Cincinnati daily press. [volume] (Cincinnati [Ohio]) 1860-1862, 1861-03-04

msy not make another failure. The Gdzette
saviDgs % banks are expected to pay in
terest on deposits, and to loan their deposits;
but these loans are to be made on such Sc
as commercial revulsions would not
destroy, "Sucb, for instance, as real estate,
worth, exclusive Of improvements, double
the amount invested" 1. e., loaned upon it.
They are also, in spite of the incredulity
Of the PRESS, to be managed out Of benevo-
lent motives; and the Gazette says, IA num-
Der of our best and wealthiest citizens stand
ready TO serve as trustees, and are willing to
give ample security for the faithful admins
Of the trust upon that principle
Now we are enlightened, and can write, just
as the Gazette does, with a certainty Of sue
cess. In the previous article we were in
formed that the principal thing that dis
gusted the depositors, who used to deposit
their earnings, was that in the crisis of 1857
they could not get their money when they
called for it; and besides, their propensity
to call for it with a rush, made them unde-
sirable depositors.
Is it proposed to establish savings-bauks
that can not pay depositors on demands
Will they not have the same propensity to
run on the banks, at every financial panic
things which are constantly growing fire.
%uuept2 How can a savings-bank, with its
money invested in real estate, meet a gen.
e1al call for its depositsi
Furthermore, as to the security of real
estate for the loans: is it fact that real
estate is exempt from commercial revul-
siops2 1t strikes us that experience is the
reverse of this, and that prices of real estate
nave become proverbial for fancy qualities,
in our financial commissions. OF all our airy
castles of speculation, mont have SO been dis
tipguisbed for total collapses as the prices of
real estate. But, we're it ever so secure, it
would not pay deposits at a time when the
propensity to draw them become contage-
Gus.
1t is within American experience that
banks of issue, established on real estate
security at one-half its appraised value,
turned out to be utterly worthless, and they
are now classed with the most celebrated of
American swindles. This would seem to
show that real estate, at half its appraised
value, may be the %fanciest kind of security.
Some of ''our best and wealthiest citizens
NAV stand ready to serve as Trustees of
such institutions, purely from benevolent
motives; but does not the Gazette know that
any of our worst sharpers would be equally
ready2
Still, we do not see the necessity for any
charter to enable benevolent gentlemen to
undertake this, unless it is to create a fic-
titious credit by a legislative Endorsement.
On this feature the Gazette is silent; there
fore we are obliged to be so, or make failure
if we write. We have an idea, that, like all
other institutions of any value, Savings
Banks must grow, and that they can not be
established by legislating a system. Nothing
was ever established in that way, and all
attempts have been miserable failures. 1t
would be a great misfortune to the people of
this city to have a system created by the
| State, by which individual character and re-
| sponsibility were sunk under the State in
| corporation, and all the concerns that would
epIlDR up uuuOl ~ WOAlO 10 pioSOu Ou u pdIs
The only foundation that savings deposit
taries can have, is in the capital and integ-
rity Of the proprietdrs and managers. Even
with these, the confidence of the public will
be of slow growth. 1t must be built up by
gradual accretions. 1t is well that it is so.
Those who desire to bring a system into ex-
istence, under which savings institutions
will spring up like mushrooms, to compete
for deposits, like 30 many mock-auction
shops, are engaged in nj work that will
benefit the people, however honest their
intentions may be.
When we have savings-banks in Cincin-
natl, that can point to twenty years faithful
and successful management of their trust, or
ten years, or ever five years, then they will
have laid a foundation for public confidence,
which will go on ~aecumulating in an accel-
Grating ratio. When we set up any other
basis of confidence than capital, character
and established fidelity, we are only set
ting a trap for the savings of the people.
AS to the kind of securities in which
savings-banks must deal, these must be
left to the judgment and business experience
of the managers. The first requisite is,
that the deposits must always be paid on
demand. When any bank fails to do this, II
has wound itself up, no matter how securely
its funds msy be invested. The only quality
that can prevent, or that should be sought
to prevent, panics among depositors, is the
established character of the management
The quality of the securities will do nothing
10 prevent a run, nor will it satisfy deposit
ors for a suspension of payments; least o
all, will security on real estate, the price o
which is SO fancy, and the sale of which il
the first to stop at any financial disturbance
satisfy them.
We presume that it is not necessary to in
form commercial men in this city tina
there is a style of business paper here whicl
is Just as safe to loan money on, as real es
tate, and which has the quality Of de6nit
value, which real estate may not have, an,
which is convertible into cash within bris
periods, OF may be converted at any mo
ment in any case of a run from deposlteri
These matters must be left to .he judgmeu
of the managers and the experience an
integrity Of an Institution which grows wit
the confidence o fthe people, will be suficier
for that and nothing else win proVid
for it.
But as to setting up any claim to speci'
privileges and immunities or virtues, for
svstem. on account of benevolent motive
we certainly must protest against such con
siderations being introduced into Legislation
for financial institutions, or having any con
nection with them and we presume tina
we need only mention it, to remind tn
Gozette that the greatest frauds and the mos
oppressive burdens that mankind has suffere
in all ages have been fastened upon il q