The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1867-09-10
TUESDAY, SEPTEMBER 10, 1867.
.,-..---, D.uls and Their Failures.

nr..,ouoI Ranks and Their Fallures'
., -, of national banks which from
g. % time occur show that this form OF
lo,,l,;no institutions is not exempt from the
,,s,,.l laws of finance and must pay the
,,ouoItv of reckless or fraudulent management
tba same as all others. There is, however,
this great and saving difference between the
failures of national banks and all others that
the country has previously had, viz, that the
value of the circulation remains absolutely un-
impaired. The notes of broken national
bank are Just as good and pass as current as
those of a solvent bank. Under the old sys-
tenn, the failure of bank was instantly fol-
lowed by depreciation of its notes, and fire.
uuently their entire loss. A man received
bills in the ordinary course of business, and
perhaps the next day found them worthless
on his hands. Frequently, just before the fail
ure of q bank its entire circulation would be
put out in some distant community. In
Kansas in the year 1859, for a few weeks
before the failure of several Illinois banks,
there was a sudden influx of their bills, which
found their way pretty well into circulation,
and were nearly dead loss in the hands of
the people. Such instances were common
throughout the entire West. Under the Ma
tionsl system this great evil is wholly avoided.
No matter where National Bank bill was
issued, whether in Maine or Minnesota, the
holder knows that it is good, and that, no
failure of the bank can discredit it. If the
National system had taught us nothing more
than the secret Of maintaining uniform and
absolutely safe currency throughout the ooun-
try, it would have conferred great blessing
upon the people.
But the failure of a national bank involves
its depositors in loss. 1t was the same under
the old system. A man who trusted the safe
keeping of his money to bank took the risk
of the banks failure. A depositor and a note
holder evidently do not stand upon equal
footing, and ought not to. Depositors usually
banks which they trust, and are supposed to
have the means of knowing something of their
responsibility and trustworthiness. The bill.
holders, however, are more likely to live hun
dreds or thousands of miles away, and with nc
possible means of knowing the standing of the
banks whose notes they find themselves, by
the ordinary course of business, forced Il
take. 1t therefore seems proper that the
bill-holder should be thoroughly protected
by the Government under whose authority
the banks are permitted to issue that
which takes the place of money. But
it may we'll be doubted whether some
modification of the banking law, which shall
secure more safety to depositors, be not justly
demanded AS a matter of fact, the public
have but very little means of knowing any
thing concerning the solvency of our banking
institutions, or of the manner in which they
are conducted. The capital of bank may be
wasted, and the bank itself on the point O.
failure, and its depositors remain in utter
ignorance of the fact. 1t seems, in the case o
the Farmers and Citizens Bank of Williams
burg, which has just failed, that not even the
directors were aware of its condition, one o
them having deposited some twenty-six thou
sand dollars Of his own funds with it only
few days before its failure. The stockholder
were in a similar condition of ignorance
Everything had been left to the management
or rather encouragement, of the President
Such instances as this show that there is de
feet in the system itself. Some means shoul
be devised whereby the depositors could be
to a certain extent at least, guarded from loss
Banks are public institutions, and they shoul
be 30 regulated by law as to afford the highei
security to those dealing with them.