The Republican journal., 1877-06-28
The Betrayal OF the Public.

The Betrayal OF the Public.
entitled "a crime that ought to be pun
ished," makes some wholesome talk re-
garding the betrayals of trust by the man
ayers of financial institutions. 1t says that
the unpleasant visitation known under the
general name of ''hard times" is not with
out its redeeming features. 1t teaches us
a great many valuable lessons, not only
as individuals, but as a community. Its
relentless pressure exposes the rotten
places in onr financial aud social sys-
tens, and SO convinces us of the impera-
tive necessity of reform 4 reform origi-
mating in the outraged moral sense of the
people, and receiving its practical shape
and operation through the laws. TO one
Of the most noticeable and dangerous of
these rotten places we desire briefly to
direct attention.
During the last four years there have
been IN unusual number of failures among
Il class of institutions based entirely upon
public confidence; such as banks and in
strance companies. Now one would think
that as these institutions are usually man
aged or supposed to be managed-by
accomplished business men, and as they
are all more or less under the supervision
OF the state authorities, they would be
stronger and safer in periods of CONNER
cial depression than any others. That
they are not is selt-evdent fact to
those who have given the subject the
careful examination its supreme impor-
lance deserves. The records will show
that since 1873 there have been more
and worse failures among the banks and
insurance companies in this country than
among merchants and manufacturers -
in proportion to the number of each.
But there is popularity of these fail
ures which is far more significant and sug-
gestiNe than the failures themselves In
a large majority OF instances the latest
annual. semi-annual or quarterly state
ment, as the case may be, put forth by
the officers OF the institution, represents
it to be in a nourishing condition. The
assets are ample, the liabilities small, and
everything is working smoothly and sat
istactolily- Then in a few months the
collapse comes, and investigation shows
that the assets have been attacked by the
mysterious disease called :" shrinkage,"
and the liabilities have undergone Il ter
rlbc expansion, and the affairs OF the
concern are hopelessly out of sorts. Now,
us it is absolutely impossible for this dis
astrous change to be accomplished in q
few months, the irresistible conclusion is
that the official statement was false. Yet
twas Il sworn statement, published in the
newspapers, and sent to the stockholders
or policy holders in elegantly printed cir
culars, In plain words, the officers of
the bank or the insurance company have
knowingly runknoWingly committed per
jury. They have sworn to a lie, and some
Of them, ut least, must have known what
they We're doing. 1t would be bad enough
if the perjury injured nobody except the
perjurers, but it Injuries the public by
creating Il confidence which the institu-
ton did not merit, and which drew into
it funds or Investments that would other
wise have been withheld. Thus the per
jury is supplemented by robbery, and it
is the too-contidmg public that is robbed.
This species of crime has become la
mentally common; SO common, indeed,
that it rarely provokes anything more
than passing comment. The criminals
are seldom denounced and hardly ever
punished; consequently the crime in
creases and multiplies and SO do its vic
TINS. Has not the time arrived when the
law should take these false swcarers by
the throat and chastise them as other
pcrurers are chastised Or shall we
continue to allow them to walk abroad
of justice because they are
''highly respectable?