Burlington free press. [volume] (Burlington, Vt.) 1827-1865, 1838-04-20

II is proper security: and 10 most cases
no dnub, it is substantially advanced. The
directors are trustees of his fund, aud they
are liable. both cvilly and crlmlnally. for
mismanagement, embezzlement, or breach
of trust.
This amount Of captal, thus secured, is
he basis Of loans and discounts; and this
is the reason why permanent, or at least
long, loans are not considered so nappro.
pirate 10 banking operations, with US, as
hey are in England With Us, 1t is evil
dent that the directors are agents holding
n fund intended TO be loaned, and acting
between lender and borrower; and this
form Of loan has been fouod exceedingly
convenient and useful in the country.
In some States, it is generally preferred |
TO mortgages, though there are others 10
which mortgages are usual. Whether
exactly conformable to the true notion of
banking, or not, the truth is, that the OBJ oct |
and operation Of our banks is to loan mo
new; and this is mostly on personal security. |
The system, no doubt, is liable to abuse.
in particular instances. There NAV be
directors who will loan to freely to them
selves and their friends. Gross cases of
this kind have recently been detected and
exposed, and, | hope, will be suitably
trented but, considering the great number
of banks, these instances, ! think are re
markably few. In general, the banks have
been we'll conducted, and are believed to
be solvent and safe
We have heard much, sir, in the course
Of this debate, Of cxccss N the issue of
bank notes for circulation | have no
doubt. sir, that there WAS very impr oper
expansion some years ago When Presl
dent Jackson in 1882, had ncgntlvcd the
hI'l for containing the Bank Of the UnltGd
States, w. hicb act | esteem a. the trna
original source of all the disorders of the
currency,) a vast addition was immediately
made to the number Of Sine banks. In
1888, tn. pubic depostcs were actually
removed from the Bauk Of the y. States,
and placed ~ selected S ale Banks. And,
tor the purpose of showing how much bet,
) ter the Public would BE- Accommodated with.
out, than with. a Bank of the United States,
these baass were not only encouraged. hn'
, admon-hcd, TO be- free nGd lbera! 10 lonus
and discounts, made on Tho strength of the
pubic moneys, 10 merchants add other
individuals. The circular letter from the
Treasury Department. addressed To the
new deppsle banks, under date of Scptem
i Der 90, 1888, has this significant clause,
3 which could not have been misunderstood
"lhe depostcs Of public money will enable you
, TO afford increased facilities To commerce, and to
u extend YOUR accommodation to indis uals and as
: the duties which pay ,ble to The Government
. arise from the business and enterprise of the ner
r chants engaged in foreign rrlde is but reasonable
that they should he preferred in the additional
. accommodation which the public dcposires will ena
BILE your institution to give, whenever can he done
without injustice to the claims Of other classes o
: the community"
II Having read this letter, sir, ask leave
I. TO refer HE Senate to the Goth section o
y The bill now before rs. There we fiuc
J. that. "lf any officer, charged with the safe
u keeping of the public money, shall loan th'
r same, or any portion thereof, with or with
e ont interest, such act shall be deemed a
p embozzlement and n high msdemeaUor
Is and The party convicted thereof shah D.
Is sentenced to Imprisonment" Sir. what
l. pretty piece of consistency is here /! Il
, 1888 the repositories OF the public none
IS were not even left TO their own desire 70
Ut gain, or their wishes to accommoda;
others, as being sufficient Incentives I,
d, lend it out: they were admoul-hed an
i. directed to afftrd increased facilities I
rs commerce. and to extend their accnmoda
n ton 70 individuals, since the public money
T. in their vaults would enable them to Civ
Ne such additional accommodation Now. sill
OF under this bill. any officer who shall do an
IS. one of the same things, instead Of BEN
i praised. is to be pnn,>ncd: he is 10 b
Is adludgcI guilty Of emb zzlcm"nt, and {
nc a high misdemeanor, aud Is to be confined
N far aught | know, IN cells as dark and dts
Sc NAL as .he vaults and safes winch are
ed onain oui metallic currency. But, a
kc though ! think. sir, that the acts Of Gov
to eminent created this expansion, yet ] al
1t, certainly OF opinion that there was q yer
O. undue expansion created. A contraction
ge however, had begun: and am of opinion
of tia, had It no, been for the specie order
ut. July, 1886, and for the manner in whic
Is the depos're law was executed, the bank
rs. would have gone through the crisis wltho
g suspension. THIS is my tu and firm belle
ID, cannot. however, discuss these poin
iii, here. They were treated with very grei
lal ability, last year, by gentleman who the
ms occupied one ct the seats of Georgia q
this floor. Whomsoever he did not salsf
~. ! cannot convince. Sui, sir, the questlc
,d Is, whether there was an excess IN II
ch general amount of our circulation, in Ma
mo- last, or whether there be now such eXces
rht BY what standard is this TO be judged
90. II The question be- whether there be t.
or much paper in circulation, it may be al
lis, swered by reference to the amount of CO
are in the banks from which the paper issues
he because am unqurstlonaby of opinion
he an opinion which | believe nothing CT
The ever shake-that the true criterion
Mt, which to decide the question Of excess,
n cohVer''o'e paper currency Is tue a,nou
ate " that Paper compared WIN tue @o'u a.
| .Il..a. L.