Year: 1872

The downright refusal on Thursday of the City
Bank and the Bank Of Commerce, two OF the
soundest and most influential financial institutions
in the country to pay greenbacks for the face value
OF certain certified checks, on the ground of being
aware that these checks were presented for the
purpose OF withdrawing from use legal tender
notes, had the effect OF raising


so SERIOUS POINT


that the Clearing House Association, at the in.
stance of Messrs Moses Taylor and Henry.F. Vail,
called meeting, which was held at half-past two
yesterday, in the Mechanics Bank, Wall street.
About forty banks were represented, and after the
President Mr. ]. d. yermiyea, had called the meet
ing to order, resolution was presented to the
effect that banks, conceiving that checks had been
presented for the purpose Of Withdrawing legal
tenders from use and thereby disturbing the money
market, had the right TO decline paying them over
the counter or otherwise than through the regular
exchanges from the Clearing House. as customary.
This resolution met with stormy disapproval,
and though amended several times until
its spirit was quite Obterated, the
Board was compelled to adjourn without
taking action. 1t was represented that such


NOMINAL BANKRUPTCY


and population at option would be detrimental to
measure decrease the value of checks, which under
such rule might or might not represent a face
value. One gentleman said it would be rather an
u
check to pass 1t through the Clearing House before
he could get 1t cashed, and unless he held bank
account II would be impossible to get legal ten
ders for the amount represented. Giving bank
this privilege would introduce disturbing iniiu.
ence into business and cause endless complications
The sense OF the meeting was to the effect that
though the action Of cques in withdrawing legal
tenders was culpable, yet the proposition TO adopt
measures which would give bank


PLAUSIBLE GROUND


for refusal could not be entertained In any commu-
nifty desirous Of maintaining high fnan-
cal status. Though concedng the action
OF the City Bank and Bank of Commerce
to be "mOrally right but legally wrong" yet in
view Of the want OF unanimity which prevailed on
the subject the meeting felt itself constrained to
take no action on the subject, and would pass no
resolutions allowing bank to repudiate unless on
absolute grounds OF bankruptcy. 49, - ..


The suit brought BY Messrs Smith h Gould will
coiisequently be proceeded with and the law court
will determine whether these banks acted up to the
spirit and letter OF their charter. The representa-
tive OF the HERALD also called at the office OF
Messrs. Smith & Gould, 70 Broadway and was in
formed that II these banks imagined that the only
result OF their action would be the costs OF pay
ment, they were mistaken, and


TILE GRAVE CHARGE


OF violating their charters will be instituted and
demand made for their repeal. These gentlemen
were sangune as to the result, and talked OF claim
ing consequential damages. The meeting al TO-
gether was unsatisfactory, and lett vague inl.
preston that any bank which should choose TO take
the risk might be morally Justified IN rcpudiatlng,
though the legality oi such proceeding was alto
gether unquestioned.