Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1839-01-12

limited, and their hopes Of gain rot 50 wen ''""D'u Is
Tie blnkers .,,,r, :;
NO., ury l,a,u.e in the system al huakInE tie Sem"
tisl, bluks AID The English Country oahk' are ~, 's:'
h-, on tbs pncIpr; and, III ssVr'"' o. '''e ''""
I ,,riuc!, under certain limitations aud restrictions,
is recngnz"d. ,1
.car,iis.s in those countries have no: oen "'tFF'eu
from ycs..nr r;r capital III those !rs.i ui"hs' on "I
count of the individual responsibility al ts s''' '.''u
cr Thnsr banks have continued, Tor many years !h
and uns!aksn-ralauirg the eEtiIr confidence !" VI.
can:,uuity In which they exist and iE'n!s''ns U.s.
the same time what evidence OF tli" p'achcao''y VI
establishing banks upon this principle, and Oh 'he'f en-
tire safety I" the public .
"Anctier prcmnem, evil Of the present banking sys
tenn is lis constant and inherent tendency to alternate
eypanson and cunlraclion-s power Of creating ana
putting III circulation an excess OF paper money, or ee
ccas;;r The quantity in ciTcua,:on at pleasure, ana
thereby inducing, occasionally, over "auihs anu
oucnl bankuplcy-and creating Facilitating, uncertain
and fictitious of value, Ious TO ali Inc stea
Interests oil l!l% country. :.
.Any system q! banking, which admits OF an unlImi'
ted issue Of psTcr, without due reference 10 e specie
bosi. on which it rests must be radically def Give
Gold and silver is the only basis which banking can
be either safely prudeny conducted and: SO i1ng as
the banks not required 10 have certain proportion
Of specie TO The amount Of their liabilities SO long We
NAV expect 10 witness continuation OF those e8pan'
sions md cont.aclons which have disturbed the bust
ness order of the community, al umes ever since the
creation of the present system.
Nest of our present bank charters require one half
Of The CAPITAL stock TO he paid in specie and Of
the recent charters require the whole but Of The
banks required 10 keep Up certain amount oil specie
in proportion their Liabilities. Tie consequence is
HAT The banks impelled By desire Ter gan extend
their issues without any regard to Their ability 10 'edecm
their notes in specie Nearly all the Tevulsions IN the
trade and business of the country with which we have
been nfrcled, have been owing 10 the alternate ezpen
sions and conraciions Of The banks When ire banks
e1pund, and money is plenty, men are induced TO eX'
hnpI.
tract their issues aud money become property
ialls-creG i. shaken-busness men are unable TO meet
their engagcmcns and compelled to collect IN their
clamsthe consequence is, general pressure Inc "a
dCa defect is that there sufficient check on hr pro
pensily in the hanks extend their liabilities RENE.
DIV the evil far practicable, bank should be au-
thorzed extend lis liabilities exclusive Of lis deposes,
beyond three times the amount Of specie IN ils p0sessIon
at The time Of such extension The effect OF this provl'
sion would be, 10 compel the banks when Their aOiI.
ties Exclusive Of depOses exceeded the proportion OF
three dollars 10 in specie in their ro>sess:on ocease
increasing their liabilities 1t would sccufr al all tunes,
extended specie basis and decrease the prooaol'
lties Of bank suspc In England custom, among
the banks has given 10 this provision the force OF law
and in Louisiana, believe, IL is incorporated into their
banking system In order to ensure the observance oil
this provision the part Of the directors, It's violation
should be forfeiture Of charter and the directors AS
sentipg such violation, be made individually liable 10
the stockholders and creditors for a.! injury sustained
"Thc suspension of specie payment by The banks must,
all times and under the most favorable circumstances,
be great evil; but nj time when commerce and all Tie
various branches Of business in high state of pros
prry ii is public calamity, which the utmost care and
prudence of The Legislature should be exered to pre-
vent When the banks suspend specie payment nne re-
fuse comply with their contracts Tie consequence
must be rapid depreciation Of their paper IN The pock
cts of the people The various suspensions OF the banks
since 1912, and the consequent loss of millions 10 the
people, by Of the depreciation OF bank paper ad
nonish that cannot be too careful IN protecting
nnr lreS aInst suc hereafter
But the actual loss which the public sustain IN The
depreciation OF bank paper is not the ony evil resulting
from bank suspensions The deprecated currency that
takes place drives Ill the specie out Of the country or
locks il up in hidden places. The country is flooded
with small tickets and spurious paper circulation lhe
solvent and nsolvent institutions cVntnunded toge-
her and general distrus and want of confidence per.
yades the whole community.
"For The purpose of avoiding this evil hereafter, the
banks should be required 10 redeem their notes while
they have the Of doing so; and It they refuse TO
do So they suspend for the want ct means, beyond
limited time, in either i, should be declared for
fixture Of charter and visited with other suitable penal
ties.
The banks should be prohibited, for the present,
from issuing putting in circulation any notes OF less
denomination than FIVE doars and ultimately, their IS
should be restricted to nues OF ten dollars and up.
wards This would furnish with an every day cur.
rency, be used in ordinary Transactions composed OF
gold and silver; while substantial paper money would
be used in the extensive business operations OF Tie
y.
Of the banks increase the specie circuGlon and purity
the currency of the Stale.
Each bank should be required 10 publish, quarterly,
true statement of the condition and situation OF lis at
fairs under the oath Of the president and cashier 20
that the people may, at all me., be able to know the
banks that worthy Of confidence, and those that are
At present. the secrecy with which The ntfairs CT
banks conducted renders it impossible for the peo-
pie know the good from the bad ones, until 1t IS loo
late 10 guard against loss.
"The legislature should rc,nin by express provision,
the power Of altering, amending, or repeating bank
charters al pleasure This provision would compel the
banks consult the wants and interests OF the people,
which is now, in most cases. secondary consideration.
They would feel their responsibility to- and their depend
the public; ard seek popular favor by deserving
il. Experience might show, that additional restrictions
and limitations should he imposed on the banks OF that
the rgor of their charters should be diminished,
reiy of circumstances night occur, which would rem
der bank uncalled-tor by the public interest, which
expedent al The time of lis creation In all these
cases. would be proper for the Legislature to possess
tie power of acting in reference to those Institutions
the pubic neres, might require. The representatives
Of the people would exercise this right, eIceth
public good demanded il, and then only in such man
Ia the equitable rights OF the stockholders
am aware that many entertain the opinion. that the
Legislature possess the right to repeal bank charters
without any express reservation of such right How
ever well founded this opinion may be in principle, II
mus, be recoleced, that there is strong current Of u
dical decisions the other way and that courts, io
lowing the legal presidents, would not, in all probability
recognize the right To all Judicial controversy,
therefore, prudence demands that this right should be
pressly reserved in the charters.
The stockholders should be prohibited from borrow
ing money out Of their own banks. This would, al
least prevent persons assoclang themselves together
obtaining bank charter, and monopolizing the stock
with The view of controlling the bank, and furnishing
themselves with money, indefinite length Of lime for
speculation. The directors frequently grant indulgen
TO this class Of creditors inconsistent with The safety
of the institutions over which they preside. One Of the
great objects of Incorporating banks is, to concentrate
The surplus capital Of the country for banking purposes
and not 10 enable few individuals who have no sur
plus capital to create money TO supply their own wants
II would remove inducement TO fraudulent bank
ruptcy, and insure more impartial administration Of
the affairs Of the banks.
"By incorporating these various provisions into the
banking system OF the State many of the objections and
evils belonging to the present system believe, would
be removed greatly obvated; and instead of having