular notions, concerning gold, are for the 
 greater part hereditary. They are less the result of 
 practical experience, and of reasoning on facts, than 
 of pure theory. 
 
 The destructibility of paper money, the facility of 
 its emission without limit, and its consequent fluctua- 
 tion in market value, with the various frauds that it 
 may serve, and especially its imposition as wages on 
 the poor and ignorant, brought it deservedly into bad 
 repute. The idea, that there was any reality about 
 it, became almost obsolete. It was natural thence to 
 assume, that silver or gold was the only real money 
 in existence. It was, therefore, predicated as " the 
 standard of value." 
 
 In the United States, politicians have made the 
 most of this theory. The laboring masses vote ; and 
 they have flocked to the polls in support of " hard 
 money." This is about the whole history of the case 
 in its political bearings, which are its most influential 
 bearings. 
 
 But paper money has been forced into narrower 
 limits. It has been so guarded by legislative restric- 
 
 17*
 
 394 THE PANIC. 
 
 tions and penalties, as to have lost, in no small mea- 
 sure, those features in which it differed so widely 
 from gold. It cannot be issued with the same facility 
 as formerly, and the fluctuation of its market value 
 is much less. In the State of New York, it has 
 become established on such a secure basis, as to be 
 transposable with gold in all conditions of the market, 
 at such an insensible fluctuation, as to remove the 
 ground of all the old objections to it. The politicians 
 do not publicly or theoretically abandon the contro- 
 versy, because it is still available in the elections. 
 But that they no longer entertain it as a question of 
 economy, is manifest from their participation, as legis- 
 lators, in the business of making and circulating it. 
 
 It has been shown by the demonstrations of the 
 Clearing House that the bank note currency of the 
 city of New York is the most stable of all known 
 forms of credit. Of an average circulation of eight 
 millions of dollars among the people, but one mil- 
 lion was returned for redemption in 18 57, during the 
 unexampled depreciation of every other token of 
 credit, not excepting even the State bond, and the 
 mortgage on real estate. And this return was made, 
 not by individuals through alarm, but mostly by 
 country banks to meet their bills of exchange. 
 
 It appears, therefore, as an established fact, that 
 gold is not an indispensable pledge for the soundness 
 of paper money, with such guarantees, and with such 
 limitations as are established by the laws of New 
 York. 
 
 It is not used, either, in the ordinary transactions 
 of commerce. Debts are paid by bank notes, or by
 
 TRUE OFFICE OF GOLD. 395 
 
 checks. But little gold passes in the channels of 
 trade for the daily payment of fifty millions of dol- 
 lars, in the city of New York. More than half of 
 this amount is settled through the Clearing House ; 
 and here, for the first time, we meet the use of gold 
 in any considerable sum. One million and a half of 
 specie settles the exchanges of thirty millions of com- 
 mercial currency. It is, then, in final liquidation of 
 balances only, that gold is used. We find it perform- 
 ing the same function between Europe and America. 
 Four hundred millions of credit pass either way 
 and fifty millions settle the balance. 
 
 The only other channel in which gold accumulates, 
 or is used in large sums, is in the Postage and Revenue 
 Departments of the Government. Here we are at the 
 end of our facts. 
 
 Gold appears nowhere in large sums, excepting in 
 the transactions of the Government, in any other office 
 than as liquidator of balances. And the amount 
 necessary to a running credit of one hundred millions 
 of dollars in our city banks, has not heretofore ex- 
 ceeded an average of fifteen millions. With this 
 sum in steady reserve, every operation of our ex- 
 tended commerce and labor has been satisfactory 
 conducted for a number of years past. It fails only 
 when individual credit fails, from excess of trade, from 
 speculation, and accumulated losses. 
 
 There is one fact that ought not to be overlooked : 
 while the business of the country has steadily 
 increased, the bank note circulation has diminished, 
 and the difference has not been made up in coin. 
 Other forms of credit have mostly supplied it
 
 396 THE PANIC. 
 
 especially the individual bank check. But the more 
 active service of the circulation consequent on the 
 telegraph, and on swifter transit by railroad, has also 
 done much to supersede the necessity of such large 
 bank issues as were formerly required. Why has 
 not gold come in to fill the void ? Is it not because 
 that, too, has been quickened in its office ? Has not 
 this new element, of activity, practically answered 
 for quantity ? "What, under the old modes of trans- 
 port lay inert, because inaccessible, is now always 
 in motion, performing its function of liquidation. 
 
