Daily Ohio statesman. [volume] (Columbus, Ohio) 1855-1870, 1867-05-04
The National Bank gyE4em-The
First gmash-Up Down South
FurIher Danger Ahead.

First Smash-Up Down South
Further Danger Ahead.
From the New Orleans Times, April Isl
The National Bank system has received
| a pretty severe shock from the recent de-
i velopment at Selma, Alabama. 1t is the
| first decided knock-down in this section
that the hazardous system has received
The vices which are laid bare by this ex-
pIoSlon we fear will be found to pervade
the whole scheme, and to affect, more or
less, all similar Institutions. Forced upon
the country by great exigencies establish
ed upon bases which the experience of two
hundred years has proved to be utterly fall
lacious--with0ut adequate checks or re-'
| Straints-it is only necessary that little
| financial pressure should be applied to ex-
plode the entire system.
| The Selma affair develops the following
alarming facts: That the deposit of the
United States funds in these banks is not
only unsafe, eminently dangerous, but is q
temptation and inducement to reckless ex-
pansion and speculation, which must re-
suit in great loss to the Government, in
| general commercial and financial disasters,
and in corruption and decentralization of the
officers of the Government. All that used
| TO be said of the demoralizing character of
any connection of the finances and financial
agents OF the Government with banks is now
| fully realized. The managers of these
banks are everywhere cheek by jowl with
the Treasury agents and repositories. The
banks are often Convenient to the so-called
office of the United States Treasury. In
these high-priced times salaries of office do
not afford luxuries, and people who handle
large a5IioufiCSso of money have wish for
luxuries. Why should not the Govern
ment agents receive a share of the interest
on the loan of the Government funds,
espeeially7as the government gets none p
Are men who labor tor their country, and
whose political status is unexceptionable,
10 be excluded from all chances of
legitimate speculation? Is all the profit
from the loans OF Government funds to be
divided among the stockholders of the
bank, who, alas in too many cases, as in
the Selma bank case-the First National OF
that city-never paid a cent for their stock !?
I If the Government is generous enough, be-
sides giving eighteen millions a year for
the benefit of the National Bank currency,
In the form of interest on the bonds given
as security for their issue, TO allow these
banks the use, of its deposits without
charge, 1t is no reason why we officials
should, In the exercise Of our choice of a
bank of deposits, receive no consideration
therefor Is
In these not very serupufous times this
process OF reasoning is natural and logr
cal one, and has probably prevailed else
where besides Selma. 1t is not bad un
derstanding, so far as the government de-
posltors are concerned. They have no risk.
They have only exercised their discretion.
If the bank should be badly managed,
should ever trade, should expand beyond
its means and suddenly encounter a crisis,
and tumble into ruin, it is not their fault.
After all, too, the Government loses no
more than the other depositors. And is
not the Government a proper person to lose
through banks it has itself established and
put into operation. and in whose favor il
has enacted laws to extinguish all other
banks, to exclude all competition with its
own proteges2 But the subject is tar too
large and pregnant to be disposed ofin the
brief space we can now command. We
propose to resume at some other time our
Investigation into and exposure of the
present condition and operation of the last
modern banking bubble. ,,..E- rza-r