Alabama state intelligencer., 1831-11-26

institution which, from it's ample endow- ments, it's healthful situation, its connexion by a navigable stream with seaports and fertile countries, from which may be easily obtained all the necessaries and comforts of life, not furnished by the productiveness ot the neigh borhood promises to rival any institution of the kind in the United States. Nothing but misdirected administration of it's resources, can prevent its most extensive usefulness in the Republic. I congratulate the State, on the fortunate selection of a President and Professors. With pleasure do express my entire belief, that their qualifications are in all respects equal to the discharge of the du- ties of their respective departments and that their exertions accord with their feelings of deep interest in the prosperity ot the insti- tutiOn
 Permit me here torecommend to your conSi- iteration tie propriety of allowing to the Trustees of the University compensation tor their services, without which proper atten- ton to the expensive discharge of their du- ties cannot, ought not, to be expected from persons whose indispensable qualification IS a residence in distant part of the State.
 On a iudcious adjustment of circulating medium, in great degree depend the hap pness and facilities of social and commer- cial intercourse A sound and well regulated currency is preventive of difficulties, and pro- motive of an easy and friendly communica- ticn between nations, between States, and be- tween individuals. The subject of banking s,therefore, one which the Legislature Of ev- cry community, involved in its varied intrica- cies and dangers, ought to view as matter of the deepest dbGankee action, it is proper to inquire how banks may be established upon principles of Re- publican legislation. If we view banking as tax upon the citizens, for the purpose of raising revenue to defray the expenses of government, we are able to recognize the power of State to become banker as le gtimate, and yet sustain the principles of equal rights to the citizens. Banking IS a tax, because by it arevenue is collected and this revenue is nseparable from the opera tions of successful banking, because of its ne cessity to sustain the credit of the paper.
 The State of Alabama, in the exercise of it's legitimate and constitutional power, has become banker It has established bank founded on permanent capital, which
 issues and lends a paper currency at mo- defate interest The interest constitutes revenue to be applied only to public use, and
 is acquired by an indirect mode of taxation to raise a State revenue. Because the tax is paid voluntarily by individuals who borrow the paper, it does not change the character of the operation; it is still tax, transferred by the individuals to the public. It will not, suppose, be pretended, because an innkeeper pays for his license voluntarily, that he does not thereby pay tax. But because State has right to tax its citizens to raise public revenue, it does not ccnclusvely follow that State has the legitimate power to transfer that right to an incorporation; or varying the expression, to tax the citizens for the benefit of the individuals of an incorporation. Under the general laws of Alabama, individuals have not the right of associating themselves together with banking privileges; therefore, when the Legislature, by an act ofincorpora- tion, grants these powers to an association, those individuals thereby receive and exer- else privileges, from which other citizens of the same community are excluded. The nature of these privileges may be readily seen, by very slight examination of the ope- rations of a private stock bank. A '.set of men, in their corporate capacity, issue their notes, by which they promise to pay aSpeci- fled sum of money; an individual wishing to obtain some of those notes, presents hys note to be discounted, by which he promises to pay a specified sum of money. The opera ton is an exchange of notes. But in the ex- change, the individual is required to pay premium, the tax. Where shall we look to find the reason of the difference in the value of the credit of these parties; the req sen why this s'set of men" may require this tax, this tribute of the individual? The par ties to the transaction arc equally solvent; the credit of each is intrinsically equal to that of the other; they are citizens of the same State, subjects of the same governments; on the face of the notes the promises are made in the same obligatory language, to pay in the the same specific dollars The reason is not found here. But when we turn to the statute book, in an act of the Legislature of government purporting to be founded on the equal rights of it's citizens, we find the req son. I do not intend to insist that the estab- lishment of company banks is contrary to the letter of the Constitution of Alabama; for that instrument seems to recognize the right of the Legislature to create such banks My object is to show, that to establish company bank, is not lcgislating strictly on principles of equal rights, which ought to be the polar star of every American Legislator, and is contrary to the true policy of a Republican government. Suppose another State to ap- ply to the Legislature of Alabama for bank charter, with the usual company bank restrictions, to authorize that State to estab- fish bank in Alabama for the purpose of raising revenue. The President and Di- rectors would be chosen from the stock holders, who, in this case, would be the citi- zens of the applying State. This bank would be constitutional upon the same princi- pies that company banks are. But would it's establishment be good policy in the Legisla- ture' Would the application not be rejected, because it would be establishing a separate interest in our Statel Because the bankers WCuld manapp the institution so as to Droducf f the greatest revenue, regardless of the inter- est of Alabama. If this argument be good, it will apply with equal force to any compa- ny of individuals clnthed with han ino ro1u=