The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1869-01-23
The National Banks-Mr. Sherman's Bill.

6Ton1 the ~ Y. World.
The bill reported by the Chairman of the
Senate Finance Committee for amending the
National Bank act is declaration of want of
confidence in the national banks, an inculpa-
tion of their management, and an impugn-
ment of their solvency. The evils and dan
gers against which the bill seeks to guard, are
evils and dangers which have been forced
upon the attention of Congress by the pra-
ctical operation Of the system.
The first section of the bill compels the
banks to make reports of their condition on
any past day which the Comptroller of the
Currency may choose to designate, such re-
ports to be required of every bank at least
once quarter, and of any bank as often as
the Comptroller may think expedient. This
is intended to abolish the present dishonest
practice of cooking up reports OF the condition
of the banks on a stated and foreknown day.
By certain tricks and subterfuges, we'll under
stood by the banks and constantly practised,
they can prepare delusive exhibit,
which shows Fictitious state Of their concerns,
created for the occasion; deceptively true on
that day, but true for no other. The conse-
quence is, that the public has no trust
worthy knowledge of the condition of the
banks, their reports being the only accessible
source of information, and being expressly
fabricated with view to mislead. This, of
course, is not true of all the banks; but 1t is
true of so large number that no confidence
can be reasonably felt in any except those old
and reputable institutions which acquired
their character and stood on solid foundations
before the national system was adopted. If
Mr.. Sberman's bill passes, as it ought and we
hope it will, the banks can no longer prac-
tise the juggle OF putting on a borrowed
holiday suit just for one day 10 appear before
the public in, and resume their ordinary rags
as soon as the report day is over. They will
never know beforehand the day whose con-
dition is to be disclosed. 1t is only their
condition on some past day that is to be
called for, and as this is to be selected at
random, it is as likely to fall on the worst
day as on the best. If the Comptroller sus-
poets its honesty, he can Immediately call for
another report of the condition of the bank on
any other past day; and as all such re-
ports are to be published, two or three re-
ports required of any bank in quick success
sion would indicate distrust, and put the public
on its guard. Nothing could be more whole
some or salutary than this feature of the new
bill, but it unsettles confidence in the banks
that such precaution against fraudulent
reports is Judged necessary.
another still stronger implication against
the credit of the national banks Is contained
in that section of the bill which requires al
banks in which Government funds are depOs
tied to give security by pledges OF United
States bonds, the deposits never 10 eAoeeu
ninety per cent, of the amount of the bonds
SO pledged. Now, whatever is unsafe for the
Government cannot be safe for private depos'
| itors. The Government has great advantages
over individuals in its means OF estimating the
solvency of different banks, and il 1t dares mo-
trust the few which it may select as deposi
taries of the public revenue, how great mus
be the danger to the community which de-
posits in them all The proposal OF such a
! bill as this must shake confidence in the
banks-a thing which the Government would
be slow to do il the management OF the banks
did not furnish grounds Of distrust,
The holders OF bank notes are perfectly safe
as the Government guarantees their payment
But the notes form but small part of the
banks liabilities. The people are more and
more abandoning the practice OF keeping
sums OF money by them, initiating in this
respect the trading community, who deposit
their money in banks as fast as they receive
~; butchers bill, grocers' bills, shopkeepers
Dlils are paid by checks, as we'll as the larger
Pnrch ases made by traders. A man who car
fies bank notes in his pocket is safe when tn,
Dank Iaiis, because the Government will pay
them; but ne who deposits his money. anc
uses " py means OF checks, has no guarantees
and this latter description oomprisas m,
greater part Of the ready money of every com
munity. 1t weuld be perfectly deiusiye