Daily Democrat and news. [volume] (Davenport, Iowa) 1859-1864, 1860-06-21

" vtsceGPts Dasanps the Banks.
s. TIE NJ i.on hs and Demoervf
exposes s blows be loose and corra
oa"l et i. b CT Banks Of Wiscok
There is piece oi systemalizcd loose
ness and bad management that has crep,
nto the Affairs OF the bank arrangements
+ this State that will bear thorough
ventilation. II began doubtless. IS 40
cay way Of accommodating friend o.
tso, but it has grown into glariog, II
not u corrupt abuse.
There is q very large amount OF the
l:omptroller's fund deposited in two Of
the banks Of this city. That he has any
funds al all is owing to the fact that the
State banks are winding up and with
Irswipg their bills from circnlstion.
When bank is compelled to, or wishes
to rel'nqnish business, it "a obliged ac-
cOrding to law, to deposit a certain
amount of specie or Of its bills with the
Bank Comptroller. He then makes his
certificate to the State Treasurer OF this
fact, and upon that certificate, the owner
# the bank goes to the Treasury and
withdraws that amount Of the State
Stocks that he has deposited for the Sc
curity Of his bills. This is the theory
of our banking law-that befo'e the
stocks which secure the bills leave the
custody Of the Treasurer,thc bills them
selves, or the same amount OF specie
must be deposited with the Bank
Comptroller. The idea is that the bills
shall be brought in and cancelled, when
the stocks 90 out. Such is the theory
Of the law; now for the practice.
II the Up-County Bank proposes to
wind up its business, and wants to &c,
is stock out Of the State Treasury, !,
does not, as formerly, bring its bill, to
the Bank Compt' oller, or deposit with
him the same amount in specie. On the
contrary, it gives the Poopendahl Bank,
At Madison, the job Of "wlndingit up"
The Poopendahl Dank then goes to the
Bank Comptroller, and hands him
"spccic certificate Of deposit" which be
accepts as specie, and it merely appears
in some investigating report that he has
so much "specie' deposited IN the Poop
cnlahl Bank. He then makes his GER
tificatc that the Up-County Bank has
deposited with HIM "specie" to the
amount Of say ter, :enty, or fifty thou
sand dollars. The Poopendahl Bank,
on the strength Of this certificate, goes
to the State Treasury, and draws the
State stocks of the up-County Bank,
and sends them to New York, where
they arc sold, and passed to its credit as
New York exchange, which it sells at a
premium Of two cents on dollar. An
advertisement then appears that the
bills of the Up-Connty Bank will be re-
deemed at the counter OF the Poopen-
dahl Bank. And they are redeemed, if
they are presented. But, as fast as they
are redeemed they are paid ont again
and put in circulation with other curren-
cy, no distinction being made between
them and other bills, the security tor
which are still in the custody of Mr..
Hastings.
In this way, banks are wound up,
without a hundred dollars in specie
changing hands on that account; the
stocks ATE withdrawn, aud yet the bills
are in circulation, with no show of Sc
curity except the integrity OF Poopen-
dahl Bank, or the fact that it is doing
enough Of this kind Of brokerage to be
a profitable institution and secure from
the il-winds Of misfortune. This Job
of "windng up" banks, in this way is
worth five thousand dollars year. 1t
gives the bank to whom official favor
has coufided this advantage towering
and oppressive power to crush rivalry
and to control the business interests of
the community, Without the outlay of
dollar Of capital, they become sort of
rag barons and hold the currency of the
State at their mercy they get up pan
les and buy bills at discount; then boil
ster up credit and sell them at a pre-.
mnm.
We thought this matter would bear
ventiating. A little light let in on the
back door route from the Comptroller's
to the bankers Office, will not hurt
anybody. The above is only a small
DINNER