Click image to open full size in new tab
Article Text
THE ST. LOUIS BANK EPIDEMIC. THE ROTTENNESS OF THE SMALL BANKS AND THEIR CONSEQUENT FAILURE. The Brazilian steamship Line, and What Has Been Done to Put It In Operation (Special Correspondence of the N. O. Democrat.) ST. LOUIS, July 20, 1877. The epidemic which prevailed with such Total results among the banks of this city has abated, but there is cause for apprehension hat it may reappear any day and force a few more of these Institutions into liquidation. The disorder lasted but a few days, but It really appeared to be of anepidemical character, as it proved FATAL TO NO LESS THAN HIX BANKS. But matters in financial and banking circles have resumed their normal condition, and though there is almost n certainty that several more small fry banking establishments will be compelled to succumb, there is no exeitement and no disposition to howl over their demise. These failures are not the result of any unusual financial depression in St. Louis, but proceed from the enactment of a very wholesome law by the last Legislature. The provisions of this law. or rather of several laws on the same subject, are very stringent, and had the effect of wiping out all banking institutions in a shaky condition. Just before the assembling of the Legislature there were several bank failures throughout the State, and very little investigation showed that stockholders and depositors had been shamefully imposed upon, not to say swindled, by these institutions. Prominent among the failures of this character was that of the Central Savings Bank of this city Hundreds of poor and honest laborers of both sexes were virtually robbed of their hardearned savings by the failure of this bank, which occurred shortly after the failure of the noted Bernard J. Reilley, who also had a sort of bank connected with his SWINDLING MACHINE The newspapers depleted the sufferings of the depositors several of whom committed suicide-and exposed the rotten condition and fraudulent management of the defunet banks at the same time. The consequence was publie feeling was worked up, and upon the assembling of the Legislature there was a genoral clamor for the enactment of A LAW THAT WILL PROTECT DEPOSITORS and punish deception on the part of bank om. cials and managers. The passage of three distinct bills for the government of banking institutions was the result, and one of these laws is stringent enough to satisfy the heaviest depositor in any of the suspended banks. This law requires a bank to make semi-annual reports to the Secretary of State of its condition, under oath, and empowers the Secretary to call for an additional statement whenever he may see fit, without giving the bank any notification of his purpose to demand such statement. It also provides that t when a bank is impaired to the extent of twenty-five per cent of its capital stock, it shall immediately suspend business. Each a 8 officer or director is, also, made responsible, t) by civil action, for the amount of any deposit @ received while the bank is in a failing condi tion, and subjects the same officer to CRIMINAL PROSECUTION re and imprisonment in the penitentiary if convicted. This law goes into effect on the first of Auto gust, and as the time approached such banks o as could not meet the requirements of the new statute had no alternative to suspend. The chance of facing a most uncertain of all human creations and having to abide by their definition of "failing condition" at at with the penitentiary as the next place of al business was not an agreeable contemplation, fo and those officers and directors who realized that their banks were not in an entirely fo healthy condition preferred suspension. to For two or three days the suspensions, one at following another in rapid succession, created th alarm and uneasiness and at one time va A GENERAL PANIC WAS THREATENED au People began to feel that no bank was safe co and there was a rush to withdraw deposits ru that made things look squally. But as soon wi free as the true cause of the several failures was ar explained and understood, the feeling of alarm began to subside, and as the suspenge sions ceased about that time, everything soon became quiet. wl in THE BOATMEN'S BANK lid much, by its course, to allay the alarm of and restore confidence. Its force of tellers pu was increased and business hours extended 30 as to meet demands, and when people saw how firm this bank stood their confidence was revived. I Is The trouble is all over now. but as state d joy previously, several other small banks will no a loubt close by the end of the month. But e las this will not create any alarm, as the deposof tors have withdrawn all their funds from the institutions referred to, and they will simply joy lie for want of financial breath. Of the susand ended banks there is at least one- the ha Butchers and Drovers'- that will meet all its oily obligations to the very last dollar. big B. M. Chambers, president of the Butchers the nd Drovers', made a proposition to secure and ho depositors by deeds of trust on valuable real state on condition that he would be allowed ofte o wind up the affairs of the bank, with time hos o realize on the assets without sacrifice. This proposition was accepted, and the necesary papers are now being drawn by lawyers. I Mr. Chambers, who is owner of the St. Louis It Times, possesses the confidence of the people cen of St. Louis to such a degree that even the tion ailure of his bank did not shake it. He has tho been a prominent man in commercial circles tair or years, and during that time has been ing identified with many of the substantial enterrises of this great city. His whole business career Col IS NOT MARRED by a single questionable transaction, and 7 Wa when he announced through the papers that ma very dollar of deposits should be paid, the in t ledge was a ecepted with implicit faith. con An effort is being made found a new bank remaine
