BANKING.

Otago Witness, Issue 1242, 18 September 1875, Page 3

BANKING.

Collecting Bills.— lt is usual for customers to leave with their banker any bills that may come into their hands If not discounted, these bills are held for collection, and are credited to the endorser when paid at maturity ; but until then they form no part of a customer's current account. An overdraft is frequently granted against collection-bills but never to their full amount. A banker is safe in allowing an advance of say 50 or even 70 per cent., for he has a Ken on the DIII 3 until the payment of any advance allowed against them. The extent to which a customer is permitted to overdraw against a collection-bill depends, of course, on his own position and that of the acceptor.

Security Generally.— As a rule, banks do not make advances without security. Temporary accommodation ia sometimes given without it, however, and in special cases considerable working overdrafts are allowed. But generally speaking, security must be held to amply cover every advance. Were this not the rule, banks would be great losera. Of the principal kinds of security we shall speak in the next two or three paragraphs.

Equitable Mortgages. — The New Zealand banker has nothing to do with these. In England a person is desirous of raising money ; he goes to his banker and deposits the title deeds of some property. On the strength of the mere possession of these papers the banker makes the necessary advance, and he has a right to retain them until the borrower has repaid him. In other words, the possession of the deeds puts the banker in the position of an equitable mortgagee, and he is entitled at law to sell the property to which the deeds relate, and to make the payment of his debt a first charge on the proceeds of the sale. But in .Nev Zealand the law does not permit a banker to hold title deeds beyond the pleasure of a customer's purchaser, who can demand their return when he pleasea And further, on the bankruptcy of the customer, the deeds pass to his trustee in bankruptcy. It follows, then, that the mere deposit of title deeds is no security for a banker, who must part with them when oalled upon.— Manual of BanMna published by Keith and Wilkie. * nmvji