Omaha daily bee., 1896-12-31
TIE rtNKING ntrndrLoN.

The recent bank failures have very
naturally created some dstrust and
efforts have been made In quarters from
which 1t was to have been expected to
glvethese failures Il significance they do
not have. Hence the statement made by
the comptroller of the currency regard
ing the general banking situation is
timely aud will be rcassuring. That
official points out what must be appar-
ent to everybody who has given intel
ligcnt attention to the accounts of the
bank failures, that these were due
almost wholly TO local causes.
The first OF the failures was the out
come Of reckless mismanagement and
could have been averted had the direc-
tors of the bank done their duty. Loans
to the amount of several times the
capital of the institution were made
upon more or less speculative ventures,
as to the condition of which there seems
to have bccn no particular inquiry on
the part of those responsible for the
funds Of the bank. 1t was inevitable
that the collapse of so old an institution
as the National Bank of Illinois, having
widespread connections. would be fol-
lowed by other disasters but the damage
done has not been so great as might
reasonably have been expected. As to
the failure or suspension of banking con-
Germs elsewhere than in Illinois, none of
them has had serious consequences. and
with Il few exceptions their collapse is
accounted for by careless and unsound
business methods. Excessive loaning of
money on real estate, bolstering up un-
profitable enterprises and indiscreet
operations of one kind and another eX-
plain their troubles.
Undoubtedly there are still other weak
and mismanaged banks in the country
which will sooner or later be compelled
to close their doors and go out of busi
ness. 1t would be unwise to assume
that all of the nearly 3,T00 national
banks are in a perfectly sound condi
ton. But none the less the assurance
given by the comptroller of the currency,
whose information is derived from re-
ports received within the last two weeks, |
that the general condition of the banks |
is excellent, may be accepted with con
fdence. He states that the average
reserve held is considerably above the |
% per cent required by law and says: |
"On the whole, it is evident that tile |
national banks today are as stable as |
they ever were and the sporadic failure |
of banks here and there. through defects |
N tbn failing hnnl. iS nf small |
Importance and wholly without general |
significance" The financial and buSi- |
ness interests of the country will give |
due weight TO this statement
The past two or three years. and |
particularly the past year, has been n
very trying period for the banks ard the
fact that no more of them have yielded to
the strain is conclusive proof of the
general soundncss and conservatism OF
their management. During the year
ending October 81, 1896. receivers were
appointed for only twenty-seven banks,
-he aggregate capital stock of which was
So, ,SO5 900 and their circulation S7G1 500.
This is certainly not a very bad record
for year of extraordinary financial
listrust and business depression. From
the strain of the last few years the
banks are not yet fully relieved. nor will
hey be until there is complete restora-
ion of prosperity. But it appears that
hey are on the whole, in quite as favor
lble condition as year ago. so that
with the assurance of stability in our
system the outlook for the
banking interest of the country appears
o be encouraging. But careful and
conservative management must continue
o be the rule in this as in every other
business.