Litchfield enquirer. [volume] (Litchfield, Conn.) 1829-current, 1842-05-12

ton. about which there IS fnuch difference
of opinion, as TO the policy OF Legislation
which has been adopted respecting the safe
of spurious LIQUORS IN any revision OF these
laws which you may deem necessary. !
recommend the efforts of these men ana
this cause to your favorable consideration.
The Banking Institutions of the state anu
the laws respecting them, will require your
special and careful attention. These Instl"
tutions have grown up under the aulhorltv
of the state, and individuals have acquired
rights in respect to their, which should not be
violated The stockholders have rights which
we should respect, and the public have rights
which we should enforce. Fortunately, we
have been exempted from many of the cala-
mites which a taithleSs and reckless system
Of banking has entaled upon the people OF
some other states but the fact is notorious,
tina: practices have grown up here, under the
name of banking, and the forms OF law,
which require the corrective application OF
the Legislative power. A thorough retorna.
ton on this subject, is demanded at your
hands by public sentiment; and doubt not
you will fearlessly discharge the duty
Banks are osiensibly established for the
double purpose OF aiding business by loans
upon paper, pay able at short periods; and
( furnishing a representative currency
| Whenever, by permanent, or long loans,
! they withdraw their capital from the de-
mands of business; or, by excessive issues
of paper, hazard their capacity for redemp-
| lion, they violate the fundamental objects OF
their existence. Such has been our system
Of legislation, and the practices Of our citi-
Zens under it. that the various interests OF
society have been more or less interviewer
with the action Of on" banks. Their cnpa-
city for usefulness and for injury 10 The pub
lie, has, in the experience of the past, been
| h tfN "
of their management; aud here is one OF
the chief reasons why they should be subject
| to the rigid supervision Of public authority.
While many, and perhaps most OF our
j banks, have been fairly conducted, there are
startling facts which show that in the man.
| ageme,nt of others, the interests of the stock
holders, and the claims Of the public, have
been most signally disregard.'d. One OF the
! most palphble evils to which ! invite your
| attention., is the application by the directors
and officers of some OF the banks, to their
| own use, OF Il large amount Of their funds
There are banks whose business has teen
crippled, whose stock has been essentially
| impaired, aud upon which severe losses have
! fallen, chiefly from the large and permanent
Indebtedness Of their officers. This evil
may be remcdic,l by prohibiting under pro-
! per penalties, any director or officer of il
bank from borrowing, directly or indirectly,
! any portion Of its funds. The objection,
sometimes suggested, that You will thus TX
Glade from bank directions all men in hu>i-
ness, betrays the sclfishness of one who
wishes to increase his own bank facilities
by the influence Of scat at the board, in.
steHd at furnishing an argument which
should have force with the disinterested and
| unbiased. The directors of Il bank are tho
| joint agents of the stockholders and the pub
lie; and who does not see that il man, incu-
| pable Of borrowing money, is free from those
temptations TO violate his duty, which lie
before the interested and sometimes urgently
I pressed applicants for funds! TO allow
the guardians Of public institution ia use
| their station for their own personal interest,
is contrary TO a sound policy and Il wise nd-
mnrs1rution of the law. With these views
long chtrrtained, and strengthened by thu,
constant developments of facis, recommend
as one provision Of IL law to Dc. enacted, that
/ no person who is IL debtor, either rs primo
| pal or surety, 10 any bank, shall be allowed
10 be a director or officer in such bank {;
aud that no bank shall be allowed 10 loan
| money, directly or Indirectly, to- any OF it's
directors or officers, or to discount any paper
upon which they arr parties, or in which
they are in any way Interested.
Another evil To which call yonr attention. IS the
practice by some of the 10 nks Of king usurous inre
rest, under the speclols aud deceptive name of
| Cii"iSe. nc heccSSlNcS OF men nave Grtten mem
INTO submission ~ these cxac'lnns; and thus many
an enierpriSing ciIlztn has, the dialect OF The SUBJ
lect, been chavez out 0i his property, under The
turns OF law by institutions created 10y law and
sp1nsihe 10 The law. The hgliest ri. exchange
between two places, can never exceed the expense
oi transmitting from one to the Other, the specie.
clndiIg the insurance an It's transportation; and il
VIII tall below thar according 10 the state nf the bal
! ancCs between Them. Such is the course OF business
! between this Siate and the cities of Newly ork and
BOSTON. that the lar rate of exchange s generally
merely nominal yet bits and pa yabe in Ihos0
ces--ihc l1cos nt Ill Others where abe banks ant
tunds-are discounted 0i our banks NJ excess
sIve rates OF exchange, hesdes the legal interest sind
than on the other hand drafts upon these funds
are sold to the nCce' sItuuS borrower equally
orn~.t !ate SNch pra cces, hesitate no, 10 say.
fair rights oi the banks would not impair; bnt we
should not forget that the community have rights.
and that II is our Huly TO protect them.
submit to you the pr,;Hrleiy OF estu lshng tariff
ct exchanges, between this oI2tc and the principal
commercial places with which transact business,
and to prohibit. under adequate pcn2ltIes, eny bank
from transcendlng the prescribed limits. W.. t..
In some OF the banks in which their captal has
he"n essentially impaired seriously involved, 10y
large amount Of suspended or dshonnred paper, The
practice Of making dividends has prevailed and thus
IN effect, portion of the capital is withdrawn from
the hanks and distributed among the Stockholders.
regard 1t as the special duty Of the Legislature
compel every hank To make good its capital and Ia
maintain It nnlmpared. 20 wind up its affairs. A
PROVISION that any hank which shall declare div-
lend while amy part Of its capital is impaired shalt
forfeit penalty to The State; and further provision
that for the purpose Ut determining the right to make
dividends, no suspended dishonored paper shall be
deemed part Of its capiiai-wauld have most sal.
ntary elect IN projecting the rights of the public
Every bank would then be compelled 10 stand before
the public IN its true character and the actunl value
OF IT'S stock, would. with good degree Of certainty.
be known; The itnpositions which have frequently
neen practlsed upon The cre6uous, through the fct