the payment of matured shares without the consent of the board of directors, who shall also determine the order of the payment of matured shares.

At each monthly stated meeting, immediately following the receipt of dues and interest, the board of directors shall offer to members of the corporation desiring to borrow, all accumulations applicable to that purpose, in sums of two hundred dollars, the value of a matured share, or a multiple thereof, or the fractional parts of one third of one half thereof. If more than one member desires to borrow, the right to the loan shall be determined by an open bidding of a premium per share, and the member bidding the highest premium shall be entitled to the loan upon giving proper security; and the amount of the premium paid shall be deducted from the sum loaned at the time of loaning, and the receipt thereof shall not be deemed a violation of the usury laws. No member can borrow a larger sum than shall be equal to the matured value of the shares held by him. A borrowing member, for each share or fractional part thereof borrowed upon, shall, in addition to the dues on his shares, pay monthly interest on his loan at the rate of six per cent. per annum, or such lower rate as the by-laws shall name, until the shares borrowed upon reach the matured value of two hundred dollars each, or the loan is repaid; and when such matured value is reached, the loan upon it shall be paid out of the share, and the proper surrender and acquittances be made. See last paragraph Building and Mutual Loan Associations.

Mortgage and Debenture Companies.

These companies are of comparatively recent growth and are a necessity of the unnaturally rapid development of our Western agricultural sections by persons who, without the aid afforded by these companies, would be unable to retain their holdings, which often in the first instance were

simply pre-empted Government lands, the holders owning little more than the land itself, and not having the means with which to erect suitable buildings thereon and to purchase the implements required for its cultivation. Settlers of this class usually, in order to procure capital, mortgage their lands as soon as they have any commercial value, which, of course, is as soon as they can produce anything which can be marketed.

Holders of the mortgages on such lands, as a rule, reside in the money centres of our country, which are mainly on the Atlantic seaboard, and can make no personal examination of the land on which they loan. This work falls within the province of the mortgage companies, who, through their agents, make examinations of the lands, extend the loans, and then through their representatives, principally in the East, sell the mortgages to investors.

The farming lands of several Western States are mortgaged to more than half of their appraised value, which mortgages have been in no small degree negotiated through mortgage and debenture companies.

When properly conducted, their loans carefully chosen, and the company economically managed, the mortgages of such companies certainly offer a fair investment, and companies of this description are of great use in bringing together the borrower and the lender in a way quite impossible without their aid.

Each company, as a rule, confines itself principally to a given area, frequently taking the name of the State or section where its loans are located.

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CHAPTER IX.

Private Bankers-Brokers-Stock Brokers-Note Brokers-Puts and Calls.

Private Bankers.—In an estimate of the financial strength of a great city, or a country, few of us, our minds filled with the enormous aggregation of capital of banks, take into consideration what an important element is the private banker, who, practically unrestricted as to his dealings, investments, and ventures, save by the consideration of receiving good security for his advances and avoiding placing his own or his clients' funds where they may be insecure, or regained only at expense and loss of interest, undertakes and promotes enterprises which National and State banks, by law, are prohibited from doing. Still less do we consider that while the aggregate capital and surplus of the National and State banks of New York City, clearing through the New York Clearing House, for instance, does not exceed perhaps $134,000,000, that of the private bankers more numerous 't is true, more than trebles this amount, and while $5,000,000 is the largest capital of any of our banks, there are certainly half a dozen or more private banking firms in the city of New York whose individual capital is not less than $10,000,000.

Private bankers, like banks, receive money from one person and loan it to another, sometimes paying interest on the money which they receive, and always charging interest on that which they loan; the difference between the two being their profit.

By far the larger portion of their business is in the furtherance of new enterprises, and the reorganization of old, the forming of companies, the consolidation of already existing corporations or businesses, the selling and buying of exchange, and the sale and issuance of letters of credit, certificates of deposit, etc.

Private bankers in the United States have all the privileges granted to State banks generally, but are not subject to the same restrictions excepting when they issue circulating notes, which they can do under the laws of most States, then they become subject to the same restrictions and limitations in that respect as State banks; but while they possess that right it is rendered of no practical value to them by the National tax of ten per cent. on the circulating notes of other than National banks.

In England at present, and in this country up to the imposition of the National tax above alluded to, the issuance of circulating notes was a source of considerable

revenue.

The business of banking and promoting, now being generally carried on by the same firms, is usually so intimately connected as to be almost inseparable; most of the larger banking houses deriving the greater part of their incomes from the promotion of various enterprises, by which is meant the furnishing to those enterprises in exchange for its securities a sufficient amount of money to enable them to begin and continue their operations.

The reorganization of various properties also furnishes a large field of usefulness, and offers very handsome. profits and commissions.

They enter into contracts with companies, by which they agree to advance them money to a given amount, receiving for such advances the bonds and stock of such companies at a given price. These they dispose of to their clients and customers. On such transactions they make two profits, one being the interest on the money loaned,

and the other the advance in price on the securities, or a commission on the sale.

To enumerate all the sources of income of private bankers is to name the various businesses of the country, in all of which they are more or less directly interested, and which they assist and are assisting daily.

Perhaps no great industry owes more to their generous assistance than do the railroads, whose securities are largely owned and almost exclusively placed by them; and when it is borne in mind that the railroad interests of the United States represent some nine billion of dollars, or nearly one fifth of the whole wealth of the country, and but for their existence vast tracts which now have great value would be comparatively valueness, it may be seen to what an extent the development of the West in particular is due to the foresight and enterprise of the private banker.

But vast interests and values are perhaps quite as much affected by the maintenance of existing enterprises as by the creation or extension of new ones, and oftentimes the reorganization of a railroad is as important to the interests of the section which it traverses as the building of a new road would be to another section.

The consolidation of properties either friendly or antagonistic, for the purpose of eliminating competition, reducing expenses, or increasing earnings, is a source of almost constant employment for the larger houses.

In the organization of a company the method of procedure is something like this: We will take a railroad company, for instance. Certain persons desiring to build a road from one point to another, after making inquiries as to the probable business which can be secured, make estimates as to the cost of the right of way-in many instances a large portion of which can be secured without cost, the land being given to the company either by the persons whose lands will be traversed, in the hope of