The Caledonian. [volume] (St. Johnsbury, Vt.) 1837-1867, 1838-12-04


one cannot consent TO its adoption until have
some new evidence that we can do it with safety.
There is, Mr. Speaker, d charm in the project
requiring the personal liability Of the stockhol-
ders for the redemption of their bills. And
confess have anxiously desired that some plan
might be ma,ured by which this fanture nigh;
be incorporated with safety into our system of
banking. But sir, the more | have investigated
the subject the more j have been led to doubt
It's adaptation, under any modification, 10 our in
stitutions
There can be no doubt but n sound policy
would dictate that in creating banking corpora
tons, their charters should he SO modified as to
secure extensive and somewhat equal distri-
button Of the stock. The safety of the bill hoI-
ders is, to certain degree, identified with the
feet that the stock of bank is distributed among
II greater number of stockholders. Whatever
tends TO monopoly, increases the facilities for
fraud and hazardous speculation. Hence the
importance of that system which shall present
an lnducement TO small capitaliss-our farmers
and our tradesmen, who by dint of industry and
economy have accumulated a few hundred dol
lars against u rainy day--to invest more or less
in bank stock.
But sir will the proposed amendment if adopt
ed, have this tendency? viii any prudent cap
italist subscribe to the stock of such bank?--
What sir, will be the operation Of this measure?
The stakeholder not only pledges bis capital, as
III all cases, for the redemption of the bills, bur
he is required to secure TO the Treasurer OF the
State, by way Of bond or mortgage, an equal a
mount, which can in no event be Withdrawn I'M
til the expiration of the charter, the failure OF
the bank. If he wishes 10 transfer his stock,
still his pledge must remain: if lie dies, his adj
ministraor cannot control it, nor his heirs inner,
1t II, until The concerns of the bank are cloSed.
Gentlemen in the support of this measure have
SAID they were not opposed TO banks, their only
object being to make them safe. But submit
the question to the plain common sense OF The
House, whether this scheme, if adopted, would
not eftectualy prevent subscriptions TO the stock,
and thus virtually destroy these institutions.
1t may not be improper here to indulge in as
Few remarks IN relation TO the proposition pre-
sented 10 the House in the early part of this dis
CUSTOM involving the unlimited liability of the
stockholders This proposition told,
could not fail to afford perfect security, and thar
1t was a requisition with which the banks ought
to comply.
I, Sir, could have no objection to this feature
in our banking charters, could ] persuade my
sell that gentlemen correct in their views of
ITS practical operation. Whatever actually tends
to add security to the public will meet my cor
dial support. But after the most careful exami-
nation, have been irresisbIy led to the con-
Vlction that II would weaken rather than increase
the security Which the public otherwise might
have. It's tendency would be to create monop-
ohes-te drive from banking operations the great
body OF small capitalists, and to- concentrate the
stock OF each bank i'm the hands of very few
having commence III GaCn Otner. In IO0O
a report was made 10 the British Parliament, adj
verse to Joint stock banks of &5 and e 10 shares,
lest they should degenerate into mere savings
banks, IN which Servant men and servant
men and little tradesmen will put their money"
And the committee in urging there the same
feature proposed in this House, add that banks
OF unlimited liability present the names of"men
oil rank and fortune" shareholders, upon
:" HON they rely as giving credit to the institution.
IL, SIR It be in accordance with the spirit of
our redublican institutions TO modify our acts
ot incorporation as to drive from them the mon
~ OF SERVANT men and women, and little trades
mem and farmers. then sir The proposition for
The unlimited liability of the stockholders should
be adopted. But sir viii it add to the security
1t The bill hoders' ! doubt not but the stock
would he taken, and that banks would go into
operation under this provision. Bnt these stocks
will he found in the hands of men who of all
others should be The Inst to engage in banking
operations. While the real capitast-the mon
~ lender, will Withdraw, and invest his money
where it shall be within his own control-there
will be found in every considerable village am
bilious business men, who, for the privilege of
'sng the facilities of bank in the prosecution
II their business, or specuaions, will readily
axe the stock, and assume the consequent re-
possibility; but the capital requisite tor safe
banking operation will be wanting Their rep
'taIion for shrewd business calculations may
I'VE credit to the institution, but their want of
experience in the science of banking, together
WIN the conneXion OF the concerns of the bank
WITH their other operations must ultimately de-
ange its affairs, and indicate TO its managers the
,ropriety of sIlrrenderDg it to other bands
The stock will be transferred, and in the event of
failure, although by the charter the private pro
erty of the stockholde is liable for the reielnp-
ion of the bills, those sockh oders will be found
D be residents of the city of New York or other
oreign parts and wholly irresponsible. slrat
Nor will a lien on real estate secure the pub
C from loss where bona .fde cnsh capital is
wanting. The bills on such bank may ultimate
he fully cancelled, hut not until they shall have
cen bought up at large discounts by brokers
Ill experience shows this. Look at the wildcat
money of Michigan. No one doubts but the
,nds pledged for the redemption of those bill
re valuable, and ultimately will be sufficient for
leir redemption. But does this fact give
sncy to the notes? No Sir trwhat was re-
arded as abundant security upon real estate,
lie notes of these banks are selling at rilinous