The drafts were of great use in commerce, particularly for the payments between St. Petersburg, Moscow, and Odessa: the charge upon them was a quarter per cent., whilst the conveyance of money through the post costs one per cent., besides postage. This convenient system was unfortunately put an end to in 1841. The charge on drafts now amounting to five per cent., operations of this kind have consequently become impossible. It was, probably, with a view to the revenues of the post-office, that this sage measure was adopted by the minister of finance.
Every one knows, that in order that a bank of discount should carry on business profitably for itself and for the commerce it is intended to assist, it must deal only in genuine commercial bills. Merchants recognise as genuine and discountable bills, only those drawn by other places for banking operations, and home bills drawn in consideration of goods sold for payment at a determinate future date. Now the Odessa bank not being a bank of issue, does not practise acceptance properly so called; Constantinople is almost the only town that draws on Odessa, and that but for small amounts, and as these acceptances are at twenty-one days' date, they are rarely discounted. Sales of goods for bills are also seldom practised, and from all we could learn, we believe they make but a very small part of the business of the Odessa bank. Goods are generally bought in that town on trust and without bills.
On what bases then have the operations of the Odessa bank hitherto rested? Rather, we are disposed to think, on fictitious than on real commerce. From its first establishment, the bank, strong in its privileges, thought to serve trade by encouraging discounts; and the facilities it afforded, induced many persons to avail themselves of this means of credit. Every one in Odessa knows how many disasters have been the consequence. Suppose a merchant wished to make a speculation, to buy for instance, a ship-load of wheat, amounting to 12,000_l.; if he had only 80,000 or 100,000 rubles capital, he obtained the indorsement of one or more of his friends, and the bank immediately advanced him the whole sum necessary, at three months. The merchant was, therefore, forced to dispose of his goods as fast as possible, in order to meet his engagements with the bank: clogged and disturbed in his operations, and fearing lest he should involve his friends, he must often have incurred great losses, and after a few similar speculations, his ruin, and that of his friends were inevitable. Such has been the fate of many a merchant, in consequence of the unfortunate facility they found in obtaining money. The bank ought to have been aware, that instead of genuine commercial bills, it was discounting mere accommodation paper, and that there is an immense difference between discount for the realisation of business actually done, and discount for the realisation of business yet to be done. Unquestionably, the bank ought to have modified its system, after seeing the mischiefs it led to; but it has persisted in its original course, and were it to desist from it without a radical change of institutions, the operations of an establishment constructed on so vast a scale would become quite insignificant.