Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1821-02-01

liable To arrangement from excessive is
sues al one time and from an extremely
rapid reduction at another, aud fuctua-
tons IN The value Of money, which we
have slIewn TO be prejudicial, will neces-
saTily result. This provision is mol new
one, having already been adapted in most
of the charters
The object of the Gtia condition is too
obvious 10 need eApiana,ioD.-By the
charter of one OF the old city banks, the
loans to the directors are restricted, aud
by tn" charter of the forty two banks, il
Is very wisely provided That no director
snail he member of The Legislature. The
fear Of u bank influence in tie general
assembly Of the State, was no doubt the
cause OF This latter provision, and expe.
rience has not yet demonstrated that the
measure VAS without reasonable foun-
dalton. In addition 10 this restriction,
there exists general act of the legisla-
ture, which declares, "tliat no judge Of
any court nor any person holding any
once under this commonwealth, in the
accounting or treasury department or in
tile land ofi,ce, or any person authorised
10 receive aud account for the public
monies OF this commonwealth" compris-
ing, II IS Supposed 0uctieneers, " shall be
capable al The same time OF being di-
rector or cashier of any bank" The
general aud permanent character of this
law, precludes the necessity of mcOrpo
Iailng lis principles into any new charter.
For strict adherence 10 the foregoing
conditions, the directors should be piedy-
ed, and individual liability should be the
result OF any failure to observe Them.
| IL the subject before your committee.
iad been TO point out what restrictions
should be introduced into the charters
or neD 0anas, there are two in addition 10
The foregoing which they would strongly
have urged, and as they are calculated
10 'hroh some light upon The important
suoject OF banking, they will be here ad.
\ vapced.
The first is, that no bank should be
allowed 10 divide ppon an average, during
the continuance oilts charter, more than
fegat interest. but that il should he per
! hitted 10 accum ulaie contingent fund
| oil Ten per cent. OH The amount OF lis ca
| piia, 10 meet occasional lesses, and 10
| MAKE Its capital whole at The winding
zap OF ITS concerns. By this provision an
additional check would be given 10 ex-
! cesslve issues. Tor il would MOI be The in.
itrest at any bank under such resiric.
| ION, 10 extend liza loans beyond the low
| est possible amount. which would Weld
the stipulated dividend, deiray It's expen.
| SEES, aud accumulate the contingent fund.
In this measure The public would have a
| powerful guarantee against any depreci
st'on or The currency. the supply Of bank
accommodations would be stsady. aud
| the dividends ami price of stock uniform.
Stock -jobbing and speculation would moi
be excited by the prospect Of a greater
or smaller dividend, and orphans and
widows, aged and ignorant persons,
! "onlt not be III danger OF losing one third
| OF Msir property. as thousands have here.
lof.re Done by purchasing stock AZ forty
or my per cent. abov" IFS par value. The
authorisinS or bank to divide seven.
eig@t or nine per cent. affords no sdvan-
tage 10 any one but the original subscriber,
Tor all subsequent pure hasers are comprl~
led TO pay an advance of principal
equivalent 10 the extra interest. and these
ia,ier not only ger no more than six Der
cent. Tor their money, bui are absolutely
obliged 10 bear aNhs kosses OF the bank.
ana 10 lose al The winding up, The whole
amour, which they paid for their stock
ABOVE the par value Thus-if nine dol
| lars per anuum be divided upon share
| OF stock which cost one hundreJ lie
market price Is at once raised to $50
dollars or somSihing near il, and for This
extra ttiy dollars, the most that the
| purchaser can get, is The chance OF yery
doubtful dividend Tor few years, upon
the capital which he has thus sunk. Apv
| provision by law, which would autl,orise
| any one portion OF our citizens 10 receive
eaSht or nlne per cenf. for the use of their
money, whilst all others were probibiied
from taking more than sir Der cert
would be marked by character of inc.
| qua lily bJ no means consonani with our
political institutions, and vet even such a
provision Is not half so odious and unjust
az 10 authorize set of avaricious specu,
latoTs ("ho comprise great proportion
OF the origiHal subscribers 10 a bank IN
atiix an artificial and deceptive value 10
stock. thai they may allure the unsus.
pec'ihS ana ignorant into a purchase, al
rate tar above It's intrinsic worth. The
price, current OF the present day quote
bank stocks at lO4 dollars DER ,hsrc
Which once commanded $50. and 9th r.
al ~ dollars which cost somr of The ore.
Sent holders 1886 Against repetition OF
sucil monsirous iDphsiiions, il is the du
ty OF The legislature TO protect the un
wary TOR II Is principally those who are
not skilled III the science of stock iob
oibs, ana who are not acquainted WjIh
ihe difference IN valur between doubtful
interest TOR term OF years aud a certain
perpetual annual revenue, who are NH
mafeIy involved. Had il not been for
the belief that a great proportion of the
present Stockholders of our banks nav,
paid high advance for their stock. your
committee would have recommended lhe
introduction of this provision into all Tie
renewals of charters, but il was consi
1rred inexpedieDt 10 deprive people OF
iIe hopes OF Iegaining their capital, even
al time when most OF them must be
ffS I,o1r GAL
as The evils resulting from tie artificial
elevation and denrAssion nf hank ntnnL