Bisbee daily review., 1907-12-24
\. !. BANKS
WARDEO OFF
COSTLY PANIC
Eastern Papers Now Contend
That Western Banks Have
Been Too Conservative While
Metropolis Hurt Itself.

The criticism OF some of tne banks
of the interior for having added to
their reserves during recent weeks so
that the statements they now are
- : = - - ~ - So
OF cash, while in New York the re-
verse cundition IS the case, has been
done 50 general that unfairness has
been done 20 certain of the institu-
tons. OF course it was the plain
duty t the New York banks to cut
intn their reserves during recent
eeKs. as * no law against that course
existed, ana hey have saved uae
country froA chat could have been
an appalling panic. Wise extension
meant actual depletion of the cash
supply, and when restriction of credit
would have looked more sensible to
an unskilled banker, and Just as lib
eral shipments to the crop moving
section as could be spared withuu,
actually imperiling everything, weI.
the two features of highly credit
able policy.
But it does not follow that, because
this was what New York did, every
other bank which did not follow suit
has earned caustic arraignment for
maTeasance. Contrary to the script
ural idea, the manager Of bank
must all the time serve two masters:
one, the business community; the
other, his stockholders. He has no
right to subordinate the Interests "a
either one to those of the other He
does so subordinae the interests OF
the business community If he piles up
a reserve of unusual proportions
when the risk to his stakeholder in
vilved in more liberal treatment of
the legitimate credit needs OF the
community is no greater that that
which he banking community OF the
country is as a whole facing, when
there are not peculiarly threatening
positions surrounding his bank or at
work in the particular community
which he serves. But ii is just as
certain that there are times wien
such peculiar conditions do exist ana
for a bank manager in those cases
TO do nothing for the welfare of his
stockholders while the business com
munity is being taken care of, is for
him to neglect one ward of his trus-
teeship in order that another l4Ay "
benefited
Especially important is it to remem-
Der in this connection that when q
bank has to stand alone no other
weapon can protect it, if events as
sumo a serious state, except a guou
reserve in its own vaults. There are
many county banks and some in re-
serve cities who are in that lonesime
position. In New York; and most
al he al m
house affords a means Tor helping
each other which relieves the 1ndIVId-
ual bank not little from anxiety as
to its own position. Where the
chances are that when cerdit is CIV
en- a customer the checks which he
will draw against such accommoda-
ton will not be presented for settle
ment at the banks window at an, put
only at the clearing house, where a
loan certificate will be accepted, the
banker who accords such credit is
by no means laboring under the diff
Guilty which confronts banker who
knows that each new loan is very ap,
to draw down Nhis cash supply some
| what. Again. when all the banks in
a city are so united through the
| clearing house, or otherwise, that all
the other institutions will come to
the rescue of any one seriously weak.
ened simply by doing its duty to the
community, conditions are not SINH
| lar to those in places where each
bank iSss:S. care fc:. its@E " ere
any assistance from nutside is snre
to be of very limited character
!. That at least some of the banks
now being assaulted for having taken
the only measure for their own pro-