 Another result has been established by the rapidity 
 of transit. It is, comparatively, non-essential whether 
 the gold of the market is held in one sum at JSTew 
 York, or whether it is distributed at various points in 
 the country, provided it be kept within the power of 
 the exchange. The transport of it by railway is a 
 mere accident on the surface of things. The amount 
 of coin in the Clearing House, at a given time, is 
 therefore not an unerring index of the strength of the 
 market. That it should be distributed where it is 
 most needed to give efficiency to labor, or to develop 
 resources, is of more consequence to the common 
 interest. 
 
 Rapidity of communication and transit is a new 
 feature in commerce, which economists have not yet 
 had the opportunity to study in all its bearings. The 
 tendency of it is, to simplify our system of trade, to 
 cure it of local eccentricities, and to bring all its parts 
 under the influence of one regulating principle the 
 Exchange, of which it is a vital element. In propor- 
 tion as the telegraph is extended, it seems inevitable
 
 ACCUMULATION OF GOLD. 397 
 
 that the Exchange shall become a more perfect index 
 of the state of commerce between different coun- 
 tries. 
 
 The accumulation of gold, since the panic, in the 
 several financial centres of London, Paris, Yienna, and 
 New York, has suggested the theory, that it is not 
 necessary in the provincial towns in quantity beyond 
 the current wants of the retail trade ; that it is only 
 at the liquidating points where it is ever required in 
 large sums. The idea here is, doubtless, the true 
 one 'that gold is not the basis of credit, but the 
 balance medium. The mass of credit settles itself by 
 exchange ; while the gold only pays up the difference 
 between the debit and the credit column. It is pre- 
 cisely this office that it fills in the Clearing House. 
 
 The influx of gold into New York, after the sus- 
 pension of specie payments, soon enabled the banks 
 to resume ; and it was then said, that they would not 
 have suspended, if this gold, instead of being scat- 
 tered abroad through the country, where it was not 
 wanted, had been in the Clearing House. Therefore, 
 to prevent panic in future, let us keep the gold in 
 New York. 
 
 It has thus been accidentally discovered, that the 
 true policy of finance is, to denude the country of 
 coin, and to keep it only at points where it will be 
 wanted if the foreign exchanges should run adversely. 
 We ought not to be ungrateful for the knowledge of 
 truth because it comes by blundering, however we 
 may regret that it has not been evolved by an atten- 
 tive study of facts. The error of this theory consists 
 in assuming the results of disease in a prostrate body
 
 398 THE PANIC. 
 
 as indications of health in a sound body. Why not 
 rather revert to the phenomena that existed when the 
 body was in vigorous health, and adopt these as indi- 
 cations of a wholesome state of the system ? 
 
 The unprecedented accumulation of gold in the 
 banks of New York is the result of cancelling a 
 foreign debt by insolvency, and of a general suspen- 
 sion of labor throughout the country. Capital has 
 returned to its owners, and lies dead. They refuse to 
 invest it as heretofore, in public improvements and 
 in trade. Let labor and enterprise be resumed let 
 the produce of the West come into market let our 
 commerce with foreign nations be restored, and the 
 coin will find its right place. The same laws of trade 
 which have brought it here, will take it away. The 
 amount held in reserve by the banks of New York 
 will be adjusted by the exchanges; it will be found 
 expensive to maintain a reserve in opposition to them, 
 at any point above the natural level. All uneasiness 
 about deficiency at particular points may cease, if the 
 exchanges are wholesome; because, as already ob- 
 served, our means of communication and transit will 
 restore every thing in a few hours. 
 
 There is a certain common property in gold, or in 
 the liquidating medium, from which it is impossible 
 to escape. It is not the product of individual saga- 
 city, but of the market at large of industry and 
 labor generally. The moment that it is taken out of 
 this relation, it becomes a dead and worthless weight. 
 It must be treated as the property of the market, 
 giving value to everything in it; and losing its value 
 the instant that it is hoarded.
 
 COMMON PROPERTY IN GOLD. 
 
 399 
 
 Are not these precise facts? And shall we not 
 give weight to them, and to all other facts with 
 respect to gold that may be developed in the progress 
 of discovery and combination ? Shall we continue to 
 look to old theories of economy as the source of all 
 wisdom in finance theories which were based on a 
 narrow range of facts, as compared with the present 
 period ; or shall we analyze, combine, and elucidate 
 our own facts, and presuming a little on our own 
 capacity and experience, add our knowledge to that 
 of the past, and make the most of it 1
 
 D. APPLETON & CO.'S PUBLICATIONS. 
 THE 
 
 NEW AMERICAN CYCLOPEDIA. 
 
