A National bank may fail, but its notes are still "as good as gold."
BANKS AS LENDERS
The bank not only receives money on deposit, but it loans money under certain conditions.
Many merchants, builders, contractors and others often find it necessary to borrow money in order to carry on their business successfully.
If a man's business reputation is good, and the banks keep well posted in such matters, he may secure a loan on his own note, though even in such cases the name of a good endorser is required.
If in addition to his note the borrower can offer security in the way of bonds of good character, or other reliable collateral, he can usually be accommodated.
Of course, the banks charge interest for loans. They also make collections on notes and other commercial paper and they issue foreign and domestic bills of exchange.
Every man with a sum large or small in excess of his expenditures, should open a bank account. Even if not in business this will encourage thrift and lead to good business habits.
INTEREST ON DEPOSITS
Some banks, particularly those known as "state" or "private," and
National banks in smaller communities, allow interest on deposits.
This interest varies with the demand for money, but in the eastern
states it seldom goes over four per cent.