The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1858-01-08


Balance due from banks STU ~
Due from banks 10y oes
Balance due from banks .sl7oe5s
The New York banks presented very weak position
their of due to and due from banks, perhaps
necessity OF their location at the commercial head OF the
There was Que to banks from them sIs so4 ,o56
Due from BANKS. o'oo,os"
Balance due banks .............s $. 1850, COG
The Condition Of eli the interior banks out Of the four
tiles before mentioned, was ~ -
Due from banks aS, o., 60
Balance due interior banks .N.,sa,s7y
The balance due to banks by the four cities inclusive,
Deduct country banxs i,I53,977
Balance due to each other and foreign banks 3s
This would appear be sufficiently large balance due
from them foreign banks and TO each other and there
but little or 70 doubt upon examination Of the general
position of the country apks accounts and those the
different cities that the redeemng banks in the city OF
New York-making liberal allowance for very large
balance due foreign bankswe debtors TO the interior
ones as a body, 81 900 ,0o1 while portion were
posted daily in that city, under the quarter per cent sys
TEN, as failed or suspended.
Allow the banks OF the their creditor
balances be used for mutual benefit at common centre of
redemption, sud under an organization which eau pre-
vent individual loss 10 each, and It would hereafter be
unnecessary 10 have bonres OF bank roes in the bank
department 10 euabe country bankers to redeem their
notes in the cities before mentioned by runous sale OF
their securities deposited this Office. The Superin
tendent commends 70 their consideration the old fable of
the bundle OF sticks. separated they are weak; tied
gether by string Of their own making, Co clearing house
for country bank notes } strong and improbable.
The necessary Of currency IN the daily demands Tor
its use mot connected with large mercantile transac-
tions being secured dollar for dollar by the very next
property to coin in permanent value. prevents its con
csnraon a suen amounts as 70 snaangsr SUSPENSION
circulating notes alone. The convenience OF the currency
is such that is safety only is desired by the public.
As al evidence Of the stability OF currency the Su
pcrntepdent may be permitted TO that bust
enabled him to leave his Office after the Suspension
the securities OF the only then failed free bank 1.-THE Island
City Bank Of New York whose securities he bad the right
"a sell for the redemption of its notes sold within
ten days after tine suspension and the notes promptly
deemed by his agent the Bank of the Manhattan Company
in New York IL proper to these notes
secured by the stocks of this State alone
This brings the superintendent TO statement OF what he
deems necessary 10 the stability OF bank capital and the
security OF the public both debtors and creditors OF
those institutions In using the words debtor and creditor
in uxtaposon the Superintendent means that their into
rests IN IDENTICAL An error in expansion OF
loans and discounts is followed by complicated one
in the necessary attempt at consequent contraction The
cafryr OF what may be called spasinodc line OF loans
and discounts implies anything but capacity IN banking
and : danperou, not o,y 10 the debtor and creditor
but also the stockholders The maintaining under adj
circumstances eady line is evidence that
not carried beyord what prudence dictated even IN
porous tines Apply this principle 10 bank staiesnents
and does not require much sagacy To learn where the
bon over the depOscr aud The stakeholder should DO
their business and invest their money.
The rst proposition OF the Superintendent is country
clearing house 10 be voluntarily established In the city OF
New York or Albany, by the interior banks. Abundant
power exists Tor that purpose IN section Chapter 2O2 OF
the laws OF lSio
seccnd-To amend the general bank law, preventing
hereafter the receiving of bonds and mortgages
ry for circulating notes, in tie Bank Department
Thfd-Tc compel by law all safety fund OF incorpo-
rated banks have on the OF July next third OF
their actual circulation in secured notes; onehirt more
BY the Is, Of January 1882 and all on the lsi OF July
Tn p,ir tho ,e,, actual circulation tho
means after GoduCi.ng the In their vaults OF their
notes from that they entitled 70 or bave re-
ceiyed from this Office.
