Southern Argus. [volume] (Columbus, Miss.) 1834-1842, 1839-01-29


50 much misunderstood D thggleatymass Of
the people, as that u nc I ionOt pro-
nose, ,(were Icapable irving leesonon. that
s.ae Of 81 ''sneg, 4 81 tOsay ought mat night |
s. q strua ID 3 ostility 70 Ysl regulated |
for such are indispepsabIe 70 tbs com |
rnercial, agricultural, and sshanieal interests
Of This country.
The system Of Banking, however, e pur,
sued by some Of the Banks, Is directly at war
with the best interests of theI people, and #
examined into, viii show an alarming deficiency
of security. to thenOts or bib holder 4An-un-
Just discrimination between the credit Of bank
directors and individuals Of equal responsibility,
that are not bank directors unfairnesF
IN tils 81 saIeIiiouiing such mOnops
k6lies. without Throwing around the enormous
privileges conferred, such safeguards as would
effectually securs the community in any event
from losss all of which, needs but fimsy ex-
amination.to show that the security for their
4 issues depends, in many instances entirelykon
the moral honesty If those controlling them,
an ingredient at least as rare in the character
Of bank directors as thatOf. other individuals.
l win endeavCfso explain the several PROPOSE
) tons as stated. a. - TOO q yiae a'ai
Isstateasinat the system Of Banking, as prac-
dced by some Of the banks, would. If examin-
) led into, show that the note holder IS not Sc
! cure. -
II Is not necessary IN proving this assertions
to state the various devices that are resorted to
Ito obtain bank eharters-the Legislature, on
! application, thinks proper to charter bank,
and we have. to deal with such an institution
/ with all the weight Of character that the law
4, gives it The first essential provision inithe
charter, generally, is that the stockholders
e shah pay in at the time of subscribing for the
stock, 10 per cent in specie, or the notes ofspe
cie-paying banks. This regirisition IS mos
generally complied with, though in some case
: it is not. The next provision is, that 20 pc
: cent on the amount of stock subscribed 10
shall be paid at 80, go, or 80 days, Gas the cas-
: i may be,) in the same manner as the above
+ The most of the charters then go on to pro,
: vide that the balance of the stock subscribed
. for shall be paid stsuchtimes, andin such man,
J, ner, as the directors may appoint.
assert that the 10 per cent. is not always
/ paid as required by their charters.
r That the 30 per cent. is rarely ever paid al
I required, and in some cases not secured, al
least, not secured in manner that would au
1fl thorize an issue Of bank. paper to twice, O
7. three times the amount. Example:
r A. B. subscribes for 1000 shares BanI
a Stock, ($l0O,OOO,) and pays at the time.7o
Al subscribing, 10Per cent. tea5 $1,000
= The time allotted fef the payment
!, of 20 per cent. arrives, and A. B.
II gives his note, with no security
- but the stock, which he pledges, $4,000
s. feg3 Sc 5sasT.s 3las4 Capital, $4,000
re IF the charter authorizes the issue of tW
d dollars for one paid, or assumed to be paid, /;
z above, sixty thousand dollars of the notes
] the bank would be put in circulation, or
4 three to one, ninety thousand dollars would b
j put in circulation, on ten thousand dollars
r. cash, and A. BIS note for twenty thousan
IS dollars. But suppose A. B. to be worth gbr
er $4,000, the amount OF his note. notwitE
al standing the stock is pledged, would be tot,
Of loss, and the bank would have IN circulatio
a. so or 100000. aud have as a basis for th
q enormous issue, ten thousand dollars only ;:
y these are things that some banks practice, an
! more, for A, B., in some cases, IS allowed t
! withdraw on his note, 2773ds Of the $4,000
i and if he should get his note discounted Il
q the amount. without security, or with insult
\. Icient security, the bank would have in circula
r. ton, sixty or ninety thousand dollars of he
IA notes. on 1888 80. capital A. B., as
et stockhalder or airectoref a bank, is. therefore
II by the covering of bank charters enabled t
issaeas money. $1,000 dollars, on a capital &
2 s3sS3S 3S--when A. B as an individual IN
y connected with a bank. would not be CONSIDER
J ed safe if hisil;abatfes sh6ald exceed his as
!. 4sets. Il ts'3oa1 $ lss1j sEeft ,ea Fissfes.e
~ It is unjust in the Legislature to grant to il
N dividuals a mopopolIzing privilege, unless II
d benefits to the community resulting from til
business Of such monopoly, should be. such a
t wouldbe for the general good, which, IN we
regulated banks, complying with the spirit a
well as the letter of their charters, nigh
be the case-uFnless, however, the Lcgisatur
4 enforces a compliance, on the part Of sue
s banks as infringe their charters, the interest
e of the peOplesare1 endangered, and such han
I directors are BY law made a privileged lclas
Of the community. at the imminent hazard !,
y every individual that touches the notes Of suc
! banks; and if the directors are not striefl
J. honest men, and they might be honest. fran
q Of the blacklist character might be practise
I 3 with impuntyi and, from the want Of inar
q gal ability The community made to sustai
Y slsslFl iR' sel's3 6ssaa5assnssso.9 as rse.
n lloeA tFtheE sEidepee Of the.danger 70, wbie
the cepmunityislhou exposed. Is thntstoek
holders IN banks arc not liable, if5the- ban
shohldfaas for more than the arnouatsof. stoe
i they may individually own. Il S then = ne
h ter iof'gFeat Consequences tosshe coiahS6ni,,.,
: know Whoafe stoek h0laeFs, and s,aesi6tl
Z StOek. owned 81 each; ior kIro9 wort
4 $l00. 600 may Be 4 director 81 6snlI.. a
y own oily ID shares 81 dstotk, When NE j
worth only $1,000 ID may Be ! director g
6 own gq shares and IS Mr.. IA. would moi
~ Fnrn0nrihYn for NO., 81 -. q =, -, ftsl