The Cecil Whig. [volume] (Elkton, Md.) 1841-current, 1842-01-08

Legislature met, and 10 suggest, as ] now
respectfully do, the propriety Of author
Using the court of Carroll county TO eX-
anime Witnesses, at its next term, with the
view of ascertaining the state of the Prls-
oner's mind.
The banks of this State have persisted
so long i'll refusing to redeem their notes,
that there is no reason to expect that til ~
will return of their own accord to the path
1t is now question for the Legislature to
determine, how much longer they are t.
be permitted to disregard the laws Of the
State and the rights of the community.
The opinion may still be entertained,
that the State banks can never be proper
ly regulated without the aid of Nation
Bank; and that as their present condition
is attributable to the want Of such au in
stltution, no remedy can be provided by
State legislation. reference to the
banking system of England will show,
how far a great mcnied institution, con-
nected with the government, has had the
effect Of limiting the number, or rcguat
ing the issues of local and private banks.
Country banks began to spring up in
every part of England Immediately after
the war of the revolution, and continued
to increase till the year 1892; when a re-
dundant currency and a general spirit
of speculation and overtradirg pro-
duced a violent reaction, and consequently
San extent OF misery and bankruptcy which
| IL =,
country" Three hundred and fifty banks
had been in full! operation; and of this
number, one hundred stopped payment,
and upwards Of fifty were entirely des-
troyed.
In 1897, another crisis occurred. In
the latter part of the previous year, heavy
demands were made on the country banks;
and some of these failing, all confidence
was at an end and the Bank of England
was reduced to so great an extremity as
to be compelled to suspend specie-pay-
ments; which were not resumed till the
year 1919.
In 1916 and the two previous years,
two hundred and forty country banks
stopped payment, of which number, cigh
ty-niae entirely failed. One pound notes
were then in circulation, and to use the
words of the writer, from whom these
statements are taken, "the failures that
''then occurred affected the industrious
''classes, swallowing up IN an instant the
fruits of long life of laborious eyerion."
In 1923 confidence had revived; and
the banks began, as usual, to enlarge their
issues; and in the two following wears, the
amount of their paper in circulation was
increased nearly fifty per cent. Specula-
ton. overtrading, and extravaganza i'm.
medalely ensucd, which, in the year
1925, terminated in another scene Of dis
tress, bankruptcy and ruin.
Nothing is more common than to as
cribe public emharrassments to some
other cause than the real one, and conse
quently to provide remedies which fire.
quently aggravate the evil. Prior to the
explosion in 1925, a bank partnership
could not consist of more than six per-
sons; and it was supposed that the mis-
chiefs OF the banking system were caused
in great measure by that regulation.
Accordingly, joint stock companies were
established, without any limitation as tc
the number of partners. Three OF these
companies commenced operations IN the
year 1925; in 1896, the number mad III
creased to fity-siX; in 1886 iorty-live
new companies were formed; and many
of these having numerous branches, ii
was computed that two hundred joint
stock banks were established in that year.
They Immediately commenced the work
of adding to paper currency already re-
dundant and continued TO increase their
issues till late in December 1886; when
the credit system, having been strained to
its utmost limits, suddenly gave way, and
change from artificial prosperity to real
distress, such as invariably at'c&ts the en-
cessve use of paper money, Immediately
took place in every part of England.
This sketch of the English banking
system shows; that the Bank of England,
for LalIa century past, whether III time OF
peace or war, or during the continuance
of specle-paymen or general susPen-
sion, has been unable to control ONT
stock orprivate banks, or to regulate their
issues, or even 10 pTolecI itseii lo'ii ''le
effect of their mismanagement 1t is
therefore difficult to conceive, how the
banking system of the United States,
pushed as it generally is to the verge of
bankruptcy, can be regulated by nation
al bank or fiscal corporation. There
can be very little doubt, however, that the
banks of every State may be controlled by
|
the authority from which they derive
| their charters.
Whether the banks of this State ever
intend to redeem their notes is altogether
uncertain; though there has been occa-
sionally arumour that they were ready to
resume, whenever similar movement was
made by the banks Of Pennsylvania,
Virginia, and the West. But TO make re-
spmntion in Mar,l,uI 1npnnInnt on tho