Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1875-08-04
The Morals OF BANKING.


lions, and their assets at one or two million
less. But in these failures, investigation
generally increases the former and dimin
isbes the latter. Not long ago, anothc
very prominent banking house, Jay Cook
& Co., were obliged to suspend and go int
bankruptcy. Their assets were not enough
to pay fifty cents on the dollar Of their in
debteduess. Everybody pities these great
bankers who have lived in splendid houses
and furnished them with costly stuffs and
enjoyed dainty yiands, and have to give up
their establishments and retire to an aver
age lot, or even humber circumstances.
The sympathy for the hundreds and thou
sands Of poorer people, who have lost their
fortunes and living by them, is not so mani
fest But the failure of great banker. who
has received the confidence of wide commu-
mites, and been entrusted with the funds Of
multitudcs, because Of his asserted integrity
means the ruin Of hundreds the destruction
Of the hopes Of thousands. Large sums
have been confded to him, in one form or
another, and his failure actually means that
he has been unfaithful to his trust that he
has invested the funds that belonged 10 9TH
ers in speculative stock, that he has taken
the scant subsistence of the poor and the ig-
norant, and turned the living Of the widow
and the orphan into the gulf-stream Of spec
ulatiye adventure, and lost It in the mael-
strom which devours everything that comes
in reach Of is crcliug eddies.
That is what such failure ordinarily
means. To take the money OF depositors.
TO wheedle out Of the hands Of the ignorant,
by magnificent promising schemes, their
hard earnings, and invest them in stocks
and securities that have no established value,
is practical dishonesty Of the worst type.
And this we imagine to be the secret of these
two great failures. Jay Cooke & Co. at
tempted, on the basis of the confidence which
the people had in their integrity, to carry
the Northern Pacific road They were TO
receive ten per cent of the bonds Of that
corporation for negotiating and placing them.
The splendid prize of their exertions, il they
had succeeded, would have been ten millions
of dollars. At the outset they had national
and European reputation as bankers. They
had placed a large government loan. They
made their reputation for integrity and abil-
ity working factor in the vast enterprise Of
placing a hundred millions of Northern Pa
cific securities 1t was powerful factor.
Many of the papers Of the country, religious
and secular, were bought by it and by other
considerations. All the tumpets were set
to blowing up the bonds. Thousands of
men Of moderate means, retired minister's
guardians widows, and trustees of orphans
took these bonds at par. How can they be
worthless when Jay Cooke & CO. are good
and pious, and the Independent or some
other religious paper youches for the ortho-
doxy of the bankers and the surprising ex-
cellence Of the investment So men rea-
soned themselves into the belief that they had
better give Jay Cooke & Co. their money aud
take his railroad bonds. 1t happened, by
the grace Of God, that the worthlessness of
the security was discovered before they had
placed more than third Of the bonds, else
Jay Cooke & Co. had been worth to-day ten
millions of dollars, and the men to whom he
had sold his bonds had been robbed of a hun
dred millions. Their only security would
have been seventy millions Of acres Of land
inhabited by buffaloes and Indians, and the
interest would have accumulated faster
against them than the mighty unstable
property would have matured its assets TO
meet it.
And it seems that Duncan, Sherman &
Co. were doing the same thing. They were
trying to foist on the market railroad secu-
rites which had no established value. That
they were interested in this form of specu-
lation which takes the means of humble
men out Of their pockets, and puts them into
the vaults of the bankers, is well-known,
even in this state. When Governor Smith
was turned away from Boston by the capt
talists there, who should have relieved him
from the embarraasments in which the Yer
mont Central was plunged, by no fault of
his own, but by the duplicity and treachery
of those who should have sustained him,
the banking firm of Duncan, Sherman & Co.
found him, and undertook to play the part
Of the Good Samaritan take him on their
beast, and provide oil and wine for his TEN.
porary necessities, but pay themselves out
of his pockets in the end. That they were
not successful in the attempt was due, not
TO their own want of cunning, but TO the
singular intrepidity of Governor Smith. It
is quite evident from the action of Duncan,
Sherman & Co. with reference to the Cen
trail Vermont and in which they were hap
PLY foiled, that speculative adventure was
not foreign to their habit of business.
And the question very naturally recurs to
thinking men, about the morality of such
transactions. Have bankers, after establish
ing certain claims to the confidence of the
community by show of integrity, right TO
embark in new and dangerous enterprises
for the sake of possible large premiums
which can only be stolen, il got at all, out
of the pockets of those who confde in their
financial ability and uprightness The
highway robber deals with his victim with
downright direetness and sincerity. lie
robs him, but does not cheat him. lie does
not try to impress those he calls upon to
stand and deliver with his superior excel
lence and fidelity to his trusts. There is a
certain sort of honor in a man who tries
conclusions with us at the end of a revolver.
At least we know what he is about There
is no pretence and no yelling Of real pur-
poses. But the great banker who swims
about the pool, and processes friendship and
offers the protection of his size and strength
TO the small fry of which he is about to
make his dinner, has none Of the honor
which belongs TO sincerity. Ills friendship
is worse than the robbers enmity. His in.
tegrity is more destructive than the high
way-man's audacity.
1t is very bad thing for man 10 build
his house with his neighbor's blood. But
it is done constantly. This terrible greed to
be rich; to get power over men and earthly
affairs to get position or influence or wealth
by means that involve the ruin of others, is
one of the most terrific OF modern social
a