Maumee City express. [volume] (Maumee City, Ohio) 1838-184?, 1839-12-14

radically defective, which did not regulate
the issues of the banks, and the amount Of
paper which they could put in circulation by
some fixed rule. In state bank, or sys-
} TEN of independent banks, the amount OF
} bank capital can be fixed by law and made
to correspond with the wants of. the COM
munity; and the amount Of paper which
they may put in circulation can be limited
by their charters, and regulated by the
amount of specie IN their vaults. This
cannot be done in any system of free bank
ing which has come under my observation,
without destroying its distinct character.
We have seen in the state of New York,
where this system has been recently intro
duced, banks organized under it, in one year
having an aggregate amount of incorpora-
ted capital OF over four hundred millions.
In the state of Michigan the same system
has been tried and failed. The difficulty OF
procuring state stocks, and converting them
into money when required and the uncer-
talnty of raising money by sale of lands,
mortgaged, constitute objections to the
adoption of this system in Ohio worthy of
consideration. However plausible in theo-
ry it may appear, | doubt whether it is the
best means that can be adopted to secure
tue end in vIew,-a currency Of uniformity
and steadiness of value.
A system of independent banks properly
restricted and limited in their power, placed
under the supervision Of bank commission
ers, and being at all times under the control
of the Legislature, if not the best system
that could be adopted, is perhaps the best
within our reach, at the present, or for some
time TO come. In adopting this system,
however, there are certain principles and
provisions which would deem essentially
necessary to be incorporated in it in order
to guard against the abuses and evils which
belong to the present system.
Each stockholder should be held person.
ally liable for his proportion of the debts of
the bank, to be estimated according to the
amount of stock owned by him. No bank
should be permitted to extend its liabilities,
exclusive of deposits, beyond three times
the amount of specie in its possession at the
time of such extension. Each bank should
be required to redeem its notes in gold or
silver while it had the means Of doing SO,
and if it refuse so to do, or if it suspend for
the want of means, beyond a limited time,
in either case it should be deemed for
feiture of charter, and visited with suitable
penalties. All notes of less denomina-
tion than five dollars should be carefully
excluded from circulation. Each bank
should be required to publish, at stated
times, under the oath Of the proper officer,
true statement showing is condition.
The directors should be prohibited from
borrowing money out of their own bank.
No bank should be permitted to issue post
notes for circulation. The banks should
be prohibited, under severe penalties, from
dealing in produce or merchandise, or buy
ing the issues of other banks at discount.
While these restrictions would remedy, to
great extent, the evils which now exist in
the present system, they would in no way
operate agains. fair and legitimate banking,
or prevent capitalists from realizing lber
al profit on their bank Investments. They
would operate solely on the fraudulent or
reckless banker and guard the public against
all loss. If the system of independent
banks should be adopted in Ohio, with these
principles of reform Incorporated in it,
with some others of minor Importance, and
firmly adhered to, believe it would, in due
time, command the entire confidence of
the communicable entirely safe and secure
to the public, and furnish us with circu-
lation which would approximate as near
uniformity and steadiness of value, as can
be hoped for under any paper system which
we can conveniently adopt. This system
could be adopted in this state and carried
into successful operation without producing
any sudden shock in the business relations
of the community.
All that is necessary to regulate the ex-
changes of the country, and bring them
down to the true point is, to secure sound
currency capable at all times of baing con-
verted into gold or silver. "Exchange is
an order for the payment Of money IN uno-
ther place." and should never much exceed
the cost of Transporting specie to that place.
Whenever it is beyond this, it is too high,
and owing to some artificial cause. It'is
:, obvious that if we had a permanent and
settled policy of banking, and bank paper
was at all times convertible into coiny that
exchanges on the eastern cities would ulti
mately settle down to something near the
cost Of transporting specie from this TO the
desired point. This ought not to exceed,
ordinarily, more than one per cent, and is
le true principle which must in time regu-
late the exchanges of this country.
The banks in this state, judging from
their last quarterly report, are generally in
sound condition. 1t is highly creditable
to them that they have, with few exceptions
continued to redeem their notes on demand,
while like institutions elsewhere, have been
under the necessity of suspending specie
payments. 1t is much to be regretted,
however, that few of our banks deemed
it advisable to pursue different course
Whether this was with view of prevent
ing specie from being taken out of the state,
sor whether they were governed by other
considerations, am unable to say. How
ever correct their motives may have been
in suspendIng specie payments, the effect
on the currency is unfavorable. 1t is much
better to lose portion of our specie fol
time, than that public confidence should be
destroyed in these institutions, and the
country filled with depreciated currency,
which must necessarily take place when the
banks fail to redeem their notes on. demand.
Most, if not all the suspended banks are,
however, paying specie for their notes.
Inprescnting my veiws on the subject Of
the currency, and the improvement Of our
hankiu0 erstem nj the time IL ia done