New Orleans daily crescent. [volume] ([New Orleans, La.]) 1851-1866, 1856-05-02

M
# NJ ID MS ~ NI1S SaEs L0UTsT Al
x IN o1s Issue q Monsay NE alluded chiefly 70
thu NOR artnient Of this the
great success attending sts reorganization into two
distinct departments 0nr were restricted
Ito benefits conferred On Tie state and old steekhold
ers by the actof March which relieved the
bank from the decree offorfeiture rendered our
courts IL stockholde rs maintained
to the contrary and restored II the enjoyment Of
its banking privileges. Though these privileges were
restored they did not restore credit efficiency or ca
pahilty Of service to the public Or the stakeholder
In the course Of our remarks We freely condemned
the real estate system Of banking notW
The successful ending of the Union Bank Inus0 pe
remembered that the Union Bank went anto opelsa-
ton in the year 1882, years before
eaI and financial blast Of 1s3 commence 81 "
years Of this time the bank had ail te
the increase of the business Of eSY attf 81
$780, and also received large share q tse business
which was Withdra from the branch Of inc unteo
States bank III this during me years
1888 and 1885,, when the branch was preparing 70 SO
Unto liquidationo ranserence to the Gas Light Som
\ navy The President of the Union Bank, Matthew
Morgan had long aimed q controlling influence
ST tae Branch bank and general finances Of onr city
ID WIZ decided favorite of the Goddess Of
who had preyiousy spread her wings over him and
attended him the first four years Of Union
bank. IN addition, the capital Of the Union Bank
vas secured at an earl the sale Of the bonds
Of The State which had been granted for that pnr
class than the generality Of subscribers to property
banks. .l5s \, $5 5#
Tie Citizens Bank, as we before stated, was to:
raise its capital bsbonds Of its own issue, without
State aid, which could not be effected, in eonse
quence of which the period Of its organization was
delayed until 1886, which was the most unpropitious
and critical epoch to go into operation. It will
thus be seen that the Union Bank had advantages
from its incipiency which the Citizens Bank had
as the Legislature granted facilities to class
or association of citizens to the exclusion and injury
Of another class association and it required three
years (and these three years were Of unexampled
commercial :prosp from 1888 the time Of char
tering the Citizens Bank, to the spring Of 1886,
before the Managers Of the Citizens Bank obtained
the desired and coveted relief in the shape Of the
State faith. N :$ 53 AN @ 58sf $tS
We win now briefly explain the happy modifca-
ton introduced into Tie charter Of the Citizens Bank
since 1852, by which it has attained its present high
position, and BY which great share Of the dangers
and evils lurking at the rootof the real estate bank
system were efactually removed and renedied, and
all the advantages Of joint stock bank secured to
\ the corporation. At the same time this does not
change views Of the inpolicy Of banking on real
estate though both systems, real estate and joint
cash stock, may work together and harmonic There
might be a bank on the same principles established
every year for twenty yearsthat is real estate and
eash-and not one be . simile Of the Citizens Bank
\ or atlantis eminence. @ = #s@.
The main objection to the revival of the Citizens
Bank 1852 YES the nsuficiency Of its active cap
ital for banking purposes True the S. 800 600 which
formed its debt to the foreign bondhoders paya
bic gradually at long and distant periods. On the
other hand, the $1,000 900 or about that amount
which formed its assets, was composed mostly o.
stock loans at from one to thirtyfour years
long loans and real estate leaving hardly 100000
cash means assets available for discounts. It was
obvious the advantages proered to the bank by the
restoration of its original privileges almost
gatorY unless additional and active resources
were created on which could have basis and oun-
dation for ordinary banking.
\
1853 at the earnest solicitation and entreaes Of the
friends Of the bank, authorizing it to convert one
million of its mortgage stock into cash stock. Under
that act the directors Of thebank (having been firstly
renstated in oeeby previous acts Of the Legislature
and the assets transferred from the hquidatng
missioners to them) were authorized to raise cash
capital Of 81 100000, which, in addition to the avail
able banking assets Of the corporation were to form
the capital of the bank : the terms and conditions
being left tobe determined by the Board of Directors
Under this authority the directors wisely conceived
the idea Of dividing the bank into two departments
4 say the mortgage stock department, which represent;
tile assets and liabilities of the old stockholders, Of
II explained in our article of Monday last and the bank
ing department with its cash capital Of l,500,0 900
4 of which 81 100000 belongs to the cash stoekhold
ers and $500 900 being the cash assets of the ole
stockholders transferred to this fund.
twill be perceived therefore, that the two depart
ments into which the bank is divided are now work
n ing independently Of each other: the collection
made for account of the mortgage stock department
being reinvested for its own exclusive profit and TIL
debt Of said department to the foreign bondholder
being met as it falls due out of its money thu
accountability Of said department and its stookhod
holders being kept distinct is that of any othe
y correspondent or customer of the bank,
On the other hand the banking department is work
ing exclusively its capital of 81 100000, the SAM
as any of the old incorporated banks of the city th
cash stockholders being entitled for the 100000
furnished by them to two-thirds Of the profits, ant
the old stockholders or owners Of the mortgage de
partment to the other third for their $500 ,000witl
this only difference that the halfyearly dividends an
r paid to the cash stockholders while the dividend
accrpng to the mortgage stockholders, together witt
the profits realized their own assets retained
Z and reinyested, and are gradually accommodating
large surplusto cancel the bonds Of the State whic
must be paid, and the State relieved of all respons
bity, before any division Of profits can ought
be expected. When the bonds Of the State are RI
deemed and cancelled it will be sufficient time to
ticipate division Of the profits, which are unde
the wise and cautious measures adopted, yearly az
, cumulating. -
The monthly statements published by the Board {
Currency show under distinct and separate heads th
condition of each department of the bank, and b
reference thereto the cash mortgage stakeholder
can ascertain the actual situation Of the departef
in which they are interested; and we can also say
4 the stockholders of the mortgage department, tbs