II may be objected to this measure aud with some force
that those bank. aying they do half Of per
cent per for the redemption Of the bank fund stock
without depositrg security the Bank Department, The
to this H. they paying old debt incurred as
partners systcm that did the creditors OF
those ha, failed long ago The legislature. instead OF
compelling immediate payment or aholshng the system
allowed the debt to be funded thus making the FINAL pay
men paravey easy, and ontrued the special rr'v
ieges Of that class % banks.
II Is hardly necessary say that since the mutual deb,
funded OF that class OF banks (he Ixis County
nank) has failed and ia bills will be wthou. doubt total
loss unless the Legislature devote 10 Their payment what
ever remnant there may lie Of the Bank Fund a,r pay
ing its present liabilities. Three others have failed during
therescni financial dfcutss the Reciprocity, late Sack
Hafbor the Yates County ard the Rank Of orleans
While the Supernt hopes that their notes may DO
paid from ter assets noudiag the personal Liability
resting UPON their stockholders he cannot conceal fro,
himself that the process viii be slow that heavy loss
necessity Of their realizing upon them AID thus put them
into the hands Of the brokers AZ heavy discount
fourbIIo compel every oahs panSlng ASSOCIATION, os
individual banker 10 the state doing business under spe
ca charters articles of asocaton Under certificates
filed Ia this Office, 10 maintain specie reserve In ia
vaults Of 20 per cent upon the amount due ~ deposit
ors-allogDg those banks located ont Of the
city Of New York, 10 retNrn specie any balance
20 their creih in soyen, bank u either the city q
would strike the mind OF New York banker may be
that this making unfair distnctca between the
the state.
let Us examine this IL so in fact, New York city being
the great commercial centre not only OF this state bu, OF
Tie Cuhed states TOW ards which rs common nucleus
tend all values. whether the products Of agriculture, me
ohaacs the the miucs Of the earth. FROM In
IS atci another class q values the manufactured
goods articles OF luxury that enter into the consump
ton q The pie ~ the interior Of TIE whole country she
l. the great enropo of our foreign commerce, aud the
OF tbs cortncnt directly tend Her natural position "a
such that her Lhabtauia mus. Of necessity devote
Themselves 10 commercial aud trading pursuits She
is literally nos only the Gibraltar Of this State, but
Of the entire country, against suspension OF
specie payments, whether The demand Tor pay
arises from foreign credits, accumulated
fcmtstc debt ieaiDgto ds,rusi and panic among our
own people.
whatever demaEf for coin unusual quantities may be
mace this state elsewhere, New Gork ciy must fur
nsh n, either through the banks or citizens located within
her bnrders tpoa no other point this state
demand TIA, can lead TO general suspensicn aud by
necessity that knows law the suspension OF tia, city
is followed throughout this state and the Union
The demand fer specie upon interior banks having but
comparatively small dcpoes amounts tonothng "a their
great debt FOR cuIrenCy scattered and OF such press
ing daily use il Ne concentrated " proluce
demand cndsngcrng their general stability. Admit that
II may for moment, II becomes a demand upon New
YORK 3, once, aud she ee-aeed from her lccay and
the fact that values before stated tend directly towards
her. to furnish the coin
Again the country banks should be allowed 70 state a.
part OF vha, be called their specie reserve funds
the balances due them from banks Ia good standing IN the
cities above referred 10 That balance better for the
payment Of country bank debts THAI coin In their vaults
and think may say that thousands Of dollars of their in
cobedIcss paid By draf upon such balances where
dollar n raid IN coin
may be objected 10 this entire proposition that i re
aies oniv b. deposits True, and Why secured note
based upon credit second only 70 coin and 70 show its
effective use to the Interior banker In time of PRESSURE,
need only refer n the fact that upon return Of notes
there has been delivered ~ securities held by THIS DO
psrtmsnt nearly 81 500 600 week for two weeks IN sue
ression 20 redeem hs circulating notes, which q The
great DEL Of the country banker THIS occurred imme