The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1879-03-26
THE NEW ORLEANS BANKS.
OpiuIens Of LOuisianfaRs Abroad ms to
Their stabflity-What senator Jonas
and Representative GIbs IN Have to


say.
tWashsngton Correspondent N. Y Heraldl
Senator Jonas, Of Louisiana, who left New
Orleans week ago, said to-day that at that
time the national and State banks generally
were complaining OF having too much money
On hand for profitable business. Thsdernand
WIS very light and at this season Of the year
money was flowing into New Orleans rather
than leaving it. The Southern Bank which
had suspended was only q State bank, and,
though conducted on safe business principles,
had large Investments In what are known as
city consolidated bonds, which were pur-
chased at about one-half their par value
These bonds were protected by Legislation
which provided that the interest should be
paid out Of special taxes, and which also pro-
vided for sinking fluid to meet their redemp-
ton. The constitutioDaIity of this special
legislation was tested before the State SUI
preme Court and desided adversely, which
deprecated the city cOnsols fully 20 per
cent, and as the Southern Bank held about
$500, 900 in these bonds the loss necessarily
embarrassed the bank. end hence the failure.
1t was, however, only bank OF exchange, he
says and did no discount business whatever.
so sound was Its management that in 1873,
when the New Orleans banks were compelled
to do just what they are now announced to
have done, the Southern Bank was able to
keep out of the mutual protective operation
and paid it's depositors on demand dollar for
dollar. The suspension Of the bank has, he
says no importance whatever. None of the
old banks, he adds, have loaned mon y on
State securities except at very large mar
gin, and this class of securities are not
accepted by the New Orleans banks save
upon the safest margin. There is Just now q
aparpty Of CURRENCY in New Orleans V rpa-
son OF the large deposits in the banks on pri-
vate deposits, and, said Senator Jonas:
1.-THE demand for money Is 50 small that the
banks have had no opportunity OF paying out
good security. / see by the New York papers
that nearly 100000 has gone forward to
protect the credit OF the banks which have the
confidence OF our business men, which means
that this scare will put them TO the cost OF
paying for the transportation OF funds be-
tween New York and New Orleans only to re-
turn the same in few days. am sure the
action Of the banks Is purely Of prudential
character, and the strong have united with
the weak In order to do precisely what they
have done before to restore public confidence
Domentarily disturbed.
GEN. GIBSON ON THE SITUATION. .fs,..-
Gen. Randall Gibson who represents New
Orleans in the House, and who Is familiar
with both the financial and the industrial con-
dition of the State, said, In answer to the
question why the bank had suspended: 81 " y
II have no private advices The suspan-
sions and panic reported In the newspapers
are undou otedly caused by the want Of conf
dence excited in the community by the dis
c,Issins in anticipation Of the constitutional
convention. They are unreasonable, for the
convention is called in the interest of economy
and good governm ent; but vague apprehen-
sions have been aroused, and private az well
as public credit has been impaired. In my
Judgment both will be benefited by the con-
vention. There had been a gradual de-
cline In real estate since 1868 until
the Nichols government was installed
when exaggerated hopes were enter
tanned. Real estate and the State
bonds advanced Immediately, and tut for the
loss OF the sugar crop In 1878 and the cpl.
demic of last summer they would have con-
tinued to advance and entire confidence would
have been once more restored. We have haG
but little credit since 1868. The taxes have
been an immense burden. Our city lost much
Of its trade by the system OF railways from
the East to the Mississippi valley, whict
made that valley tributary 10 the East. Near
| ly one-third of the land of Louisiana, former
| ly cultivated like garden and enormously
| productive, has not been rescued from the
thistle and weeds since the war. 1t is as fer
! tile as ever and labor can be readily procured