The Foreign Loans And Balances

It has been pointed out that cash reserves must form a fund apart from or outside the ordinary discounts. To be operated so as to cause no disturbance whatever to the country's finance and trade the reserves must either be in the form of hard cash or kept in an outside country. That is why the large banks follow the policy, which has brought them much criticism and abuse from those who do not understand what cash reserves must do, of keeping a considerable part of their reserves outside Canada.

As a matter of fact, the existence of this outside fund, and the knowledge that it is there available for bringing home in an emergency, together constitute one of the most solid of the bulwarks of Canada's banking. Even if brought home, as the critics wish, the foreign fund could not be used to alleviate stringency here. It is a reserve, and to be kept so it would have to be held as cash in vault, unless outright panic were to break out in the Dominion, in which case it would be used to furnish aid to solvent and worthy houses whose existence was threatened, and to pay off depositors.

How The Staff Is Handled

A very large part of the success achieved by any bank must be due to its staff of men. To get the best results out of the staff the men must be kept keen and zealous. The two great incentives causing them to put forth their best efforts in the bank's behalf are ambition and loyalty. The ambitious officer, whatever his rank, throws himself unsparingly into the bank's service when he knows that the prompt and certain reward for good work well done is rapid advancement. And when the men as a whole feel that the bank uses them well they will be far more faithful and loyal than if the idea is general among them that they are meanly treated.

If bank directors, stockholders, and general managers had a clearer idea of how a generous treatment of the staff increases profits there would be more uniformity in this respect. All over the country the clerks and officers of the different banks compare notes as to how they are used. If any one man gets the notion that he is not getting proper recognition, one effect is to kill his enthusiasm. As, time after time, the opportunity to do a good stroke for the bank presents itself to him in the ordinary course of his work, he resentfully refuses to lift a finger or to put himself out.

Good Treatment Pays

Quite probably there will be men showing this disposition even in those banks that accord the most generous usage. In a large force there will always be some cherishing unreasonable expectations and resentment if they be not fulfilled. But, where the general treatment is good these fellows will get no hearing. Far different is it when the staff as a whole feel that the bank is niggardly and mean in its treatment of them.

Then a large number of the officers have the same hard feeling towards it in their hearts, though they may say nothing. In an hypothetical bank of this kind it is to be expected that petty defalcations would be constantly cropping up, that rudeness to customers would flourish unrebuked, that new business would be sought without vim or resourcefulness, that the loans and discounts would be carelessly handled. All this would have a decidedly detrimental effect on profits. The probability is that what would be lost that way would much outweigh what was saved in salaries, etc.

The general manager has to keep these considerations in mind in his regulation of the staff salaries and changes. He does not want to waste the bank's money through paying extravagant salaries or in the other staff expenses; he must keep the men well animated. The salaries must be well up to those paid by other banks similarly situated, otherwise discontent will spread.