Staunton vindicator. [volume] (Staunton, Va.) 1860-1896, 1885-04-17

TINsLEY 8 MORN. Propretors.
Published every F-1ay. Price 50 per year $l,Oo
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Transje-s1 advertisements 10 cents per line each
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Local circulation in Augusta, Rockbridge, Rock
ingham, Aleghany, Highland and Bath counties
Gives general and local news: stories and mis-
cellany reliable commercial reports at home and
by telegraph; special Washington correspondence
and telegraph correspondence.
H. G. T1NsLEY,
A. s. MORTON.
FRIDAY MORNING. APRIL. II. 1885.
DISASTERS WHICH SHOULD NOT
HAVE OCCURRED.
No higher evidence of the healthfulness
of the National Bank system, nor of the
conservative character of the men in con-
troll of the banks under it, could be furn-
ished than the rare cases of broken banks
which have occurred during the long and
disheartening period of business depression
which has afflicted the trade of the coun-
try for nearly two years. These exceptions
are so few, ana fortunately SO glazing IN
their character as to emphasize the truth
of the rule. The three national banks
that were broken in New York city last
year were banks that had been thoroughly
Quilted by their officers and directors be-
fore the pinch came, and yielded like
empty shells. The failure of the Planters
Bank in Petersburg was the result of the
same process on the part of some Of its
officers, and the failure of the National
Exchange Bank of Norfolk seems to have
been more literal copy of the mode by
which the assets of the New York banks
were melted into thin air than even that
at Petersburg. The Norfolk Exchange
Bank was oficersd in a manner most IA
vorable to the process of quitting. The
President, besides being heavy borrow
er, seems to have been an easy going, con-
fiding sort of man who had perfect reli-
ance on the capacity of the bank to stand
the borrowing of others. Of his officers,
one was partner in large private bank
ing establishment IN the adjacent town of
Portsmouth, and two of his brothers were
partners in the same banking house and
directors in the Norfolk bank. So manned
it is not surprising to find the following
issued as the way in which the $2;423 900
of the depositors in the Norfolk bank had
been loaned out:
Balm & Bro. borrowed, $1.2Sl. 200
Geo M Balm, Al, 900
Jno. B. Whitehead, $1,000
Smith & Co.. 100000
Reynolds Bros, 100000
Hymans & Dancy, 100000
Ouray Mining Company, $4,000
Total, $l97S, 900
just about one-half of the total deposits
loaned to one frm-the banking house of
Balm & Bros, in which the officer and two
directors were partners, land the remainder
distributed among five other firms, one of
which. the Ouray Mining Company, is re-
ported as worthless. How much the Pres
Ident of the Bank knew of the affairs of
the concern, though heavy deposition IN
1t himself, may be inferred from the fol-
lowing extract from the account we read
in Norfolk paper Of the first intimation
he received that his bank was insolvent.
Orson Adams, the Government Bank Ex-
aminer from Washington, had just been
examining the bank preparatory to rec
ommending the renewal of its charter,
which expires in May:
'sHe called on Mr.. Whitehead at the bank
and said: ''Mr. Whitehead, did you know
that Balm & Bro. were overchecked to the
amount of 81 ,2S1, oOo?"
''Why, man, you're joking" said the bank
president; you'd better go back to Wash
ington.''
~ am in earnest" said Mr. Adams.
He turned and called Mr.. Balm, who was at
his desk in the main part of the bank.
''Mr. Balm, are not Balm d Bro. overdrawn
at this bank to the amount of 1881, 900?
''They are, !" replied the cashier.
MIR. Whitehead made no reply, but sank
back in his chair as though he would faint
He had heard the news for the first time, and
knew it meant ruin"
That is brief history of how the news
which was to involve whole community
rich and poor alike, in financial ruin ind
consequent poverty and distress was re-
ceived. How the bank will liquidate may
be inferred from the fact that against the
$1,z81 900 of Balm Il Bro. the bank hold i
s570,0 of such stocks and bonds as the
Southern Telegraph Co. anG the Meherrin
Valley r. r. Co. The bank had been
clearly ruined by the violation Of the Z.
S. Banking laws by its officers, and while
they have given up everything they own
to repair the damage they have done, their
whole assets will 60 but little way to.
wards it.
Closely following the failure of the Elk.
change Bank, came another one of an
entirely different character, and which
shows warningly how easily panic stricken
people may damage themselves while at
tempting to save themselves. The Farm
ers' Bank Of Norfolk. was on a sound
basis. 1t had good deal of funds in the
Exchange Bank, but could stand the loss
and go on in safety. The city deposltors
understood the situation and by increased
deposits showed their confidence. But
the country depositors, of whom there
were many, became frightened and COM
menced withdrawing their money as fast
as they could communicate with the city.
Remonstrances were useless. The Presi-
dent Of the Bank seeing that it was unfair
to permit the country depositors to draw
out while the city depositors were putting
in, closed the doors on all, and there was
another suspended bank in Norfolk adding