The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1866-07-28
The National Banks.

The conduct OF a few of the national
banks has occaSiOned some trouble and
annoyance for the whole family OF institu-
tions organized under the bank law of the
United States. That law has tcrmi-
mated the existence of all State inStitu-
tions, and forced the nation TO the adop-
,ion Of these national banks exclusively.
The banking law, we believe, is as well
guarded as laws controlling and governing
banks well can be. We certainly have en-
joycd in this country every sort OF expert
cncc in maladmiuistration II fraud III the
operations OF banks, and with such expert
cnce before them, our statesmen ought to
be able to frame laws that will, so far as
laws can do so, protect the public against
imposition and fraud. As we said i'll an
article some time since OH this subject,
everything depends, At last, upon faithful
and vigilant officers. If the affairs and
daily operations OF a bank are supervised
by efficient, intelligent, and upright officers
all will 60 we'll; but without such just and
loval administration the worst evils of
banking may at any day fall upon a COM
munity as 4 natural consequence.
The invitation to 20 into the business of
banking under the national bank law IS
very strong. 1t permits of a very small
minimum capital. And the last six years
have been so favorable to the rapid accu-
mutation of fortunes that it became an
easy matter for single individuals to go
into banking, each having his w bank.
II was only necessary to distribute 4 few
shares to the directors in order to go into
operation. 1t might be asked why should
a man with large capital devote it to bank
ing, aud subject il to the control of q board
of directors who had very little interest in
the bank he established Why, very plainly
TO get the benefit of the discounts upon de-
posts, which often multiply several times
the sum of the capital of the bank. This is
certainly reason enough. But there were
many INSCRIPTIONS spectators who went
into the national banking business with
the expectation of using the capital and
deposits of their banks in their private
schemes and s%peculations. They had the
selection of their directors, and hoped to
be left by them to manage matters their
own way, and use the funds as they de-
sired. 1t is in this way that frauds have,
in q few instances, been committed, by
which heavy losses have fallen upon the
public. And these have occasioned, more
or less, distrust for the time, and have in
duced the Federal Government still further
to tighten the restrictions upon the privi-
leges Of banking, with the view Of still
further protecting the public, and the Go
vernment itself, which is compelled to be
. large depositor.
1t is certainly an advantage growing out
Of the abuses We have seen if the law is
made more effectually to protect the pub
lie. But nevertheless, after all that the
law can do, we must rely mainly upon the
integrity and capability of the mon who
manage banks. 1t is these administrative
qualities alone that can afford the surest
safeguard to the community.
Certainly after what has happened there
should be an increased determination on
the part of bank oficers-presidents,
cashiers, and directors-to adhere to rules
and utterly rejectSll departures from the
proper usages Of legal banking. One vio-
la,ion but opens the door to others, and
the danger is that before the door can be
shut again it will be too late ; Q catastrophe
may have como upon the bank permitting
these outlines that will break the bank It.
self, in1ict serious injury upon the CON-
munity, and blast the regulations Of most
Of those that are concerned in its manage.
ment.
1t is a matter Of very great Importance
just now for the national banks TO keep
within the boundaries Of safe preccdents
and not TO allow their means to get beyond
their control. There must be q day not
very far off when the whole system will be
subjected to the severest ordeal. Those
that are not ready to meet II will, like tho