The Rhode-Island Republican. [volume] (Newport, R.I.) 1809-1841, 1840-05-05

ont rs large circulation. Of this kind. az would
more than compensate them for their present
issues, even il tho sum should not amount to
what they now have in circulation and any
bank that could not sustain a competent circu-
la,ion, of that kind. would only prove that il
was established where one was not wanted, or
was conducted by incompetent persons.
Nor i, the circulation Of bills receivable an
untried experiment, for about 90 years ago a
number OF banks issued such facilities, Ia. they
we're then ealled) and circulated them exten-
siv.ly. until they were prohibited by the legsla-
tive authority.
Thus far the banks would require no specie.
and would be banks OF discount and cireulatiss,
botromed on the strength Of their capitals, and
further sustained by the credit given to ihoir cir
culaton by those Of their immediate neighbors,
who may always be supposed to know them best.
The banks should also be required TO keep on
hand in specie CON- about what the banks
10 Rhode Island now do say, each, per cent.
on the amount Of its capital stock. II should
be required to issue in bills payable on demand
in specie, like amount. TO entitlc it to all the
privileges of circulating bills receivable, which
for the sake Of brevity aud distinction shall call
Bank Bills.
For better illustration | will suppose bank
Of 100000 capital az nm example. $4,000
should be issued by the bank, and eountersien-
ed by = general officer Of the stat. appointed
for that purpose, md the same put in circula-
ton. The bank should have. ut least, $4,000 in
its vault in specie coin. When any Of said sps-
Gle bills are received by the bank, either in the
course Of its business or by way Of run for spe
Gle, the bank should not be allowed to hold the
specie bills bu, pay them ont TO the frs, person
who has to receive money in bills of tho said
bank and, it the course Of business will admit.
on the same day and if not then on the first
opportunity after But no Bank Bile OF the
said bank to be paid out until all the specie bills
on hand are disposed Of so that the specie bills
shall. as much n possible, be always in the
hands OF the people. And in all cases the a.
mount Of specie, belonging to tho bank, in its
vault, shall be as large a, the amount OF its spe-
Gle bills in circulation
others specie bills for their Joint benefit, to en-
able them TO avoid the wholesome operation Of
their specie engagements upon their issue Of
bank bills.
Banks thus organized would have a spsoi.
circulation Tor it's equivalent Of about one-thlrd
tho whole bank paper usually in the hands Of
tho people, aud about two-thirds Of such as
would, also, psy specie debts at bank The
people wonld then have in their own power.
nearly all the specie in all the banks OF the state
They never have had the power over more than
all, by virtue Of holding bank bills and evou
the power which they have had heretofore. or
now have, has been some times unavailable,
even for single dollar.
The bank bills would bs receivable 10 all pay
mcnts to be made at bank. and such are specie
payments. Everything else may be refused Tor
such debts but specie or those bHis and as the
payments to be msdo the bank in less than a
week would generally exceed the amount of
the whole Of It's Bank Bills in circulation. there
cannot bo doubt that the demand for these
would always make them current in the hands
oi the people. The people, hswever would be
the Judges; for if the bank did not make them
popular, then the evil consequences would GIl
on the bank itself Their Bank Bills, must be
kept " unstalned and unsupported" or tho hol-
ders OF their specie bills would soon su,pend
their issues OF Bank Bills. This necessity
would at all times keep down the circulation 10
of he g..
point, and that alone, would il be safe 10 jssue
Their Bdnk Bills; aud as tho wants Of the pso
pie huctuate but little tho amount could not va
ry much. OF course, there could no great in
ha'lon OF bank paper take place. nor. on the
o'her hand. general eurtalmeut of bank ac-
communications, which always ends in panic and
u's'ress' Inc banks now, after they have re-
duced thslr discounts to tho lowest sbb, (as is
TIE case at presenD begin gradually 10 expand ;
mus taking the lead, aud then the business o.
'ho country follows. But under the system
proposed, | think it clear, that busines,
"ouId hr't make the demand and the bank cir
culaiion and accommodation follow up and sup
Ply the Hatural wants incident to tho revival Of
business.
Hoe ''ontd the change c6cd the profits of Banking
The banks now in operation arc sapabl. n,
o"e' 70 au"pt and carry into effect the proposed
reform 1t Is by the wealth aud credit of in,
country alone, that mixed currency of speci,
and paper can be sustained: that wealth AND
credit is now largely possessed by the banks
they are constituted out of, and composed of
the principal funded property OF this country
they at present furnish nearly all OUT cursne,
and for them 10 continue to do SO would p,o
duco but little sensible change
The next question is, can they afford to come
into the measure
The answer depends wholly upon what .ifee,
the change may have on the profitable use OF
their power OF keeping up a circulation of Bank
Bulls, that mig uht give them "a tnucb n. 49,.