In The Klondike

In the Klondike, the practice is to buy gold dust as it is brought in, paying for it such a figure as would cover cost of shipment to the assay office in Seattle or San Francisco, and insurance and interest, and leave a margin of profit. The banks have their own assayers and gold buyers in Dawson, and they can tell with great exactness merely by looking at the dust that is brought in where it came from and what it would yield when melted down. There is a great difference between the value of the gold obtained from the various creeks. For gold from the richest creeks $3 or $4 more per ounce can be paid than for that from the poorer creeks. The arrival of the banks in Dawson consequently made quite a change in the purchasing power of the dust recovered by certain miners. Before they came, gold dust was the general medium of exchange at a rate of $17 per ounce, and little or no discrimination was made against the poorer qualities.

Dealing With Promoters And Organizers

Another phase of the business at mining camps is that which results from the activities of promoters and organizers. They are selling stock to outsiders more or less all the time, and are continually offering for discount their sight drafts, with mining scrip attached. As the people engaged in this business are sometimes of little or no financial standing, it is by no means an uncommon thing for the drawee of one of these drafts to refuse it.

Naturally, the banks receive numerous applications for loans on mining stocks, but they are, it is said, almost universally turned down.

Apart from this special class of business, there are in mining camps, as everywhere, merchants whose stocks of goods and good accounts and bills receivable show a sufficient margin over their liabilities to warrant the banks in advancing to them.

In dealing with the members of a mining community the managers have to be on guard quite as much against the optimism that seems inseparable from the business as against intentional fraud. All the men who plead for loans of a few thousand dollars to sink a shaft or drive a tunnel a short distance to a point where they have figured out to their own satisfaction that they will strike a vein are not rogues. On the contrary, many of them implicitly believe what they say; but, though they are usually willing to pay well for the accommodation, it is almost a sure thing that the banker who lends a ready ear to proposals of that kind will live to rue it.

Banking System Flexible

The banking system of Canada is very flexible, and the banks readily adapt themselves to the special needs of all the particular industries in different parts of the country. Besides farming, manufacturing, and mining, they finance lumbering, the fisheries, the dairy industry, in the country districts, in addition to the more complicated business met with in the cities.