Chapter 14

Cindy was right about us needing a bank. My idea of, me becoming a middleman for my people making deposits to and withdrawals from their Multiverse banks was a stopgap measure that would suffice, but only for a short time. The more I thought about things, it was very evident that the Banking Guild would not establish a bank on Earth in the near future, and we needed one now.

By the time I got to my office portable, I had formed a rough plan to handle this issue. My first step would be to establish an interim system for my people to do their Multiverse banking, to include finding someone to handle the accounting of my interim system. Then, I would create a bank here at the ranch. That meant I would have to locate someone to run the bank. Making my Bank part of the hotel in the Trade Center complex was probably the best location for my Bank. My people and the traders would be have access to my bank. The very first thing I needed to do was to consult with a few of my key advisors as to the best way to proceed.

As Cindy had pointed out, I was delinquent in finding an accounting agency to handle my financial affairs. Locating an agency should not be a major effort. Once I have an agency, Cindy can hand over the responsibility of tracking my expenses and they could also set up the system for tracking my peoples’ banking transactions. I can hand off the transaction data to Kendrick, and he can transfer the funds between my bank account and my peoples’ Multiverse bank accounts.

Before going into my office, I stopped at Cindy’s office.

I said, “Cindy, I’ve decided to create a bank here on the ranch now. I can deal with the Banking Guild if they ever get around to deciding to install a bank on Earth. I need some advice on the best way to proceed. Please call Matt, Mary, and Abby. Ask them to join me in my meeting room at eleven for a short meeting. If you can think of anyone else, whose opinion would be beneficial, call and invite them. I’ll need you in the meeting, as usual.”

Cindy reminded me, “I always attend your meetings to take notes, Doug.”

I said, “Yes, you do, and I appreciate your effort. In this meeting, I want you there as an active participant more than just a note taker. You were in the meetings with me when I met with Kendrick and Kevin, so your point of view will be essential.”

Everyone showed up early, so I started the meeting with, “I decided to open my own bank here on Earth, which I is likely to become a chain of banks. Cindy pointed out that the Multiverse members of my staff have bank accounts in the Multiverse that they need to access, and currently they can’t do that. I will also need branch banks in other countries before the Banking Guild gets around to setting up a bank here on Earth. I will begin with a single bank here at the ranch.

I asked, “Abby, has Charlie gotten back to you regarding my question of how to go about creating a bank in the US?”

Abby said, “No, but I’ll call him after this meeting and let you know what he says.”

I asked, “Matt, what are your thoughts on me starting a bank?”

“As you’ve said before, you will need a bank here to support trade with the Multiverse and if you are trading in other countries, a chain of banks that include those countries will be necessary. So, I don’t see a problem with that other than the timing. You don’t have enough trading business to support a bank.”

I said, “I know and I hadn’t planned on opening one now until Cindy told me about the banking problems my people were having.

“Initially, I won’t have enough business to justify the expense, but we need a bank now. What I set up will be a very small bank. When I begin trade with traders and in other countries, I can expand it, and also set up small banks in those countries.”

Mary said, “I agree that a bank would be beneficial. However, you don’t have to limit your business to just the ranch. With the proper inducement, I think many of the people in the local area will open accounts in your bank. If you include on-line banking, people from other parts of the US, and possibly other countries will open accounts.”

Matt said, “I hadn’t considered that, Mary. What type of inducements were you thinking about?”

Mary said, “Think about your current personal checking and savings accounts, Matt. Each month, we draw less than one percent interest on our average daily checking account balance, and the interest rate on our savings account can be less than that. The bank uses all of its depositor’s money and reinvests it, and they receive a much higher interest rate than they pay us.

“If Doug’s bank invested the depositors’ funds, he could easily get a eight percent annual return on the investment, or more. If he made bank loans to other people and businesses, he could get a sixteen percent, or higher, return; a lower interest rate would give him even more loan business. If he advertised a three and a half percent return on checking accounts and a four percent return on savings accounts, I bet his bank would be swamped by people applying for accounts in his bank. I know I’d switch our accounts to his bank for that reason alone.

“He could also advertise very low interest loans for his customers. All of the current banks advertise loan interest on a home at the prime rate plus an amount that varies according to how greedy a bank is. What would happen if Doug’s bank offered home loans at a half a percent below the prime rate?”

Matt said, “Yes, those types of inducements would undoubtedly get him a lot of customers. It would also cause him a lot of problems with Earth’s banking community.”

I asked, “What type of problems, Matt?”

Matt said, “I’m not sure of all the problems, but you can bet that they would complain to the Reserve Bank about your bank practicing unfair business practices.”

