The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1867-01-26


The Gaze Of the Bank Of North America.
On Thursday last considerable excitement
was occasioned on Wall street by the announce
ment Of the sudden death of Mr.. Yelverton, the
President Of the Bank of North America, and
the rumor that the lamentable event was In
some way connected with losses sustained by
that institution. All manner Of reports found
currency for time and miniature panic
was manufactured; but the facts soon became
known and were found in substance to be that
stockbroker firm, enjoying good credit at
the bank, had overdrawn their account to the
amount of one hundred and twenty thousand
dollars and suspended payment Their drafts
had been certified by the deceased President,
who had confidence in their stability and in
tegrity; and the news Of their failure had so
affected him as to occasion the attack which
resulted in his death.
The bankruptcy Of this firm was not in itself
an event of much moment They were what
is known IS an open board house or curbstone
brokers, and their liabilities were not of great
magnitude. 1t is said, too, that they had put
up securities sufficient to cover great part Of
the debt due to the bank. The bank itself was
in sound condition, its surplus being nearly
double the amount of the oyerdrafts, surprising
the latter to be total loss. was only the
tragical event accompanying the failure that
gave it its apparent importance.
There is, however, . lesson in this occurrence
which. ifproperly studied, may be productive
of good results. A bank has fiducial charac-
ter 1t has no right to risk its funds wantonly
and unnecessarily to accommodate any of its
customers. Its capital is not the property Of
its President nor its cashier, nor of any Of it's
officers. They simply act as the agents and
trustees of the stockholders and depositors,
and are bound to be even more careful Of the
funds entrusted to their keeping than IT they
were their own exclusive property. 1t is a
gross breach Of trust for any officer Of bank
to certify the check of any party who has
not sufficient securities to cover the
amount within the reach and control Of the
institution. Least Of all should they certify
large 0verdrafts by stock brokers, who stand
much in the same position as gamblers, and
whose large fortunes Of to-day MY be broken
down and swept away tomorrow by some
sudden change in the market An unexpected
rise or fall in fancy stock, to any material
amount will often turn the millionaire of one
moment into the pauper of the next, and the
very fact OF a stock broker needing to make q
heavy overdraft on his banking account i'm
plies that he is plunging into speculation
which chance may make remunerative or ruin
GUS. The reckless manner in which many OF
our banking institutions conduct their basi-
ness Is notorious. and this Is especially the
case with banks connected with the stock job
hers and spectators Of Broad street. The
stockholders and depositors in snch institn-
lions are entitled to some protection, and n It
is not to be found in the prudence, integrity
and firmness Of those who act in the capacity
of presidents and cashiers, it should be Sc
cured by some stringent legislation. The
officer who certiies an overdraft in any banking
institution should be held responsible in his
individual property for any loss that may
ensue from his act.