The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1873-10-10
Some Lessons for the Banks taught
by the Recent Financial Cohvul.

Some Lessons LOT tue bduhs Idukns
by the Recent Financial Conyui-
sion.
(sfom the Philadelphia Record
The crisis through which the country
has Just passed has demonstrated what q
slender thread binds financial institutions
u the observance OF laws II there are
mo Sabbaths In revolutionary times" so
also are there no laws Except those which
they make unto themselves) Of binding
force upon banks during the existence oi
a panic To all intent and purpose, the
national banking law IL now treated as q
dead letter. The lawful reserve Of IS per
cent has been intrenched upon. No atten.
ton is being paid 10 1t, notwithstanding
the law prohibits them from making any
new loans or discounts when the reserve
Is below the lawful requirements,
but on the contrary are making more
liberal loans than before the panic began.
We do not say that the banks have pur-
sued policy that the public exigency did
not demand, on the contrary, had they OBJ:
served the law, the panic would have
overstepped the bounds OF speculative
circles, and invaded the walks Of legiti-
mate business. We only sllude TO this TO
show what an elastic garment our !egisla-
ton is, and how easy Il is 10 find an ex-
cuse for the nor, observance VI Its require.
ments. 0nc good result will come OF
this, however, us It renders the way clear
for modification OF. the present law, or the
enactment Of asnew' one based upon free
backing principles, Without Congress being
liable To- the charge oil Invading vested
rights, which, ii any existed, have been
forfeited by the action Of the banks them.
selves. -5..-. r..aa--sl
There Is 0 great lesson taught by the
preegnt depEeciati6n nivalue OF o certain
class ol securijies that bank and trust com.
pany officers should take 10 heart. II Ia
the duty OF such institutions 10 loan their
deposits IN such away as to be safe and
under easycoptrol, THIS crisis has devel.
oped the TACT that This course has not been
pursued. HBusines paper" based upon
mercantile trinsart ions has In many cases
BEEN refused, and that accepted which
rested on foundation which could not
stand the strain Of q public fright, His
tory sgain repeats Itself. The banks
throughout The country have been aiding
In tho TOO rapid conversion Of active CAPT
tai into fixed, capitaB banks. not so much
In Philadelphia or elsewhere, under OBJ
legations 10 pay large deposits on
demand, have locked up those de-
posts by { loans on paper made
Tor The purpose Of developing rail-
roads and other fixed Improvements
The exhibils made by priva,uT bsnkersl IN
this city and New York show that in
mans cases the whole OF the money cap.
ital posseSSed'by these concern, and more
In some cases, was "locked up" 10 this
character Improvements, and that they
were dependent upon borrowing from
their depositoTs and the banks for the
capital 10 conduct their current legitimate
business The present trouble should stop
this sort Of expansion The more rail-
roads built with capital the better; aud Il
can be obtained when ills clear that The
ioadis needed, but bank or bankerssn de!
posts must not be used for any such puri
pose. l England was taught lhis lesson 10
iS47, aud We arc learning it 10 our cost
now, .riN u z sI....