 EDITED BY 
 
 GEORGE RIPLEY AND CHARLES A. DAM. 
 
 PUBLISHED BY 
 
 P. APPLETON & COMPANY, New York 
 la 16 Vols. Svo, Dunble Columns, 750 Pages each. 
 
 Price, Cloth, $4. ; Sheep, 4.76 ; HalfMor., $6.00; HalfRu*., $5.5C 
 per Volume. 
 
 EVERY one that reads, every one that mingles in society, it, 
 constantly meeting with allusions to subjects on which h* 
 needs and desires farther information. In conversation, in 
 trade, in professional life, on the farm, in the family, practical 
 questions are continually arising, which no man, well read or 
 not, can always satisfactorily answer. If facilities for reference 
 are at hand, they are consulted, and not only is the curiosity 
 gratified, and the stock of knowledge increased, but perhaps 
 information is gained and ideas are suggested that will directly 
 contribute to the business success of the party concerned. 
 
 "With a Cyclopaedia, embracing every conceivable subject, 
 and having its topics alphabetically arranged, not a moment is 
 lost. The matter in question is found at once, digested, con- 
 densed, stripped of all that is irrelevant and unnecessary, and 
 verified by a comparison of the best authorities. Moreover, 
 while only men of fortune can collect a library complete in all 
 the departments of knowledge, a Cyclopaedia, worth in itself, 
 for purposes of reference, at least a thousand volumes, is within 
 the reach of all the clerk, the merchant, the professional man, 
 the farmer, the mechanic. In a country like ours, where the 
 humblest may be called to responsible positions requiiing 
 intelligence and general information, the value of such a work 
 can not be over-estimated.
 
 2 D. APPLETON & CO.'S PUBLICATIONS. 
 
 PLAN OF THE CYCLOP/EDIA. 
 
 The New American Cyclopaedia presents a panoramic view 
 of all human knowledge, as it exists at the present moment. 
 It embraces and popularizes every subject that can be thought 
 of. In its successive volumes is contained an inexhaustible 
 fund of accurate and practical information on Art and Science 
 ,n all their branches, including Mechanics, Mathematics, As- 
 tronomy, Philosophy, Chemistry, and Physiology; on Agri- 
 culture, Commerce, and Manufactures; on Law, Medicine, and 
 Theology ; on Biography and History, Geography and Ethnol- 
 ogy ; on Political Economy, the Trades, Inventions, Politics, 
 the Things of Common Life, and General Literature. . 
 
 The Industrial Arts and those branches of Practical Science 
 which have a direct bearing on our every-day life, such as 
 Domestic Economy, Ventilation, the Heating of Houses, Diet, 
 &c., are treated with the thoroughness which their great im- 
 portance demands. 
 
 The department of Biography is full and complete, embra- 
 cing the lives of all eminent persons, ancient and modern. In 
 American biography, particularly, great pains have been taken 
 to present the most comprehensive and accurate record that 
 has yet been attempted. 
 
 In History, the "New American Cyclopedia gives no mere 
 catalogue of barren dates, but a copious and spirited narrative, 
 under their appropriate heads, of the principal events in the 
 annals of the world. So in Geography, it not only serves as a 
 general Gazetteer, but it^ives interesting descriptions of the 
 principal localities mentioned, derived from books of travel 
 and other fresh and authentic sources. 
 
 As far as is consistent with thoroughness of research and 
 exactness of statement, the popular method has been pursued* 
 The wants of the people in a work of this kind have been care- 
 fully kept in view throughout. 
 
 It is hardly necessary to add that, throughout the whole, 
 perfect fairness to all sections of country, local institutions, public 
 men, political creeds, and religious denominations, has been a 
 sacred principle and leading aim. Nothing that can be con- 
 strued into an invidious or offensive allusion has been admitted.
 
 THE NEW AMERICAN CYCLOPAEDIA. 3 
 
 DISTINGUISHING EXCELLENCES. 
 
