New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-08-08
DISTRrST And ITS EFFECT

Certain ideas are suggested by the latest
bank statement showing the condition of the
Ncw-York banks. which may be of value Ia
statesmen at Washington Their first need Is
10 determine precisely what the evil j. which
must be rcmc1cd. There have been 50 many
conflicting ideas about it that the plans pro-
posed for correcting the evil are almost with
out number
The banks Of New-York are now holding
about S147, 100000 less deposits than they
held about year ago. The decrease in amount
Of loans is about S7S.OOO.0 900 and the de
crease in amount Of cash held about 500. 600,
600 On the face of things II i evident that
these banks have been drawn upon. III the
aggregate very heavily. 10 meet bligatiouS 10
other bank, or 10 their own dcpositorS and
in many cases they have been induced
10 make advances of large amounts for the
purpose of helping banks elsewhere. Out of
all this il has come to pass that something more
than 90 and nearly 80 per cent of their de-
posts year ago has been withdrawn.
There is no reason 10 suppose that the
hrinkage OF credits AT this city has been great
el than in other parts Of the country. On the
contrary. the well known ,oundness and good
man;gemen. of the banks of NcwYork have
given hem a measure Of confidence which is
scarcely rivalled by the banks of any other
city. IL : not "A violent presumption, then
that a shrhkagc of credits which appears in
the Operations of the banks Of this city may
have been AT last as great. and perhaps even
greater, III the banks Of other cities and of
many country to'ns. But a shrnkage Of 80
per cent OF the creGts Of all banks throughout
the country could L,t occur without almost
universal prostraton # business. What has
happened in pOn; Of fat. is that the banks of
New York, because of thcr great strength. and
because OF the high degree of confidence they
deservedly enjoy have emplrcd their strength
and their credits tC a considerable extent 10
aid institutions elsewhere, les. fortunate in
circumstances. Nevertheless, the shrinkarc in
credits throughout the country mus have been
very lar6. II as much SG5, 90, 600 has
been withdrawn from the banks of thu city in
cash within the last year. and by far the great
er part Of it within the last two months. itmoy
well be inferred that if not in this city. ,t
least in other cities which the New York bans
have endeavOred to assist, rs great a sum has
been withdrawn from circulation entirely by
the distrist of depOsitJrS. Something like a
quarter, at least, of the deposits inr,lsted to
the New-York banks and to those which they
have endcavorcd to help, must have been taken
out of their vaults by reason of the d>trllst
which has prevailed in the business community.
II is this distrust which has caused the lack
of currency. We have in circulation in paper
of all kinds about ~ 600. 100000. But the
credits for which banks of all sorts are liable
TO their depositors amount in the aggregate 10
not far from 81. 900. OO0 600. II only a fifth
of the deposits were withdrawn the banks
would be left without any resources whatever
for the payment OF their Indebtedness. OBJ
vio,isly no such state of things has occurred
nor could any such state of things occur with
out entire suppression of business in all parts
OF the country. The dcpositOrs have ncycrthc-
less drawn from the banks sums amounting
in the aggregate to several hundred mill.
ions it is probable, and much the greater
part of the sums thus withdrawn has been
boarded by individuals or hidden. because of
their distrnst of ordinary places and mplcs of
safckeeping. If Congress wishes TO set things
right and To- restore prosperity. its first duty is
TO restore the confidence Of the peopIc in the
future success of business and of the banking
institutions which depend upon the industries