Different Kinds Of Business - The Farmers In High Regard

The kind of business the manager will be called on to transact will depend on the kind of a district in which his branch is located. The majority of the country branches are located in the prosperous agricultural districts. In them there are considerable dealings with farmers. There is much variety in the business of the various agricultural branches. A branch in an Ontario town, for example, will contrast sharply with a branch in a Manitoba or Alberta town. In the East, the bulk of the farmers' business consists of deposits; in the West it consists of loans. Wherever it is, the farmers' business is highly prized. Taking the farmers as a whole, it can be said that they do not use the bank's capital - they furnish deposits to equal or more than equal their borrowings. The dealings of the bank with them, therefore, consist in its turning over their money at a profit. Moreover, loans to farmers, when properly made, comprise one of the safest of the bank's investments, and cause probably less anxiety and trouble than any other class of loan.

Of the other classes of dealings there are many where the opposite of this is the case. It cannot be said that manufacturers do not use the bank's capital; they do, and most extensively. The amount of loans to manufacturers far overbalances the deposits received from them. And quite frequently the loans are difficult to handle, and occasion much trouble and anxiety.

Handling Farmers' Accounts

Those who have been most successful in dealing with farmers exercise care not to let their loans exceed the surplus liquid assets of the borrowers. They avoid making advances that will be regarded by the borrower as something that can run on indefinitely-like a mortgage. They require a clearing up of liabilities every year.

The notes offered by farmers are usually endorsed -one good farmer backing another, or else notes secured by produce shortly to be sold. In the East the loans are not usually large enough to be specially referred to head office; but in the West they are on a larger scale. Loans of the big farmers there not infrequently amount to one or two thousand dollars or more before their liabilities are cleared off through sale of produce or live stock.

The Produce And Live Stock Buyers

Then there are the accounts of the produce and live stock buyers. They require advances of the bank's money to enable them to pay cash for what they buy. The advances are usually for short dates, and are secured by endorsed notes, or by pledge of the commodities bought. These men, especially the live stock buyers, are expert traders, and pretty keen on getting horses, cattle, etc., from the farmers as cheaply as possible. As a rule, they are careful of their reputation at the bank, and do not try to get ahead of it. For all that, the loans have to be carefully watched.

The Town Merchants

Town merchants are considerably in evidence in the branch books. They will be of all sorts, from the rich man or rich firm keeping a large deposit with the bank down to the struggling little shopkeeper, who makes fifteen or twenty dollar payments on his bills as they come due. In dealing with them, the manager has to use more or less care and watchfulness, according as they are weak or strong. He can discount for them with tolerable freedom the notes of good farmers, because the latter may quite legitimately give for their store accounts notes due in the fall or at a time when they expect to sell some of their surplus goods. But notes of professional or other men living in town, when offered by the local merchants, are scrutinized more carefully. They are not always proper instruments for the bank to advance on, because the makers often lack realizable property.