Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1839-11-01
REPORT OF coMMIrTEE ON BANKS,
10 the House Of Representatives, non ia

whetnef II IS t1pedient 70 Charter or fechart.
er any banks without making The private
property of the stockholders liable
for all the debts OF the bank. or without
making the stockholders give ample security
for the debts Of The bank, and to report, by
bill or otherwise" beg leave respectfully 10
make the following report;
While the lossrs sustained by The comfnu.
Unity have as yet been from but few Of the
banks 10 this stnte the events of the last
yeats, and especially some OF very recen,
date. admonish us that 10 ;he granting or re.
newal Of charters for such institutions. a
waichful vigilance for the security olihe bill
holder is not only required by public senii.
mrnt, but is just and reasonable 10 ITSELF and
is the only way to continue that confidence
without which paper money loses all claims
10 public favor.
All must agree that il is incumbent on the
government which grants 10 individuals the
exclusive privilege Of substituting paper Tor
coin as circulating medium. TO provide for
the community who are 10 receive such paper
the best security that may be practicable. iha,
such paper should at all times be converla.
Bile into gold and silver. And while the
clearrst principles OF justice demand this for
the safety Of the public. the highest consid.
ersiioDs Of policy as il regards the banks.
require that every efou should be made 10
place them on such footing Of stability and
permanence MS will inspire reasonable and
necessary confidence in their solidily and
strength. Panics and pressures. though ne
cessarily attendant on an extensive system
OF paper circulation, are greatly aggravated,
and their calamiious effects arc mainly pro.
duced. by the feeling. that there is for the bill
holder no positive and certain ultimate secu.
rity Hence il would seem that banks Them.
selves. that design 10 do fair and legitimate
business upon actual capital. equally with
the community. Interested in their being es.
Iabished upon. as already stated. grounds
which may be the best calculated 10 inspire
mistaken confidence in their ability aud sa.
| frty
Taki&k counsel OF experience. FAR safer
guide th& imposing theories or confident
assertions-we ought 10 conclude that those
provisions intended as safeguards. which
have heretofore been found Intellectual. will.
with more probability. il not certainty. prove
so hereafter The history ofbnnking 10 this
country demonstrates that nearly all bank
failures arise. eiihersfrom wan, Of actual
capital paid in, from fraudulent practices. or
FROM neglect or mismsnagemeEt Of the di.
reciors.
| Failures OF banks chartered under The ex.
isting laws ofihis state. can scarcely take
place for The want OF capital paid IN, il those
laws ale faithfully and rigidiy enforced. u
the fraudulent conduct OF bank directors
should be made highly penal. the committee
k..is fail hal
be- much less likely TO occur. And failures
from the neglect or Encouragement Of the
directors. would. as is believed. BIZ most like
ly to be checked. by repairing from lhrn
and the stockholders, a higher degree oil re-
sponsibiliiy to the community awakening
that vigilance, and inducing that csuiion
which walchful and prudent men exhibil 10
the management OF their own private sfisrs-
With r-gaid to the mode OF accomplish
ing the grra, object in view, the commiiiee
are aware tina, some diversity oil opinion
may exist But they have seen with regret
that while the opponents oil reform are con.
strained 10 edmit that "wisdon would seem
10 dictate. that we adopt and incorporate
into our system. such additional seruri.
ties and guards. as will effectually en-
sure the safety OF community" they. al the
same time. endesvor TO destroy the effect OF
this administration, by attempting to throw
discredii upon the opposition, or as il has
been termed. the cry ngalnst bank monopoly,
and BY insinuations, tending 10 disparsgethe
means conceived 10 be necessary 10 remedy
the existing evils. MS we'll as the motives Of
those who dssirethe adoption Of such means.
We are told that hanks "werr created expires
slv for public convenience" II ibis is true,
we believe il 10 be the imperious duty oil the
Legislature to charter them. only on such
conditions, as will ultimately secure the bill
holder against loss and. Notwithstanding
The party IN power have seen fit TO publish TO
the world. that "nany visionary propositions
on this subject. have been. and doubtless will
continue 10 be submitted. from various mo-
lives, which, though specious in theory. will
be found, on examination, impracticsble and
unsafe in their operation" Still. your COM
mitee believe. that II these visionary meas
uyes OF reform. as they have heen called by
some, had been incorporated into bank char
tiers ofthis state. that the honest bill holders
would no, have suffered those severe losses
which the present unsafe banking system has
brought upon them. Assuming, then. that
The present banking system is unsafe. your
committee believe that the interest Of com
niuniiy requires. thar the Legislators. with
out distinction Of party. should immediately
bring about a reform. notwithstanding ws
have been admonished TO embrace with eau
lion any new and un,ried measures. ~
As il respects the manner Of obtaining for
Their s.curitv the making the stock holders