A SUGGESTION FOR BANKERS
[To the Editor of the SPECTATOR.]
Sin,—The attitude of the North Country Banks in regard to the question of unsecured overdrafts is undoubtedly a con- servative one. In the majority of cases the Bankers insist on adequate security being deposited, either in the form of deeds, gilt-edged stock or a satisfactory guarantee. They do lend considerable sums without security, but only in cases where the customer is of good standing, his position fairly well assired, and the condition ,of the business well known to the Bankers. An instance is recalled of a Limited Company taking £80,000, almost without leave, and certainly without
other security than the stability of the Company, the con- sciousness that business was flourishing, and that the money was required for raw material and extensions. Bankers find it exceedingly difficult nowadays in many cases to get their overdrafts repaid.
Where the customer is doing badly he is often unable to repay without serious sacrifice ; where he is wealthy he often finds it inconvenient to do so. During the past few years the Korth Country Banks, and no doubt the " Big Five " also, have borne a heavy burden in enabling British industry to carry on in difficult times. Generally speaking the Banks are riot enthusiastic about new ideas, nor anxious to finance them. They do help, and help very considerably, but not as a rule where the success of the project is of doubtful attain- ment. Certainly the more doubtful it is, the more certain the Bank would be to ask for security in some form.
The suggestion of " Lancastrian " that a levy on Bank profits of 1 per cent. should be made to promote the growth of British trade is not in itself a very unreasonable one, and might conceivably repay the Banks several times over in increased business arid turnover, but the exact form which the propaganda should take, the precise way in which the money should be spent, the nature of the industry that would be entitled to support—these and many other points would no doubt be closely examined by those interested from a Banking standpoint.
" Manchester Exporter's " experience with his American yarn buyer, however unfortunate, does not appear to be a sufficient answer to " Lancastrian's " statement of the advant- ages which would accrue from the employment of American travellers. He (Manchester) would not suggest, probably, that more than a small percentage of such men would act dishonourably, and in any case the risk of such occurrences Might be lessened by making honesty the best policy for the traveller.—I am, Sir, &c.,
NORTHERN BANKER.
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