Bad Banking is no Thinking Thing

[Terrel L. Shields]

The idea that the mess the banking system is in is unique and unforeseeable is malarkey. It was readily apparent, predictable and well established precedent as well as advice on how to avoid it.

The following is an excerpt of a statement by one Hugh McCulloch. Don't recognize the name? He was once Comptroler of the Currency and Secy of the Treasury.

Let no loans be made that are not secured byond a reasonable contingency. Do nothing to foster or encourage speculation. Give facilities only to legitimate and prudent transactions....Large loans...are generally injudicious and frequently unsafe. Large borrowers are apt to control the bank and its customers, it is not difficult to decide which in the end will suffer.

Biography of Hugh McCulloch - oh, the comment above? In 1863 Mr. McCulloch sent a letter to every National Bank in the United States (of course, that was in the Northern US during the midst of the Civil War.)

http://www.ustreas.gov/education/history/secretaries/hmcculloch.shtml

 

[Crunch Hardtack]

Good post. There is really nothing new under the sun. SSDD.