136 THE FARMER AS A BUSINESS MAN. 



fact, deposits may usually be withdrawn without notice, but 

 the bank has the right to require notice. The reason of this 

 is obvious. Savings-banks are created to lend money on long 

 time, and for the most part on landed security. Deposits are 

 made in order that they may be so loaned, and in that way 

 earn interest. There is usually no requirement for a "reserve" 

 sufficient to pay deposits upon demand. In times of panic, 

 however, there is usually no sale for land, or for securities 

 based upon it. Savings depositors are, to a large extent, poor 

 people, easily excited, and quite prompt to demand their 

 money if they think they can not get it. And yet they all 

 know that their money has been lent, and is for the most part 

 out of the bank's control. They do not, however, reason upon 

 this, but simply demand their money. Under such circum- 

 stances the bank, if it can, takes its mortgages to some large 

 financial institution and borrows, upon them, the money to 

 pay off the depositors whose money is invested in them. If it 

 can not do this it closes its doors and goes into "liquidation." 

 Tlie money loaned out is collected by the "receiver" as rapidly 

 as possible, and returned to depositors, less expenses. It is a 

 long, tedious, and expensive operation, and depositors get 

 back but a portion of their money. A " run" upon a savings- 

 bank is one of the silliest of things. Depositors who make it 

 are really making a run upon themselves. Of course savings- 

 banks do sometimes loan money unwisely and so fail. This 

 is a risk that depositors must take. As a rule the money is 

 wisely invested, and is safe with time given for collections 

 Farmers who have borrowed money dislike extremely to have 

 their mortgages foreclosed. They can hardly dislike it more 

 than bank officers. No foreclosure takes place wdien the mort- 

 gagor can sell the pro])erty for enough to pay the loan. In 

 case of foreclosure the bank nearly always has to take the 

 property. Having no use for land or any machinery for 

 successfully managing it, banks are less likely to get interest 

 and expenses from it than the former owners. They never 

 foreclose until satisfied tiiat the mortgagor can not pay. When 

 that is the case, the quicker the foreclosure is made the better 



