Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1839-02-28
Testimony against Ere, Banking!


This system FIRST established in the u States, in
the Stale Of Michigan. What do her Bank Commission.
ers rep"rt to her Legisature' Their testimony
concluslvely against it.
"On the 18th day of March, 1887, the act peculiarly
entitled the general banking law passed. upon the
plausible principle of introducing free competition into
what was considered profitable branch Of business,
heretofore monopoized by few favored corporations
In little more than year. 49 banks organized
with nominal capital Of $50 900, and about 40 went
into actual operation under It's provisions These inst,
tuuns protrssed have actual and available opa
Of s. 6io OO0. 30 per cent of the nominal capital being
presumed have been paid in. according law in gold
and silver they authorized To Issue and put in ccu
la,on bank bills the 81 1862 500 being twice and
half the amount Of capital paid in and possessed The
feature of the act which authorized banking under the
suspension lawlhat to say giving the sanction Of
law, the issue OF promises to pay not liable to redemp
ton in gold and silver on demand, gave irresistible
impulse their by opening the door for the debt
or, Gada,e his liabilities by transferring the pub
lie al aIg his Indebtedness TO individuals The result,
is well known, and it is believed that is not too strong
language Ia assert that species of fraud and eraSiOn
OF law, which the ingenuity OF dishonest corporations
has devised, have not been pracsed under this
"The loan Of specie from established corporations, be-
ordinary traffic, and The money sci in
ton number Of institutions. Specie certificates, YETI
fed by oath every where exhibited, although these
certificates had been cancelled the moment Of
their creation, by draft for a similar amount and yet
such sublerfuges were pertnaciousy insisted upon as
fair business transactions sanctioned by custom and pre-
cecent Stock notes were given, Tor subscriptions 10
stock and counted as specie and thus not cent oil real
capital actually existed beyond the small paid in 10y
the u?righ, and unsuspecting farmer and mechanic,
whose little savings and honest nnne were necessary
to give confidence and credit The notes OF lnslitu-
tons thus constituted were spread abroad upon the
community, every manner, and through every pos
sbe channel; property produce stock, farming uten'
sils, every thing which the people of the country,
tempted by advanced prices, tn dispose Of were
purchased and paid for in paper, which were known
by the uttereIs, be absolutely YalueleSS. Large
amounts OF notes were hypothecated for small ad
vances, or loans of SPECIE TO appearances Guam
titles of paper drawn out by exchange checks,
that say, checked out Of the banks by individuals
who had not cen, in bank, with no security beyond
the verbal understanding, that notes Of other banks
should he returned, at some future time Such are. a
few, among the numberess frauds which were IN hourly
commission. Thus law which established upon
principles well csed and approved and hedged round
with much and guarded with many provisions,
that few, supposed would venture 10 bank under
it, became by the base dishonesty and gross cupdy OF
lew, who had The control Of the specie Of the coun.
try, nothing less than machine Of fraud.
Painful and disgusting the picture appears, it IS
neither coored overcharged and falls far short of the
reality.
"The result Of the experiment, Of free banking in Mi
chiSan, is, that al low estimate, million of dol
lars Of the notes Of insoven banks are due and unava
able in the hands Of Individuals
The commissioners conclude their report by recon-.
mendng the repeal Of the general banking law, the
Enlistment of State Bank proposed by the Exrcu
tive, undr the control of the Stale; and suggest the
popr;ey of prohibiting the issue ut bank bills untsr the
Denomination OF five dollars, at least
The Bank Commissioners (Aless:s. Prtchet!e, fe!ch
and BelD draw most disgusting picture Of the conse
Guences Of this Free Bank System in Michigan. They
state as .ihe result of The experiment. thai at ioc
agte, million Of dollars Of the notes Of inSOrsHt
banks are due and unavailable in the hands Of indvI
duals They declare that Standing Michigan does,
upon tie rams IF her edit and currency beooves her
10 carefully examine The caues. Irhich hare precya,ed
10 almost entire desTuction the edce lately erected
and by the hgh, Of other examples, and her expe
Renee to rear upon safer aud foundation. that
which her present condition calls upon her to establish
Fl these lessons do not warn the Citizens of virginia
to pause and ponder they would not be aroused Though
one from ,Ir dead
Tie Message We lay before readers the import
ant Mss<ag. Of The President Of the U. S. which was
laid before Congress Tuesday last. Its statements
ard language worthy o! oil praise. We should sup
pose that troUI the present amCuhe diplomatic relations
/ Of the ,wo countrias which Minister in London
has 80 wisely contributed 10 bring about there is every
to believe the storm m1y be dlsspaed and hosti
lsS prevented The Proclamation Of the President was
certainly received The best spirit by the British Min
s,erand i, was in every way considered as worthy OF
the Chief Magistrate of great people We should con
sider between the two countries il it can be no
morally avoided, Of the greatest caames which
can belal the u. 5.