The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1877-07-22
THE ST. LOUIS BANK EPIDEMIC.
THE ROTTENNEss or THE SMALL.
BANKS AND THEIR CONSEQUENT
FAILURE.
The BfasIaian steamship Line, ana what
mas llTcn Done to PUT II In Operation.

Especial Correspondence ottne M ". DemocfRt,l
Sr. Louis, July 20, 1877.
The epidemic which prevailed with such
fatal results among the banks Of this city hos
.abatod. but there IL cause for apprehension
hat IL may reappear any day and force few
more of these institutions into liquidation
The disorder lasted but few days, but II
really appeared to be of an epdemical charae.
ter, as IL proved
FATAL TO NO LESS THAN Six BANKS.
But matters In financial and banking circles
have resumed their normal condition, and
though there Ii almost certainty that sew
eral more small fry banking establishments
will be compelled to succumb, there Is no OK
element and no disposition to howl over their
demise. These failures are not the result Of
any unusual financial depression In ST. Louis,
but proceed from the enactment Of d very
wholesome law by the last Legislature. The
provisions OF this law, or rather Of several
laws on tho same subject are very stringent,
and had the effect Of wiping out all banking
institutions In shaky condition.
Just before the assembling of the Legisla-
ture there were several bank failures through
out tho State, and very little investigation
showed that stockholders and depoaitoss had
been shamefully imposed upon, not to say
swindled, by these institutions. Prominent
among the failures OF this character was that
of the Central Savings Bank Of this city.
Hundreds Of poor and honest laborcrs of both
sexes were virtually robbed of their hard
earned savings by the failure of this bank
which occurred shortly utter the failure of
the noted Bernard J. Reiley who also had u
unrt IF In MI non anfnd with hia
sw1NDLtNa MACHINE.
The newspapers depicted the sufferings Of
the depositors several of whom committed
suicide-and exposed the rotten condition and
fraudulent management of tho defunct banks
Mt the same time. The consequence was pub
lie feeling was worked up, and upon the as
sembling OF the Legislature there was a gen
eral clamor for the enactment Of
A LAW THAT WILL PROTECT DEposrroRs
and punish deception on the part of bank OH |
cials and managers. The passage Of three |
distinct bills for the government of banking
institutions was the result, and one of these
laws 10 stringent enough to satisfy the
heaviest depositor in any of the suspended
banks.
This law requires bank to make semi-an4
nual reports to the Secretary Of State Of Its |
condition. under oath, and empowers the Sec |
rotary to call for an additional statement |
Whenever he may SEQ fit, without giving the |
bank any notification of his purpose to de-
mand such statement. 1t also provides that
when bank is impaired to the extent of
twenty-five per cent of It's capital stock, IL |
shall Immediately suspend business. Each
officer or director is, also, made responsible.
by civil action for the amount Of any deposit
received while the bank is in failing condi-
lion, and subjects the same officer to
CRIMINAL PROSECUTION
md Imprisonment In the penitentiary IL con-
victed.
This law goes into effect on the first OF Au-
gust, and as the time approached such banks
ls could not meet the requirements of the
new statute had no alternative but to suspend.
rhe chance of facing a jury-the most uncer-
ain OF all human creations--and having to
lbide by their definition Of failing condition
With the penitentiary as The next place of
BUSINESS was not an agreeable contemplation,
md those officers and directors who realized
hat their banks were not In an entirely
lealthy condition preferred suspension.
For two or three days the suspensions, one
GLOWING another In rapid succession, created :
llarm and uneasness and at one time
A GENERAL PANIC WAS THREATENED.
'eople began to feel that no bank was safe q
nd there was rush to withdraw deposits !.
hat made things look squally. But as soon '
s the true cause of the several failures was 4
Explained and understood, the feeling of .
larm began to subside, and as the suspen- o
ions ceased about that time, everything soon
ecame quiet. y
THE BoATMEN's BANK ii
Id much, by its course, to allay the alarm
nd restore confidence. Its force Of tellers =
as increased and business hours extended
, as to meet demands, and when people saw
ow firm this bank stood their confidence was
svived.
The trouble is all over now, but as state d Il
reviously several other small banks will no jo
cubt close by tho end of the month. But q
lis will not create any alarm, as the depos- Ia
ors have withdrawn all their funds from the D,
lstitutions referred to, and they will simply 10
e for want Of financial breath. or the sus- AZ
ended banks there is at least one--the b,
utchers and Drovers-that will meet all its OF
,ligations to the very last dollar. bi
B. M. Chambers, president OF the Butchers til
I'd Drovers', made proposition to secure al
,positors by deeds of trust on valuable real hi
tate on condition that he would be allowed OF
wind up the affairs of the bank, with time h
realize on the assets without sacrifice
his proposition was accepted, and the neces-
Try papers are now being drawn by lawyers.
r. Chambers, who Is owner of the st. Louis
ines, possesses the confidence Of the people 1t
st. Louis to such degree that even the &c
ilure Of his bank did not shake it. He has til
cen prominent man in commercial circles th
IT years, and during that time has been ia
entitled with many of the substantial enter in
rises OF this great city, His whole business
ireer
IS NOT MARRIED &c
single questionable transaction. and
hen he announced through the papers that w
cry dollar of deposits should be paid, the mi
ledge was a,cepted with implicit faith in
An effort is being made to found new bank co