New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-08-30
TIE culcAGO FlILTRE.

The State Savings Instituton OF Chicago was
| considered sound, even at the Chemical BANK
of this city, where il ordinarily held II large
balance and the gross miSmanagement when
now appears was probably concealed eflectu-
ally from prying eyes at Chicago by those
mysteries of book keeping in which some rail-
way and insurance companies have proved
highly skilled. This and several other banks
of Chicago, when a failure occurred at st.
Louis. were pushed sharply by depositors, and
compelled to fall back upon their thirty or Sixty
days rules for protection, and 1t has been an
open secret since that they have made strong
efforts to fortify themselves against the emer-
gency thus deferred. Not n little OF the loss
of funds by New-YOTk banks, whlchsbas so
depleted their reserve that it is smaller than IL
has been at this season in any year since 1870,
except in 1878, has been due to the demands
made from St. Louis and Chicago in conse-
ouence of these disturbances. But the State
Savings Institution, 1t seems was not merely
in temporary dilficulty-it was practically
bankrupt through mismanagemcnt, and 1t IS
not strange that its failure revives the alarm
of some weeks ago.
The immediate effect will naturally be n
quick demand for any available deposits here
by Chicago banks. 1t is stated, however, that
the amount remaining here subject to call has
not been as large as usual, since the disturb
ance at Chicago in July, and we may reason
ably hope that the demands yet to be made
will not embarrass the banks of this city.
For they have to bear the brunt, whether dis
aster begins in Boston or San Francisco, III
Chicago or New Orleans; the only consider
for
any quarter is held here, and the commercial
safety of the whole country depends very
largely upon the wisdom and promptness OF
the bank managers of Ncw-YOrk. In judging
what, the occasion requires, they will not for-
get that the Secretary OF the treasury mas
himself compelled by law to redeem 81 ,OOOooo
in legal-tenders at the end OF the MONTH ana
that sale of gold to that amount VIII there
fore be made this week. Anhcipations OF de-
Law in the movement of crops, moreover do
moi seem to be warranted by the recent re-
ports of receipts at the West. The occasion
is one which calls for unusual care.
II is disheartenng that week after week,
sometimes in one city and sometimes IN an
other. these proofs of general mismanagement
of corporations come to light. Now Dank,
now an insurance company now savings or
trust institution, and now railroad, brings
about disaster and absolute ruin by gross dis
regard of trusts which should have been sa-
cred. All know the cause. The spirit of spec
ulation f0stercd TO the utmost during years OF
war and initiation not only gave sudden wealth
TO many persons, but inspired in them a readi-
ness for during ventures which utterly units
I them for fiduciary positions. Shch men, as
soon as they find themselves pushed by the
fall of prices, the shrnkage of values, or the
failure of others, naturally turn to operations
more or less of a gambling character, in order
to regain what they have lost. Then dliiicul-
ties come and then abuse of corporate trusts,
and the inevitable result we see, day after day,
in the collapse of institutions once deemed
sound. There Is but one remedy, and that can
be applied only by stockholders themselves.
| When they learn to exclude from positions of
trust men who have acquired the speculative
habit we shall see fewer dlsgraceful failures,
and the business of the country will be saved
| from many severe shocks.