New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1884-06-07
Fl1SE 4ccEprrNcES or CHECKS.

Commissioner Griflith's decision that the OIL
GERS of the Wall Street National Bank must DC
held TO await the action of the Grand jury lot
oycr-ccrtifyng checks. notwithstanding Their
plea tina, they did not certify" the checks, but
| accepted" them is just and wholesome. Such
a ruliug has been expected by the friends OF
souul banking for a year or more past, Tor the
cuestion has been earnestly moOted in banking
circles As il concerns the security OF all de-
no.tnrs and Stockholders, il deserves. just now,
an untechnich explanation. Long ago the Gus
tom arose of n holder of bank check call
ing ot the bank to ask if il were good, and OF
tbo cashier writing good" across the face OF 1t.
soon the question was asked in the courts,
What does this certificate meant The banks
claimed the meaning to b. only this-that there
was money enough in The bank to the deposit
TORS credit at the time when the check was
shown to the cashier for payment Oh the cheek
then. But the courts (of this State and many
otherS) said: No; what a check holder wishes
to know is, not whether the check was good
"vhen drawn, but whcthcrit will be good when
" he comes for the money. lfy0u BANKERS pay
" the dcpositOr's money on other checks Whlle
"tlis certified check is outstanding, 1t Is y0ur
own loss. On certifying check the CASHIER
should charge 1t to the depositor, and hold the
..o,,ount forthc holder; aud if he does not do SO,
:" fine bank must pay the check when presented
| sos q debit of its own Such being the edict OF
the courts such became the general practice OF
the banks; aud, as followed among conserya-
five. prudent banks, it has always been safe
one for all concerned. But banks willing to ald
sneculators have been accustomed to Ger
| tify checks for large and favored dcpoS-
itors during the forenoon, although the
| drposit might not be large enough to
| cnver Them. upon the engagement or under
standing that the depostOr would make his
account good before o'clock. Sometimes
| this expectation was disappointed, and then the
check. being by the above decisions of the
courts IN engagement of the bank that the
money should be forthcoming, had to be paid
from other funds, and thus the general deposits,
and even the capital of a bank might at any
time be wiped out in day by a few over-cer-
tificates given by an accommodating or dishon-
est cashier.
Congress early prohibited National banks from
certifying checks except against actual deposits.
The first prohibition was not sufficiently strn-
gent to suppress the practice hence In 1852
an act was passed declaring that whenever
check should be certified beyond the amount of
the drawers deposit, the check should be good as
an obligation of the bank, but the false certiii-
cate should be good cause for closing the bank
by the Controller, and the officer giving it
should be punishable by fine and Imprisonment
not exceeding So 900 and five years.
This penalty, it was thought, would suppress
the practice but the speculative bankers and
brokers devised the plan of marking checks
accented instead of "gOod." This. they
claimed. was not not certifying" We believe
that both the Controller of the Currency and
the Attorney General at Washington have
given official opinions that this device is a
mere evasion of the law, but the decision
of Commissioner Griffith is the first
judicial opinion. The object of the law,
as he explains it, is to prevent bank OH
GERS from putting the money Of the general
mass of depositors and the capital of stock
holders at risk upon the mere expectation that
a depositor will increase his deposit; and the
mischief done by accepting" a check is as bad
rs that done by certifying, and may even be
worse. because acceptance is the more distinct
and onerous engagement to pay the check when
presented He pronounces accepting mere
evasion and equally criminal and punishable
with certifying