Richmond Enquirer

The Cause of Bank Failures -It appears that the Phoenix Bank, at Charlestown, Massachusetts, which has lately failed, reported itself at the last returns to be in a very flourishing condition, with its capital entire, and a surplus fund of reserved profit to the amount of $20,000. It now appears that it had loaned $400,000, being 100,000 more than its capital, to two commercial firms. One of these firms contained a director of the Bank, and the other a son of that director. These firms have stopped payment. The disaster therefore arose, as in the U.S. Bank and most other cases, from large loans to directors and their connexions.

Banking will never stand on a safe basis either for the public or the stockholders, until rigid restrictions are placed on the proportion of the capital which may be loaned to any one person or firm, and especially to directors.-Pennsylvanian.