Constitutional Whig. [volume] (Richmond, Va.) 1824-1832, 1830-02-12
HOUSE OF EGATEs, FEn. s.


under consideration, in Committee ofthe Whole, Mr..
GARLAND, ofNclson, proposed additional section,
requiring Fund to be set apart to make good its
capital in ofloss.
Wr. GARLAND Of Nelson, said that it was due
to the committee that he should briefly state the
views which he had of the subject Of the amendment
now proposed and the reasons which led him to offer
1t. MIR. u said he did not profess to understand
well the banking system. banking operations, but
he thought he understood the system sufficiently we'll
to hazard the assertion, that public confidence ex-
listed IN the ability of banking any other issttu
ton Of that character to redeem les stock so would
be the credits given to it; and proportion the
istence of that credit would be the value in market
OF the stock and in proportion the value of the
stock would be the circulation of its paper If this be
true, and of which Mr.. G. said there could be no
doubt, every scheme calculated to give additional So
cury to the stability to the stock of the bank and
well calculated In its results to the final re-
derpton Of II, must operate benefcally to the bank
in giving u ,ts stock and the paper which ents in
creased confidence and value. Mr.. G.. said he be-
1Ieved that the scheme which he had now submitted
was we'll circulated 10 have the effect of increasno
the value of the stock of the Bank of Virginia, and
restoring public confidence in its ability to redeem
should expire He said that in Offering this amend
ment, he had no design whatever to embarrass the
bill with view to its final defeat, for in such course
of legislation he had not, nor would not ndulge he
always disposed permit the friends Of any uea-
give to it, much perfection as il was sus-
ceptible Of but he offered in spirit of friendship
with view make the bill palatable to himself and
those who feared could redeem its stock and
restore that portion of public confidence Which SEEM
ed now to be lost.
Mr.. G. said he might be mistaken in his views of
the effect which this scheme would exert upon the
stock and operations of the bank, but he verify be-
lievcd it would have the effect which it was DESIGNED
TO lave by its Mr. G. said does the bank now
sustain the full measure of public confidence which
once sustained? VIII the Developments made in the
course of this investigation impair confidence in the
integrity of the stock, and reduce it's vaue2 And will
not this want of confidence embarrass the operations
of the bank in the circulation of it's notes? Mr G.
snd that the bank by its showing exhibits want
of ability to redeem its stock by twelve per cent aud
none could doubt that the officers of the bank had
made as favorable report of their condition as they
could with proprietyi bu' great many not salts
fed that this is the real condition of the bank with
ont any imputation the integrity of the officers
many believe that the bank, if required to close
its concerns, could not pay more than sixty dollars in
The hundred of its stock believe they cannot
pay as much With these facts before the comm;Injtv
and the want Of confidence manifested here by the re-
personalities of the people, be otherwise than
that their confidence III the bank must be greatly
shaken, and its operations consequently much embar
raised. We have all that want of confidence is
well calculated, and does embarrass individuals al
though there may be really foundation for it, So
with this bank, although there may be really no foun
datlon for suspicion yet the CIV has gone forth
and the effect will be produced Chem so far as the
bank is concerned, Nr G. thought this scheme would
be valuable.
Mr.. G. sad that the State, he thought was deepIvp
terested in the Of this propositions if the effect
would be such as he had in his feeble manner attempt
cd to show. She had large Investments in the stock
Of the bank, which subject alike to the losses
arising from the casualties which might attend the
operations of the bank. The interest of the State
then would be certainly promoted BY the adontion of
scheme calculated to confidence in tie abil
ity and integrity ofthc bank, because in the deve,oue
mens of time anu circumstances, the State might find
1t her interest to dispose other stock in the bank and
invest her funds useful and profitable or to an
propriate it to meet energen exigencics-a success
tlll sale would certainly then depend upon the conf
dencc which existed in the integrity of the bank
stock.
Mr.. G. said that the proposition was re5 souabIa in
ITSELF for he thought that any loss sustained by the
stock of the bank should be borne by the stockholders
and not by the innocent holders Of their paper-tlc
stockholders themselves established the system and
they circulated: and will circulate their notes uuon
the credit of an anmpaired capital stock; necessarily
as far as can be, the profits this capital stock should
be consecrucd to the redemption of the stock itself
This argument is certainly irresistible when wc know
that the stock alone is responsible for all the.uotes
which the bank ens, and that the stockholders are
not responsible tor one cent out Of their individual
estates and that in their operations their stock shall
fall short of redeeming their paper by one-haf the
innocent holder who received their notes in the coorsn
OF fair and honorable trade sustain the loss al
though the stockholders individually NAV be ro1ng
wealth.
GIr. g said that the bank capital was s., 700 ooo
and by the amendment offered, he proposed to
take per cent from the dividends of the stoot,
capital stock in at the oloa, of their operations
the stock was deficient. This scheme would com
u1Bnce with a fund Of $4,000, which would be annu-
ally added to that amount until the expiration of the
charter to ascertain the amount of which at that time
needed only the process of simple arthmetical cal.
citation If at the end Of the time TO which he eXten
sion OF the charter limited the bank could redeem
It's whole capital this fund would be restored to the
stockholders if not, then far as was necessary il
would be restored to the stockholders The fund
thus set apart would not be idle Pie amendment
fprrfr hat tcho ho
profit, and consecrates the profits the same purpose
with the caPita--n IL only be withheld from the
stockholders Mr G. asked was this reasonable AS
regards the stockholders Remember that the div
dends are senni-apnua and when once they 90 into
the hands OF the stockholders they become their pri
Vae funds and cen never be ached by the holders
of The bank paper, although the bank stock BIO net
Worth one dollar in the h0Ddfed. Ought then Mr.
Q: asked, the stockholders to complain because of
this requsition them secure the redemption of
Their capital stock Mr.. G. said that this svste EN-
someWhat varied in lis details Ed hnnn ndontnd