Daily Ohio statesman. [volume] (Columbus, Ohio) 1855-1870, 1867-06-19
THE NATIOSAL BANKS.

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Especial Correspondence OF the Herald
"a ST. LOUIS, June II, 1867.
MY last letter, exposing the stumptail
character of the national banks. was writ
ten from Chicago before I had an opportu-
nifty of fully Investigating their manage e.
ment in the Interior. have just visited
some OF the principal towns in the rural
disTrieis. and some startling revelations are
the RESULT 5idlislaI Jos n lsa}I' .i7slaEi
One of the great items of business is ad.
vauees tosorairs and stock dealers. To IL
instrate this will give an Instance. In
one of the Interior towns there Is a bank
whose capital stock; is 100000. In the
same town resides A large dealer. who sup
niles the Eastern market with CATTLE. This
dealeris u man who has no personal assets
toofFer as security for accommodation: vet
he has made arrangements with. this bank
by. which he draws tpou 1t without limit.
When he purchases from two hundred to
fiye5ahuudred head of cattle he paws
for them in the shape of drafts tir6n
the bank. in which he has no. funds, The
bank honors the drafts, frequently to
the amount of 100000 per week, or
fiftyIper cent. of its entire capital, in direct
violation OF section forty-se of the act,
which provides that ssthe, total liabilities of
any person or of any company or firm Tin
Guiding in the liabilities of a COMPANY or
firm. the liabilities of the several members
thereof) to any association, including lia-
bilities as acceptor of bona fle bills of ex-
chance pavabie ont of the State where the
association is located. shall at no time ex-
ceed one-third: exclusive of liabilities as
acceptor, one-fifth: and erczlsiue of liabilities
on such bilLs of erchap0e one tenth mart of he
,,,o,,ot of tbe cositnI sfack f s,,cb dssoci1tio,
tzct,taily Daid in. 500 Y - ~ '1dT TIsi
-T1'he dealer sbir,s the cattle r., the Eastern
market. disposes of them, and if he be hon
est places the amount of his Indebtedness
to the credit of the bank. Should he feel
disposed to profit by the confidence of the
bank he car, easily pocket the proceeds of
sale and leave the bank in the iurch, with
one half of its capital lost in one transac-
tion. am aware that one bank accommo-
dates one dealer to the amount of halt its
capital stock weekly. and, how much thew
accommodate others it is impossible to saw.
Itis certainly, to say the least of it, loose
and dangerous way- of doing business,
which can only be accounted for on the
supposition that the officers of the bank
are interested in the profits accruing on
the sales.a This is A a-represpntatiye ease.
,snsl ,onf- half tbe hanks of tI,e Interior are
N V
the Government deposits for their own
benefit. which is not untreuuently twice the
amount for the security of which they have
deposited bonds In the Treasury. AT
- Section 81 of tho act provides for au ex-
animation of the banks by an officer ap-
pointed by the Comptroller of the Curren-
cy. This examination is a huge humbug.
i learn that all through the West the banks
are in the habit of hoodwinking the exam
liners by various means. The moment an
examiner enters upon his round and visits
a bank, kilograms like the following are
sent by the President or his cashier to their
correspondents: :-sExaminer Is inspectin g
us to-day. He goes to - tomorrow. Be
ready for him." Qh{CjitAH n r!
The officer receiving this dispatch at once
prepares his account to make good show
ing, and should it be unsatisfactory he not
auDfrequently borrows checks and other
paper, and under the mysterious heading
OF ''cash items" &C., the work of prepara-
tion Is complete. Frequently these checks
are borrowed from other banks for a day to
enable cashier to make up his sworn
statement, and returned to the party from
whom borrowed next day. z1 a. 7s--
p Cases have been reported to me where
these examiners have been ,dined and
-wined until they were no longer in a con-
adition to examine the books, when they
were invited behind the counter, and, after
mark, "Oh. you are all right it is unneces-
sarys to examine your institution."a The re-
suit of this laXity Is that the examiner
makes his report to the Treasury that such
banks are in a flourishing condition, the
.stoekholders, the Government and the de-
times is suspension and the development
Gently disgraced New Orleans, Selma and
other places, ,,-,,,. ,s, ----s.....,,. ,,....
In most instances the small depositor is
the sufferer; but occasionally, the Govern
ment is loser a lso, as the banks hold out
inducements of from two to four per cent
TO omcers for deposits OF ofGovernmentfu funds
when yerS Ss tlsqrelsay lasgely g3ceeu .ne
AZ t,. % .ts. ~ o1n
sa1s 1no0 nao 4IIe;
naso iy ~! ~ SIels syc pos'
oSnSi hns = e 0Da tS; tS;s caa ;,
capital stock of but $2oo,oO0, has sl,so0,o0O
0eposlts, much ot winch Is py Goverhmenl
omcers, oheIl9uitn OF welcn Is not secured
soa.aS sor ns 10 her'
Lei me illnstral 9. this by a dialogue thai
took place few weeks ago between gen
Western national bank:
President am DELIGHTED with the hank.
ing system. It is so profitable.
a.1 MT. BIN what way? a. E-r~.s,..r.,s
President-The Government business
We hayeover one million dollars Govern.
ment deposits. which we turn to ,acconnt
for increasing the diyidends.. "9l.~s@>,-
Mr. BIS IL possiblep And how mucI
have Won deDosited to .secnre, these de.
Iposits -
President-Onlv one hundred thousanf
dollars - hSFs'sis
Mr. R,-It ia strange the government
will Conduct business 81 bazsrdonsIv How
,,nas n come theu era not more 10 rsf,,i3
"s P,.ss;Se,,t - with . sm;iaSNoI that i
easily eTnIs;ned. The Govern nment officer
find t,profitabIe to deposit with ns. -