The enquirer. [volume] (Richmond, Va.) 1804-1815, 1805-04-26


our banking capital
c. Ihave, and this opinion is founded ON a
Jingle fatt. The capital of every bank mutt
coDiia OF actual /oseie. If you cannot collect
this ipecie, you cannot increafe the banking Ca
pital Have you then contidered whether
there is as much fpeciein Piyginia as will admit
of fuch an augmentation Is it not fact
that when the lar inftalment was paid in,
the fhareaolders could4not find fuficient fpece
in the market that they were obliged to ex-
change bank notes at the bank for fpecie, and
it was with this money thus drawn ont of
the bank, that mott of the lal inftairnent was
paid into it.
NJ But is there not comfortable fun of
gold and iiver coin in the inner country of the
tate?
C.. There certainly is, yet long time mutt
neceiariy elapfe, before paper money can take
its place, and drive it into the towns
M Could it not be obtained from the Nor
them towns?
C.. Probably not. You forget that the lat
inftalment might alto have been drawn
from that quarter of the union. You forget
too the numerous and repeated complaints
which have prevailed in that quarter, about the
tcarcity of gold and FLYER. The great number
OF new banks and the equipment of E. India
fhps have, they fay, locked up the circulating
coin, or fent it out of the country. Was it
not the other day, that an E. India fhip vilited
this river fora cargo ofdoars, and that an ex-
travagant premium Of per cent was allowed for
them at Petersburg (! In fact FIR, any attempt
to ncreaf- the banking capital of Virginia would
be unavailing, until we can increafe our metal
lie medium. You might indeed take the money
from the prefent bank and throw it into new
one, or you might return it into its prefent re-
fervoir, but you could not by this operation in
create the banking capital of the fate, or the
facilities of commercial enterpriie.
NJ. Perhaps then this is not the proper mo-
ment for efccting fuch an augmentation. Such
moment however mutt arrive!
c. Certainly But sv6en will that moment
arrive isan important problem. Some have
recommended an exten6on of the capital, when
ever the prefent ftock fhall be worth certain
premium; as 80 or 10 per cent. AS to my
fell ihould prefer your former criterion.
"a. Have you then made up your mind about
the 6eR iyltem for efeding this Object Would
you rather increafe the capital of the pre(ent
bank, or eaablilh a new bank
C. On this queition / am not prepared TO ex-
prefs concluiive opinion. | will merely con-
tent myief with obferving, that the expence of
conducting tzvo banks is evidently greater than
that of conducting one and that the COMPETE
tlon, which will inevitably grow up between
them, may fometimes have the effect of extend
ing their difcounts beyond the proper limits
ofprudence or neceffity. 1t is alto worthy of
your confederation, that the fpirit of icaioufy
between two banks, is not likely TO lead to the
| ordinary advantages of a free competition
Why is it better TO have two fmalI Cores in a
neighbourhood than one large one Becaufe the
merchants fN cheaper and by dearer. The opc-
ratons ola bank, however, do not admit of e.
milar refut. The terms of trading in bank are
uniformly the fame. TheirbuGnefs is principally
E,,aI 49, 81, ~Tx
Filling of their own notes but the profit of
this bulinefs is always mined by their charter
to the kgaira of intereft.
NJ. But what plan would you propofe for eff
feGting this augmentation Would you have
the legiisature to pats a law, authorizing the
board OF directors TO open books For receiving
additional fubfcriptions?
c. According to the way, in which the pre-
TENT flares were taken I? No. The prefent
mares are worth now Is per cent. advance, &
they are continually advancing. Let us then
fuppoie them to be worth 80 per cent, at the
time when the fubfcrption books lha be open
ed for the new flares. Each new flare will be
worth as much as an old one, becaufe the buff
NETS of the bank will then be fiifficient to en-
ploy not only the old but the new capital: Each
i of the new fhares will therefore be worth 80
per cent adpanee, and the fubfcriber will thus
be entitled for 100 dollars, to fhare that is
worth $50 dolls. Do you not then perceive
that fuch fair profpeet of speculation would
| ftimulate the avaricc Of the competitors, and
that the flares would fall into the hands of
thofe who are fortunate enough to make their
way up to the fubfcription table, and wary
enough to multiply the number of their prox
! les.
! M. Would you then have them to paw the
full price of the flares?
C. Certainly nothing could be more equita
BILE.
M But in what way would you with thefe
premiums to be collected, and how would Won
difpofe of them? Would you compel them TO
make an annual contribution into the public
treafury?
C.. No. It fhould be the part of the Iegifla-
ture to authorize the board of directors (vyben
the flock was worth so per cent , to adyertife
certain number Of flares for fale to the high
eft bidder. The purchafers would then be obIip-
ed TO pay this advance on the flock and thi.
premium fhould conftitute new fund for the
benefit of the fate. Let 5000 flares for in
ftance be fold, and the treafury would at once
acquire capital of $4,000 dollars, to be an
propriated to fome pnbfe purpofe.
M. Have you then thalked out any particular OBJ
jea for the inveaiture of th, capital!
C. We have fmple and appetite criterion before
us 70 determine its proper deitinaton. AS this
FUN is principally contributed by the merchants,
and Withdrawn from the purpofes of commerce,
is not the lepinature hound IN re,,,rp (, ;o.o IL