This section is from the "Practical Banking" book, by Albert S. Bolles.
This general inquiry concluded, he will have improved his own mind, and be ready to meet and to reason with those who, because the system has not been perfected in a century and a-half (dating from the establishment of the Bank of England), demand its entire abolition, or at least such changes as would render it powerless for good, alike to individuals and to communities. He can say and prove that credit, wide, liberal, beneficent credit, belongs to the era of liberty, and that it was unknown even in free England until after the expulsion of the Stuarts, and until the revolution there had secured personal freedom. He may stand upon the emphatic declaration of a great statesman,* that the system of credit, as it now prevails, is the vital air of commerce, and that "it has done more, a thousand times, to enrich nations than all the mines in all the world." He should, indeed, admit that its fluctuations, its ebbs and flows, sometimes cause desolation and ruin; yet he should not fail to insist that good and wise men steadily strive to improve it—that, as sweeping conflagrations allow of the straightening and widening of streets, and as disasters in traveling by steam suggest more careful management and better machinery, so do bank failures and the delinquencies of bank officers, however appalling the circumstances at the moment, serve to discover and to apply new checks and new remedies.
If your bank is old enough to have been through "a crisis," and if you have not served in it as an inferior officer, you have much to learn of its past business. Such an institution, for example, has a "suspended debt" account, or at best overdue paper secured by mortgage or other collateral; and assets of this description always have a history, and sometimes a very intricate, a very perplexing one. But you must become master of that history. Directors change every year; and in a little time, all who were at the "Board" when this class of paper was taken will have vacated their seats; while, then, some are still in the direction, make written memoranda of the principal facts.
Let it be manifest to your associates and stockholders, that you feel an interest in everything which relates to their welfare. To work the whole of your capital and of your deposits, to keep both actively employed at all times, and yet to be always able to meet the demands on you, require great wisdom; and the most skillful and experienced financiers sometimes find themselves at fault for the moment. Your duty requires continual experiments to effect this great object.
Need I suggest the benefits of a fixed system, and of method, even in matters seemingly of little consequence? Everybody finds —as seamen have it—that "a stern chase is a long chase." The business of today should never be deferred till tomorrow. Answer letters, and file papers, at the instant. Remember everything, if possible; but trusting to memory in nothing: let your books contain a record of all transactions. Allow no outstanding bills against the bank; and have a voucher for the smallest item charged to "Expense Account."
You can be, and you ought to be, ready for an "examination" by the "Commissioners," or other functionaries of the Government, and of your own "Board," without previous notice, and without the slightest special preparation. In fine, close your vault daily with the reflection that no act has been neglected, and that, if sickness or death should occur "the bank can go on "with no loss to your family, sureties, or stockholders. Do not smile, if I add, that your banking-rooms should be swept, and your desks and counters be dusted daily; that one " slut-hole" is ample for all the twine and waste-paper; and that the accumulation of official papers and memorandums in your private drawer will cause both you and. your associates serious delays and much inconvenience.
Panics and pressures are as certain in banking as storms in winter. When either exist, firmness and courage, if not really possessed, must be assumed. You are presumed to know the nature and extent of your resources under all circumstances, and at periods of general distrust especially; and if the amount of those immediately available are insufficient for every possible call upon you, thus advise, your directors without delay.
A knowledge of human character is indispensable. Study it. The "actions, looks, words, and steps" of your customers "form an alphabet:" and your "eyes are spectacles to read others' hearts with." Careful, close, and continued observations will enable you to detect a counterfeit man as readily as you now do a counterfeit bank-note. My own experience is, that those who change countenance, or the weight of the body from one foot to the other, when meeting a full, searching and fixed gaze, are not truthful; that those who ask for additional accommodations, prefacing the request with a story divided into acts like a drama, are already bankrupt; and that those who petition in whispers, in an unnatural tone of voice, in a cant, or a whine, are hypocrites. Some years hence, I shall be glad to ascertain how nearly your experience accords with mine.
You should be courteous and respectful to all. Self-command is a great virtue; indulgence of passion is a great fault. Impertinence and stupid ignorance might sometimes be rebuked, were it not for the danger of contracting a morose and irritable habit of speaking. There is no loss of dignity, or of self-respect, in perfect silence under the greatest provocation, and that, accordingly, is your safest course. The cashier's popularity or unpopularity gives character to a bank. The directors are seldom visible, and sometimes unknown to occasional customers; but their executive officer is an ever-present and a known man, and should bear in mind the Latin proverb, namely, to "be cautious what he says, when, and to whom."*