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

would have had no inducement to retain
1t. In either event, more equal diffusion
of the shares would have been the conse-
quence, and it would have reached the
hands OF solid capitalists, who would have
held only what they could pay for. 1t is
believed that the loss of the dividends, and
the liability to pay interest on the install
ments due, would have been sufficient to
compel even the stock jobber to SELL
Although, if those discounts had not been
made, the immediate profits of the bank
would not have been SO large yet would
not have had an unwieldy capital TO ma
mage: it could have proceeded gradually,
growing with the growth, and strengthen
ing with the strength OF the nation, as it e.
merged from the evils of the flood of paper
issued by the local Institutions. The bank
could have felt its way, and increased its
means with the increasing demands OF the
country. Such a cautious proceeding would
have enabled it to render invaluable SER
vice in checking the issues of state banks,
and bringing them to the alternative of "a
vowed bankruptcy, or 10 the permanent re-
sumption of specie payments. The evil OF
the country was the immense amount OF
bank NOES and credits the bank Of the u.
States increased ii by its credits to stock
holders. That course did indeed, enable
the directors to declare large dividend
bu, that the apparent prosperity was tempo
rary anu tallacious, is demonstrated by the
recent dividend OF two and q MALT per cent.
Ii might have been supposed, as it has
been ur,ed, that the discoLnting on stock
was the only means in the power Of the
bank 10 enforce tie payment OF the second
instalment. 1t is believed that the engage
ment on the part Of the stockholders could
have been enforced without difficulty by
the courts of law-decisIons to that effect
have been made in the courts Of the states
of Pennsylvania, Massachusetts and New
York. And when the stockholders note
was taken without an endorser or any o.
Their collateral security, but the pledge OF
the stock, it is not perceived how his legal
liability was increased. In the state of the
stock pledged, there was indeed prospect
of indemnity, which depended however,
wholly on the price OF shares in the mar
ket. The same circumstances that pre-
vented the actual payment of The instalment
would have interiered, it is presumed TO
obstruct the liquidation of the note given
in lieu of it. And in the emergency which
would have compelled the bank to reduce
IFS discounts, il would mostrequire good
price for the stock-and the very necessity
OF the times which would force an unusual
quantity of il into the market, would pro-
baby defeat the object Of security. In
fact, large part of the amount thus dis
counted, was not paid at the maturity Of
the notes vide statement XVII. but
were renewed. Of the still Larger pro-
portion which appears from that statement
TO have been paid, it is wholly impossible
to determine what part was converted into
notes, on personal security, or what part
assumed the new shape, which was given
to notes discounted on pledged stock after
the 20th Feb. 1917. 1t ought to be re-
marked, that many PERSONS after finding
the disposition of The Board, obtained dis
counts, who were perfectly prepared to
pay and would have paid their instruments
if the inducement to credit had not been
offered to them.
Had the bank resorted to its remedy thro'
the courts TO obtain the payment of the Sc
cond instalment, it would probably have
obtained something from the stockholders
it could have lost nothing-and at all events
would have saved the dividends upon the
delinquent stock. But by taking the note
of the owner il admitted that the install
ments was paid and abandoned the means
of coercion given by The charter in with
holding the dividends, and obtain no.
thing. 1t did not increase the responsible
lily of the stakeholder, while exposed
the bank to the loss of the dividends, and
- the chance of loss if the stock should be
forced into the market, in large quantities.
The committee are Of the opinion that
those resolutions, and the practices of dis
counting before mentioned; were incorrect
That they are particularly Objectionable,
from their partial operation in affording
facilities To some Stockholders which