The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1867-07-29

tenn. In one day there is an announcement of
the collapse of The .Unadilla National Bank, an
account of the defunct Newton National Bank,
Massa ehusetts, disclosures Of the Weedsport
Bank defalcation and statement concerning
the deialcation in the Pequonnock Bank, of
Bridgeport This is pretty formidable amount
of news for one day Of national bank failures,
swinding and corruption. 1t is not necessary
to go back to the thirty or forty other cases of
failures and swindling among the national
banks during the short period Of year or two
that the system has been in operation. With
these the people, unhappily, are too familiar
the batch of news now before Us is quite
enough to arouse public attention to the rot
tenness and danger of these institutions.
This Bank OF Unadlla, in Otsego county, of
this State, which it is reported has made bad
failure, with liabilities of two hundred thou
sand dollars and with very small assets, was
a safe, respectable establishment, under its old
charter and before it became one Of the ma
tional banks. Such was the case, too, with
several others that have failed All this goes
to show the corrnpting influence Of the system,
the opportunities for frauds and reckless spec
ceved by the apparent national character and
name of these irresponsible institutions. The
facilities for fraud and speculation with other
peoples money are so great that honest men
are made dishonest. The whole system is
loose, dangerous to the public and corruping
in its influence upon those doing business
under it. 0
There appear to be two causes chiefly for the
defalcations and collapse of the national banks.
These are excessive speculations, particularly
in produce, with view of forestalling and con-
trolling the markets, and the, fast living OF
those connected with the institutions. In some
cases the failures and robberies are caused by
the bank officers dabbling or gambling in stocks.
The Unadilla Bank followed the career Of its
deiunct predecessors. 1t is the same old story
| over again.
| When we look at the opportunities for
swindling we are not surprised at the break
| ing down of these banks. We shall be sur
prised if many more do not go the same way.
Our special correspondence, published short
time ago on the subject, showed the general
unsoundness OF the banks in the West. As to
! the pretended investigations into the affairs Of
| these institutions by government inspectors, as
| provided by law, they are unreliable There
are many ways Of dcceiving these government
agents. and not few Of the agents themselves
are bought up to overlook Irregularities. The
banks can well afford to pay thousands OF
dollars to needy and corrupt officials for
having their rottenness covered up, and too
MANY of these officials are ready to pocket the
bribe.
Under the old system deposi.ors and others
doing business with the banks looked closely
| INN their condition and operation; now they
cannot do that 80 we'll. and they place conf
deocc in them because the government has
given them the name of national banks, and
because it is enormously supposed they are
: sonnder on account of having quasi connec
| sop with the government. There was direct
and individual responsibility in the old banks
houch they had their defects. Under the
present system the government saves itsel
and the note holders first, rs far as it can
| when banks fail, but the confiding individual
deno,itors have poor chance Of getting thei
funds The government, even, may lose IL
deposits, and In case of general smasn-ur
when in all probability the bonds heid
securiiv for the bank currency would becom
greatly deprecated, the Treasury Department
would have to make up the deficiency out
the public money for redeeming the circuif
h ton. Such is the boosted safety OF these II
e secure and rotten institutions.
7" But this is not all we have against the nations
i banks. They take directly from the publ
l s.~v N. IN
latiou. They are, in fact, invested with vail
st able privilege-that of having the benefit OF
~ national currency. which properly belongs
N the government for the benefit OF the Treasul
~. and the people. II is clear giftof twenty mi
nd lions a year Of public money to monstro'
-, monopoly it is taking large sum rom
heavily burdsncd people and giving II to II
10 espitslists. Then these banks use this we
hs money. in connection with the other privi'eo
which the power Congress has given to them,
," torestall and monopolizs the markets, and tn
IN, make the suffering people pay twenty-five
er,. fifty per cent moro than they should pay for
Il necesssries OF life. Besides, they were in'
his tinted bv Mr.. Chase, Mr.. McCulloch and III
friends es q powerful political machine. q
80, II hey be perpetuated they will in the end
,,es only absorb all the profits OF industry, but
control the destiuies Of the republic. The fin
aid, cial power, monopoly, danger and other e'
IN ot the old United States Bank, were moth
80. compared with what we may apprehend II
the national banks. In every point OF v
ORE thew are most dangerous and stipend
c'ur' fraud upon the country. The creation Of Il
'"' wa, a great blunder on the part Of Congr'
m.ri their continued existence is Disgrace to an
been nsh,ened people and government; aud uu
'pri.. they be speedily swept away IL will be did
., 600 80 Ak ana ,hev vii, heco-ae