The Hillsborough recorder. [volume] (Hillsborough, N.C.) 1820-1879, 1838-05-04


eight millions sierling-made up Of eigh-
aeen millions Bank Of ERglsnd notes. and
ten millions Of The notes Of private bank
srs and l0ins-sIoek companies; bullion in
The bank. nine and half millions; debts
due the Bank Of England. twenly-lwO
and half millions. The amount oflOans
and discO0nIs by private bankers and
inini-slaek companies 10 not usually stat
/ Cd. l belieEe. in the public accounts. II
il bear The same proportion In their notes
in eireulstion. as in the case Of The Bank
af England. Il would exceed twelve mil
lions. We NAV. therefore. take the
amount OF bank asbls in England 10 be
lhirIy-iiFe millions. Dot suppose that.
Of the securities held by The Bank Of Eng.
laGd. exeheqner nnies constitute . large
parl: in other words. that large part Of
lie bank debt il due BY The government.
The amount of coin in actual circulation
i estimated 10 be thirty and half mil
linns. The whole amount Of circulation
in England. metallic and paper. l. Usually
stated. in round numbers. al sixty mil
lions: which. rating the pound slerlir: al
!. 81 so, is equal 10 two hundred AMI sigh-
ty-eighl millions Of dollars.
| u will be seen. sir. li.ai our paper cir
culaiina is one half less Than thai af Eng
land. bu, our bank deb, is. nevertheless.
much greater: since ihiriy-fEe millions
sterling amount 10 only one hundred and
sixly-eight millions Of dollars; and this
sum. too. includes The amount 0f exrlle-
gher bills. or government debt in the form
nf such bills. which the bank holds.
These facts are very material 10 any jus,
comparison Of the state Of things. in the
two countries. The whole, or nearly the
whole capital of llle Bank ol England. is
lent To the government. not By means Of
exchequer mites. but on q permanentlOan.
And as 10 the private banks and joint
stock companies, though they issue bills
for circulation, they have no assigned or
appropriated capital whatever. The bills
circulate on the private creditof the indi-
vidual bankers. or al those who compose
the ioin,-s,ock companies. In the Uni
ted States. an amount Of capital suppos-
, ed 10 be sufficient 10 sustain The crediiof
the paper aud secure the public against
loss. is provided by law, in the act Of in
corporation for each bank, and is assign
ed as a trust fund for the payment Of The
liabilities Of the bank. And If this cspi-
tai he fairly and substantially advanced.
il is a proper security; and in most Ca
ses no doubt il is substantially advanced.
The directors are trustees Of this fund.
and they are liable. both civilly and cri-
minally. for Encouragement. embezzle'
aeni, or breach Of trust.
This amour, Of capital, thus secured.
is the basis of loans and discounts; and
this is the reason why permanent. or at
least long loans are not considered so in
appropriate to banking operations, with
us, as they are in England. With US, it
is evident that the directors are agents,
/ holding a fund intended to be loaned. and
acting between lender and borrower; and
this form Of loan has been found exceed
ineiy convenient AM useca! in The coua-
! try.
/ In some states, it is generally prefer.
red to mortgages. though there are others
: in which mortgages are usual. Whether
exactly conformable to the true notion Of
banking. or not, the truth is, that the OBJ.
iect and operation Of our banks is to loan
money; and this is mostly on personal
security. The system, no doubt, is liza
bic TO abuse, in particular instances.
There may be directors who will loan too
! freely to themselves and their friends
Gross cases Of this kind have recently
been detected and exposed, and, I hope.
will be suitably treated; but, considering
the great number Of banks, these mstan.
ces, think, are remarkably few. In ge-
neral, the banks have been well conduct
ed, and are believed To be solvent and
safe.
We have heard much, sir, in the course
of this debate, of excess in the issue of
bank notes for circulation. have no
doubt. sir. that there was very impro-
per expansion some years ago. When
President Jackson, in 1882, had negativ-
ed the bill for continuing the Bank of the
United States, (which act esteem as the
true original source of all the disorders
of the CURRENCY vast addition was i'm.
mediately made. to the number of state
banks. In 1888, the public deposites
were actually removed from the Bank of
the United States, these banks were not
only encouraged, but admonished, to be
free and liberal in loans and discounts,
made on the strength of the public mo-
neys, to merchants and other individuals,
The circular letter from the Treasury De-
parlment, addressed to the new lepnsite
banks, under date of September &c, 1888,
has this significant clause, which could
not have been misunderstood:
" The deposiies Of public money will
enable you to afford increased facilities TO
commerce, andtoextend yoursccomuoda-
tinn to individuals: and as The duties which