Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1815-10-25
FOR TIE ENQUIRER.
CONSIDERATIONS
On TIE subject Of LTnchartered Bant-,
HY \ DIsINTEREsrEo CITIZEN.


liSecd IN Irgina; ami endSavOred To Stew lnat
these prospects are by no means ilattering. Sine.
! those papers were written, my predict ous have in
no Slight degree been realized and thongh nj, the.
contemplated Banks have not commenced their o..
perLtions, yet the Information have received from
tn mot intelligent men in the UpUer CuuntI.g i,is-
tiles the assertion, that the embarrassment in the
ansdcu'ns OF business has already very cons.ters-
bly, ested their diiceutents, and thus cried up the
very fountain ct their profits. II is generallr n
matter at fair calca!atpn that moni.d institutions of
this descriptions established with arg. caniais for
the express purpose Of discountug, would in com
mencing business be eager To- discount ali the good
! paper which might offered them. Uni
numbered with the burden of Old business. one
would Almost suppose that obstacle could
present ITSELF that would impede their progress in
ieni'ng out their funds, especially in Country
where borrowers abundant Yet 7 ara told
that though the Banks of ieesburg Waterford.
Fauqui'r, Charlespwn, Harper's Ferry and Win
chester, have been lately pUt ihto opeiat on with
nominal Cari'a ei perhaps two mlio,s ofd1lars-
The applicants for discounts nj the Farmers' Bank of
w nchosttr, are as numerous as ever Moreo-
yer, understanding the immense nominal sum NJ
market Tor loan, in the Capital OF these Banks the
Cid Bank has gwen great OeEce 70 its dealers be-
cause the present state Of things las prevented its
discountng any paper whatever. This fact, whch
have derived from undoubled AUTHORITY, proves
one Of two tiii g.:
Either, that the New Banks, notwithstan ding
they are just commencing business, arc afraid to dis
count argvh ar, tliet those who wish TO borrow do
ma, apply 20 the Cnchartered Barls, bcealis their
notes are not suited for the purposes OF exchange
Both OF these causes probably contribute to the
effect; aud in dwelling somewhat upon them, we
shall discover the more readily what has been.
aud is likely to DC the effect Of these Establish
ments
First then, az the caution which the New
Banks are compelled 10 observe in discoiRting "a
per- and the reasons tor their apprehension OF dis
counting largely
At the opening ofthesc Unchart9red Banks. every
Individual whois Stakeholder in them, who was III
the same time in debt to the Branch Bank of Winch
ester, world instantly become interested in borrow
ing from his own Bank, and paying up his debt to
the other. The supposed facility of procuring
leans, the power of borrowing deposit of Stock
tn desire OF giving busness 10 their own institution,
all conspred to produce Ibis feeling. Her c. 10 SOON
CT re the doors open for dscounting than numbers
poured in TO become borrowers ray off their old
debts 10 the Old Banks. They obtaiied discounts
and according To custom, the New Banks issued
their 01cn notes tn the borrowers BIT when the
borrowers took them to the Old Ranks 20 pay oil
their debts, they told they would not he rcce-
we'd IN payment. Thus, they lad ineuiTeia Sc
cond dcbtwithout the ability 10 pay of the FIRST -
Ot cnurse, they returned to the New Bank with its
notes, and demanded specie or notes OF Chartered
Banks. These OF course must be paid, and sum
which was lent in the morning, sometimes de-
maDdcd before night No Bank could continue 10
discount on such tcrins-and hence, il soon became
evident the New Banks must OF necessity st7p ac-
commOda,ion-dsconnts, and deal en- q small scale in
wLs; is called sixty day paper.
ms operation, however, was vet more extensive.
IL stockholder in a new Bank loreseeng the
course OF things aforementioned, or learning i,
from experience, was ever q. SIRIUS 10 avoid
falling INTO the snare it became off tnes i,nDrscti.
cshle. For, the old Bank, for reasons hereafter =
be mento ed, found it necessary 60 curta;l their
Dealers ana 1t WIS obvious that a cu,ail IF SOCK
holders no 10
per. Persons, therefore, whodid not wish to pay
oil the OLD score, were yet compelled to borrow of
their new Ha"s TO pay up the clatGi and then were
driven back upon ii TO demand Virginia chartered
paper, ortore'sn chartered notes, as other
would answer their purpose.
Besides these, there were others disposed TO bor-
row OF the Banks. Such were those who had
taxes to pay to the sheriff, or United States collect.
or, or debts due to individuals 1'hese, when they
borrowed OF the new Banks, aud received their
notes, returned back upon them immediately for
other paper because neither the Sheriff or Collect
or would receive uncharered notes for their
claims. Nay, If the debt we're due to q private in
divrlual, he would be unwilling to receive unchart-
cred nutts in payment, Because, they would neither
pay taxes debts for themselves or release their,
property or bodies from execution. Hence, these
borrowers also came back upon the new Ia ks
with q demand Tor such paper rs would answer
tn purposes in the transaction of their business
This course ofevents must inevitably arrest their
discounts since any bank, which should discount
freely under such circumstances, must soon ex-
haust the funds in their Golfers intended to meet
the current demand.
In short, such n state of things would produce a
constant run upon these Banks, If they did not
yield 20 the plainest maXims Of prudence and
coniinc their discounts within very narrow limits
One may venture indeed to divine, that G. ose TN
chartered institutions which from their proximity
TO the chartered Banks, are within the immediate
influence OF the causes above mentioned, have moi
yet been able TO put into circulation even the A.
mount OF their capital II not, the proceeds of their
loans cannot exceed six and ore quarter per cent
and II IS evident that after deductng from that pro-
it the salaries of officers, the composition for the
United States tax, the cost and charges Of paper
the disbursement for house rent and fuel, and the
many incidental expencss of such an establishment
q most contemplate dividend must remain tor the
stockholders The bubble must soon burst.
and their anticipated gairs will be ascertausd to be
unreal as the baseless fabric Of vision ;--snd
those who, deluded BY their own coyej6usness, or =
misplaced confidence in others, have embarked hen.
lille fortunes in th'se crazy bottoms, will soon be
loud engaged n The heartlcss business Of saving
from the wreck The q Of their wasted funds
Bat 1t is not Only rom Tie indspOsiiOn Of the III.
rectors OF UAchartcrcd Banks todscount largely at
limitation 70 their business is to b. expected If
the present state Of thiags continue, they will soon
cease 10 have applications Tor discounts, except from
desperate irdiyiduGlswho can borrow no where
else. 'il.is is the second position above mentioned
on which proposed to remark.
1t seems indeed tobe a euIolary from Che facts
already advanced in s,ipport Of TIC former For, ir
the notes Of Unchsrte, cd Banks are foand aot 20
answer IN the market lor the purposes OF Exchange
those who want money 90 pay taxes, or debts, or
for Inc common purposes and concerns OF Tic, VIII
be unwilling to pay SIS per cent interest for narer
wlreh thcg cannot use when they have procured
10. This state Of things viii be much acc. lcratcd,
1t it has not yet actually arrived, 10y the course