The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1867-09-09
, MOTHER BANK BUBBLE BURST.


srn District.
Ftor1 me ~ Y Sunday Herald
Tho rotten and unsound condition OF the
national banking system has been again exem-
nT6sd in the suspension on Saturday Of the
Rarmersi and Citizens National Bank of Will
Tsmsburg and the transterral OF its books and
assets TO the charge OF me receiving otlcer
sPP irreoularitcs in the affairs OF this institu-
iiop have been already brought, to light, and
vet more interesting and astoMnsI;ing ms 4; p,eveiop-
1nents may be expected before the lnvestigatlon,
-vkich has inst been commenced, Is concluueh
The immediate cause of the suspension was an
order issued by the Treasury on tne otn ihs,anI;
The regulations OF the Treasury require tnae an
conntry balks under which class the termefs'
and Citizens was enrolled in the Iist OF naIlon9i
banks shall maintain reserVe lunu M III l9gsle igIt
sondors in their vaults amounting to at least
sttoon nor cent of the gross sum OF their de-
Dosits and circulation. me Farmers. ana
tsiizens, Bank held about 81 OUO OF deposlts,
md was permitted to issue circulation OF about
SSso o00 In national bank currency notes. 1t
had also about $4,000 OF old state notes hoatlng
about in the financial world, and as these bills,
When gathered in, would be converted into
national bank currency, the Government
counted in that amount as part OF the circulation
of the bank. In order to comply with the
requirements of the Treasury, therefore, the
Farmers, and Citizens Bank ought constantly to
hold in it's possession about $2l0, 600. About
month ago the agent of the Government whose
duty it was to see that this regulation was OBJ
served discovered that there was a considerable
deficit, the amount of which is unknown, and is
yAriously stated at between $50 900 and Sl00 600.
A notification that this deficiency must be made
up was at once served upon the President of
the Bank, Mr.. o. M. Beach. The conduct of
this gentleman, If the statement of the directors
can be credited from this stage of the affair,
has been quite extraordinary and wholly mex
plicabe. Instead of cOnvening special meet
ing OF the Board of Directors and explaining the
critical position of the bank, for the prosperity of
which they were, equally with himself, morally
responsible. he kept the fact of the notice having
been received profound secret. Since the re-
Ceipt OF this important notification four of the
regular weekly meetings of the directors have
been held; but the actual condition of the bank
mas never been on either of those occasions dis
closed or any intimation whatever given of its
impending fate. The directors declare that the
stoppage of the bank was as sudden and unex-
pected blow to them as TO any of the stock
holders or depositors, of whose interests they
were the custodians; and several of them urge
in corroboration OF this, that within the last
week they have themselves con6ded large
sums of money to the care OF the bank, one
Of them having thus deposited no less an amount
than twenty-siX thousand dollars. What the
motive of the President could have been in thus
concealing the truth from the kno wledge of his
brother officials is as yet wholly unexplained,
but further developments will probably dispel
the mystery now resting upon this portion OF
the affair. Under these circumstances, of course,
none OF the measures that might have been
adopted to preserve the credit of the bank and
render its suspension needless have been
adopted. The stockholders assert that they
would have been perfectly willing to have had
If such course wo1ld have restored the bank
TO condition OF perfect and unimpeachable
financial health.
The Farmers and Citizens Bank was orra-
nized as a National Banking association about
two years ago. but 1t had existed as one of the
banks of the State of New York for long time
previously; Its capital amounted to $500, 600, in
shares OF $40 eacn, and had all been subscribed
up 10 the time OF the suspension the fair fame
Qf the bank had never been questioned, and 1t
sh,oyed an, extremely enyiable reputation for
4hn CT. al nr,1f Tho
experience and ability of.the Cttcers 10 Whom
the charge OF It's affairs bad been comHltted' It's
stock ouly recently was quoted at eighc per
cent. premium, and last July dividend OF
five per cent. was declared, and the custom
ary bank statement, showed a surplus of
$40 0O0 This statement, however, is now gene
rally discredited. Some speculation took place
in Williams burg yesterday upon the shares of
the bank, but sales were effected only at a
--.nvus u rscounr. e
The classes mostly affected by the failure c,
The Farmers and Citizens Bank are the smaller
tradesmen of the Eastern District and the Long
Island farmers, men of small resources, whose
whole available capital was intrusted to the
custody of the bank. Considering the smallness
of the means at the disposal OF each, 1t may oe
very well imasined that the number OF deposit
tors was very large and the effect of such action
on the part of the bank the cause of much
specul alton and excitement and of temporary IT
not permanent distress to q large portion of the
population. A number of the depositors were
men engaged in trade In Williamsburg, employ
ing a number of hands, whose weekly pay was
usually drawn from the bank each Saturday.
This NAV not affect those with sufficient capi-
tai on hand, but many of the smaller customers
deposited the business receipts daily, aud then
drew for their requirements. The result was
that many of them were last night unable to pay
their work people, aud the latter went TO their
homes in far queter mannerSthan might have
been expected from people in their sitna4iT5T1
The greater number were pRSS0ns in almost
destitute circumst anaaNs aud the distress occa.
lohed 0Sy-AS sudden stoppage of the means fol
R2sAsffng lies neceSsaries may be well ina
gined, and many poor victim of bad manage
ment and wild financial speculation retired to
his home last night in the most pitiable MOOD
having no hope before him but debt--that is, il
he had creditor starvation and misery fol
himself and little ones for the coming week.
Many OF the storekeepers, especially in Gran
street, were also much embarrassed, and were
unable 10 meet their regular weekly engage.
ments, and business in some establishments was
partially interrupted from the moment of the
announcement Of the suspension of the bank.
Some persons, more frightened than Others,
waited for the hour of opening to present their
checks or books; but were met by coored
porter who informed each that his instructions
were TO admit no one. These orders were
strictly obeyed, and many who feared their
worldly all was irretTieVably lost waited lone
and paten ly for some explanation from the
officials of the bank; but they did not con
descend to vouchsaie any, and the darkey, witt
most monotonOu' and husky voice, continued
his steIeotyped ans Ver aud with gravity an
wisdom repeated, mot cent here-you get n
stamps to-day.p Several ladies tried tn
gallantry of the coored porter; but t
no avail. There was mo admission
sure" where is the President or tn
directoIs" asked one. They are not here.