The Washington herald., 1908-04-26


James c. Hallock. OF Brooklyn. N. Y,
whose father originated the clearing
/ house in America. and who has himself
studied the subject of clearing houses
fo- many years, said yesterday IN an in
] tervlew with a representative OF The
/ Washington Herald:
'Thirty-two thousand deposltors in
| Brooklyn. probably 10000 in Greater New
| York. had accounts in failed banks last
winter
/ millions of citizens throughout the
Union have come to distrust Wall street
as a stewpot of panlcs. which boils over
Unexpectedly. The American people would
rejoice to see Congress enact a law which
would protect the country against fnan-
cial disturbance from that quarter.
Favors Legislative Action.
Possibly a few men in New York
would scream as If they were 10 be killed.
But even in battle many more than are
killed think they are going to be. How
ever, 1t is true, wish our Representa-
tives would rise as one man and render
harmless some New York bankers. who
could be crushed as easily as a spider.
Understand that the principal banks
In the city belong to a union: yet they
let one of their number suspend and de-
serted five, forcing four to fail, so that
for months there have been closed banks
on whose dusty windows the passing
advertisement Of desertlon in the soiled
letters. Member of the New York Clear
ing House
Cannot even its members be trusted?
Now, though these broken banks suffered
losses which their shareholders have had
to bear, every one of the six will re-
sumo or pay depositors IN full.
Their funds would have far exceeded
their liabilities TO depositors. If a little
time had been allowed them 10 realize
on their assets.
Banking In New York Safe.
Banking in New York is conducted
much more safely than people suppose.
Not since the Marine National Bank
failed, in 1884, with a net loss 10 de-
positors of s765, 500. has a dollar been lost
by depositors of failed national banks in
the city of New York The only other
net loss that ever occurred was $25.612 by
the failure of the Croton National Bank,
in 1861; that is to say. less than $4,000
in forty-five years OF national banking.
an average of less than $4,000 a year.
with no net loss at all for the past twen-
ty-four years
st. Louis has had only one net loss
g.
42S. in 1857, an annual average of less than
$3.50. with no net loss at all for over
twenty years. Chicago has had four small
net losses. aggregating s462. .458. since 1s55.
an average OF only $1,000 annually for
the past thirty-three years, with no net
loss since 1893.
In short, the national banks OF New
York ara so absolutely safe that they
could guarantee each others deposits
without practically any risk When the
runs occurred on the Mercantile National
Bank, First National Bunk of Brooklyn,
National Bank of North America, and
New Amsterdam National Bank. all the
other national banks in the city could
without peril have offered to receive
checks on them for deposit.
What Existing Lew Requires,
National banks are required by law
TO receive at par any and all notes or
bills issued by other national banks. Con-
gress, under its constitutional power TO
promote the general welfare, should also
compel the national banks Of New York
10 accept checks on any OF their number /
There can be no question that It would
promote the general welfare. History
shows that in this country no great panic /
has started anywhere but in New York, /
and there could not he one if at ali times |
checks on every national bank there
were accepted by all.
Bank notes are always received, |
though the bank that issued them may
have failed. So. in New York, checks on |
national banks should be received by na- /
tionai banks, though the bank drawn on
were good or bad, open or closed. Ma
tional banks have lost nothing by reeelv- |
ing at par national bank notes. And the /
national banks Of New York would lose
nothing in the end by receiving checks on /
other national banks in the city, under
all circumstances.
Bank AssassInatiOns.
Investigation would show that more
than one of the closed banks In New /
York were assassinated by other banks /
there. The offense Of bank assassination |
is criminal In its nature. To protect de- |
positors against the effects of bank as-
sassination, the criminal character Of re-
fusaIs to accept checks on other national |
banks Of New York should be recognized |
in the law Of the land.
TO refuse checks drawn on a New
York bank. which. though temporarily /
has sufficient funds TO meet
them by any process of Liquidation, is a /
form of malicious mischief which, If il /
results In closing the bank may annoy |
and injure thousands of citizens, with |
their wives, children, parents, and credi- /
tors.
'In New York it is the old story of
Cain. Where Is thy brother?' And he an
swered: 7 know not. Am I my brothers /
keeper2' Then the Lord said, What hast
thou done? The voice of thy brothers
blood crieth to me from the earth
Mutual Concern ir New York,
''The New York banks assert the right |
to be their brothers keeper. Ever since
June T. 1854. in the month following the /
failure OF the Marine National Bank, the |
clearing house committee has been en-
whenever II considered II for
the interest Of the association, to examine
any bank member of the association. and /
to require from any member securities /
of such an amount and character as the
committee might deem sufficient for the i
protection OF the balances resulting from
the exchanges of the clearing house
Since 1890 every non-member bank or
institution clearing through a member
has had to submit to the same examina-