Mobile daily commercial register and patriot., 1841-11-05

Innsnuch as have but recently been officially in- formed, bl The commiss Iuners, oi the comietio Of the building, haze not issued proclamation giving effect and operation to the penal code Thai will
 be done m few days.
 The banking syslem of the State of Alabama, con tines be subject of increasing sncitude and anX iety with the community at large, and will, trust commend itself to the early and dgent attention of the General Assembly. This system has been in operation eighteen years. In that time has expe renced all the vicsstudes of prosperity and adver sy, to which period of that duration subjects hu- institutions. It has passed through seasons of great prosperity, calculated to deNeiope and unfold its abilities and usefulness; and 1t has experienced the wintry gale of diversity to a sufficient extent to test it's energies, and the correctness of the rinc- ples which il is founded. Aided by the full light of experience and intimate observation, through a long series o years, the grave and important ques- tions presented for the deliberate consideration of the General Assembly, are, whether, upon full and candid review of the operation and effect of thIs system upon the public interest," ii has answered well the ends and the objects of it's establishment, for fur nishing circulation of steady undepreciated value; afordng safe depository for the public tunds-and furnishes reasonable hope that il will by the Isuc- of it's operations continue to pay the interest the capital stock and finally reimburse that cap- tai, for the payment of which the faith and credit of the solemnly pledgedl However gratifying it might he to just sense of patriotism and state pride, to be able to give affirmative answer to all these questions, candor imperatiyely requires that most of them should be answered in the negative. For, although it is with pleasure admitted that he public funds committed to the custody and safe keep
 ing of the bank, and forming part of the capital; the payment of the interest and redemption of the stock l depending, they do, upon the sure foundation of plighted public faith, beyond the reach of ciden; it is less true, that the present condition of the banks is not such to afford satisfaction and encouragement to the community, either in regard to their past management to inspire full confidence | in their future The large of bad and doubtful debts-the enormous due from indiv- dals, of which will, in all probability, should the general bankrupt law go into effect, he settled in the compendious mode of schedule and affidavit, - and the fearful encroachmeni already made the | ptal stock-are consider atons well calculated to | cast the most ominous con ectures the of | the whole system.
 | Whetber the failure of these institutions to realize the reasonable expectations of the public, is owing to defects inherent in the system, or is to be found in the of selecting the boards and directors, and in which they have managed the affairs of the banks, is the question submitted to your candid deliberate determination. And upon the de- cisOn of tat question: depends the fate of the banks, and the circulating medium of Alabama. Ii the de-
 ects in the system, and radical, they are ad- mitted to be without remedy, and the system ought 1 to be apandoned as least soon as proper sub stitute could be provided. And have hesitation in declaring 1t my settled opinion, that if the present mode of eecting directors IS to he continued, the
  better. If, on the other hand, the defect lies in the manner in which the directors elected, and which the affairs of the banks have been conducted, it be- the indispensable duty of the legislature to ap ply the corrective, and to adopt such will
 insure their better management hereafter l has been my misfortune to differ with majority of the legis future, in relation to the of electng hank d- rectors; and in relatpn to many important points of policy in the management of the banks, Whether l the measures recommended by me Would have been skasr he asserted but that the pursued by the legis
 ature has been most disastrous it's effects upon the hanks, is, unfortunately, no longer problem. But 1 for the settled conviction resting my own mind
 that in the present state of society, paper currency
 is indispensable, and be only constitutionally fur nished by the states and not by the general govern meni, the dscouragements have experienced in en- deavoring, far Alabama is concerned, to place the State Banks on a better footing, would have i- duced to abandon the present system altogether, and to have looked to some other expedisn; within the puryiew of the constitution, as substitute. And I still think, with entire respect for the opinion of others, that the State Bank system susceptible of ing rendered source of incalculable benefit the people of Alabama believe further, that the State Bank system is destined ultimately under some mo- difcation other, furnish the paper circulation of this Union.
 In refecting upon such measures would most likely tend to alleviate and improve the present dition of the banks and enable them regan sound and heaiihy action the following have occurred to as most kel, to be productive of that desirable re- salt and they are, therefore, with becoming defer ence respectfully recommended for your considera- ton. Still satisfied, and deeply confirmed ,lian ever in the correctness of the opinion that the present mode of eecting directors Is not only erro- neous, but will prove fatal to the banks, if persevel- ed in, of opinion that 1t should be changed, go as to make il the duty of the Governor 10 nominate double the number be elected, and for the Senate or the two Houses jointly, select from that number the directors for each bank. The presidents should, think, be elected as at present, by joint vote of the two Houses. l am also of opinion, that the number of directors should be reduced to two, and presi- dent, for each bank; that they be paid sufficient salary to secure the best financial talents and that they be required devote their constant time and at tenton to the business of the banks, until they a condition tn resume specie payments. It will be proper also to adopt suitable measures to compel punctal attention to their duties, and punish them for negligence or malepractice in office.
 No doubt it will be objected to the proposition ts reduce the number of directors that it is arstocrac to take power from large and bestow il a snal- CT number; and that the proposition increase the compensation, is anti-republ,can in its tendency.- These objections sound Ioftily in theory, and are strictly correct in practice. But the mistake, the tire mistake, consists in their application the pre- sent case, Whoever heard of man seeking the appointment of bank director either from patriotic motives or for the distjnciion it confers On the contrary, the accounts of many of the directors, from 1854 to 1887, prove that they were under the in6u ence of d much more powerful motive than the love of country the love of fame And, even if it were otherwise, it may be safely affirmed that greater or nore fatal error has been, can be committed, in regard to the mana cement of the banks than that they ought be conducted what are usually term ed popular principles. The office of bank director certainly would be, of all others, the desrable if the capital of the bank was increased by being constantly used, and every man could be supplied with whatever amount his necessities required whe- ther he was able to pay not. But this not being the case, the capital being borrowed, ought to be permitted to borrow unless he be able and will. ing to pay. Equally delusiye and ruinous to the banks, will be found the faneiful expectation of ob- taining competent talents to manage the notorious and mutilarious of banking institution, alrea- dy extensively embarrassed, ably and successfully, without adequate compensation 1t may be remarked as general rule both in regard to public and pr- vate affairs that those who willing to labor for nothing, fall, most usually, under the denomination of hard bargains. This remark does not, of course refer offices which confer great political distnc- ton, which doubtless sought, in many instances even at entire sacrifice of every thing like pecu niary emoument, from love of honest fame and the more eDnobng feeling of, patriotism. But, so far banks concerned, experience furnishes ample testimony the fact, that their present embarrassed condition is owing in great measure to the election, in former periods, of directors, who accepted the situations without any stipulated compensation sut- cient compensate man of ordinary capacity with the fixed determination to compensate themselves.- Volunteers certainly answer admirably in some de- partments of service; but experience has amply proved, that they are not always the appropriate corps from which to select bank directors. The most fatal tendency of the present course pursued, both m legislation and the management of the banks is, that it will inevitably plaoe them under the tro of their debtors. Let this state of things be once accomplished, and it requires participation