Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1816-03-30

| onmn lation OH his own bill, endorsed
| by friend. More capital is put into
motion, and nov spur is given 10 enter
priz. private business hout,snes, and pub
lie works rise ia q moment.
In 4 word. Banks give as a cheaper. and
more convenient medium of crCu atiOn,
! than meta' and the mcans of oct unmg
/ capital in 1 saorler time, and on better
| ter IS.
Ties privileges may indeed be abused.
| individuals may push the,r credit toa FIR,
an'i be tenpted to 5ng1ge ia enterpr res
| which may involve them in loss. Ia tnis
case, when the bank calls upon them tor
it's dues. they fall into the hands of usnrers
and the rate ri interest is raised. Ii the
bank too, wishing 90 increase its dividends,
overtrat,es It's paper flows back upon t.
La case of any great national emergency,
il mas flow back so fes', thatr cannot meet
| It with specie; and is then compelled to
close It's vaalts.
Then arrives the crisis, which we now SEE
with ali the evils. which have been enu,ne
rated, at its heels. Not. that in this state
OF things, the Bank is i.soivent +; because,
1t 1t be prudentiy managed, it must have
tor every note, that is issued, the note OF
two or three persons, who are able % pay.
or. II II has loaned 20 the State, the good
and sufficient stock Of that State but, Ihis
stability does not remedy another evil. Its
paper may not deprecate from any want of
contdcnre-but we have no guarantee,
that the bank will not 2buse its irresponsi-
biil'y, by over trading TO enlarge Its divi-
dendS, aud issuing more papsr than the
market requires And this eAtess of the
pap'r medium must depreciate its value.
For instance ; before 1897, the Bank
OF England had not quite 10 millions out
Since TIE suspension of her D tyments, more
than Is millions. Her dividends have
been raised from to 10 per nt.-In the
U. =. since the suspension of cash pay
ments, we have seen the banks diyi e
more than they did before. The circnla-
tiuu OF their paper must, therefore, have
INCREASED.
~ tANKs must iheu be subjected to some
str,>tons-That we may use them with
on receiving any injuTy,is indeed the great
difii' ulty.-rhe main maxim upon which
| ali such institutions shau be placed. is,
70 make their paper colUerti6ie INTO spe-
! C,e*.--Without this restriction, how can
We be sure that they VIII not issue more
paper than is necessary. that prices viii not
| rise, articles grow dearer, and exchange
| with foreign states be against MS ?--If this
restriction existed, their redundant paper
would law back upon it, as fast as it over
| flowed,
| Ia tbs point of view a convertible Bank
! Mole IS much superior to a Treasury Note
Mr.. Randolph was certainly mistaken,
when he expressed himself in favor of the
latter. Treasury Notes may overflow & the
| circulating medium may depreciate, be-
Cause these notes are not at all times con-
| vertible into gold aud siiyer-but, convert
1 ha I'll taH f0 ada
themselves to the demands of the market.
No charter ought therefore to be granted,
which does not compel the bank to comply
with this requlsition. No bank should take
it upon itself to suspend its payments with
out paying enormous damages on the notes
it evades, or even f5rEeitng its charter.
If any surprizing emergency should a
rise. and the government should think fit
to interfere, it should only do SO on the
condition, that the dividends OF the Bank
should be rsduced-for. thus, you would
ioduce it TO wind up its business, am cur
tail its circulation by degrees.
This other restriction seems to be essenti-
| a, that 1t should not go into operation until
the 9Uhole Of lis steele cahiiGiis paid in
The usual custom is, for bank to receive
tao or three instalmcnts, and then proceed
to business the result is, that the remain
hlH iISldlhiClltS are UHITOWtQ OF ITSELF
| Thus, its vaults are never full, & its spe-
Gle always deficient. How is a bank in
| this stu ton to meet It's engagements y
The Ma ional Bank, for instance -
| which is to cure las DR.. BIB tells the S.
nate,) al the distempers Of our cir u.ating
! medium. ought To have its vaults well flied
with specie. lit goes into action with
only Sl,400, 900, what good is ,t 10 do !?
How long is it to stand run upon it? This
sum. when distributed among branches,
is US 600 to each sum, on which the
Bank will not dare to issue any conside-
rable number of its notes, or it will very,
soon be reduced to the necessity of closing
it's vaults.
DR.. BIB should recolle t, that he malady
we have to cure is very SERIOUS one-and
! that haSty cures are very seldom lasting.
| He should also recollect that there are
sometimes cases, in which the physician
! only makes the malady worse.
So much, oil generH grounds, for uses,
abuses and restrictions OF banking institu-
tions.
| ---s
Qusru ifa Great Bunk we're to discharge
It's notes in coin, aud subordinate institutions were
to pay its own notes Of cer7in amount in the paper
OF the Great Bank would CHS be sufficient pre-
caution