New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-09-24

deliver from hundred thousand to half q
million dollars worth Of stocks or gold per
diem; larger houses, proportiOnately larger
values Purchases are frequently made In
costly lots, requiring checks for sums running
from $4,000 upward, and even az high as ten
times that amount. Almost every banker or
broker in good credit has an arrangement,
definite or implied, with his bank. by which
he is allowed to largely overdraw his balance
in payment for blocks of stock-with the
understanding that before p III. of the same
day he shall deposit the certified checks Oh
other people, in amount sufficient for the re-
demption of his own checks and the MAIN
tenance of a respectable " balance" On the
latter the bank makes its profit Large houses
often omen accounts of this sort with several
banks at once.
Not only the suspended Bank of the Com
monwealth and the Bank of North America have
been in this practice for years, but unless
we are msinformed, almost every institution
in their vicinity DESTROYS OF brokers accounts
Among those who "certify"-to use the Street
nbrase-are the Fourth National, the Mechan-
ics Ranking Association the Bank OF New
York. the Bank of America, the Bank OF the
State of New-YOrk, the Bank OF the ke-
publc. the Corn Exchange Bank, the Con-
tinental, and various others. All are more
mr. less in one category. Each relies upon
the honor of its customers to make the
mornings overdrafts good and, truth to
saw. in many years this reliance has not
been without foundation. Instances are
few and far between where dishonoraDie ad-
vantage has been taken of bank favors, and
each case has been visited with severer PEN
atty and disgrace than any form OF CONNER
cial default.
With respect to the Bank of the Common
wealth it is doubtful, to say the least, whether
an oyerdraft was the main cause OF Its sus-
pension. Mr.. Haight's deficit was less than
5000 900. about half of which has been made
good, and it is perfectly well understood that
nothing but the suddenness and severity OF
the manic prevented him from making his
account good at thel usual hour. The action
of two brokers.j on Monday. with respect to
the Bank of North America, was deliberate,
and intended to secure themselves from loss
by any disaster to that institution. The result
proyed it to have been needless and 1t has
received the censure of the Street.
The whole system is perilous and illegal.
There should at least be some provision
by which the united banks should make
themselves responsible for each others
Qualifications but even this shadow of security
is wanting for all parties concerned. Suppose
that 400 houses Overdraw, each, an average
of $4,000 daily (and these figures do not half
reach the TRUTH, and it is seen that dozen
Banks "certifyn to the extent Of ten millions
beyond their customers deposits. When, as
now, they suspend this usage, all business has
! to stop. Some method should be adopted,
like that upon the London Bourse, by which
settlements can be effected at stated periods.
Three-fourths of the clearances would then
be arranged by payment of differences, and
there would be no need for " overdrafts" of
| any kind.