The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1867-06-19

From 1e Herald
Our special correspondence from the West,
On the condition of the national banks,
makes such revelations as should open the
ewes of the public to the rottenness and danger
of these institutions. To us the facts revealed
are not at all surprising; for we have long fore
seen and shown through the columns of5the
Herald what must result from such an i'm
mepsely fraudulent aud incongruous system
We felt it our duty to proclaim to the people
the danger that It was inevitably coming. For
a time we stood almost alone in our efforts.
The vast power of the national banks over
politicians and the newspapers generally made
IL uphill work, but the people and many OF
our public men are becoming enlightened at
last. The independent metropolitan press is
above national bank influence, and can afford
70 tell the truth. In spite of the power of this
gigantic monopoly and of the Chase radical
faction, which looks to it as a grand political
ma chine we saw that a large party in Con-
gress last winter and spring, as well as several
leading newspapers of the West, dared to
attack the monster evil.
Our special correspondent referred to, who
is employed in the work of probing the rotten
condition of the banks, and who has visited
Buffalo. Chicago, St. Louis, and many other
principal towns Of the West, gives us startling
results of his Investigations. Daniel O'Con-
nell said once that he could drive a. coach and
six through the acts of Parliament and he
certainly knew how to get through or around
them. Our national bank managers and direc-
tors find it easier to evade the National Bank
act, and do so with the greatest facility For
example, one of the banks spoken of by our
correspondent has capital of two hundred
Thousand dollars, and it honors the drafts of
speculating stock dealer, who has no funds
in the bank, to the amount of hundred thou
sand dollars a week, or fifty per cent. of its
entire capital, in direct violation of the forty
seventh section of the act. How much
this bank accommodates others we
do not know, but the probability is that
it does so to large amount thus carrying
on transactions vastly beyond its capital or
what the law allows. "Half the banks in the
Interior we are informed, "are guilty of like
violations of the law every day." In many
cases the speculators without means who
obtain such accommodations are bank directors
or their friends. In one case bank president,
more honest than the rest, withdrew from the
Institution because the directors were specu-
1ating largely with the funds, and he could not
control them. 81 resigned" he said, "sold
out my stock, and abandoned the concern.2'
He very properly added, "Under the law, as
you are no doubt aware, the stockholders are
only liable for double the amount of their
stock to creditors. A board of unscrupulous
directors, if they were so disposed,
ut period when the deposits are large,
can speculate upon the funds, and, in the
event of trouble threatening, transfer their
stockto men of straw, retaining only sufficient
to give them control of the institution. Take,
for example, bank with capital of two hum
dred thousand dollars, circulation Of hun
and fnAiv m
Government deposits of a million and half.
1t may have deposited half million in bonds
with the Treasurer to secure Government
deposits and circulation, yet how easily it can
fail, and the managers profit at the expense OF
the Government and unsuspectng depositors!
There is much rottenness in the system, and l
am glad am out of it." Such is the testi-
mony of a National Bank President who
knew all about the system. Can we be sur
prised then, if the Government should lose
the peoples money, and thousands of unfor
tunate depositors be feeced by these gam
bling and rotten institutions? Have we not
examples in the cases of the Merchants Ma
tiOnal Bank of Washington, of the First Ma
tional Bank of New Orleans, and of others
that might be named Is there not the best
reason to believe that the evil is widespread,
and that general crash will be the conse-
quence
The people of New York, and all through
the pOpulous part of the country on the east
ern side Of the mountains, have been suffering
from the high price of provisions. They have
been astonished to see flour over twenty dol
lars a barrel, and provisions in proportion
when it was known there was an abundance in
the country. We now learn that it was the
pet national banks of Mr.. McCulloch and
Mr.. Chase that forestalled the markets, and
that, too, by using the peoples money, and
through the power which the peoples repre-
sentatives in Congress had given to them.
But, like all greedy spectators, they have
Overreached themselves, and have large stocks
on hand when prices are falling. This is one
of the chief causes of the shaky condition of
the Western banks at present. and one which
makes such prudent man as the Bank Pre-
ident referred to before stand from under the
,E'rotten system"
But what shall we say of the Government
of those members of Congress, and particu-
larly of Mr.. Secretary McCulloch, who bolster
mp this infamous systeml What shall we
say of the Secretary of the Treasury, who let's
these spectators and forestallers have the
Government deposits to carry on their ne
fariOus business with and to cheat the public 2
1ncompetency is too mild term to apply to
him. He is guilty, we fear, of doing wilful
great public wrong. If he does not see the
evil he is too stupid to hold the smallest Office
If he does see it, and, from weakness or some
thing worse, dares not grapple with it, he de-
serves to be removed, impeached, and pun
Ashed. Not content with taking from the
people upwards of twenty millions year in
profits on circulation which belongs to and
should be appropriated to the public use and
mot content with other enormous privileges
never conceded before to private corporations,
hn..l