New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1875-12-07
BANKS OF NEW YORK.

NAlie the conultlon OF Inc prlnclra
banks in New York seems sound, it is
very difficult to see how the reams of
names which are said to have gone to pro-
test without publication can fail to affect
either their stock value or rate of divi-
dends. From the money article of the
New York Herald Of the twenty.eighth of
November We learn that a raid is recon-
mended on the smaller banks for the pur-
pose of Strengthening general credit
Here is the programme of he Herald:
The present condition of business affairs,
az is well known, does not warrant the ex.
istence of the number of banks for savings
now in operation. and the opinion of lead.
ing bankers throughout the city appears to
be that the sooner the small fry, which are
simply drain on the industry of the peo-
pie, are weeded out the better il will be for
the community generally.
Thus, New York would drown the kit.
tens to strengthen the cat 1t is an unfeeling
transaction, because the ''small fry" re-
fused to represent the poor people, who
have confded their all to the care of these
pItttutlOub luStltutlCnS.
This raid has commenced, and some
ten or twelve little banks are to be
squelched. We can not say that the SYM
patty felt for the depositors in these
banks extends to those who manage them.
The business of getting up public enter
prises for the advantage Of managing
them, is by no means confined to our
own city. As fine art, it has been a
success among US. Whenever we have
seen series of anonymous conmunica-
tons, commencing scheme, for economy
or high profit on capital invested, we look
to see Pubiicus disappear, and John
Smith pressed anonymously for a prin-
cipal Office in the enterprise, on the
ground that he was its earliest advocate.
Some Of these New York banks have
not fifty thousand dollars deposits; some
have good deal more; but their assets at
their own valuation when reduced to
market value show deficiency below their
liabilities. One of these is found short
some twenty-five thousand dollars on
business Of less than half million, an
other Of about the same business falls
short the same sum, the deficiency in
each case being due to shrinkage in the
value of real estate and collateral
stocks. What tends to unsettle financial
faith in such institutions is the false GER
tifcates of solvency given in one instance
cited by the public officer appointed to
investigate the condition of the banks.
When there was, according to the Herald,
"a known deficiency" the public officer
certified that the value of its "assets, over
and above all its liabilities, F" was one hun
dred and eighty thousand dollars.
To give some insight into the possible
motive for organizing these little cash
traps we note that one Of these little
banks is rugged and run with one presi.
dent, two vice presidents, one secretary
and seventeen trustees. These twenty
one officials, besides cashiers, book-keep-
ers, tellers, runners and porters to manage
less than half million of money. That
these trustees are public-spirited men is
shown by the fact that they gave their
bond in one case to prevent their bank
from going into liquidation. How far
the acceptance Of this official position
may have enabled these trustees to borrow
the money con6ded to them upon the de-
post of collateral stocks no one can
know, nor can this consideration be de-
tected under the miscellaneous beading of
"bonds and mortgages" ..
To employ some twenty persons to man
age four orfive hundred thousand dollars,
when tenfold the amount may be
handled and guarded by a single broker
and banker, would indicate low grade Of
business talent in New York. By the
time the humble depositors and stock
holders shall have compensated these
generous guardians for their services, it is
not surprising that the principal com.
mitted to the guardians should have been
diminished. Still this raid on the "smsll
fry" shows alarm on the part Of the larger
financien. There is evidently shrink
age" in all the branches of business, de-
cline in market prices, and the entire as
sets Of society viii be brought to the same
severe scale Of valuation with the "tzus-
tees bonds, real estate and inflated fancy
stocks Of the ''small fry" banks of New
York. III str