Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1815-12-19

which dividends are founded LIST the sums origin
ally paid by the proprietors, rs their stock and ca
pital, on the positive existence, and integrity Il
wiieh rests all publ lex credit and confidence 2dy
The sums borrow Ell from the pubck, on the faith "A
sad capital, by the issue OF their notes. then
nominal virtue this is "a loan given by the
public, without any interest, and not unire-
quently without any g,eat general advantage
dep nding much an the p uden;, or imprdent use
tut he customers OF borrowers tom the bank,
make OF such aivsces, which in some states OF
shty, where equality OF property IS a necessary m
gredent, may even become great political evil,
by ail'ng the rich ia their struggle for power, aud
ooiseri"g the over-grSwiug influence ct the large
me, candie towns, ia their energetic pursuit of
Sealth ani moaopoy.-1he contract which, the
bank lla; made with the pubick ~ repay this loan
| On demand, ought to be faithfully compiled with,
as being the only title u, its legal and constitutional
existence refusing TO pay or REIN curse the pubek
this loan, IS breach of every engagement, they
nate with the pnbcs servants, or legislators, when
they got their charter, and ought to absoye the
| government, from the compliancc with the priv
| ieges granted them by said charter; and, OF
course. rendere every propi tor OF bank stock,
ponslbie to the amount otsil his property, for the
| payment OF every note, that's, reduce him tn the
same situations as respects his responsibility to the
| pnbiics, as nc would have been, had he not been
iSvoured with the privileges granted by the char
ter. Any reduction OF the capital stock by unwar-
| ranti,hle dividends, may perhaps be- considered MS
1
guarantee, they pledged to the public on the faith
OF Which they obtained the privilege TO issue notes
It's, however, evident that the publ,ek cannot adj
n't any excuse for the stoppage Of the banks, but
| a total inability TO pay which only arise from n
| loss or msappicaton OF their whole original cipi-
tai, as we'll ms of the sums they received by loan
IRON the publick on issuing their notes all pee
| tensions tounied M private publck interests or
| CONVENIENCE ought b naIuissble
The temptation ni encr,achine upon the caDit,I
kxrtt l.. l..
through ignorance or corruption have neglected to
limtthe dnidend,) has been such, that in the few
instances, where such mistake has been commit
ted III Europe, they ended like the South Sea Bub-
be, IN the loss and ruin OF those who had cone scc
In them there wanting instances even In
our shcrt-lived expe,ienee OF banking, to prove the
facility with winch the proprieors, through their a
gents the directors, can divide, by way OF profits
both their capital and the loan they have got from
The public, leaving nothing to pay their notes-it is
easy to giIdr down the stream OF iEterest particu
larly on immediate pecuuiary interest. Some from
Incidence, others from necessity, are prevented
from investigating into distant consequences, aad
justice itself is overlooked when 1t mnst be sought
Tor amongst mass oil complicated effects Bodie:
OF men frequently overlook Justice, more than in.
diviiuas, they countenance and prote ct one ano
Their; the responsibility of the individual, being los;
m the mass, until habit confirms the practice, aud
almost changes wrong into right.
ne beS'nni e OF our banks IS generally laid by
|
hopes OF selling out at a premium which Ireini
un depends much upon the amount of the first div
hends, and prospect OF future profits. Their unIi
mited circulation, in field sntl then unoccupied
with the absence OF any bad ,ebts not having a.
yet time TO ascertain them, gives encouragement
or ut least specous preteXt, for making large d.
Vdend at the announcement Once begun, il is
not easy IL lessen the dividend, as the director.
must give sat action to tn propret0rs If they wish
to keep their places Unfortunately for the proper
management OF banking business with US, men are
pushed into the Direction, not so much because
they are fit tor Directors, by uniting the necessary
individual peenniary independence TO the requisite
knowledge; but, because the direction suits their
peculiar situation, and forwards the accomplish
ment ot their own purposes the dividend once es-
tabl shed at 10 or ~ per cent suppose, cannot be
| reduced by Directors depending on their places.
Tor the necessary att ia carry on their commerce,
but may be expected In be continued, even after
the cugtuug Of their circulation by the establish
ment of other Banks, or the making OF great
| many bad debts, (rOm the hazardous aud specu!a.
tive commerce OF their customers 10 whom they
have furnished capital y has caused the annual diyl-
dend TO eneroach on the capital.
| Another delnson arises from the nature and ron.
prOdueuveness OF our waste-laIis and lots, which
the banks get. as cover for debts, in cases OF
| oa.kTuptcy; which, though they may eventually
sell TOR tile value OF the debt vet produce nothing
| Tor the dividend When from any or all these
| causes, The bank directors continue to make annual
dividends, which reduces the quantum of capital, it
acts IN the ratio of compound interest, and or 8
| per cent. dividend annually. than the positive
prohts after deducting ali bad Or non-prOiuctive
debts, viii eat away the whole capital, in less than
~ years. But, this DEPRESSION speculative pr01a-
bilIy, has taken mp all my paper and the further ia
quI7ss into probable consequences, must be left TO
| another sheet.
PG'is, l5M Nay, 1915.