Western sentinel. [volume] (Winston [i.e. Winston-Salem], N.C.) 1856-1886, 1885-04-30
A FINANCIAL CRASH.
FOUR BANKING HOUSES I'M NOR.
FOLK CLOSE DOORS.

I Sister Cities to Review the Situation.
Special Correspondence Of the Sentinel.
NORFOLK, Va, April 24.-As you
requested, our arrival in Norfolk was
followed by rapid strides towards the
financial centre that has recently ex-
perienced SO much excitement and
loss. The great excitement that at
first followed the suspensions, has, of
course, subsidized, but traces Of uneasi-
ness may yet be seen on the faces of
merchants or tradesmen interested.
There is no doubt that the recent fail
ures indirectly affected all, and inn
poverished many. This extended not
only to various points in the State,
but to number Of European deposit
tors.
THE EXCHANGE BANK
which suspended on the End inst, was
regarded as one of the soundest banks
in the South, and literally and extern
sively patronized. For instance, DIR.
Mcdonald, of the Pacific Bank, San
Francisco. feels the failure to the ex-
tent of $270,000. The surprise felt by
those not concerned in the suspension
was almost as great as the distress felt
by those whose last dollar had been
locked in the vaults. Banks, however,
always are, and always will be, myste-
ries to the great majority whose idea
of business is based on old, common
place principles. But the experienced
financier beholds no mystery in the
laws of finance, and is seldom misled
by gorgeous, annual statements or fic-
titious dividends. The Exchange Bank
was warned ON the 18th of March that
its reserve fund was deficient, but lit
tie attention, it seems, was paid to a
warming that should have been, if nee
essary, forcibly impressed. There is
no other evidence necessary to show
its recklessness. The charter of the
Exchange would have expired on Sat
urday, the 10Th, but the gaunt arm of
failure, which had been hanging over
the bank several years, grasped its
victim. Perhaps it was better 80. The
Exchange might have pasted paper
over the gap in its reserve fund, Sc
cured a new charter, put on the air of
prosperity it has learned SO we'll to as
same, and continued to risk the money
of its depositors. There is no real
sympathy here for the bank or its of
fcers. The great brotherhood of bank
ers naturally sympathizes and laments
but the depositors feel that the officers
overstepped the bounds of investment,
and are responsible for the wild spec
ulations that have left the assets plen-
tifully sprinkled with almost worth
less paper. Many of the so-called Sc
curities, which the Exchange has been
pleased to number among its assets,
have little value to-day. AS we stood
In the bank yesterday, conversing with
| an examiner, we were reminded OF
rare, old historical documents presery-
ed for the benefit of future generations.
However, the managers of the Ex-
change could hardly have had histori-
cal preservation in mind when these
securities were accepted for good, solid
U. S. cash. The historical truth OF
the matter is that depression in all
quarters of the State, where the secur.
tiles once had value, caused what the
Exchange is pleased to call an unfere-
seen shrinkage that human judgment
could not even suspect, and that was
discovered too late to apply any RENE
dy. When bank has failed, it is a
most thahkless task to "explain how
it was DONE" Explanations certainly
satisfy no one, and only increase the
Indignation of depositors. In the pres
ent case, the safest explanation is that
the heaviest losers are perfectly able
to stand their losses, and the smallest
depositors unfortunately stripped oi
every dollar they owned.
OTHER BANKS
naturally suffered from the suspension
Of the Exchange. Indeed, the whole
system of banking in this region ap
pears like a most unfortunate combi
nation. The life of one was the life
of others. The statement that panic
caused run on other banks, and thus
necessitated their suspension, is absurd
Such statements can create no sympa
thy in clear, calculating mind. Wher
the Exchange had gone down, the col
lapse OF other banks was scarcely sur
prising. The suspension of the Frank
lin Savings Bank and Balm Bros.
Portsmouth, was nothing more or les
than the natural result of the Elk
changes failure. One could hav
placed his last dollor in either will
equal safety. Balm Bros. have placet
their liabilities at 81 100000, an.
their assets at 81 100000 IF we judg
| this bank by methods which the Ex
change pursued, it is safe to say tina
the assets, under liberal estimate, ar
worth not more than 81 400, 900, leav
ing q deficiency of 100000. Wild
we might say, criminal, Speculation
has been the rule. On the 9th inst
the Farmers Bank, unable to foot il
self or its depositors another day, wa
compelled to succumb. Here. in on
short week, we see no less than fou
banks closing their doors, and az
knowledging that their officers ha
abused the deposits entrusted to thel
investment. The ball of suspensio
had only to strike the foremost, an
! let it fall against the other ten-pins
finance. It still rolls onward, hoWe'
er. These banks are not the only ter
pins whom it has struck, or whom
may strike. There are a number
mercantile interests that could barrel
keep their balance, and q number Mh
must eventually totter and fall. Th
distress that the failures have cause