 While we prefer that the work should speak for itself, and 
 that others should herald its excellences, we cannot refrain 
 from calling attention to the following points, in which we 
 take an honest pride in believing that the New American 
 Cyclopaedia surpasses all others : 
 
 I. IN ACCURACY AND FRESHNESS OF INFORMATION. The 
 
 value of a work of this kind is exactly proportioned to its cor- 
 rectness. It must preclude the necessity of having other 
 books. Its decision must be final. It must be an ultimatum 
 of reference, or it is good for nothing. 
 
 II. IN IMPARTIALITY. Our work has undergone the exam- 
 ination of Argus eyes. It has stood the ordeal. It is pro- 
 nounced by distinguished men and leading reviews in* all parts 
 of the Union, strictly fair and national. Eschewing all expres- 
 sions of opinion on controverted points of science, philosophy, 
 religion, and politics, it aims at an accurate representation of 
 facts and institutions, of the results of physical research, of the 
 prominent events in the history of the world, of the most sig- 
 nificant productions of literature and art, and of the celebrated 
 individuals whose names have become associated with the 
 conspicuous phenomena of their age doing justice to all men, 
 all creeds, all sections. 
 
 III. IN COMPLETENESS. It treats of every subject, in a terse 
 and condensed style, but fully and exhaustively. It is believed 
 that but few omissions will be found ; but whatever topics may, 
 through any oversight, be wanting, are supplied in an Appendix. 
 
 IV. IN AMERICAN CHARACTER. The New Cyclopedia is 
 intended to meet the intellectual wants of the American people. 
 It is not, therefore, modelled after European works of a similar 
 design ; but, while it embraces all their excellences, has added 
 to them a peculiar and unmistakable American character. It 
 is the production mainly of American mind. 
 
 V. IN PRACTICAL BEARING. The day of philosophical ab- 
 straction and speculation has passed away. This is an age of 
 action. Cui lono is the universal touchstone. Feeling this, we 
 have made our Cyclopaedia thoroughly practical. No man of 
 action, be his sphere humble or exalted,can afford to do without it.
 
 4 D. APPLETON & CO.'S PUBLICATIONS. 
 
 VI. IN INTEREST OP STYLE. The cold, formal, and re- 
 pulsive style usual in works of this kind, has been replaced with 
 a style sparkling and emphatically readable. It has been the 
 aim to interest and please, as well as instruct. Many of our 
 writers are men who hold the foremost rank in general litera- 
 ture, and their articles have been characterized by our best 
 critics as models of elegance, force, and beauty. 
 
 VII. IN CONVENIENCE OF FORM. No ponderous quartos, 
 crowded with fine type that strains the eyes and wearies the 
 brain, are here presented. The volumes are just the right size 
 to handle conveniently ; the paper is thick and white, the typo 
 large, the binding elegant and durable. 
 
 VIII. IN CHEAPNESS. Our Cyclopaedia has been univer- 
 sally pronounced a miracle of cheapness. We determined, at 
 the outset, to enlarge its sphere of usefulness, and make it 
 emphatically a book for the people, by putting it at the lowest 
 possible price. 
 
 Such being the character of the New American Cyclopaedia, 
 an accurate, fresh, impartial, complete, practical, interesting, 
 convenient, cheap Dictionary of General Knowledge, we ask, 
 who can afford to do without it? Can the merchant, the 
 statesman, the lawyer, the physician, the clergyman, to whom 
 it gives thorough and complete information on every point 
 connected with their several callings? Can the teacher, who 
 is enabled, by the outside information it affords, to make his 
 instructions doubly interesting and profitable ? Can the far- 
 mer, to whom it offers the latest results of agricultural research 
 and experiment? Can the young man, to whom it affords the 
 means of storing his mind with useful knowledge bearing no 
 any vocation he may have selected? Can the intelligent 
 mechanic, who wishes to understand what he reads in his daily 
 paper? Can the mother of a family, whom it initiates into the 
 mysteries of domestic economy, and teaches a thousand things 
 which more than saves its cost in a single year ? In a word, can 
 any intelligent American, who desires to understand the insti- 
 tutions of his country, its past history and present condition, 
 and his own duties as a citizen, deny himself this great Ameri- 
 can digest of all human knowledge, universally pronounced the 
 best Cyclopaedia and the most valuable work ever published?
 
 HG- 
 
 16 
 
 G ' 
 
 University of California 
 
 SOUTHERN REGIONAL LIBRARY FACILITY 
 
 405 Hilgard Avenue, Los Angeles, CA 90024-1388 
 
 Return this material to the library 
 
 from which it was borrowed. 
 
 -3
 
 m I |