Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1868-02-29

| IL they have proved anything. the fall
ures Of banking institutions in Memphis
have proved that the question: OF seeu-
rity Of funds entrusted 70 them is purely
problematical The names Of wealshy
nen are put forward and the public
credulously believe them guaransorsthai
banks are pecuniarily sound. Hundreds
hasten 10 deposit their surplus with in
stitutions controlled by these men who
are so responsible, so capable, and so
honest Here are half dozen men OF
known wealth paraded in the newspspsrs
as officers and directors OF bank. Col.
lectively. they are worth half a dozen
times the capital necessary for the bnsi-
ness Of the corporation Matters pro-
gress swimmingIy. Depositors rush to
the receiving teller, and breathe freely
when for their hundreds or thousands a
clsrkly entry Is made in heat bank book.
The names of these very rich and very
reputable men penetrate far into the in
terror, and the planter with few thou
sands unemployed rests uneasily on his
pillow until bis hoard is safely lodged in
their capacious vaults. Widows and
orphans, with their pittances, know no
place 20 safe for their treasure as the
vaults controlled by these men, whose
wealth is too great to take wings, and
whose integrity and business capacity
are the marvel Of the community.
But confidence awakens some morn
ing to paralyzing shock. Evil news
travels like wildfre, and rumor with .
thousand tongues spreads the dread in
telligeuce that this strong bank, owned
by these marvelously wealthy men, whose
integrity and capacity have become one
of the wonders Of the land, has dropped,
like a star, from the armament, and will
be known no more forever. II is not
possible that So-and-So, So-and-So and
will permit an Institution
co ntrolled by them, and which they are
so able to sustain, to so down dishonored.
if through ill-fortune its affairs
are disarrsneed, creditors may res,
easily. Each of them is Croesus in
wealth, Neeker in financial wisdom and
an Aristides in integrity. Ewes laekedj
they wisdom and integrity, their means
are ample, and all win be ven after 8
brief delay.
This is surface consolation. Outside
ali looks fair aud bright as summer
morning. But raise the esr;aiu, sni I,
here is something black and oninoas
beneath.
True, these capable and honesi asn are /
in wealth hey are very re
and those holiisg their inii- !
ridual notes are as csrsAia Of having 7
hem paid as though TIE rnoasy we're a. Z
'eady in hand. ]
But by the laws, these capitalists 0w1 1
he bank only so far as their individual
took goes. A, worth million dollars,
WINS $4,000 stock. al paid mp B., T
worth million dollars, owns $4,000
took, all paid up. c., worth half mill
ion dollars, owns $4,000 stock, all
,aid up. Approached by hopeful o
reditors, whose thousands are f
deposited in the vaults through con-
dence in the banks owners, A. B. I
nd c. blandly reply: Gentlemen, you b
ave our sympathies in your misfortune; d
re, too, are sufferers our stock has been Il
ost in unwise speculations, and by mis- r.
ortune or the speculations of other
anks. Being all paid up, it was all lost; g
cling all paid up, we are not responsible c
or deficits" And A. B. and c. have the a
aw on their side. What the assets of n
he bank, in financial chips and whet- Y
tones, may prove, the army of despair i,
ng creditors will obtain, pro rata. Poor tt
onsolstion; but without remedy.
The evil is with the system. Men of s.
7ealth and high standing become stock Il
olders and officers in banks in Tennes- 81
ee for the purpose ofproft, and as a mat. T
err of speculation. Their names are put b
onward as moral capital. They inspire o
ublic confidence. The masses vie with
ach other in entrusting money to banks q
those controllers are so remarkably O
reality, capable and honest. The stock [
invested by A. B. and G. becomes more "
than double the sum o
therwise disposed. Heavy dividends p
ccrue, and in few years the principal
) returned in profits. The only risk is r
D the bank unwisely frittering its capital r
took away; but to the stockholding-
fficer whose investment has already c
ealized hundred per cent it ceases to o
o risk. j,
When a bank goes by the board these Il
acts come strongly to light. Indigna- tt
ion and curses then succeed confidence. u
What is the effect Of the names Of these
len being thrust so prominently forward a
kept to operate as deception and a il
att In cases of failure that is the re- o
alt But the law aud the authorized p
ystem of banking permit such things, r
nd the fault is with the law. Under the c
responsible names are t
ut decoys-frauds for they imply {
uarantee on the surface which does not q
xist in fact.