The sun. [volume] (New York [N.Y.]) 1833-1916, 1876-03-12
The Low Price of Bank stock.

The statement Of assets put forth by our
city banks should in most cases assure
higher prices to their stock than it actual
ly commands. The depression OF this elias,
Of securities is not due 10 shrinkage OF
dividends below the normal rate OF in
torcst, for the profits of bank stock COM
pared with real estate and n ways con-
tirue to be highly inviting What then il
the meaning OF this singular irrration be-
tween current price and apparent value.
The facts before rs scarcely justify the
inference that the majority Of our leading
banks are tainted with perjury and fraud,
aud are accustomed. like some dofunct
savings Institutions, to swell their -chcd-
ulrs with rotten assets which ought TO bc
charged to profit and loss. Not seldom
their capital stock IL 50 large and So widely
distributed that distrlist of their published
exhibits would need to be general and
notorious in order to reach the bulk of
shareholders. Long before the apprehen-
sion of dishonest balance sheet could
spread sufficiently to affect the price of
shares, it would have been exposed and
enforced by the public press, and formal
Investigations must hav6 followed. Fur
thermore, n suspicion OF this grave nature
could not fail to depress bank stock far
below its present figures.
1t is manifest, however, from the dspro-
portion of price to assets, that the demand
for bank scrip has sensbly declined, and
that for some reason these securities have
ceased TO be favoTtc investments. The
fact is that misGivings which had long
haunted the public mind respecting the
management of our city banks have be
come nvcterate and profound since the
temporary paralysis of those institution
cugendeg:9 ny the crisis Of 1873, This feel.
'"SS cf dissatisfaction and uneasiness
points, not TO the character of officials, hut
to the normal methods Of business and the
habitunl disregard Of precautions in trans
actions possibly involving the entire CAPT
tai of the concern. Doubtless the chief
offenders in this direction are those banks
which court brokers accounts, but these
are numerous and important enough Us
was demonstrated in the last panic, to co.
cree their old-lashioned comrades to con-
current Suspension.
A rather ludlcrous contrast .srrfTs.tcd
b. .uc PROCEEDINGS Wljrh p,,ta take place
toptcnp,raneously in ihe dir, ctors' room
and nj Tie tcllors desk. While cautious
and long headed directors are pottcring
oven rAper presented for discount, doubt
ful . hetAor to accept or reject note for
some thousands of dollars, the paying tel
Ter has certified checks for hundreds Of
| thousanda, perhaps millions, against de-
| posts In fHlWo not even expected before
| three o'clock in the afternoon. In what
are known as the Broad street banks
| the executive officer, whether cashier OF
| president, Is VIGOROUSLY reluctant to fur
| nish explicit instructions In the matter of
certlcation, and the whole weight OF re-
| spousibility devolves upon the paying tel
Ter. Now the latters legitimate duties are
so onerous that he Is plainly incapable Of
that surveillance over customers aud those
manifold inquisitorlal functions insepara-
BILE from sound banking management,
In smooth waters the financial craft ma y
lp9 Rsyigateq on these principles without