Nashville union and dispatch. [volume] (Nashville, Tenn.) 1866-1868, 1867-03-14
THE NATIONAL BANKS AND RECR-
LESS SPECULATION.
From the New York Tin

FROM Tue new 10TH lllleE.
The last few days have been fruitful of
developments in respect to the criminally
reckless management of various national
banks. Losses, by defalcation, are reported
since Saturday last-half of the amount in
Massachusetts, banking houses-Which can
not fall short, in the aggregate, of TWO
million dollars. The example set by the
great Washington failure last year seems
to 'stimulate light-fngered operators of
various grades and degrees. In a Massa-
chusetts village, bank director goes into
wild speculations TO an extent, involving
twice the amount of the banks capital,
carrying down with him. at the same time,
a bankrupt Boston firm 10 the tune Of a
million dollars odd. A Hudson n. "
bank, a Newton Mas7) bank and Balti-
more bank, are all reported heavy losers
by deiaulting clerks and runaway cashiers
The multiplication, dsy after day, of
these failures, demand at the hands of Con
sress an early and thorough investigation
into the whole system of national bank
management. Even admitting that the
hill, Of the defalcations, hitherto reported
are due to dishonest bank officials, the prac-
tice Of Wholesale stealing has become so
common that new safeguards against pecu-
lation are imperatiVely demanded in the
public interest. Aside, however, from the
lilferingsof clerks aud cashiers, there is a
very prevalent and growing impression in
the minds of prudent business men that
large proportion of the national banks are
knowingly and deliberately committed by
their directors TO reckless stock operations;
thai hundreds Of different kinds OF stocks of
q purely nominal value are run up by
means of advances utterly unwarranted on
any legitimate banking principle and that
bank directors ave themselves more or less
the sharers in the plumber thus secured.
There are grave reports abroad as to the
extent TO which this practice is carried on
by city institutions which are not yet the
sabiect of popular suspicion; but which
are believed by keen men of business to be
thoroughly rotten. Some are known 10 be
deeply interested in pools" In several
cases where a heavy decline of particular
stocks has followed, the banks are left with
large amounts Of worthless securities on
their hands and yet loans continue to be
made to enable the operatives. if possible,
to work themselves out Of their trouble.
ANY one Of ordinary moral sense or bust
HCnt tAiidtAAN MUST hftOA hAiSAE Niilh NbAA VI
thing, if it goes on, must land us. The
whole national bank system must be
brought into disrepute.
An easy money market may temporarily
help the floating off Of worthless stock
but the deprecated shares become thereby
of no more value TO the holders, whether
these are bank directors or private capital
lists, and the public should not only be put
on their guard as to the multitude of worth
less stocks thus manipulated, but Congress
should AZ once institute a commission of
inquiry into national bank operations gen
orally. They can get abundance of testi-
mony on the whole subject, if they go no
further than New York. Similar inquests
in regard 20 revenue frauds have shown
the magnitude and the daring character of
the operations in that line. Let the same
healthy inquiry be made into banks. Sound
institutions will only profit thereby; while
those that are the agents for an illegitimate
aud reckless class OF borrowers demand, at
least, the penalty Of exposure.