New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-12-18
CAUsE or RECENT F1ILURRS.

A startling fact appears in regard to the
recent failures of many banks, savings banks
and trust companies. They fail because bad
losses or bad management, years ago, are now
disclosed by rapid withdrawal of funds by de-
nositor,. In every case for months, rapid de-
nlction of deposits has forced the fatal examl-
nation of assets. In St. LOUIS, Clllcago' DOS
ton. Newark, and New-York, the same
symptoms appear Managers and trustees
have been peacefully sleeping on their
assets. and something has unexpectedly
caused sudden examination. Then II
has been found that, but for the forbearanco
Of creditors, the concerns were really bankrupt
veors ago. Moreover, 1t is right to say that
the withdrawal of funds has not, In many
cases. been occasioned by any especial fear OF
tbcunsoundness of the company affected. A gen
cral withdrawal OF funds appears greater win
unsound than with sound companies, but trace
able to some other cause than special appre-
bension rs To the companies immediately con
cerned These failures have followed IN great
number. because the assets of such companies
have in many cases been improperly invested.
Withdrawal of funds from companies sup
posed to be sound, as well as from others sus-
pectcd of unsOundncss, can be readily eX-
planned. Not in the ordinary Tay-by sup
posing that hard times, and the gradual
exhaustion of the resources Of individuals,
cause withdrawal. On the contrary, facts
prove that the agge gate of deposits in banks,
savings and trust institutions have been
increasing until recently because the majority
of people have so curtailed expenses as to add
to their savings But why should man not
Withdraw funds payable in lcgal-tender dollars
if he thinks that the dollar now worth 81
cents may presently become worth 90 cents
or less Getting the money into his own
hands, he can save himself from loss in
many ways. Among the many, he can make
special deposits of gold, payable in gold; he
can buy securities expressly STIMULATING gold
payment; he can send his money abroad. For
months there has been active agitation for re-
peal Of the Resumption Act and for an act
authorizing all debtors to pay silver dollars,
now worth 90 cents, instead of legal-tender
dollars, now worth 81 cents, or the gold dol
lars worth 100 cents, which have been prom
ised Ii does not seem strange that there has
been an unusual withdrawal OF funds, but we
can with difficulty imagine the stress to which
all such companies will be exposed If the Silver
Bill should become a law.
Investments have been very unwisely and
rcklessly made that is clear. Few compa-
mes have been able to show clean bill of
health. In most eases, IL is not question Of
integrity, but of that disregard of legal re-
strictons and of proper caution, IN respect to
trast funds, which can with difficulty be dis
tinguished from an offence. If, however, this
abuse of powers or neglect of trusts has been
common, what are we to expect What, es-
pecay, can we expect, if general anxiety as
to all deposits should be caused by legislation
Thoroughly solvent companies would survive
though sOrely tried. But is 1t possible to guess
how many there are which became entanged
with investments of questionable value prior
to the panic, and which have been holding on
hoping for n revival of prosperity?
The natural conclusion, from the condition
of companies recently pushed to disclosure, is
that very many now called solvent would be
found to have made unfortunate investments.
No one can deny that investments in similar
corporate stocks have been generally considered
safe and proper. How many companies might
be forced to realize upon such investments,
even at present prices, in case of general alarm,
who can guess
-------------------