The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-05-20
Our Washington Correspondence.
wAsHIAsroS May 49, 1866.
THE NATIONAL RANKS.


THE NATIONAL BANKS.
Tho failure Of the Merchants National Bank OF this
city is no surprise to that portion Of the business com
munity who had any knowledge Of those managing that
Institution. II has been wonder for long time past
why government intrusted Its funds In that bank
over night For business man TO deposit money there
was considered among his associates an evidence OF
insanity If merchant gave check on the bank he
would be looked upon suspicious These facts have
been notorious for long time and were 40 generally
talked about that when the bank failed It's list OF
deposors confined almost exclusively TO the govern
mcui and men in the different departments. The bank
would have failed three months ago had II not been for
lhe fact that the bolstered up and this Is
not the only national bank In that condition II the
affairs Of the banks under this system could only be
known II would be found that the government has been
paying interest on call deposits In the ubTreasures
throughout the country aud at the time pacing
funds the hands OF the national banks and allowing
tho latter OF these funds without interest Thus,
in fact the policy Of the present management Of the
Treasury Department has been pay interest for money
u bolster up Chases rotten system Of banking This
Che whole affair in nut she'll and the people called
upon 10 foot the bill In the shape Of taxes.
II is but q short time since the government was
paying interest on nfty sixty millions Of special de-
posts N It's Sub Treasures Al that very time the
hanks nearly that amount which not drawing int
rest, but as banks Of this city concerned
was used to buy up claims against the government
from Ave 10 ten per discount and the money drawn
from the Treasury Immediately for those claims The
seuera public have idea Of the abuses which exist
under IN. national bank system.
rHs wAsmseros nssxs.
The failure Of the Merchants National Bank has In
measure lifted the veil from the operations Of these
banks but Il has done 80 only a limited extent II
depends very much upon the action Of Congress whether
the country will profit by this failure will be permitted
60 drift along until general crash OF the banks nkes
place The banks New York city and State and New
England altogether different from those organized IN
this locality In New York. for instance, there was
State banking system In existence long before the forma
ton Of the national plan. Under that system the
business OF banking was 40 rcs,ricted that
The l00seness which exists In many places win
the national banks impossible The New York
banks since their change 10 the national system have
continued 10 conduc, their upon the sound
principles and therefore stand different from the banks
n other localities The nat onal organizations IN THIS
city are not conducted any such rules They are or
ganzed for altogether different purposes II u almost
Impossible Tor merchant business n get any
accommodations al these banks In the shape OF discount
81 paper even " ~ OF the very best charntcr Th0se
In charge OF the banks their funds 10 speculate
claims upon the government and n analysis OF their
organisation examined into will at once be seen a. a,
this plainly the object OF the banks least this and
securing funds Of the government deposit
Take, for instance the Merchants Bank, which has
Jus, faied Certain parties about the departments
Interested In the bank; they made for two rcs
hrst, for their Influence In securing deposits
the part Of the goyefnment second, 10 hurry
through claims which the hank bad discounted One
ent with several weeks since By out
SIDE parties for trusting their funds In the Merchants
psuoaai Bank They excused themselves on shs rousd