Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1840-12-04

oral Assembly,
saaad, and s,eodv resumption will be made and 1t
- nroner that the Legislative authority should take
stems to facilitate and desirable ana necessary
result The quarterly reports from these hss'leslon9
10 the Executive required by the act oil March, ia9''
have been regularly made by most oil them. Inc
Merchants and Mechanics Bank, not having accepted
the provisions OF the act Of March, 1885, providing &C.
neral regulations for the Banks OF the Commonwealth,
Is mol required TO make these reports. statement oil
The condition ofth1 institution, however, was received
in July last, and will be found with the oiher reports
accompanying this communication 30,
Having received intelligence Of serious deialca-
ton and erbezzemenl in the Bank of Virginia. III the
month of April last ! deemed it my duty under ihe
act Of March, 1887, to appoint three commissioners !"
in.pect and report the condition OF that lnsti tuloh
Their report, together with The instructions uhaet
which they acted and the correspondence between
this department and the president oil the Bank OF
VIRGINIA, are herewith submitted. Criminal pIosecu-
tions have been commenced against some Of me par
lies implicated in this transaction. The report oil
these commissioners, and the subsequent ACTON o me
s,ockbolder. of this Bank, are the only sources Of III
formation as 10 lis condition, 10 which have had &C
cess These indicate very considerable loss 10 the
Institution, the effects OF which have been severely
felt by the Commonwealth, as well as ln0iV'aua's
The whole subject which will demand your care
FIJI consideration The dividends arising from the
stuck Of this Bank have heretofore constituted al I'M
uortant item in the fiscal resources OF the Common
wealth, and | suggest whether it IS not expedent 10
provide for their regular continuance the condion OF
the Bank shall warrant IL rather than to suspend them
mill the orgnal capital restored This Will tend to
m,ig,;e the Inconvenience which has resulted to the
State and 10 individuals, and may be accomplished ny
dapuu the present pta stock to the present resour
ces of The Bank There is no other alternative but TO
SUSPEND the dividends until the actual losses oil the IN
titu,ion have been repaired in which event IT VIII be
necessary TO provide for considerable deficiency in
the public receipts from other sources
The occurrence Of so large dealcation IN any bank
without immediate detection, implies great negligence
ls cement, and furnishes another PROOF OF the ne
cssity for some additional safeguards TO protect the I'M
nense interests of society in these institutions ltmay
b.mpossible to prevent crime under any sys'eH' out
tits not very difficult 10 detect offenders OF hs class
uider vglant application Of the general laws oil inc
land, and of the particular bylaws OF banking coPa
mes.
The condition of our Banks generally for some years
past, has excited much and anxious inquiry as TO the
advantages and Inconvenience oil the established sys-
ten Of credit This system has been exposed 10 Inc
d;ngers Of its peculiar structure ana TO those
which are incident to plan Of government The
cm,icling agencies Of seyenand-twenty governments
ech of which has claimed and exercised the power OF
legislation this subject, continues TO present dii
cities which exist where beyond the limits Of Inc
United States. The number OF local interests 10 De
commodated besides the political influences which
hive been connected with this subject, do not permit
tie of any State 10 close It's eyes upon The
surrounding causes which must, to some extent inter-
FIRE WITH if they do not control its own policy our
experience has often suggested the inquiry, whelner
rany of the inconvenences which VIC have felt, did
rot result necessarily from the peculiar forms OF our
government, and whether they were not compensated
y the benefits which enjoy, as well as by the DAN
ers which have been avoided by limited ana Jea,
aus concession of power from the States TO the federai
Government While the power to regulate the cur
,ncy, if discrcey used by the Federal government
night savc us much inconvenience the trainers OF our
federal compact 10 have been aware that 1t was
me which might be abused for very different pur-
,o.es. As the power of Government must Of neces-
liz be conided TO fra and fable men, it IS better
Grant too little than too much; and under Govern
neuts of prescribed constitutional limits 1t IS not SAFE
o exercise any power which is not clearly granieo or
necessarily implied While we can only influence
the other States as they may influence US Dy oice VI
ieyamplc, and the Federal Government by our voice
expressed one OF rs constituents
il is Impossible for 10 foresec what will nc the acton
Of either in reference 10 subject on winch, as much
as anv other, the whole Union has common interest
The Federal Government, in its fiscal relations WIN
the States must either employ its own means or those
Of the States for the collection and disbursement oil
its revenue; and whether it relies on a National
Bank Independent Treasury, OF specie, or oil tea-
.sury notes, of Government credit IN some other
form or on the State Banks, TO furnish the medium OF
collection and general special repositories oil lis
revenue its influence must be felt 10 greater or less
extent bv any system which the States can adopt
Each State therefore, has duties as well as interests
result from lis intimate ASSOCIATION with The oiher
states, and with the Federal Government, which should
not be disrerarded in its deliberations this subject
II we had absolute jurisdiction of this whole subject,
Tor If we were called to leGslatc al original
question our views and our duties might be very DIFF
icrent But it proper for us TO regard the condI.
ton Of The country it really is, and not as our INA
cuations might depict it, When Banks were first m
troduced they were intended to be, what they ought
now To be- the means Of circulating paper always con-
vertible into specie at the will Of the holder. Their
failure realize this just expectation, whether 1t IL 10
be ascrbcd TO errors of legislation, 10 missnanage.
me Mt OF the banks 10 both causes has demonstrated
the NECESSITY for reform of abuses which have been
SO extensively felt by society.
would suggest that there is necessity for more d.
rect and efficient responsibility in the agents or officers
to whom the business of banks is conhded The present
rate of bank profits on fair business transactions, rem
ders it Que stonabe whether stockholders can be made
personally table, without destroying the system; but
the sponshilty Of directors 10 greater extent than
now exists even if it should require premium or sa-
ary 10 induce the acceptance Of the Office, would be
practical economy, if prevented only small portion
of the losses which frequently occur The commits
soncrs appointed TO investigate The affairs OF the BANK
of Virginia. have expressed no opinion as 10 the Liability
of the rcctors under the act OF 1857 as It IS properly
|, question for judicial construction should it arise
orbear express any opinion with regard 10 It,
While it would be unjust and injurious TO the corpo-
aons and individuals, unnecessarily 10 expose private
:rcd IL, publicity Is I'D the Va oei'"
ess is calculated 10 render these institutions safe
nd usrful The quarterly reports required of our
,anks, have had the effect, doubt not, of increasing
heir caLon and vigilance Though the discretionary
power rs vested in the Executive 10 appoint special
:ommisss 10 examine my of tie banks, it is power
which apparently designed only for emergencies s
md ,ccssity its exercise cannot well be known
mil The danger has occurred. 1t is therefore not re-
medal. a permanent board of competent commits
,ioners organized so that portion of the members
banks at irregular intervals would probably answer
better.
The efficacy of forfeiturcs and other penalties now
imposed 10 prevent suspensions OF specie payments
NAV we'll be questioned, they invariably re-
leased and could not well be enforced without ntct-
ing severe pun shmen's on the community for the de-
.lnqucnces of The Banks. think it is better 10 sub
ect banks 10 the payment OF an adequate rate ol IN
tcrest on their notes during periods Of suspension, as
they would be thereby stimulated TO resumption, and
induced TO suspensions by keeping their issues
within moderate bounds.
or,ount of stock held by the State in