The Abbeville banner. [volume] (Abbeville, S.C.) 1847-1869, 1856-01-03
~ I s g EA Il a III 8OWS .
New York Banking.

"NihNhO huNluttioio III llO houC) hiuNCt
OF that city. Poor Banks, and those who
endeavor to do II large and hazardous bus
mess on small capital, are curse to any
community:
"The returns from our banks show con-
clusively that some of these institutions do
their business upon the capital Of others,
and that the prudent and conservative have
to carry upon their shoulders tho reckless
and improvidcnt.' Were all of the hanks
to follow the example of the latter, they
would all go down together in some mo-
mcnt of panic or financial embarrassment.
The conservative banks deem Il specie basis
Of 20 per cent. of liabilities Il limit below
which it is not jnlicious or safe to run, and
they therefore arrange their business accor-
dmyly. The reckless banks knowing that
their prudent ncighbors vii! not go he!ow
this average, dash on without any regard
to such limit, relying for safety, not on
their own resources, but upon the re- erves
of the others. They are like those i'm
provilent idlcrs who earn only enough for
to, days provisions, regardless of future
want, because they see the accumulated
stores of the industrious on either side, and
know that before they starve, they can
draw on the granarcs of the more provi-
dent. 1t is chiefly out of this recklessncss
on the part of some of the banks, that the
system of demand loans has grown to be
such HI intolerablc nuisance. Every well
established bank finds 10y experience how
much Of its depositcs it can safely depend
upon as capital, and uses the funds thus
entrusted to it accordingly, in the discount
of prime business paper ut short dates, re-
serving Il specie basis for all its liabilities Of
20 per cent. If the course Of I'LL the banks
were uniform in this direction, there could
be (humanly speakiny) no sudden and dis
aStrous contnctions. But in the face Of
this conservative action, some reckless
Lanks-ori yinatcd to fnd n place for il
President and Cashier, or to procure loans
for Il clique of greedy borrowers up
in loans al! the funds they can ohtain, with
out much regard TO the future. When tho
day Of strngency comes they are forced
to borrow Of those capitalists who have
funds in the prudent banks, and the latter
are therefore compelled to give up por-
ton Of the deposit S they might otherwise
have safely used, or to draw down their
specie below safe limit. Finding, after
little experience, that they are liable to
these sudden calls on their dcpositcs to make
up for the reck!essness Of their ncig,Jors,
the sound banks keep large amounts loaned
ont son CALL tempting spectators to ell
gage i'll operations for which they would
otherwise lave no means, and running them
by pressing for the money when they want
it most, or else avoiding such ruin by pinch
ing their legitimate customers.
"The whole foundation Of the reaction
in the money market, against which no sa-
gacity or foresight Of the prudent can guard,
Is laid by the improper course of these reck-
less institutions as above described. The
sound banks, and the mercantile communi-
ty generally, all pay tribute to these finan-
cial corsairs: and the evil has now become
intolerable. Some have proposed legal
enactment ohIiging all banks to keep on
hand 20 per cent. of their liabilities in spe-
Gle, but we have some doubts in regard to
the efficiency Of this plan, and are disin-
clined toward any father legislative inter
ference will, the banks, Il a. remedy can be
found elsewhere. We think that this rem
edy lies in the proper verdict Of public
opinion. Let the community understand
who the real disturbers of the money mar
kct are, and frown upon all bogus banking,
whether in city institutions under a flourish
Of trumpets, or i'll wild cat cabins in the
Pine Log Districts. 1t might serve use
ful purpose to publish every week table
showing the per centage Of liabilities held
in specie, by each Of the banks. Each of
our readers can: however,. make the esti-
mate from our. regular weekly summary,
and we invite attention to it. ..:sa.