Retrieved from “www.archive.org is claimed, a severe check is placed upon the borrower by the discretion of the leaner. It is practically impossible for any member to be an habitual borrower without its being known to the other members. Thus creditor banks are enabled to exercise proper care in making loans, and thereby to avoid loss. The rate of interest on such loans corresponds very closely with the rate on call loans. The newspapers regularly report the clearing-house rate, and this doubt- less has some influence on the rate in the market. A prominent banker has said that the effect of this custom is to make the rate higher than it otherwise would be, as the banks needing the money must have it,

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