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partner in the concern, and, as an honest man, is bound to conduct it in as faithful and diligent a manner as he would his own private affairs, that he is at the same time appointed to a solemn trust, in having the interests of numerous others, equally interested with himself, under his management and control. In fact, unless the director of a bankis a man of strict integrity, he is placed in a position calculated to be productive of great mischief. He is invested with power to ruin the fortunes of others, and to inflict much commercial evil upon the community. Where there is a want of integrity, there is a want of capacity, and the bank must necessarily be mismanaged."

We fear, however, that English human nature is not much better than American, for Mr. Bell thinks

"It would be a most wholesome regulation, were it stipulated in all deeds of settlement, that no bank director should be privileged to overdraw his account. The great facilities which directors enjoyed of raising money from overdrawing their bank accounts, have, in some instances, resulted in extensive commercial disasters, and in the total wreck of large establishmerts. The temptation to specu ations of all descriptions which such facilities hold out, necessarily increases the risk of the bank, and induces no rigid inspection of the accommodation afforded to other custom

ers.

Where those who are entrusted with the management of the bank forget the extent and importance of the trust reposed in them, and begin to enter into unwarrantable speculations with the funds committed to their care, it is not supposable that they will be particularly scrupulous as to the general management pursued by others."

Mr. Bell's book abounds with excellent observations, and we have quoted only from portions of it that we think least

known to our readers. With the same design we will close our too brief review of so valuable a book, by some extracts from his chapter on re discounts; for, though the practice is not resorted to by our country banks as extensively as it seems to be by English banks, yet re-discounts are practiced, and we do not remember to have ever before seen the subject discussed on its banking merits :—

"A bank whose capital is either not commensurate with its business, or imprudently invested, becomes dependent, in a large measure, upon re-discounts. The facilities which exist for this, are chiefly confined to London bill-brokers. Few banks have any arrangements with those houses for permanent or stated advances, nor might such engagements be at all times convenient for either party. Banks therefore, which are in the position alluded to, are often put to incredible inconvenience from the caprice and disobliging manner of bill-brokers. The remedy for this is obviously for a bank to confine its operations within the prudent limits of its own capital. To conduct a large business with a small capital, and depend on the London market, or even its own credit with other establishments, for the re-discount of bills, is a very unsound and unsafe system, and altogether an error in banking. The bank that is under the neces sity of constantly re-discounting its London paper, however large may be the profits it is enabled to divide among its shareholders, is evidently laboring with too small a capital. In fact, wherever large dividends are declared, there can be no doubt the bank is working on too small a capital. The official returns made by joint stock banks show that numerous establishments in the manufacturing and mining districts possess very inadequate capitals, and the same fact is revealed by the large quantity of paper bearing the endorsement of these banks kept constantly afloat in the money market.

"It is perfectly practicable for a bank to confine its operations within its own available capital so as to avoid recourse to the discount market, and it is at all times desirable that this should be practiced, though it is not at all times convenient, nor in ail cases profitable. But no bank, whose chief business is that of discounting bills, being at the same time a bank of issue, can be considered secure with a small capital. The very process of re-discounting, which is the great source of its profits, multiplies its obligations with such amazing rapidity that the liabilities of many small banks in this way would be incredible, were fact, and the process by which it is accomplished, less familiar to the community. It is not a sufficient argument against this statement, that if a bank is to hold these rediscounted bills as liabilities, they are entitled to take credit for them as assets. As a matter of accounting, this is doubtless correct; but as affecting the stability of the bank, the matter must be contemplated in a different light. The risk which the bank runs is multiplied in proportion to the amount of bills re-discounted. A bank with a capital of £40,000, having bills running to the amount of £300,000, would have its whole capital swept away by a percentage of loss that would not be ruinous on its original discounts. Now it cannot be doubted that this statement represents the condition of numerous banks in the manufacturing and mining districts. The system is evidently unsound, and such establishments cannot be too strongly urged to call up more capital. These observations are not intended to discountenance or throw discredit upon the system of re-discounting. Many banks are known to look upon it with apprehension, as being a system fraught with danger. It is well for them if they are so circumstanced as to realize a reasonable profit without this adventitious

aid. The absurd and dangerous extent to which it is in some cases practiced, is what is here objected to."

We cannot conclude, however, without saying, that, how hazardous soever re-discounts may be in England, the reliance on them is very hazardous with us. Some years since, one of the large banks of New-York was prosecuted for damages in refusing to discount for a country bank according to a written arrangement which it had previously entered into. We know, also, a country banker who had made, without charge, large inland collections during two years for a New-York bank, on the condition that the country banker should obtain, when he desired, discounts to the extent of $20,000; still, when the discounts were demanded, a pressure existed, which induced the New-York bank to repudiate the agreement. These examples are quoted, not to impute any delinquency to the banks of New-York, but to exhibit specimens of the condition to which business is occasionally liable in NewYork, (our best money market,) and the consequent hazard to country banks of relying for funds on re-discounts, even when fortified by explicit assurances. The full stomach loathes not the honey-comb more proverbially, than a struggling city bank loathes a needy country correspondent, who is urging his stale claims for discounts, and thereby attempting to add new burthens to a load which is already too great to be borne by the city bank without the most painful apprehensions.

REVIEW OF SCHOOLCRAFT'S "RESIDENCE OF THIRTY YEARS WITH THE INDIAN TRIBES ON THE AMERICAN FRONTIERS."*

THIS book is inscribed to A. B. JOHNSON, of Utica, with whom, in 1810, the author made his first excursion to the West, preparatory to the manufacture of window-glass by a hundred-thousand-dollar corporation, just created by the New-York Legislature. Mr. Schoolcraft alone possessed any knowledge of glass-making, and to him, with a salary of a thousand dollars a year, was confided the planning of all necessary buildings, contracting for their erection, originating the furnaces, procuring raw materials, governing the artisans, disbursing the expenditures, manufacturing the glass, and preparing it for market. But few manufactories of window-glass existed in the United States, and their absence was painfully apparent in new settlements by window-sashes disfigured with rude substitutes for glass. This state of the country caused the stock of the corporation to be owned by patriotic citizens; and among the most active and influential of the corporators was the Hon. John Greig, who resided in Canandaigua, and who is still there, the foremost citizen in all that is praiseworthy; illustrating strikingly, by his eminent social position, the scriptural promise, that "He who watereth shall be watered again."

The bank of Seneca Lake, a mile from Geneva, was selected for the new establishment. Forest timber covered the site; but in about three months glass was manufactured for market, and a small village had been erected for the workmen. Mr. Schoolcraft was only seventeen years old; and this reveals his early character as unmistakably as the

Published in 1842.

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