New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-04-22
extrao rdinary withdrawal of deposits from

malnIenuuceI
tner deposites for investment on the money
where opportunities for larger safns were then pre-
g. Were deposits Withdrawn fright TO any consid
cradle extent II 30, have they been returned =,
T. During the panic, when demands were MADE py ue-
positOrs for their money, what course ala your nsttu
on take in respect 10 payments d you pay az 9su'a,
upon demand avail yourself OF the provisions Oh law
which TX the time within which payment may "e n"oe
after demandf ,
g. Give any other Information, or opinions formed
panic upon the savings banks and their deposItors
About four afths Of banks IN the State made care
fu answers Their replies indicate with approximate
exactness the effects of the panic or l2 banks
responding the circular declare that they felt the
panic sensibly. different banks In different ways and in
degrees Forty hvc banks did not feel the panic
in any extraordinary upon their deposits. Tho
banks in the cities, especially in New-YOrk and Brook
yD most perceptby felt tho disturbing force In the
country the depostOrs dad not show alarm the
desire 60 withdraw their money. Some Of the banks,
manufacturing towns notably increased their depos
its in the last quarter OF the year others suffered
very much in the drain made upon them.
Thirty-seven banks report that money withdrawn
from them 70 some extent for the maintenance of de-
positOrs Thirty others OF the opinion that
the money drawn from them was for other uses than
maintenance such TO pay maturing Obligations by re-
s dealers. whose trade dun by professional men,
who could make collections by persons with small
surplus invested in savings banks Thts last class often
drew money 10 aid friends who had debts 10 meet, out
could not raise the money elsewhere sucn money was
and lent OF friendly accommodation.
Thrtyve banks state that their deposors drew money
To extent for speculative Investment when unusual
opportunities presented for buying securities.
These deposors had large in bank waiting such
Some banks had drafts for all OF these purposes
II safe to say that the drafts for maintenance we're
very limited In number and In amount IN comparison
with the Withdrawals for other purposes.
THE INFLUENCE OF FRIGHT ON DEPosTroRs
sxty-one banks report withdrawals of deposits from
fright among their depositOrs. Thirty eight state that
little Withdrawn from them through fear. In some
degree however fear Influenced the depostOrs Of 81
banks; p report that they evidences Of fright
In S. where money drawn through fear the funds
have mainly been returned or are coming BACK gradn-
ally. Only SIX banks nave faed 10 recover Wholly OF
partially the deposits withdrawn. 10 Ia Significant
sS ' money ndF the pmr Of fear Were RON the least
intelligent class Some such drew their money 10 hoard
it, and after holding for weeks, returned II Ia the
banks in identical wrappers IN which was fastened
! when paid OUT by the bank.
SeyenyslX banks pall their deposltors on demand al
through the panic; only five required notice and sd-
hered IT, Tnirynine others required notice. but re-
paid depOsitors showed their need Of money
Tor subsistence, or for use IN meeting payne Inc
! banks which paid demand generally found no en-
! barrassment from the drafts upon them. Tney have
the depoSors and checked the disposition to draw funds
| through apprehension. but IN NeW-1Ork most
| OF the banks united requiring notice. This had
| the effect 90 stop Withdrawals from all the
| banks, whether they required notice or NOT.
The other banks, when required the notices, attribute
their salvation tins Some OF the stronger banks
! would probably have withstOod any run upon them
Some Others would is likely have broken The lmne
date eject OF that calamity would have been to aggr
yae panic aud intensity the alarm which already
existed. The fact that the depOsltors We're ghtehed
IL their conduct in giving notices OF the With
of their money ana not drawing 10 out OF bank
when OF notice EXPIRED they had reeov-
cred their sober senses. The requirement OF notices.
therefore, the effect 10 protect the depositors and
save them OF interest and probably sometimes
loss principal, by the Withdrawal of their
and liberal 1t guarded the depOstOrS ana yet gave
the needed aid winch the exlgeDces OF the panic
| suddenly required.
THE LESSONS OF THE PANIC.
OF the panic has taught the
OF the savings banks the necessity OF conservative
policy and of keeping their well in hand to
Just such peTilous this They found
that what is called the available fund.-" or moneys
hept hand upon call temporary loans, secured by
inc pledge OF coLater.s were NOT az an aFdIidDe 10
bring currency. The term IL a mlsnOmer The men
had made such loans were struck by the panic and
could meet their engagements. The real available
securities upon which money could be raised without
State. Some officers Of banks very positive
IN lner eOxlntion ,t b P o a ,e se t UniS
local bonds available for pledges colaterais IN max
ing temporary and 10 tide the danger. The
reduction In the OF public stocks held by the
banks evidence that they arc the KIND of securities
\ most used by the banks 10 obtain funds. II was
Fortunate doubt. that the Government became the
large Of its bonds aud sustained the market
the banks public stock Jan. !, 1873 s45759J7.
enriTy only IS SS56O The shrinkage Is almost
acy $e25OOO0 1t only u this single item that there
These relied upon to fortify the banks
against the drafts actually made upon them and the
| CONDITION OF THE SAVINGS BANKS.
The condition Of savings institutions the last
New Year very strong, and stronger indeed than
it has been several years The increase in the de-
posts during the year is s2S,464 The increase
the surplus Is slG72OSs Thus tie banks in much
/ better position than they the lat Of January,
1878. In the proportion OF surplus 10 haDllles the
banks stronger than they nave been In several years
Jan 1885, and stronger than ever before except
al the OF 1868 Jan. 1866, their percent
OF surplus 10 liabilities was l16 jan 1919 was
the proportion epOstOrs deposits which shows
the Of deposits which have been withdrawn. The
year 1873 is 1880 But te average deposit has dimin
ished g. the average, Jan 1873 being sS4e TO- and
jan 1874 $40 r. This Is proof That the sla depOsi-
the who continue steadfast IN their patron
age OF the savings banks lt Is the speculative or the
investing class Of depOsitOrs mainly who withdrew
81 100000 from these banks during the last half OF 1873
The officers OF the savings banks anticipated large
drafts upon their deposits after Jan. Most OF the
! banks paw interest semi-anuually, Jan. and
/ July l. As the panic occurred midway
/ me hair wear many depositOrs were dOubtIess
restrained from drawing funds by the desire 10
the interest which had accrued. II was expected
that such depositors would call for after the
terest credit New Years But this expectation
nary whie deposits came in freely These facts Ger
tainy indicate that the savings banks in healthy
| condition Ihey throw much Lghl, also. upon the ma
ter1a condition OF the people OF the state who not
small surplus This class is not subject any very
| pressure at present from haru times wolves
met me ordeal 10 winch thew were 40 snodenty an
ected proves their strength illusory
| FIVE PER CENT RECOMMENDED AS THE RATE OF
| DTEREsT-GENRRAL RECOMMENDATIONS.
The rate Of interest which ought to be paid by the
banks upon deposits with due regard safety for all
interests is held 70 be unsoived problem. The pri
mary question is defined to be absolute security OF
principal fund II Is intimated that the present coupe
iOn among banks obtain deposits by Offering high
rates OF interest is not compatible with safety, and is
| not consistent with sound policy.
Legislation limit the amount Of individual deposits
single bank has faed utterly The prOhbitory law
Is eyaded by indirect methods of making deposits, and