New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-12-31
THE BlyKS PROTECTING THENSELVES.

] iitu III gOtttN gillho.
THE BANKS PROTECTING THEMSELVES.
Not too early, the financial institutions Of
this city comprehend that they are assailcd.
They should have taken warning long ago.
! The regulator means to bankrupt them If he
can. Hence they begin to consider means OF
| defence. To the surprise Of many, who do not
consider the vast power they WELD, they find
/ that they are abundantly able TO stop the
rcpudmtor where lac stands. He can ruin
| himself if ho likes lie cannot ruin them
unless they are weak or timid enough
to let him. What power the great COM
mcrcill cities have, has been well earned
| by long-contnued fidelity to business OBJ
! LEGATIONS. Ii is q power which votes in Con-
crc,s can neither give nor take away. Those
cities loan the available capital of the nation,
and all that comes hithcr TO be loaned
from foreign countries. They hold the purse.
Their banks can say on what terms they will
lend. If war is proclaimed against all credit
ors and all honor, it is for them TO say what
form of loan is necessary to make them safe.
No power can force them to make loans in
currency which n Congress can deprecate at
will, or at the demand of debtors. IN every
case they can require special contracts to bay
gold. The borrower who is not willing to
contract that the value borrowed shall be the
value returned is precisely the borrower with
whom sound banks want no dealings.
Only few institutions thus far have taken
this position. But there are enough already to
show important Western borrowers that they
cannot get money if they mean to make worth
less the currency in which debts are to be paid.
Chicago wants to borrow; if gold, that Is well.
But if Chicago wants to borrow legal-tendcrS,
and then to make those lcgal-tenders of less
value than silver, Chicago looks for money in
vain Every hour this temper grows. The
banks see the danger. 1t will be surprising if
the Clearing House Association does not act,
as it did in 1862. If 1t advises the banks 70
put all their business on gold basis as soon
asspossiblc, the clearing houses of Boston and
Philadelphia will certainly follow without de-
lay. Indeed, concerted action might be Sc
cured. But there is reason a5 to New York
banks, savings banks, insurance and trust
companies, which has not received the atten-
ton it merits. They are Obliged to consider
the requirements of New-YOrk law.
On the first of January, 1879 no contract
to pay dollars made within this State can be
satisfied except by the payment of coin dol
lara. Thcre is no possibility that silver coins
in adequate quantity can be obtained. At the
utmost, the Silver Bill cannot pass both houses
for several weeks; it cannot pass over a veto
until late III February. if as soon; and the
minis cannot supply coins for the payment Of
large sums before January 1879. Laws exist
ing elsewhere do not matter. California
requires payment in gold, and its bank
ing institutions have compelled such pay
mcnt. A law of NewYOrk. enforced by
New-York banks, will easily establish the
same basis here. THE banks are bound to
prepare to obey that law. They will do no
more than their duty if they give notice to
customers to begin even now to adjust all
transactions to the basis which the law of
New-York will require one year hence. The
occasion favors. Forty millions or more in
gold may be disbursed here within short
time. The banks can keep 1t here if they
wish, and they will not be very wise if they
let the opportunity slip.
If the banks Of this city unite, those of Bos-
ton, Philadelphia and Baltimore will find it adj
vantageOus to take the same course in self
defence. Suppose that they pass a resolution
requiring that all loans made hereafter shall
specify a certain amount of gold, or its mar
kct equivalent in other funds. They can lose
nothing let Congress do what it may. All the
vast commerce which is transacted through
these cities will have to adjust itself TO a gold
basis. Any intelligent banker can make the
necessary changes in book accounts. If men in
Chicago want to make bills or drafts which
shall be honored in New-Yorli, let them name
gold value. Cincinnati, St. Louis, and New
Orleans can do the same, or can make their
payments aud transfers without the aid of
banks ia Eastern cities. Upon the adoption of
gold basis by Eastern banks, the commerce
and capital Of the country may regard with
comparative indifference the attempts of the
regulators TO swindle the East. Indeed they
cannot well disgrace the country The Gov
eminent itself will be compelled either to do
business In gold values, if it wants to use the
commercial channels, or to ship its own coin
across the country or the ocean.
Perhaps the chronic inertia of the banks, so