Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1858-10-02
THE WAR OF THE BANKS.


The history of the establishment at Boston of
the Bank of Mutual Redemption, by and in be-
half of the country banks of this and other
New England States, for the purpose of acting
as mutual redemption agency in whose profits
they should share, is well known. The Suffolk
Bank of Boston, which has done this business
with great profit to itself, by self-electon and
common consent, heretofore, has opposed the
movement from the start, and is now resorting
to the most extraordinary measures to break it
down. If it succeeds, it will only be through
the contemplate cowardice of the country banks.
Instead of coming up boldly to the support of
the new institution which they have established,
and transferring their accounts at once and bod
lily from the Suffolk to the Bank of Mutual Re-
demption, as in good faith and consistency they
were bound to do, each has waited for the other,
and all to see if ''the thing was going to go"
before they ventured to quarrel with the old re-
demption agency.
OF course, the Suffolk has taken advantage
of this, but in such way as could not have
been expected Of respectable institutions and
as Will. probably, react with serious effect upon
itself. 1t has adopted the policy of shooting
the descrters,' in order to crush out every dis
position to fulfill the purpose for which the new
bank was established 1t has refused to ex-
change the bills which it has accumulated of the
banks that have led the way and transferred their
accounts, when demanded, and the specie prof
tered in return but boarded them till it had
such an amount as in its opinion. would break
such banks if precipitated upon them at an un-
guarded moment, and then and thus presented
them at their counters. Thus it proceeded
against the Milford, y. IT,, bank last Thursday
with $4,000 of the latter's bills, against the
Farmers at Orwell, VT, on Friday with $1,000.
and again on Saturday against the Merchants
bank of Lowell with 10000 in its bills. The
demands were promptly met and thus the Suf-
folk disappointed Of its purpose of announcing
throughout the country the failure of these banks
to redeem their bills. to punish them for their
temerity, and frighten others from following
their example
This sort of intimidation. since it has failed
thus far to crush single institution. is arousing
the banks TO sense of shame at their weak and
cowardly conduct heretofore. and creating pub
hc sentiment which will operate both upon them
and the Suffolk bank. The following banks
were represented at a meeting at the Massasoit
House, in this city, last week, to consider this
subject
Agawam bank, Springfield; Brnttlcboro bank. Brat
tehoro, Nt Chicopee bank, Springfield Conway
bank, Conway Cabot bank. Chcopee Franklin
County bank, Greenfield; Hovoke bank Northamp-
ton; liadley Falls bank Hnyolc: John Hancock bank
Springfield; Lee bank 7ee Monson bank Monson;
X,
Sheburne Falls We.,fed bank, Westfeld.
The conclusion to which thev arrived was as
follows -
Re'ulyed. That 1t is cxpedient that the banks rep
resented at this meeting, and other banks inclined 10
su.tain the Bank Of Mutual Redemption withdraw
their deposit, from the Suffolk bank.
Resolved, That the representatives Of the several
banks here present will recommend to their several
institutions, ~ mceng to be held next week, vote
to remove their special deposit, from the Suffolk bank
as soon a forty banks including those which have al
ready acted, shall have united in the movement
1t would have been much more creditabe to
these banks to have resolved to change their ac-
counts instanter, and to have done it. as the
I-o"tH udiiA> ,in't j"et ds..~. G..-L ...,:...
would alone have made up the forty associates
they demand twice as soon as their contingent
purpose will do it. A little boldness and prompt
ness on the part of the country banks or any re-
spectacle number OF them will settle this thing
at once and forever. If they continue to falter,
they deserve TO be crushed out and put under
the reign of King Suffolk forever; and thepub-
lie will never again lend ear to their complaints
The general merits of the question, involved
IN the establishment of the Bank of Mutual Re-
demptlon by the country banks to supplant the
Suffolk bank i'll business which it has arroga-
ted to itself, and whose profits it has absorbed,
have been abundanty argued. There seems to
be no good reason why the banks themselves
should not do their oNn business, instead of
paying another bank to do it for them; there
is no ground for doubling that it will be done
quite as well, and the public as well protected
as heretofore each bank becomes a check up
on each other; and the interest of all is the in
terest of every honest and well managed inst-
tuition. That there is profit to be made in the
business is evident from the position of the Suf-
folk, whose stock is worth more than that of
any other bank in Boston, which pays 10 per
cent dividend regularly each year, and has a
large reserve profit. The amount of funds
which its levy upon the country banks places at
its disposal, free of interest, is enormous. Of
its four millions of liabilities. three are due to
country banks for permanent deposits and un-
drawn balances. This enables the bank to main
tain its loans with safety up to the very highest
figure Only one or two other banks in the
state are able to carry up their loans to the lin
it of the law. The country banks say, if they
can establish an institution to do this common
business for them all, and themselves own the
stock and reap the profits of the accumulation
of their own balances in Boston, they ought to
have the right to do it. The legislature, in
granting them charter, conceded the right
The conduct of the Suffolk is an assumption of
the right and power to deny this right and this
authority of the legislature. "On what does
this our Caesar feed that he has grown so fat ?"
--Spriag Rep. Sept 10th.