Daily Richmond Whig. [volume] (Richmond, Va.) 1828-1831, 1829-06-25

The peculiar functions of the Directors are presnr,ed
TO have been exercised in determining upon the me-
ccssity policy of purchasing bullion or of selinu
the goods, and in asceraining in what market and az
what price the bullion is To be procured aud tbe
goods sold The authority of the agent extends no
father than to the pnist1yiaI Nor of n,,rcha
sing and selling which authority il Is M ,lo;h, go
potent for tho Directors TO delegate But Tho ph,vor
10 purchase bill, of exchange as exercised h., ~ p
siden. aha Casnier, involves very delicate diserc-
tion mrciuuon to the solvency OF the parties IN Tho
bill, the cordlton OF the funds OF the nstu,ior aud
thc rght OF discrimination between different hills
Au OF winch import clearly, that the power 10 pnr
cnasc Dill OF exchange involves the exercise of tho
yecu.a' troS reposed IN the Directors AMI which
'somi IT'S nature, Cannot be transferred So far vonr
o''cc nave made no distinction between bills of
~o'se' properly so called and domestic dinIIs be-
i.s VI opinion that all Instruments in tho nature
OF Dill OF exchange, are comprehcpdid under
tnat generic term. But, they are fully aware of the
P.ausiDty which the argument in favor of the cxcr
else Vi this power derives, from the necnssv of do
'cgating the authority Of PURCHASING forero and nor
,aern bills, t"the President and Csehier 10 enable the
Dunk 10 raise specie IN case OF an emergency No
soch necessity however, exists in relation TO the dis
'ounto oil domestic drnfts, which your committee re-.
gard IN no other hight than as n substitute for nego
t'abfc notes, and as means of obtainin. Bank
accommodation without tn application to the Drec-
TOTS All the arguments therefore rpeJ a,oinst tho
authority to delegate the general power to purchase
o"ls " Exchange, apply with double force 10 tho pow
or To discount domestic drafts If the Board OF Di-
recors can delegate the power To disco,,t domestic
gratis; and thereby substitute the discretion of the
president and Cashier for their own iudrnlent vorr
co,nmh'ee can see no reason why they cannot also
aeiegate the power of discountng notes. They are
Doth acts performed IN their fduciarv character and
imply the exercise of exactly the same ,rrec of dis
creton, yet no one will contend that they can dele
gate the power of discountng mites Your commit.
zee therefore conclude That the right delegate the
power OF d'scountng bills of exchange and drafts
- not conferred on the Directors OF the Bank of Vr
gina, by the charter of that institution.
oecohniy. Is tins power conferred the Direc-
a nv fhah u,- Ian.
on the 9TH section of the bye-laws us conterrin1
this authority. This section provides, sihat the
poa,a OF DIRECTORS are authorised To ascertain and
mark ont the various duties aud cmplpyncn. of Nh.
omcers clerks and servants OF the Bank and direct
them accordingly; TO assign tn the President such
auditonai functions rs are not designated by law"
IL Is inferred from this, that the Board of Directors
nave authority 70 delegate to the President and Cash
ier the power to purchase bills or To discount domrs
TIC drafts BY this construction the directors have
au.hority TO assign TO the President, any other
0tccr' or even mreant OF the Bank, uiiitea pocer.
by TINS construction, authority is given to the Direc
tors, ey transferring all thoir powers To an ,esyon
Sofe agent, to superscdc the necessity their own
existence. IL cannot be presumed tIat powers so
unlimited were intended tn he conveyed by terms so
vague and indefinite. The proper construction of the
sectloi, VIII confinc It's operation the various min
sseriat duties tn be performed by these several Off
GERS OF the Bank Surely SO important a function
ms th"t claimed by the president, wuu not have been
assigned 10 him In common with the the porter and
servants offhe Bank. But independently of these
general views, your committee conceive Tint the
right to delegate this power, is virtually denied to
The Directors by the bye-lws. The, igtb section
provides, that no discount shall De made without the
consent OF three-fourths of the Directors present
Your committee understand this section as apply
ing we'll to bills drafts as to notes And thew
are confirmed in the belief of the correctness of this
construction by reference the third section of the
regulations for the interior management of the Bank
OF Virgiula by which it is directed, that all bills or
notes offered for discount shall be delivered into the
Bank on Monday or Thursday, and laid before the
Orect0rs THUS prccluding the belief that il was IN
tended that the authority discount IL, any case
should be exercised by any others than the Directors
themselves. From these considerations. your COM
mittee Is induced TO conclude that the right to dele
gate to the President and Cashier of the Bank of
Virginia, the general power purchase bills OF ey
change, or TO discount domestic drafts cannot h,
derived either from the charter bye laws of the
institution Apd that therefore. 10 such power ex
isis i'll the Directors.
Upon the next subject of enouiEy, whether il he
cxpedient not, that the Directors should vest this
power in the President and Cashier of the Bank
your committee would observe that, general rule
II cannot be expcdicnt for corporation 10 transcend
the limits Of it's chartered authority. One of the
greatest evils arising from the existence of corpora-
tlons, is the accumulation of power in the hands of
individuals. To Obvatc this evil, the powers of the
corporation should be distributed that no one of
fcer should exercise all undue influence. Your COM
Inittee not aware that the power vested in the
President and Cashier of the Bauk Of Virginia of dis
counting bills has been improperly used, but they
dce it inconsistent with the character of our laws
and institutions, that power capable of excrting
extensive influence society, should De entrusted
TO any one individual. They have besiiation hOw-
over, in saying that the exercise of tbs power bv
tie President and Cashier of tile Bank has been q
Of great profit tothe institution. And that its
restriction To tic Board OF Directors would have
tendency TO drive the trade ~ bills If exchange (prop
cry called) from this TO some other banking insii
tuition. The merchants who principally deal in bills
of exchange, are engaged in some branch of COM
Incrce, IN which many of the Directors Of the Bunk
re also employed. Il would be highly injurious to
their interest TO expose TO .heir competitors in trade
tho course Of their bsncss which inust necessarily
he done ifbis of exchange, drawn by them are laid
before the Directors for discount fhis Is the prn-
cipa reason why is thought cXpcdicnt to vest the
power Of purchasing Hills IF ercha,ge in the Presi-
dent and Cashier of the Bank. Your committee
would, however, observe, that this applies only TO
rect commercial bills of exchange, drawn in the ac-
tua course of business; and has not the most remote