I asked, “Matt, would the Reserve Bank have a problem with my bank paying higher rates on account balances than the banks that complain or on my bank charging less interest on loans than those banks?”

Matt said, “I don’t know, Doug. I am not familiar with the Banking regulations that control interest rates. I suspect the interest rates the banks pay and charge their customers are based on what they think will get them more business. Therefore, they set their interest rates to be slightly better than what other banks pay and charge.

“If you come along and set interest rates they consider ridiculous, then they will complain. However, if I’m right about what controls the interest rates is correct, then the Federal Reserve Bank wouldn’t cause you a problem.”

I asked, “Abby, do you agree with Matt and Mary?”

“I definitely agree with what Mary said. As Matt said, I don’t know enough about banking regulations to say if he is right or wrong. You will need a lawyer familiar with banking regulations in order to file your applications, so ask them.”

I said, “Okay. The way I see it is, I have the funds to start the bank, so my next step is to find a lawyer who will assist me with filing the application to start a new bank. While the application is being processed, I can find the people to run the bank and discuss things like interest rates with them. Anything else?”

“Mary said, “You will need a place to do the banking. Have you thought about where it should be located?”

I said, “I made a final decision on where to build it.”

Cindy said, “Doug, you and Sandy talked with William about designing your Trade Center. Instead of a new building, add it to the Trade Center. If necessary, you can build another building later.”

I said, “That is a good idea and it will solve a few related problems like security. The only problem is the Trade Center won’t be completed for three or four years.”

“That shouldn’t be a problem, Doug. You can use a portable until the Trade Center is complete.”

I said, “Let’s talk about it later. Anything else?”

Cindy said, “A new bank will take time. What about our discussion regarding you being an interim bank?”

I said, “Yes, I plan to do that, but I didn’t mention it. What Cindy means is, I will personally act as a bank for anyone that wants to withdraw money from one of their Multiverse bank accounts or make a deposit to an account.”

Sereine asked, “How will that work, Doug?”

I said, “We will need to use the official or an estimated currency exchange rate. Our recor and keep records. To make a deposit or withdrawal to or from your Multiverse account will be a multi-step process:

Step one - if making a deposit, give your Earth currency to Cindy, or to whomever I designate as my banker and. I will deposit the funds locally in my Earth account. If making a withdrawal, Cindy will give you the equivalent Earth currency in exchange for a Guaranteed Funds Data Chip.

Step two - during my next trip to the Multiverse and you were making a deposit, I will transfer funds from my the data chip to your Multiverse account. If you were making a withdrawal from your account, I will present the Guaranteed Funds Data Chip to your bank and transfer the money to the General Funds Data Chip and will then use the data chip to transfer the money to my bank account.

“Cindy, I believe everyone has a General Funds Data Chip, but we don’t have a chip reader. Add buying at least one chip reader to the things I need to do during the next trip to the Multiverse. We may need more than one chip reader or back-up chip readers.

“Anything else?”

Cindy said, “I looked at the list of facilities you and Sandy will have in the Trade Center and I noticed one thing that I think you will want to add. You won’t want the traders to be coming to the Embassy to use our Twixt terminal, so start a Twixt business in the Trade Center or in the Hotel.”

I said, “You’re right about me not wanting them to use our Twixt terminal, and I think the Trade Center would be the best location for that type of business. I’ll talk with Sandy about your suggestion.”

Matt said, “I think most of your banking business will be with Earth customers. You may not want them in the Trade Center portion of the complex, so it may be best to locate the bank in the Hotel or other portion of the complex.”

I said, “Okay, I’ll think about where in the complex to locate it.”

There were no further comments, so I ended the meeting. Cindy and I went home for lunch.

Abby was waiting for me when I got back from lunch.

Abby said, “Doug, Charlie let Aaron know about you starting a bank. So far, the President hasn’t commented on your intent.

“Charlie also asked the chairman of the Reserve Bank about what is involved in creating a new bank. He was told that most new Earth banks need about twelve to twenty million dollars in capital to get started. They have to apply to the regulatory agency, and once the regulatory approval process is complete, your bank can go into business.”

I said, “Sandy and I have the bullion we brought back from our last trip to the Multiverse. We intended to use that to fund our new LLC and to create its subsidiaries. Keeping in mind that I have cash in my Earth account and most of that balance is committed to other projects, I need to know if the backing needs to be in cash or will bullion suffice. I’ll talk with Sandy about using some of the bullion we intended to finace our new business to finance the bank, and I can replace what I use on our next trip to the Multiverse.