New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-09-20
THE PANIC.

q fancy stock crash. Not q mercantile house
is affected Not Savings Bank is troubled.
General business in New-York has rarely been
better, and there is little or no alarm
outside of speculative circles. But holders of
third rate railroad stocks have suffered and
are destined to suffer. For many a
concern not yet reached, there is,
through the approaching Winter, bad
outlook Fancy prices have been broken, the
public disposition to invest in fancy stocks Is
gone, even meritoriOus railroad enterprises
will be viewed with distrust, and shaky
houses may expect to spend the rest
of the season in diligent UNDERMINING. For
Messrs. Fisk g. Hatch, as for Jay Cooke 81 Co.,
there is only the sincerost sympathy. They have
rendered great and honest service in the
material development of the country, their
name is synonym for integrity, and their
failure is a public misfortune-soon, all will
hope, to be retrieved.
Meantime let us trust that, with such men in
Wall Street as have not lost their heads, the bit
ter teaching of the past week may be Needed
One lesson that may bel learned from this
manic and should have been learned without
it, is that for years back the New York banks
have been keeping on hand very inadequate
amount of cash in comparison with the nature
and amount of their liabilities to depositors
A comparison of the respective weekly reports
will show that the legal tender reserve of the
banks of this city, excluding gold, which is no
longer part of the circulation, is subject to
quite as numerous and violent fluctuations as
the reserve of notes in the banking department
of the Bank of England. And experience
| teaches that our banks have even less control
| over the reserve than the Bank of England
has. Unlike it, when the tide is running out
we have no power to stop it. We may, there
fore. conclude that the banks of the City OF
New-York require for their safe and easy
working as large stock OF money IN
propOrtiOn to the demands which may
be made on them bys depOsitOrs as
the Bank of England does Examining
its returns for two years back, we find that
though the bank has twice taken vigorous
measures to support itself, the reserve of
notes has never fallen so low as thirty per
cent of the deposits, while it has often ex-
ceeded fifty per cent. Long and bitter expe-
rence has taught the necessity of holding this
proportion. Turning to the statements of the
New-Yo banks, we find that since 1859 they
amount of thirty per cent of their deposits,
while they have usually been below twenty
five per cent and often under twenty per cent.
Our maximum has been below the Bank of
Englands minimum, and OF the two
steeds ours is the more difficult to control.
Now, without further enlarging on this sug-
gestive topic, is it any wonder that our banks
have not worked with ease or safety That
we so often see money lending in Wall Street
for one-duarter, one-half, and even one per
cent for use over night9 That degrading, de-
moralizing, and in every way pernicious de-
pendence upon the National Treasury has
grown up among us
And this cOmpels us to make few Observa-
tons on the misconduct of the last two Sec
retaries of the Treasury. Secretary BOutwelPs
interference with Wall Street year ago,
which even at the time was conspicuOusly
more advantageous to certain friends of
Government among the spectators in gold
and stocks than to men engaged in legitimate
business, is one of the prime causes of the
present panic. Another prime cause is
the power claimed by the Treasury
Department to reissue the forty-four
millions of greenbacks which have been
called in and canceled-a claim NOR
ally as base, practically as menacing to
the national credit, and legally assill-founded
as Gen. Buffers scheme to pay the interest on
the bonds in greenbacks. Indeed, we con-
slider the latter the more respectable PROPOSE
ton of the two. The consequences of these
fatal blunders of Messrs. Boutwell, and
Richardson are easily traced. So far
from prOfting by their troubles of last
year, the banks have suffered them
selves to be caught with even less reserves
than they held in 1872. Only once during this
calendar year have they held fifty million dol
lars in greenbacks against debts to depositors,
PAYABLE on demand in greenbacks, of more
than two hundred millions. All Summer long
their legal-tender averages have been allowed
to run from five to ten millions below
the corresponding figures Of last year,
while in tho dull season from the
list of May to the middle of August they
heedlessly expanded their loans twenty
million dollars. Their reliance was on the
Secretary of the Treasury, who, not to do him
injustice, gave out intimatiOns nearly two
months ago that his policy would be "to de-
"fend the interests of legitimate commerce,
despite the ingenuity of those who choose
10 BaulDle WIFI Ino udIlouih OlOuiV W.
will only say that the Secretary appears to
have handled his weapons most unskillfully,
for more Israelites than Philistines are among
the slain.
There is another point, connected with the
course which Secretary Richardson may take
in this emergency. which is deserving of con-
sideration. 1t is a vital matter that the credit
of the United States Government be not sub
iected TO any unnecessary strain. for our whole
hot oil