Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1893-07-27
The safety Fund and "Runs.'

II il the want OF confidence IN the banks
that causes the runs upon them. No
thing else. Under tho existing national
banking system no note-hoider ever en-
cages in run" on national bank. He
never even looks into his pocket-book TO
sec whether he has note on u broken
bank or not. The government stands at
the back OF every bank note and inspires
confidence amongst all classes and condi-
tons Of men. II wss want of confidence
in the safety Of deposits that broke we
might say nearly every bank which hos
failed during the prevailing monetary
troubles. Road the story of one bank.
On Tuesday the Indianapolis Bank OF Com
mcrce did not open its doors Why not!
Read
"For some days rumors we're curroni that TIE
bank wa. in trouble and these rumors han the
effect Of starting quiet run upon II, which
though quiet, dopleied the banks funds aud
finally made necessary the suspension spoken
or
There was nothing in the world the
matter with the Indianapolis Bank OF
Of Commerce. II had lent Its deposits TO
it's customers for sixty or ninety days
aud of course could not deliver them on
demand" 1t was confidence that was
l9ckinc; or, IN other words, 1t was
safety fund, or redemption fund, or
government backing that the bank need
cd. That bank has lost by this suspension
more than II would have bad 20 pay as a
guarantee fund in twenty years.
Now, read what the Controller OF the
Currency says:
.'The I'VE banks which have been permitted
70 resume we're forced 20 suspend because OF
runs. All were in q healthy condition and well
managed"
81 am convinced that had notice OF rams been
given tue banks would have been able to meet
the demands. The trouble grew out OF scare
The banks wore unprepared for the sudden as
sault and suspended 20 protect themselves
Many banks have boon caught up In this way,
aud ne soon as confidence IL restored they VIII
be prepared 10 reopen The banks are sound
and should be supported. II tho public con-
tinues its confidence IA Institutions which nave
been ably ana cOn59rvatiyoly managed Tor years
there will be fewer failures"
Yes. confidence" is what IL needed.
How ia il TO be seoured2 We answer by
establishing 20 saf0tg fund ~ TO give TO
depositors the confidence which note
holders already posses.
The best banks and the worst banks are
in the same boat. Tho bad ones are 30
managed as TO destroy public confidence
in them and the moment the people lose
confidence in the bad hanks and seek in
vain to withdraw their deposits from
them, the depo4itors in the best banks be-
gln 70 suspect the solvency of these banks,
and then begins run" 3" The devil
take the hindmost." h the motto of tho
wild, reckless, unint0rmed dopositors
There is no more sense nor reason IN a
crowd of angry depositors trying IN vain
to get their deposits out OF bank than
there Is IN mob OF any other sort col
lected for any other purpose. There Is no
use in arguing with the economical.
would-be thrifty SONS Of toll, or with their
wives, sisters. daughters, or mothers. We
cannot believe that any bank would be so
blind 10 ITS own interests a. to he willing
10 rsk facing al any time mob of angry
depositors rather than TO pay annually tho
small sum OF money necessary for each
bank to pay in order TO make bowling
mob Of deposit)rS al unknown thing IN
the future
The telegraph tells us of run on Tues
dav upon tho German Bank OF Louisville
also that American citizens are depositIng
in Canadian banks. Also that two Indian
apolis banks suspended. Also. Mllwau-
kee bank. Ais, other western banks. And
whyI Because the people lacked conf
dence in the banks, and did not know
what TO do In order 10 get back the money
they had deposited in those now suspend
cd banks.