The Dallas daily herald. [volume] (Dallas, Tex.) 1873-1887, 1884-08-14

IL was DY lne immaculate suspension oil |
Dne or two others holding large deposits
Of money, destroyed CONFIDENCE in a
and sent deep thrill of APP
over this country. An in
cipient panic threatening to assume
frightful proportions, was everywhere
The wise readiness and heroic courage
displayed by the Clearing House banks
in this eXigency was as remarkable as
it was effective, In the panic of 1873
similar measures were adopted, but not
until after much injurious delay. AT
this time il was prompt and decisive
We who were tarthest away from the
exciting scenes can testify to the relief
their actions gave us. In the city it
Immediately restored confidence in the
banks, and at all interior points it
quoted rising apprehension.
Of the so-called Clearing House cirtif-
Gates was a practical though partial
recognition Of the principle here con-
tended for.
1t was practical, because through the
use of these certificates every bank cred
itOr at the Clearing House, became u
willing lender of its entire credit bal
ance to any debtor bank or banks desir
ing to borrow.
1t war partial because the benefit of
this operation was so much restricted
With a larger cash reserve here con
tended for, and with the right to raise
interest rates 50 as to bar out more
PANICKY BORROWERS,
the Issue Of these certificates would have
enabled the New York banks to supply
every legitimate call for loans. As it
was, they were in a,pOsition TO lend with
irnnlnIn az bp tp1 IA
reserve was made available mt any point;
but ii would seem, if observation may
be trusted, that such power was not eX-
ercised. a vigorous policy Of cOntrac-
ton in loans was the observed rule
"a policy which was oppressive
to debtors. injurious to tho
banks themselves, and detrimental to
It's widespread effects to industrial in
terests everywhere. This policy found
q ready if not necessary imitation in all
the cities and villages through the land.
But tho general adoption of such a
course does not Justify it as wise,
though where common sin prevails
criticism Is disarmcd, even if the sin be
acknowledged. The prevalence of evil
policy makes individual exception diff
cult if not impossible.
A banker who should try tho remedy
OF expansion, when all his neighbors
were enforcing contraction, might soon
ind his reserves transferred to his
ncighbOrs vaults.
The principle does not admit of par
lial application. 1t must be thoroughly
embraced and generally acted upon, or
ii will fail.
If these reflections upon the remedy
Tor financial panics are justly founded,
four
GENERAL SUGGESTIONS ARE IN ORDER.
First keeping of cash reserves
considerably larger than y per cent. in
ordinary periods by banks in the reserve
cities.
Second A repeal of usury laws thus
leaving the price of money to be regula-
ted, rs are all other commodities. by the
law of supply and demand.
Thlrd-A removal of the injurious re-
striction now imposed by the National
Bank act. A restriction which if OBJ
served in time ofpanic will prejudice the
bank and imperil all business interests.
Fourth-The adoption of some rule TO
secure uniform practice in loaning
freely IN times of panic out of the cash
reserves.
1t will be said that public prejudice
renders II idle to expect repeal of the
inusury laws. This must be, for the
momont, admitted. 1t still remains,
however, that true principles make their
way and receive final adoption through
beng held to the public mind until their
value Is recognized.
1t viii also be said in answer to the
fourth suggestion that no rule of the
Kind indicated can he devised suscepti.
bic of enforcement. In such al answer
| cannot concur.
IHE CLEARING HOUSE CERTIFICATES
prove that cooperation, in one respect
az least may be secured. 4 trusted
committee of the Clearing House asso-
cation issues these certificates against
the pledge of securities they deem suni-
clent, and all members receive the Ger
tilicates at their face. Why could not
another committee OF equal prudence
make all the loans in times of panic to
the public, with funds furnished for
that purpose 10y all the banks, in proper
Ton 10 lhelr cash reserves from day to
day?
This is merely II suggestion TO indi-
cate that through study and reflection a
resolution can he found. other suggcs-
| lions to meet this end will no doubt he
offered to your consideration. In this
haStN presentation | have purposclv
omitted many details of argument.
| several questions ROMAN which no
/ doubt affect it-qucstionS of interest on
| deposits, the methods and
DIRECTION OF BANK LOANS,
and other questions quite subordinate.
! II your minds are engaged with The
| theme, its full treatment is in your
/ hands.
lisa last, perhaps, choice between
| evils 1t may Toe dang rlus to loan. Ii
is more dangerous To refuse.
- 1
! l.elt to run it, course, like "A conhagra-
ton, 1t will cease only when all il feeds
on is destroyed. With approved engines.
we put out incipiCnt tires. With i'm
. proved guards, we have brought down
the percentage of steam boiler eNplo-
SONS toa practical nullity. Dynamite
Is transferred in safety from one end of
/ the country to the othCr,t douseful work
IN quarry and mine. Electricity lies nm
der control, and lights of 9O,OiN-candlp
power turn night into day.
Shall We now admit that In the realm
of banking and finance higher degree
of perfection cannot he reached? Our
conqucsts in other fields are sufficient
ailrnation that we shall not fail in this.
Secretary MWSland read the resolu
lions submitted by the Executive Coun-
sol, rs follows:
] AN'f'NaN'Nat AANA ~ - lllf NtllNt OI INT
American Bankers association, that the
coming of the standard silver dollars of
il2ls grains, is against the welfare of IN,
country, aud recommends To Congress A
discontinumce of such coinage.
\ committee Of three was appointed IL
invite Hon. William Grocsherk to spenl,
upon the question.
Mr.. Groosbeck, OF Cincinnati, re-
spondcd.
lie favored bi-mctallic currency, ant
went ON to show that for centuries golc
and silver had been of equal value n,
currency. The change took place in Isl
or lSi2. What had been done i'm In,
past could be done in the future. 1
might be Impossible for one country I,
carry gold and silver alone for its cur
rency and he favored under the presen
condition, the suspension of silver coin
age In the United States until otho
nations took action on the subject. 4
vote of thanks was extended 10 Mr.
Groesbock and the resolution was ear
} riod.