Clearfield Republican. [volume] (Clearfield, Pa.) 1851-1937, 1881-08-31

and boarded. Thus not only the credit
system and the money token power /.
destroyed, but the real monsy itself
disappears, not to be again visible until
induced out by an enormous depression
in prices
AT present there is but one alarming
indication of trouble, and thatis in the
number and magnitude of new enter.
lprises, involving the issue of millions Of
obligations. In lS71.72, and for hall
of 1873, this same sign Of coming
trouble was apparent, but to frac.
tional extent as compared with the
present. As thisis purely convention
of bankers, and as ! am probably the
Oldest member Of the association, |
must be excused in uttering a word of
caution to bank managers, more par.
ticularly TO those at the head of
deposit banks. In receiving deposits
from the general and promiscuous pub
lie we morally, though perhaps not
legally, assume u fiduciary trust, and
in using such deposits the utmost eau.
tion and conversation should be strictly
adhered to by always having q sure
and speedy controllabllity over a sui.
ficient amount OF our assets TO meet
any "demand obligation" even in the
light Of a raging panic. tits criminal
to assume liabilities or enter into nc.
gotiatons, though ever so promising,
over which hangs a contingency that
may possibly ondanger this fduciary
trust Intimately connected with the
ideas that are briefly expressed above
is the spirit of speculation, bordering
on gambling. 1t is safe to say that
during the past three years nine ont
Of every ten ventures have netted
q profit. This is because almost con.
tinually prices have advanced. Whom
the panic and depression shall come
as surely as they will-then all ad.
ventures will be losses, and many
"lambs" will come to grief ] simply
touch on this topic because in the dc.
linqueney of bank officers it is often
shown that the deialcation is the out.
crop Of venture, Banks that under.
take heavy negotiations which, if for.
tune favors, will yield enormous divi.
dends, but if fortune irowns, bank.
ruptcy is inevitable, must always stand
in the category of doubtful institutions.
We are positively going too fast and
il is the part Of wisdom, and | conceive
it to be but our duty, TO put on the
"brakes,n that the wreck, when it
does come, may be less disastrous. |
instance an item Of the panic of 1873.
Early one morning the active managers
of three Of the New York city banks
were invited to tho Office of Jay Cook
q Co. We informed thatsl, ,000,.
600 were necessary by ten o'clock to
save that house from protest. What
security do you offer a? was asked. An.
swer- None; our securities are all
used" 1t is needless to say the million
was not forthcoming. We left In
fifteen minutes Wall street was in q
pcnic and thisis only a duplicate Of what
transpirde in 1856, when the'Ohio In.
surance Company suspended, | will
not elaborate the progress and results
OF these panics, for you are all oonver
antwith what transpired in and follow
ing 1873. Sufficient TO say that houses
OF undoubted standing were unable to
stand, and the New York city banks,
after one startling failure-the "Com.
monwealth"-were saved from sus.
pension Of even currency payments by
lodging with clearing house COM
mittee securitiesand taking certificates
that were good at the clearing house
for debtor balances. The banks then
to . great extent, declined cash or cur.
rency payments, but certified checks
and drafts "good through the clearing
house. This was certainly a unique
financial measure, but it saved the
banks from an out suspension of even
currency payments. Specie was then
out Of the category of money. ! refer
TO these historical events toshow that
panics do eliminate in revulsions Of
some five years duration. Gentlemen,
| am not prophesying evil, so do not
stone me | am only ringing the bell
to awake the brakemen, for unless we
show up and guard our assets moth
ing in the past will compare with what
is in the future. The ncgotiations--the
issue of stocksand bonds-are fourfold
what they were in 1873.