It is the business of a bank to loan money to responsible persons
within reasonable limits. The regular customer of the bank is entitled
to and will receive the first consideration if the demand is larger
than the bank can safely meet. A business man should not hesitate,
when occasion requires, to offer his bank any paper he may want
discounted, if in his opinion it is good, nor should he be offended if
his banker refuses to take it even without giving reasons. A portion
of the loans of many banks consists of investments in solid bonds, but
the bulk of the loans of banks is made on commercial paper. Time and
demand loans are made upon collaterals of many descriptions. The
larger banks loan on an average from $50,000 to $100,000 a day. Banks
_discount_ paper for their depositors--and simply term the operation
discounting; but when they go outside of their line of depositors in
making investments in time paper they call it _buying_ paper. They
generally buy from private bankers and note brokers. National banks
are prohibited from loaning over ten per cent. of their capital to any
one individual or corporation except upon paper representing actually
existing merchandise.