Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1838-01-18

of the law and the courts had decided that apples 70
case like that at present existing, every BANK Ia Tue
Commonwealth might have been shut up, by the mold
ers of its bills Immediately on the SUSPENSION aP.
pIicalion was made by highly respectable Cointee
of the citizens of Boston, requesting that the
ture might be convened 10 consider and act upon Tue
extraordinary Stale of things which had arisen, with
view % provide remedy for the evils which mgnt De
anticipated by the banks and The community MS aP
pica,on was submitted 10 the council at meeting nea
afterwards by presous aoournhe en-,
necessary 1t is believed that oil parties were soon
united in the same opinion
"rhe very limited extent 10 which, as it is under
stood the holders of have attempted by legal pro-
cess TO comne their payment in specie sufficiently shows
tina, general confidence is FELT in The solidy OF The oanks
and that their failure to redeem their bills III com JUS
lifted by public sentiment. In this state oil Things, II
does not appear Ia me advisable 10 make any change IN
the laws which enforce the obligation OF thus redeem
ing them .u..oa - s.. ..ob,h,v hs.D
strengthened by the formation OF an association OF The
banks of this city, for The purpose OF exercising mutual
control over each other and OF laying before the public
weekly statement of the aggregate condition Of The as
ISOLATED institutions. This association has no doubt
served as saiutary check the tendency 10 an undue
extension of bank paper md bunk credit, which might
be expected to take place suspension OF specie pay
ments The object would have been fully answer
ed by weekly statement Of The condition OF each IN
diydual bank; and such statement if the existence of
the association be prolonged, would be highly advisable
sin addition TO the other legal consequences of fail
ure 10 redeem their bills demand in specie seems TO
result from the provisions of the loeth section OF Inc
thirty sixth chapter Of the Revised Statutes, that e
banks have incurred forfeiture of their Charters should
the Legislature see fit enforce it, 1t may be taken Tor
granted that the fact Of such failure, produced
by general suspension, will not in my individual case
be deemed ground Of forfeiture II Will be Tor the TWO
inf nm
thew alone are able 10 procure Of The conduct OF each
institution in the present sate of things, whether IL Is
equitable and expedent that this forfeiture should IN
INV case be enforced Ii is presumed that very large
nrooortion of the banks Of the Commonwealth will be
deemed we'll entitled the ndugent regard, and some
Of them the decided appreciation, OF the Legislature.
No hesitation probably will be felt in vacatng he char
ers of those which have made an avowPd bankruptcy,
and have ceased in any form 10 meet their Liabilities
The mode in which the affairs Of these institutions mas
been managed, seems proper subject Tor scrutiny
Whether the condition OF any others OF The banks IN
the Common wealth is SUCH that they have ceased 10 De
public or even private benefit and should be requr-
ed TO wind up their affairs as practicable, Is LOT
the Legislature 10 decide.
"A suspension of specie payments is, by all adms-
sion one of the greatest cnlarniles which bela
commercial people Nothing but the necessity which
Produces cnn Justify it. While il lasts, there IS no GER
tain standard Of value, and efecual check on the s'
sue of paper which from being unredeemed soon tends
to become rredeennbe AS an example! itis essehaiI
y corrupng and tends directly to impnr the sense oil
moral obligation in the community For these reasons
il is matter not merely of interest and expectancy,
but Of the highest moral obligation on the parl OF lhe
banks and OF every individual who has contracts 10 ul'
6 labor, in every lawful and proper way TO promote
the return To specie payments Nothing which Will
hasten it, in however slight degree is unnporan'; no.
thing which deuys it, however well meant Inc iinheu.
ale object is UNSUITABLE. On this ground, deem 1t mat
ter Of regret that semannual dividend o! profits was
declared generally by the banks of Massachusetts on
The first of October lappears 10 me, that II Inc duy
of these institutions, at time like this, 10 apply their
dposabe The last dollar, 10 the one OBJECT
of restoring specie payments and mat WINE 'ne sus
ensiun continues the Banks should be prohibited 6y
law from making further dividends. II VIII also deserve
your consideration whether those institutions whose un'
duly extended Liabilities form of the obstacles 10 Inc
resumption OF specie payments Ut any such trfe nirj
should not be required by law at some reasonaue rae
reduce the amount Of their obligations within some
fixed proportion TO their resources.
awhile the suspension continues and the community
is consequently without the means OF bringing The con.
dton Of the Banks to the only test il worthy oi
your consideration whether il is not eIpedIen that
monthly statements of their business should be returned
to the office Of the Secretary of State or some other De-
partment Of the Government This provision would al
all times be useful the Legislature and the public IN
the existing slate of things il is highly desirable II II
practicable TO make the returns extend to the enSh
of time and the Of the security on which loans are
made, il might check the application OF pahk cEeus 70
improper objects of speculation.
ono other measures within the competency OIL lie
Legislature occur calculated to hasten Inc re
sumption Of specie payments The attainment OF l.at
most desirable object depends on Two cnnduohs, VIZ
the cessation of demand Tor specie Tor iofrlgh remit
ranccs and the restoration Of confidence at home The
first condition appears 10 be already iulhed the second
as far as the banks concerned VIII depend mainly
upon steady pursuit o system oil reducing 'eif a
biI,es In this they ought as 1t seems 10 me- 10 oe
sustained by the voice of all good citizens empatically
expressed take the greatest satisfaction IN expressing
the belief that no nsuperable obstacle exists to very
early return TO specie payments. ~
q" respectfully submit the consideration OF the Lee
pislaure whether the present be not favorable season
Tor the introduction of amendments into our hanS
ing system 1t cannot be denied, that the soono prh
cipes of banking have been widely departed from, anu
that mode Of establishing and conducting banks mas
gruwn up abusive and dangerous in the extreme In
lis proper understanding, bank is an institution design
ed facilitate the operations Of trade, by short loans Ia
mid Of business transactions. The stockholders IN sacn
oil institution should be who have surplus moned
capital which they DESTROYS OF employing IN opera
lions this Of kindly which the public greatly oeheneo
! AT the present day too many bank charters nave aen
obtained not by those who have money 10 lena, pu ny
those who wish borrow These institutions are some
times put into operation with gross evasion oil he i"
if not in direct violation Of it, Where no such abuses
as these take place. there is yet reason to tear That
much of the business of banks administered IN many
cases. consists of loans made for length OF une lo
objects and kind Of security, foreign 10 Inc True
principles of banking and dangerous TO The community
cit may deserve question, whether IN al iutufe
grants of bank charters the Of all the s'ockhold
ers. with The amount of stock TO be owned oy each,
ongbt no, 10 he piyen Such ia The loosentss of the
practice in this respect tina. has been brought to
my knowledge of two distinct sets of directors and stock
holders, claiming be organized as hank, under one
and The same charter Ii should aso as itsees 10 me-
At Nil tines be required of the banks to keep certain
proportion Of their capital in specle and this should be
considerably urger than has usually beenkept on hTna
BY the greater part of well managed institutions. line
limit to which bank mny 20 in assuming l'noIi'ties on
nd hny c,sh funds should
cautious experience of few prospectus years, but
of long PERIOD including times Of pressure and d'sTnsl
In rejecting the lessons of such an experience ana In
extending their liabilities the utmost Expansion which
time of general prosperity and confidence will tolerate
many of our banks have, it is believed, committed an
error which cannot be too speedily reracted.