The spirit of democracy. [volume] (Woodsfield, Ohio) 1844-1994, 1844-12-20
GOV ERNOR BARTL E Y's
INAUGURAL ADDRESS.
Concluded from fourth page.

ofihe various opinions on the subject
and the magnitude and complexity OF
the interests it involves. To make a
bank which shall be safe, practicable,
and popular, is the problem, and is one
Of no easy solution.
The State banks Of sister States have
not proved more useful and secure than
local ones. Their connection with the
government is liable TO abuse, and ex-
poses them TO the prejudices Of the peo-
pie, which ought never to be overlook
ed, when they can be regarded without
detriment to the public interest.
The existing general law may be
safe, but it is not practicable. A sys-
tenn oflocal banks cannot meet with
general favor, because it confers (ac-
cording to the partiality of the legis-
laturel to certain corporations and To-
calities great and exclusive privileges,
and its adjustment gives rise to trouble
some conflicts, not to say corruption.
A system was presented to the last
Legislature, and which is similar to that
adopted in New York, which meets
with considerable favor. 1t is liable,
however, to a serious objection; it
would subject us too much to the mer-
cy Of Wall street.
The following plan, which is a modi-
fication ofthe system referred to, 1t
seems to me, obviates this objection:
lst. Let the system of banking be
free; this would secure its popularity.
end. Let every bank be compelled
to keep in its vaults, at all times, one
third Of its circulation in specie tor the
redemption of its bills; this would pre-
vent unnatural contraction and expan-
sion in the currency.
3rd. Let each bank deposit with the
State Treasurer as security for its cir
culation, the amount it issues, either in
Ohio State stocks, orin real estate with
in the limits of Ohio at half its apprais-
ed value on the tax list, independent of
perishable Improvements.
4th. Lei every bank be required to
have capital Of at least $4,000 actu-
ally paid in.
5th. Let there be adequate guards
against diminution of the security, by
depreciation of the value OF the stock
or real estate heldin trust, by the State
Treasurer, and against fraudulent ac-
ton on the part of the banks.
9th. Let there be also provisions, for
the exercise of the necessary St rutlny
into their operations f,om time to time.
and for the closure Of such as may fail
to pay their bills on presentation, at
their respective counters.
7th. Let there be due limits upon the
capacity OF the stockholders 70 borrow
in the Bank in which his stock is held.
The first Inquiry which arises in ex-
aiming this plan, is as to its practical
bility. This will appear. if we consid
what will be the probable profits to the
stockhald IN his actual investment.
For the State stock, or real estate
held as security, he continues to receive
his profits, TO wit: his interests on
State bonds, and his rents for real es
tate.
For the s3i per cent paid in, he
would receive l8 per cent, it the issues
were at all times at their maximum linn
its; but as this is impossible, perhap:
the average issue could not safely bt
estimated at more than $3.50 on eacl
800 paid in. This would give the
banker Is per cent. Deduct for ex.
penses and losses, say five per cent,
and we have profit of 10 per cent.
Secondly: lsthis system safe? Wha
is the security to the bill holder? Say
he holds in his hand $40 bill, for thi:
he has as security, lst, the ten dollars
deposited in the State Treasury, in re
al estate, or in State stocks. 2ndly
Three dollars thirty thre and one thirc
cents in specie in the vaults of the bank
3dIy: He has the discounted note or
the borrower and his endorser, (ten dol
lars,) making in all security of $23
SO l-3-ten dollars ofwhich is in thu
hands Of State officer who is disinter
ested.
fit be objected that real estate is
not readily converted into money, !
may be answered, ist. That the a
mount Of specie required to be paid in
makes the resort to the collateral secu
rity Of doubtful necessity. 9nd. Th'
real estate is subjected to sell at ont
half instead Of two thirds its appraised
value; an that value to be fixed by tn
Assessor.
Ifit should be said that the plan suy
gested has been tried, and condemne'
in Michigan, the answer is. that, upo'
comparison, the above draft differs ma
terially from the Stree banking law
which was formerly adopted in tina
State; and that the lands of this Stat
are generally cultivated and saleable-