Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1818-03-13


OF banks, their utility and effect OH soci-
ETY., beng necessarily of a public nature,
they must be familiar 10 all. Then sure
ly, this honorable body does not stand
IN need of any instruction from any lille
Ultimate source.
The committee will conclude this gem
eral report OH The state of the currency,
by examining briefly, the foundation on
which the preSen, circulating medium Is
based. The committee believe, the pre-
sent circulation ia the state principally
consists of the notes olthoSe banks whose
nominal capitals are small, aud compos-
ell principally OF the notes of the indivi-
dual Stockholders, talledsiock notes so
that the security OF the public consists ol
the private fortunes OF individual stock
holders, and those fortunes, in great
measure, consist of the stock, for which
they have given their NOTES; SO that the
bank is enriched by holding their notes,
and they are enriched by holding tic
stock OF the hank. Aud as these banks
Lake large dividends, many rapid, and
what are considered solid fortunes, are
made. Like boy mounting ii summit
AS The sEn Is setting, suddenly observes
his shadow on the opposite precipice, IRE
gardless OF the gulf beiween) Is aston
ished To see how tall he has grown; when
| night ensues, ere he is aware, he is plung-
ed, shadow, substance and all, III Tie a.
byss below, covered with darkness and
despair. Such the committee extremely
apprehend will be The result OF MANY of
the present situations, and bring ruin and
distress on the county, unless they
| change their mode of business.
The committee take pleasure In stating.
on the other hand, that there are u mum
her OF banks in this state with real and
solid capitals, but whose circulation is
small and consequently their dividends !;
whose affairs are conducted with pru-
dence and care, and from whom the pub
lie have nothing 10 apprehend.
On the whole, the committee concede
fully III the opinion expressed by his Ex-
celehcy, OH the subject of banks, in his
speech, delivered at the opening of tie
session, where he saws:
he evils arising from,the disordered
stare OF our currency, have been aggra-
waited by the backing operations of indi-
vlduais, and the unauthorized emissions
| OF small notes by corporations: thew re-
quire the immediate aud correcting inter
| position of the legislature. | also submit
1T to your serious consideration, whether
| The incorporaiion ofbanks in places where
they are not required by the exisencies of
commerce, trade or manufactures, ought
| to be counienanced. Such institutions
| having but few deposits of money, must
| rely Tor their profits principally upon the
circulation OF their notes, and they are
| therefore tempted to extend il beyond
their faculties. These bills are diGused
either IN shape OF loans, or by appointing
confidential agents Ia exchange them for
those of other establishments. But the
| tormer mode being conducive to profit.
Is al first generally adopted; and in The
early stages OF their operations, discounts
are literally dispensed. This produces
an apparent activity of business, and the
indications OF prosperity. But il Is all
| iaciltIous and deceptive, resembling the
hectic beat OF consuming disease, not
the genial warmth ofsubstantial health: a
reaction soon takes place These bills
are III turn collected by rival institutions,
or passed 10 The banks ofthe great cities,
and payment being required, the only re-
source left is 10 call in their debts, and
exact partial or total returns of their
loans.
The continual struggle between con.
n!cIing establishments to collect eacI, o.
thers notes, occasions constant apprehen-
sion. The sphere Of their operations is
! narrowed. Every new bank contracts the
| Ter SubJectIng the communities within
their respective spheres of operation TO
the pernIclous viclsSitudes of loans at one
period proiusely granted, and at another
parSlmoniously withheld, they finally set
tie down INTO d state of torpid inaction.
and become mere conduiis of accommo-
dation TO a few individuals. The legis-
laiure are then solicited 10 apply RENE
dy by the incorporation of other banks.
whereas, every new one of this descripti.
on, unless attended by peculiar circum-
| stances, paraliZes portion of CAPITAL and
angments the general distress. The ba-
nlsiIInent of metallic money, The loss oil
commercial confidence, The exhibition O.
fictitious capital, the increase ofcivil pro-
seculions, multiplication Of crimes, HE
| Injurious enhancement OF prices, and the
| dangerous extension Ofcredit, are among
| the mlsciIleiS which flow from this state
OF fhinSs, and 1t Ia worthy of serious in
| qniry, whether greater augmentation of
| such institutions may moi in course of
| time produce an explosion that will demoIish
| the WhOLe system. The slow and peyjodical
returns of husbandry being incumpetcn1
to the exigencIcs of banking establish
menis, the dgITcuttUrGiiDteresi is the min.
! c'pat sufferer by those proceedings"
IL the facts slated in the foregoing be
| true, and your committee have no doubt
they are, together with others equally re-
prehenSible and TO be dreaded such as.
that their influence too frequently, nav
often, already begins 10 assume d species
OF GIclaiIon altogether alarming and un-
less some IudicIous remedy is provided
by legislative wisdom, we shall soon wit
ness attempts to control all selections TO
ONCE ~ our counties, nay The election TO
tins very legislature. Senators and mem