Southern Argus. [volume] (Columbus, Miss.) 1834-1842, 1839-12-17
GOVERNOR BAGBYss MESSAGE.

we lay before our readers, that portion of Gov
ernor Bagby's Message relating to the Banks
Of Alabama. His Excelency, it viii be per-
ceived, is not so destructive in his recommen-
dations as some Of his party no doubt would
desire him to have been. In which he has
shown his good sense at least, however much
it may be disapproved of by those who differ
with him in opinion on this particular subject
Withal, however, the Governor is little mon
committal, " as he is willing to waive bus own
views, and give place to those of any one else'
who may, as he says, suggest better;
"a careful inquiry into the affairs and con-
dition Of our Banks, as well as the principles
on which they have been conducted, seems
not only to be demanded by the condition Of
many, and what is likely to become the condl-
ton Of most, if not all the Banking institutions
in this country and in England, as well as by
the deep and important interest which the
people at large have in them, but by the higher
consideration Of public morality, and phghted
public faith.
These institutions, it viii be recollected are
founded on capital raised ~ the sale of Stock,
for the redemption. 81 which the faith and credit
OF the State are solemnly pledged; and are
owned exclusively by the State. To them the
peorraie look for relief from their pecunIary en-
barrassments, to the extent OF their ability, TO
meet their engagements to the Banks, with
promptness and fidelity. And upon the faith
ful, and successful management OF the Banks
must depend the ability of the State to redeem
its faith and credit solemnly pledged for valu-
able OBSERVATION-DISCLOSURES indeed we look to
the last resort, the imposition of direct tax
upon the people for that purpose.
Viewing our Banking institutions, then, in
either of the lights presented, it is perfectly
obvious, that they involve considerations of the
greatest magnitude to the present and future
generations, considerations intimately con-
nected with the public morality, and interwo-
ven to some extent, with the permanency and
duration ofthe Government itself. 1t is not to
be concealed that excessive Banking is and
has been the great paramount evil of this, and
indeed of most countries in the civilized world,
for the last twenty years. Before the resist
less torrent of excessive Bank issues, the safe
pursuits of ordinary business have been aban-
doned; honest industry has been seduced and
decoyed from the employments in which labor
found fair and adequate reward public NOR
atty has been undermined by the profiigacy
and extravaganza consequent upon the easy
facility, with which the representative of mon-
ey could be obtained to almost any amount
and the very foundation of society shaken to
IFS centre, by the revulsive shock created by
the sudden obstruction Of this prodigious
stream in its frightful course.
In the remarks, design to submit to you, il
is not my intention TO attempt to investigate
all the causes, which led to the Pr esent condi-
ton of our Banks-for hold it to be the par
OF practical wisdom, to exert itself in relieving
from difficulties, rather than to exhaust itsel
IN frultess inquiries as to the manner In which
they were supernduced.
That the contraction of public debt, should
always be accompanied by the means, or GER
tain prospects of extinguishment at giver
period, appears to me, to be one of the sound
est, as well as one of the plainest maxims II
political economy. But it seems, that III the
management of our Banks, and in the manage.
ment of all Banks founded on capital obtained
in the same way, this salutary principle has
been lost sight of-and, that instead of pursu
ing that prudent and cautious course, by which
they would have been annually able to realize
sufficient profit in money, to pay off thei
stock by the time it became due, they have
literally sold out their capital, amounting, IL
this State, to upwards of ten mlillons and nov
find real difficulty in sustaminga circulation o
three or four millions.
Perhaps of all the errors-to call it by M
harsher name-into which the Banking lnstl
tutions of the present day have fallen, there il
none more fatal to their credit, or destructive
to their successful operation, than selling o.
lending out their capital for ordinary promisso
ry notes, or Bills of Exchange; thereby de
stroying that Just and Indispensable proportion
between basis and circulation, without tht
constant and scrupulous observance of which
it may be safely affirmed, no Bank can Ions
| redeem its paper, or maintain its credit. In
deed, it seems to have been reserved for thu
ingenuity of the fnanciers of the present age
to discover the impolcy of Banks keeping
their capital in their vaults, although, in man,
instances, actually srequired to do so, by thu
terms of their charter.
The argument is, that in this situation it i
dead, idle, inactive capital; and that if prof
| could be made upon it, it ought to be employed
instead of remaining as a foundation to sustain
the credit, and redeem the paper of the BAN
when presented; and hence, It invariably hap
pens, and invariably willhappen, while effect
continue to follow their causes, in the progress
of ev, nts, that banks which pursue this course
never can sustain themselves amidst thos
shocks and commissions, which conflicting com
mercial and pecuniary competition Away
produces: and suspension, and inability to pa
is the inevitable result. For Ihold it to be a
true in banking as in architecture; that n
solid or valuable superstructure canbe sustain
ed, unless it has firm and substantial basis t
rest upon.
Another, and most prolific source of evi
connected with our Banks, is the mode of cleo
ting Bank Directors. If this should be doubted
or require confirmation, think, it will be foun
IN the fact, the evidence of which is furnishe
by the records of the Banks themselves, tina
two sets of Directors, and the members of tn
Legislature for two successive years, embra
cling the same period, obtained accommodation
to larger amount, and viii probably be tn
cause of greater loss to the Banks, than tn
whole community besides. This in itself woul
seem to be a sufficient commentary upon tn
present mode of electing Bank Directors. LIE
! IT not be supposed for moment, that it is in
tended to cast censure, either upon forne
members of the General Assembly, or upo
those, who were entrusted with the difectio
! and management of the Banks. My object
! to correct, if any influence can exert, can e
} feet it, an evil which has brought embarrass
ment upon the community, and state of cor
fusion and arrangement little short of ruin upo
the Banks; and the General Assembly will
Justly responsible to the people, if they lend th
| h;gh sanction of their appreciation to the cor
tinuance of a measure fraught with such in
mense consequences to the Banks, and to th
community at large.
1t is admitted, with pleasure, that the law
the last session reducing the number of Diret