Seattle daily post-intelligencer. [volume] (Seattle, W.T. [Wash.]) 1881-1888, 1884-09-24
OAIly pOST-IiTELLIGehceR.
gask FaIITEEs

During the past six months, ali over
the country. rotten banks have Deen
tumbling down, dragging With then
millions Of the funds Of honest dsE19@-
tors. and invoking thousands OF INNS
csn, yietims 10 hopeless insolvency anc
financial ruin. Hardly a week hss pss--
ed without chronicle II one OF more
hank failsres, coupled With exPo@ur1z
n. iueotupssency and carelsssne-s %
the uar: of directors. and Of rasrA!iiy
and criminaliiy on the part Of baAk Of
6cials, startling and unparalleled II tie
history Of the banking business ii sais
country. The public have come 10 D
lieve. no, without apparent eaase, that
there are more rotten banks and II 5re
d,sbones. bank officials titan ever here
tofors and are in condition OF sDoef-
tainty and unrest, that although Dot IL
the least Surprising, - none tie les
hnrtful TO general bzsIness credit and
prosperity.
The uas.! IN c4ase Of this condition OF
affairs, the reason shy 80 many banks
failed Ii easy 70 disc IN. IN evsTy case
it may be traced dir city 10 the mama
for speculation ID railroad or mining
sscuri,i1s. oil or food products. II IL
the result Of gambling vIth other peo-
pies noney OF credit Bank presidents,
cashiers and directors. xho from tnesf
official positions have control not only
OF the funds Of their baHks, hnt OF tie
money Of deposit0rs, reekisssly aud dr.
honestly ose such funds IN private
specalatious. Probably IN no Gaze y
such diversion Of funds made with
dishones. intent, that IL - say. the pm
nary motive il not 10 rob the bank nor
ia depositors. The money IL used to
further private interests by speculation.
II the money used is increased by a
turn Of Fortunes wheel, everything
goes on smoothly enough; neither the
bank nor its depositors suffer loss, and
the fortunate individuals who have
taken such grave risks, appropriate the
profits to their personal use. Bot on
the other hand, il reverses come, II the
wheel turns the wrong way, the newt
able result is loss of the money, rain 70
the banks, and to their depositors; and
irretrievable disgrace - the recreant
officials, often eliminating IN the crime
of suicide. The sania for gambling ~
difficult Of analysis. II seizes upon
men with strong hands, and holds them
with relentless grip. Losses only slim
ulate the victim to desperate measnret'
and lured by the igHis foinus Of hoped
for change Of fortune, crime succeeds
"irreRularity," until exposure brings
destruction. Into the great maIttrom of
stock speculation, IN some Instances
during the present year, not only the
money Of banks, the money Of depos-
itors, bat all the available assets of Ger
tain institutions have been wildly flung,
only 10 be whirled downward into the
seething vortex Of irreparable disaster.
When the last glimmer Of hope dlsap
peared, either from entire absorption
of all available resources, or discovery
and exposure Of criminality, towards
have fed, or killed themselves, brave
men have lost their reason, or succuInb
ing 10 the inevitable. have been sent 10
prison to expiate in part their crimes.
The effects produced by 50 many fail
nres. upon the banning system of tie
country and the morale Of its managers
will be salutary. IL Is hard to learn les.
sous by the stern teachings of expert
ence, but they are liable 20 be lasting.
One of the results of the deep impress
sion produced by the failure Of 50 many
banks will be general tightening of
the screws Of bank management which |
will mare To the better protectioB both
VI stockholders aud depos.tsrs. There
viii be more vigilance exercised by bank
directors, and less careless confidence
reposed in bank officers Danny
directors vii be replaced by live men
who will keep watch over she business
and closely scan not merely the conduct
VI tbs hanks bot the business and per
sonaI habits vi their officers. Ii Is
glaringly apparent that speculation il
the one great enemy 10 the solidity of
banks IL 10 the treaeheroas current
that continually eneroAehes upon the
Integrity OF hdnoiary agents, and which
hss often sweep away the millions with
which they are entrusted. The day will
come, and speedily, when no officer or
employee of a bank in the United States
viii be permitted 20 purchase share
Of stock on margin or 10 use, even in the
slightest degree. any funds or credit of
the bank, for purposes of speculation.
Dishonesty can be as well checked in
banks as elsewhere. In fact, the stand
ard of integrity among bank officials is
not. in spite of recent numerous and
EE618tt11aA AakkhANct 0SAbW that Vi WHIT
classes Of business involving equal or
similar financial resi- onsihility. There
are now over zoe National Banks, yet
in the period from 1868 10 1888 emily 50
Of them went into the hands of re-
ceiyers- The total losses to creditors of
these banks were but 100000, or an
annual average of $3oo.0oO. against an
average annuAI deposit OF $50. 0oo, 200
Ia oihsr words. the average annual
los@es 30 dsposilors were less than one
twenty second Of one per cent. This Is
certainly q very small margin OF loss,
aud while doubtless exceeded by losses
in private banking, the percentage
therein IL not very largely in excess.