Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1897-01-28

WHY BUSINESS HALTS
TT is MOT BECAUSE OF BANK
FAILURES.

/
/ Notab1;, the lingo Corner of the Sem
ate-Kansas Makes a Move Against
Wildcat Corporations.
| Why Business Revival Is Retarded.
| The failure Of the National Bank of
Illinois, followed as it was by other
suspensions, until twenty-eight banks
had closed their doors, has caused con-
| siderable comment among those who
supported Bryan in the last election
They point to these failures and tri-
umphantly ask when the business re-
vival, promised during the election, is
| to begin. AS a matter of fact, these
successive failures, numerous though
they may be, have nothing to do with
| the general revival of business. They
were due to purely local and individ-
ual causes, and indicate nothing regard
ing the general trend of trade.
The National Bank of Illinois was
looked upon as one of the solid 6nan-
cial institutions of the country. So gen
eral was this confidence that the de-
posits amounted to nearly thirteen mil
lions of dollars The failure resulted
wholly from mismanagement. The af-
| fairs of the bank were directed by the
| president, and excessive loans were
made to shaky concerns in which rela-
tives Of the president were interested.
A sum equal to half the capital of the
bank was loaned to a company in
| which son-in-law of the president
was partner, and it is reported that
| another half-million dollars was loaned
| to another concern in which another
son-in-law was interested. 1t is report
| ed that besides these loans, which can
| not be realized upon, there are one mil
! lion dollars in bad debts, though wheth-
er any relatives of the accommodating
president were associated with the diff
| ferent concerns does not appear. The
| directors, instead of attending to their
duties of supervision, left everything TO
the president to manage, and the long
| exercise of absolute power destroyed
the sense Of responsibility. The fail
| ure of the national bank caused the sus-
pension of others, and all Of them can
| bs referred to the reckless mismanage-
| ment of one man.
| Such failures must occur SO long as it
| Is impossible to secure more effective
supervision of the affairs Of the nation
al banks. The statements presented by
| the boards of directors must be accept
ed as correct, and any Irregularities
that do not appear in these statements
cannot be discovered by the Govern
| ment officials. An examination Of the
affairs of the thousands Of national
banks that shall be more than superb
cial would require a staff Of officials
! and the performance Of mass OF Work
that it would be impossible to secure.
The only effective remedy seems to lie
in increasing the responsibility Of the
| directors and forcing them to become
more than mere figureheads.
The suspensions of these banks do not
account in any way for the postpone
ment in the revival of industry, nor do
they indicate that another era Of ex-
IRENE depression is approaching. The
cause is to be sought in another direc-
ton. The demagogic utterances OF
those belligerent members of the Uni
ted States Senate, who, if they are to
be taken seriously, desire to plunge this
country into an unnecessary war with
Spain, have been the most potent cause.
Capital is always timid, and uncertain
ty causes investors and manufacturers
to hesitate. Under modern conditions,
war is an affair involving the expen-
diture of millions of dollars. Even
Spain, bankrupt though it may be, and
despised though it is by these Falstaf-
fan statesmen, could continue HOSTILE
ties for period of more than a year.
During that time the foreign commerce
of this country would be practically
destroyed. Large sums of money would
have to be expended for ornaments
and munitions of war. Vast amounts
of property would certainly be destroy
ed. Whatever the outcome, this coun-
try would pay far more than the value
of any results that might be secured.
Business men realize these facts, and
they are unwilling to embark in any ex-
tensiye enterprise or to extend their
present undertakings until they know
that the bellicose statesmen of the Sen
ate are to be suppressed.-San Fran
cisco Argonaut.