Edwardsville spectator. [volume] (Edwardsville, Ill.) 1819-1826, 1821-05-22
FOR TIE SPECTATOR.
STATE BANk-NO. VI.

of the State Bank, in order that a clear view
may be taken OF the arguments we shall offer
in support Of the system upon which it is pre-
dcaied as well Us 10 test the objections urged
against it.
1t viii be perceived, that in our former num-
bers We have shewn, first, that banks hay t
been established and fostered by all enlighten-
cd nations, and tie reasons for such support
have been fully detailed. We have also sheWn,
that in all those countries where they have
been established they have in disastrous pc
RODS been compelled to suspend specie pay
ments, which suspensions have been of extern
siye and various durations; and that those OF
the greatest capitals, have been established,
not on specie, but on the credit oftheir respec-
tive governments; and most of them have
been Immediately under governmental or mu-
nicipal control Considering these points as
incontrovertiby established, we shall shew
the analogy in point of system, as well as effect,
and the certainty of the accomplishment OF
the objects proposed by the charter. The
law creating the bank establishes it 70: the
period OF ten years, with capital of S50O,00O,
of which S300,000 only can be now issued
the balance being at the control of the next
general assembly. This sum of $4,000 is
to be loaned out to the citizens of the several
counties in the state, in sums not exceeding
$1,000 To any one individual; personal Sc
curity to be given for sums not exceeding
500, and all above that amount, unincunl-
bered real estate, to double the amount i'll va
lue OF the sum loaned, is TO be mortgaged and
II at any time the estate mOrtgaged should be
deemed insufficient, additional security may be
required, and in case Of refusal to comply, the
debt may be Immediately collected. The
amount borrowed is TO be refunded in ten an
nual instalments--siX per cent. interest per
annum being paid in advance. The capital is
to be distributed and the loans are to be made,
on the ratio of population in each comfy, as
nearly as practicable. The notes of the bank
bear an interest of two per cent. per annum,
and are to be receivable at all times for debts
due the bank, for state and county taxes, and
all other debts due to the state. A principal
bank and four branches are established the
proceedings Of which are subject to the eXa-
mination of the legislature by committee, and
tc which the principal bank is required to re-
port. Notes to an amount greater than the
capital stock are prohibited from being issued,
and one tenth ofthose issued is required TO be
withdrawn from circulation annually, and is
never again to be re-ssued. The treasurer
of the state is required to deposit all the public
funds in the principal bank, and claims against
the state are to be paid by checks drawn by
him on the bank, payable in its notes. Ii is
provided, that the directors Of the principal
bank, when they shall deem it expedient, to
appropriate the amount OF moneys in bank,
other than the notes created by the act, and be-
longing to the bank or state, to the redemption
of the notes issued, may give 90 days notice of
such intention, and in case such notes as are
designated for redemption are not then pre-
scented, the interest thereon shall thereafter
Ia, ,,lc n,,I 9TH h.,
longing to the state, and all the funds and all
the revenue, which now is or may hereafter
become payable to the state, is pledged for the
redemption of the notes. And the people by
their representatives in the general assembly
convened, have pledged themselves, at or be-
fore the ten years named in the charter, and
before the dissolution Of the institution, to re-
deem all such notes in gold Or silver coin. The
directors Of the principal bank and branches
are appointed biennially by a JOINT vote Of both
branches of the general assembly. Creditors
refusing to receive the notes of the bank on
execution, are subject to have their judgements
repleved for three years.
In order to test the operations of this insti-
tuition, it will be seen, by calculation, supposing
the instruments to he punctually paid, that the
paper thus issued will in the period of seven
tenths of the time proposed, be entirely re-
turned to the offices from which it issued, with
out taking into calculation that which would be
distracted from circulation by being paid into
the treasury for the various sums which will
yearly become due to the state. In this esti-
mate we have not included the discounts which
will be retained, but which may also be loaned,
and will Of course be SO much beyond the
$4,000 to be secured. AS it will be per-
ceived that the notes are prohibited from be-
,,c loapaI en- ir1,yi1u,l NV
his instalment in these notes, will of course
take from circulation the amount required to
be yearly refunded, and the consequent re-
demption of the whole currency thus be ac-
complshed within the time contemplated
And as certain guarantee that this will be the
case, it will be seen that the borrowers, by pay
ing punctually their instruments in these notes,
receive the benefit of the interest which would
be due on the notes at the time of payment.
But supposing that a portion of the borrowers
do not refund one-tenth, at the time stipulated,
will it be denied, that the amount of taxes due
TO the state in each year, will not make up the
deficiency The amount arising from taxes and
the salines, exceed yearly $4,000. This alone
would exceed by $4,000 the amount requir-
ed. But it will be said that the expenditures
Of the government will cause the reissue of
this sum. This is denied-the taxes for the
last two years, with the actual receipt of
small sum from the salines, enabled the 60
vernment to pay all the old arrearages of the
territorial government, of between 90 and
$4,000, and to pay also nearly the whole of
the expenses of those two and the current
year; and at the next meeting of the legisla-
ture a surplus of at least $4,000 will be in the
treasury. But throwing out Of view the whole
operations of the refundng by the medium OF
taxation, is there nothing to induce the bor-
rowers to be punctual, and in case OF neglect or
refusal, will not an estate worth double the
amount claimed, as must necessarily be the
case, sell for the sum demanded And although
Il mipht be unfortunate for the borrower, still