Herald of the times. [volume] (Newport, R.I.) 1830-1846, 1840-05-14
Brief Review of Henry Bulls "pro
posed alteration in the System
of American Banking
[For the Herald Of the Times.

H For the Herald Of the Times.
Mr.. Atkinson The r. I. Republican o
May 9Th, contains a Proposed alteration ir
the system of American Banking" over the
signature of HENRY BULL, of tins town.
The character and experience Of the propo-
ser has induced me to look over the plan
with some attention, and its novelty induces
me to offer you few thoughts which have
occurred to mo in relation thereto for publ
cation.
The p,n, in the words of the proposer, is
this
"For better illustration I will suppose a
bank Of 100000 capital as an example,
$4,000 should be issued by the bnnk, and
countersigncd by general officer of the state
appointed for that purpose, and the same pm,
IN circulation. The bank should have, at
least, $1,000 IN its vault in specie COIN
When any of said specie bills are received
by the bank, either in the course of its busi.
ness or by way of run for specie, the bank
should not be allowed to held the specie bills
but pny them out to the FIRST person who has
to receive money in bills of the said bank
and, If the course Of business will admit, on
the same day f; aud if not then on the first
opportunity after. But no Bank Bills Of the
said bank to be paid out until all the specie
bills on hand arc disposed of, so that the spe-
Gle bills shall. as much rs possible. be always
in the hands Of the people. And in all cases
The amount of specie, belonging to the bank.
in its vuult, shall be a. large As the amount OF
its specie bills in circulation"
Banks should not be allowed 10 hold each
others specie bills, for their joint benefit, to
enable them to avoid the wholesome opera
ton of their specie engagements upon their
issue Of bank bills"
Let the Banks be authorized to issue an
amount in Bills Reeeiroble for all debts due
the Bank equal to four times It's specie Bills"
These j, will be borne in mind, the gentle.
man calls " Bank Bills"
The most remarkable feature ofthis plan is
the issuing Of two kinds Of bills--one pay
able in coin on demand, the other receivable
for debts due tho Bank which issued them
only.
Another peculiarly is this. The bills pay
able in coin in all cases when in Bank, to be
paid out before any "Bank Bills" are paid
out.
The specie in Bank never to be less than
the amount of specie bills in circulation.
TO show the plan clearly, and in oil its
parts, shall take a supposed case of bank
in this town and put it in operation, and watch
its progress.
A Bank with 100000 car,al-S4,O in
specie Oh hand-havng called in all its cir
culalion, paid it's dcposiles and divided all
profits on hand, would then have
Specie 8 1000
Notes Receivable $4,000
100000 its capital.
Lot said Banks receive from the State OH.
Ger, coun'srsiyncd by him.
Specie Bills $ 4,000
Bank Bills 10000
$4,000
And il will be ready to commence bus-
ness on the new plan. 1t now proceeds 10
discount paper aud receive deposilcs.
Thirty days after, lis probable situation
Is 0s follows -
Assets rS.s Note. Receivable slleSoo 5000
sl2O,OOO
Capital Stock, 100000
,.,.,.,! Drpositrs, IU,UUU
sr,J,f n."k l,,Ii.. ni.'' Circulation. 600 Goo
.laO,OoO
The Bills payable in coin being oil in CIR
culaiion, A brings $1,000 Of them for specie
aud receives it.--B presents his check ior
$1,000, which le has on dcposItc, immediately
after. The $1,000 specie bills are now IN
Bank aud must BE- paid To hun. II they are
paid to hin, then there will BE- $1,000 specie
bills on, with only $1,000 specie IN the vault,
The specie bills cannot be paid to him, tor II
liicy are. the amount Of specie bills out vii
,cx.ced tho specie On hand by 5000 u