Herald of the times. [volume] (Newport, R.I.) 1830-1846, 1837-10-05
The Merchants Bank,
OF PROVIDENCE,

OF PROVIDENCE.
We regret TINT our circumscrbed limits
preclude the possibility of publishing entire.
in this days paper, the Decision of the Su-
preme Court, on. the case of the Merchants
Bank Of Providence. It is an able exposition
Of the Bank Law, and (says the Providence
Conrier,) appears to have given entire satis-
faction to all concerned.
The Cashier and other officers Of this
Bank, it appears, were summoned before the
Supreme Court, last week, on complaint of
the Bank Commissioners, who preferred a
bill of injunction against said Institution for
the consideration Of the Court. 1t may not
be known to MI our readers that the Mer-
chants Bank is n general deposite bank Cor
nearly all the banks in this State, and any
measure, therefore, adopted by the Court
against said Institution, would necessarily
affect, more or less, all the banks having de-
posites therein. The bill presented two dis
tinct points
The first is, that this bank has conducted
its business against law, "in that on the 18th
day of September, 1897, said bank owed oil
amount Of debts exceeding the capital stock
actually paid into said bank over and above
the monies actually deposited IN said bank
for safe keeping"
The second charge is. that tho bank is so
managing its concerns, that the public are in
danger of being defrauded thereby: in that
the said bank on the Ilth day of May, 1887,
had in circulation in bills of said bank, tho
sum Of $l0Gl9, and owed to depostors in
said bank, the sum of $252 ,203 So; making
the sum Of their present liabilities amount to
S262 eS2 Sc; to meet the payment Of which,
said hank lad, on said day, Of present means
in specie. the sum Of s3O4 479 80, and Of bills
of other banks the sum Of Sl5Os72 So; max
ing in all the sum of $lSl ,25l 81. The a
mount Of discounts OF said bank, on said day,
amounted to the sum of S563,427 SIS. On or
about the said ] lth day of May, the said bank
suspended the payment of specie for its bills
and other liabilities. On the 18th day of
September, 1897, the said bank (stil refusing
to pay specie for its bills) had in circulation
in bills Of said bank, the sum of SIO9, ,566 25,
and owed to depostors in said bank and for
unpaid dividends, the sum Of 8 90, ,405 Band
also owed balance to other banks, after de-
Quoting the balance due from other banks to
the said Merchants Bank, the sum Of SILL
644 %; making an aggregate sum of present
liah ,f >f
1921 ,Gl5 81; to meet the payment Of which
the said bank had, on said day, Of present
means in specie, thc sum Of Sc9.3l4. Tho
discounts Of said bank,on said last mentioned
the aggregate amount of circulation, depo-
sites, balances due other banks, and unpaid
dividends due and owing from said bank, on
said last mentioned day, was $500 800 %, said
bank having capital of s5C0,0O0.
The Judge, after fully stating the Courts
construction of the Bank Act, decided that
the first charge afforded no adequate reason
for writ Of injunction against this Bank
He then proceeded to take general view of
the duties Of the Commissioners and of the
Court, and to inquire, whether this bank is so
managing its concerns, that the public are in
danger of being defrauded thereby-and con-
cludes as follows:-
The act investing this court with power to
issue an injunction, on complaints Of this de-
scription, was passed in June 1886 The
banks of this state were then specie paying
banks, and it cannot be doubted, that IL any
one of them had then suspended specie pay
ments, with great liabiities,an comparative
ly small amount Of specie, but that upon com
plant made to this Court setting forth the
fact and after n hearing an injunction must
have been granted almost as n matter Of
course. The law has not altered, but the
condition Of the banks has.
We mention THE, not because we are try
ing the Merchants Bank for q suspension Of
specie payments, but because we must me-
'cessarily take that fact into consideration
along with the specification on which the
general charge is founded. The truth Of a
general charge is to be tested by deiermin-
ing the question, whether the liabilities Of
the hank have been 50 increased by its circu-
lation, deposits or other Indebtedness as that
the public are in danger OF being defrauded.
Our inquiry may indeed be so far simpltied
as to touch only the question of circulation,
keeping IN view the other liabilities of the
bank us they may affect its capacity to re-
deem its bills; for the bill holders are in gen.
eral the greatest and most frequently the
exclusive sufferers. IL then the circulation
Of the Merchants Bank such that the public
ore in danger OF being dcfrauded theI eby?-
We cannot consider this o,,pstion without