BANKING.

Otago Witness, Issue 1243, 25 September 1875, Page 3

BANKING.

Bius op Saj&e.— The security conveyed m a bill of sale ia of a very risky nature. All bills of sale must be regiatered, which operates against their value as seounty. As a rule, bankers should never meddle with these instruments, neither do they . but of course any seennty is better than none at all, and if a banker is in a fix with a customer, h9h 9 will take a bill of sale over his customer's efteits, rather than go without any security at all.

Mortgages.— Her*, as in England, a mortgage is not first-class security, and bankers do not care about having anything to do with it. A man can mortgage his property to as many parties as ha pleases.

Assignments of Leases are fair security, but to be avoided on aocnunt of the trouble and inconvenience the assignee may be put to in the event of the bank, ruptoy of the person assigning. And when assignments are taken aa security the advance made upon them should always be a long way within the value of the lease.

Cash Credit Bonds differ from othe? kmds of security inasmuch as these bonds ofler personal security. Two or more persons becomes sureties for the party desiring the' advance, who has himself to sign the bond ; and all are then liable to the accommodating bank. Cash credit bonds are made out for a specific amount and fur an indefinite period, and a clause is usually inserted to the effect that either of the sureties shall be at liberty to withdraw on giving notice in writing to that intent, but the party so withdrawing is liable to the bank for any advances that may have been made on the bond up to the expiration of such notice. Cash credit bonds, if judiciously granted, regard being had both to the principals and sureties, are good security. A banker, however, expects that cash credits shall be good operative accounts, and a person to whom a cash credit has been granted, should never exceed the limit named in the bond. It is, of course, needless to remark that the sureties are liable only for the amount which they guarantee, e.eif A has a credit for £500, and overdraws £1000, and in the meantime becomes bankrupt, his sureties cannot be called upon to make good more than £500 with interest. The rate of interest is named in the bond.— Manual of Banking, published by Berth and Wilkie.