Alexandria gazette & daily advertiser. [volume] (Alexandria [Va.]) 1817-1822, 1819-01-21

the bank dividends, at the par oil exchange
and at the risque and expense OF the bank.
Such an arrangement was made, by which
il was stipulated to make the payments SIX
months afterthe dividends were declared
the papers on this subject are marked
XXXIX, XL, XII. How far it was OBJ
jeetionable thus to offer inducements to
foreigners to become interested in our
stock, and emi-annually to Withdraw from
the country the amount OF their dividends,
the committee do not undertake to decide,
as they consider it one OF those general
and abstract subjects to which the reso-
luton of the house does not direct Their at
tention. But, thus 10 compel American
stockholders, and the government to con-
tribute to the possible loss. OF paying the
dividends to those abroad, appear UNJUST
The nearly equal division OF director
or this important subject, and the a
bic reasons assigned in the report of
the committee against the measure, ought
at least have prevented the precipitate a
doption ofthe resolution And when the
committee find among the eleven VINO voted
in the affirmative the names of directors
who have been constantly and largely en-
gagged in the purchase and sale of stock,
and that of the ten who voted in the mega
tive, not one has been ascertained to have
dealt in those Transactions, they are almost
irress,ably impeled to the conclusion, that
the measure was aaoped more with view
toenhance the price of shares, than for the
permanent benefit OF the institution.
The practice of discounting on stock, to
the full amount paid upon the shares, APP
pears to have commenced early at the pre-
sent bark, under the 4ih bye law, which is
similar TO the 18th regulation for tha 60
vernment of the Offices, both Of which were
adopted at the commencement Of the in
stitutOn.
They authorize discounts without an en-
dorser, on the stock OF the bank, or the fun
ded debt of the u States, or such other pro-
perry as shall be approved when pledged
to an amount sufficient to secure the pay
ment of the notes. By statement refer
red to in the cashiers examination, XVII
Itappears that the total amount of discounts
on pledged stock, up 10 3oth July, 1917,
was s ,Ol6, 1882 Ga, of which there had been
paid, at that time, 2,8l5,G65 Oh: those
loans, it is presumed, were made chiefly
at Philadelphia, as the Baltimore loans on
stock had moi commenced to large extent
at that time. On the 95th July, 1917,
resolution, marked XXI. was adopted,
authorising The Offices to discount notes, Sc
cured by pledge OF bank stock or funded
debt, with a recital, that ii might be desi-
rable to many persons to obtain temporary
loans on such pledges, and form OF the
pledge was directed to be transmitted; it is
marked XXXfl. These notes hal no endor-
Sers, and the discount was in fact made
upon the credit of the stock, For by 4 re-
solution of the 30th September, 1917, mar
ked AXXIII. the president and cashier
were authorised, in all cases, to renew
those notes when they fell due between
discount days, and by the resolution OF
November 9th 1918, marked XAAlV. the
president and cashier were authorised in all
cases, when required by the party, TO sub
stitu'e the note and hypothecation of the
person to whom stock might be transfer
red, and on which loans al par have been
made.
By the resolution Of Goth August, 1917,
marked XXXV, discounts to stockholders
were authorised, at 1875 dolls, per share, u
pom presenting collateral security Tor the
95 dolls. The provision Nquiring an endor-
ser, or collateral security for the excess, "a
bove the par value, was in many instances,
and to very considerable amounts, etectu-
ally evaded. by some OF the largest borrow
ers becoming endorsers for each other.
The alleged reasons for The resolution are,
that bank shares had been discounted upon,
at 1870 dolls; by the local institutions in
New York, and that it was necessary, in
order to employ the capital, which had
been increased beyond the ordinary means
of using it advantageously, by the redemp-
ton of | millions of the public debt. The
practice of other banks would not, in the o.
pinion of your committee, afford any jusli-
location of the measure: and, when that
practice was to be urged as reason, the