The Ohio Democrat. [volume] (Canal Dover, Ohio) 1840-1900, 1840-12-18

lt'does not unfrequenlly happen that
'when bank fails the stock holders, Of
those who manage its affairs, are large
ly the gamers. This fraud, with impu'
nifty results irouI the principle contain,
cd in all our bank charters, Of limileC
} liability. The banks, generally, arr
authorized to issue three dollars of ihei
J own notes for every one dollar Of capi-
) tai paid in; and the capital paid 10 is al
that is liable for the payment Of thel
} debts. A bank thatlmay disposed Il
} act fraudently, can put out three dollars
Ofits own paper for every one that i,
liable 10 be applied 10 the redemption o
T. its notes in circulation. The banke
BY breaking, loses the one dollar o
Stock but gains the three that were is'
sued upon 1t, This may not often occur
bu, it is sufficient 10 know that il hal
occurred, and that it may again take
place, to authorize the Legislature t
guard against it. This limited liability
Of the stockholders, not only furnishes
an opportunity to commit fraud with i'm.
punity, but holds out an inducement IA
engage in excessive banking. The
banks are.not restrained in their opera
tions, because they know that if sue
cessfGl, the greater part of the loss may
be thrown on the public. The induce.
ment should be the other way. The
temptation 10 commit fraud, or TO en>
gage 10 excessive banking, should be
taken from them. This can only be
done by increasing the personal respon'
sibIlIty Of the stockholders, and placing
the banker on the same footing, as 10
stability for the payment of his debts,
with the farmer merchant, manufacturer
or other citizen. Is there any reason
why the whole community should be
made liable fori the payment of their
debts, while tie banker should be ex.
emptl lfan ASSOCIATION should be for
med for the purpose OF erecting man.
ufacturing establishment, and after hav-
ing exhausted all their means, become
involved in debt, each member is liable
for the whole of the debts of the asso-
citation, although they may have lost
heir joint ptop'hy by some great mis-
fortune which no prudence could have
guarded against lfa similar assocla~
tion obtain arter, and embark the
capital ln the business OF banking
and fail, frauduIently or otherwise, they
are personally exempt from the ayment
of any of their debts. All that can be
reached is the stock paid and the assets
OF the bank, and nine cases out of ten
the credi ors can ne tber find $40, k or
other assets. Is there any reason for
this dlstinctio : Is there anyjustice in
it, The business Of manufacturing is as
honorable and useful, and as much en-
titled to legislative protection, (and
m uch more so, as that of banking
Why exempt tha one from personal la
biIity and not lhs other? 1t is said that
If bankers were made personally respon
slbie fortheir debts, as other C zens,
they would not invest their money in
bank stock. Why would they not? Is
here any thing more hazardous in bank
Qg tn an in merchandising manufacrer-
ng or other ordinary pursuits of lifel }
So far from this being The case. capital
ssmore secure when invested in iegit-
mate banking than in slmos, any other I
business, and equally, if NOT more
productive. If those who own the !
, anks, and have the control and man
igement of the q, are unwilling 10 trust
zach other, and are fearful Of losing
he'll capital, it would seem to be unrea-
senabe that they should ask the public
% take their notes and trust them.-
They ask the public o incur all the risk
Or the egreatar portion Of ii while they re,
,eive all the prof 8 Of the business.
Such claims should not be tolerated.
Bankers should be paced on the same
'ootlng with other 10 ividuals; made re-
'eonslble for their detts like other cItI-
.ens; and, being 80 responsible they
v youid conduct their business with more
prudence eId regularity. apd cOnse-
luently with more safety TO the public.
In my lasta ,nual message | look occa
ion, to state dela my views as to the
eslrictions Limitations, and addition
! guards, which in my opinion, should
% imposed n the baaks for the public
ecurlty; to which would beg leave 10
efer you.
Having q ascertained the evils and i'm
efections of the present system of !
anking it would be your duty TO pro-
ide, as far as practicable, sultablesrem~
dies. ln doing this, II must ever he
orne in mind, that the interests of the
eOple is tn paramount object 10 be se- I,
ured.
A STATE BANK. ;
As the subject Of State bank is a. {
ain agItated in the public mind, you I
,ay be called upon to consider of this
leasure. | cannot think that such an c
lstilutlon would be calculated to pro- {
tote the interest OF the pubic /. would s
oua m adua mt q uoa nuar tho lnnoI I,o nka .