The spirit of democracy. [volume] (Woodsfield, Ohio) 1844-1994, 1844-12-20

i
dictate Of Justice and common regard for the pul
lie safety; but not so. Instead of consenting to Q
increase Of their obligations, for the honest an
faithful exercise Of their prerogatives, they requir
important special exemptions from the liabilities
I which other persons are subjected.
First: 1t is claimed that the stockholders of bank
shall be exempted from personal responsibility 70
the payment of their debts and the redemption G
! their notes. 1t is difficult to conceive how an
community, blinded by neither prejudice or by in
terest could be deluded into consent to the iustic
Of this claim. Why should bankers not be mad
responsible for their bank debts upon equal footin,
with the individual ctizen' The business of bank
ing is not any more hazdarous, indeed if prudently
and honestly conducted, it is less SO, than the mer
camille or manufacturing business, or other ordina
ry pursuits If those who own the banks, and have
the entire control and management of them, are un
willing to trust to their safety themselves they ought
not to be tolerated in asking the community 10 trust
them, and to adopt their promlssory notes as money
When bank fails, the loss must fall either on the
holders Of its bills and creditors or upon its stock.
holners. The former receive none of the profits o
the bank, and have no voice in its management
Nothing can be more fagrantly unjust than that
bankers. who receive all the profits, and have the
entire management and control of the institution,
should require community to run the risk and bear
the loss in case of failure. The individual citizen,
who industriously follows his pursuits, regularly
continues to increase his ability to discharge his
liabilities as he accumulates property. But not so
with bank it divides all its profits among its stock
holders as they accumulate. The riches which are
acquired by bank are not retained by the corpo-
ration, but regularly, at short periods, divided
and left to accumulate as private property in the
hands of the individual stockholders. The stock
holders, therefore, may be poor in their corporate
capacity, as bank, while they are immensely
wealthy in their private capacity, as individuals,
from the profits received from their bank. Thus
bank may fail and become nsovent, .either fraudu.
ently or otherwise, and the people, with large
amount of its paper in circulation, be left to suffer-
while the stockholders are living in aftluence, and
surrounded by wealth, accumulated by means OF
the bank. The exemption of the stockholders from
individual liability holds out strong inducements to
engage in excessive issues of bank paper, in order
to make large profits, and furnish the means of
committing frauds with impunity
Second: 1t is claimed that banks shall be exempt
from liability to taxation upon their capital and be
subjectto be taxed merely on their dividends or
profts All other persons are taxed for the sup
port OF the government, on the capital of their in
vestments. The private citizen who lends his mo-
ney at six per cent interest, is taxed one per cent
on his capital, while banks, with extraordinary
privileges, claim that taxation shall touch only their
profits e..
Third: 1t is claimed that the charters of the
banks shall be exempt from all liability to alteration,
endment, or repeal by the law-making power of
the State. Private copartnerships, and all the
modes Of prosecuting other branches of industry,
are subject to the correcting hand of legislation.
But from analogy to the presumed nallibity of the
divine prerogative Of kings the people are to be led
to believe that the banks can do no wrong; and
that, therefore, certain sanctity should be thrown
around their chartered rights and proceedings,
which will place them above the reach of the rude
arm of sovereign power.
Fourth: 1t is claimed that they shall be protected
from any act on the part of government or private
citizens, calculated to impair public confidence in
them, inasmuch as their success depends upon
keeping suspicion asleep.
Fifth 1t is claimed that their condition and pro-
ceedings shall at all times, be exempt from exaniina
ton and inspection by public officers Although
the public has a deep interest in knowing their
condition and mode of doing bushes, yet it is
thought necessary that the mysteries of the bank
parlor should be scrupulously concealed from the
public eye.
Sixth: 1t has been claimed that, Gin times of ex-
traordinary emergency, and financial embarrss-
nent and distress, they should be permitted, in Or
Ter to relieve the people and prevent the gold and
ver from flowing out OF the State, to suspend
pecie payments, and thus violate the only condi-
ion upon which they were granted the high prvi-
ege of converting their promissory notes into cur
ency.
Such are briefly the leading privileges and ex-
mptions demanded for banks in this State; and it
not matter of surprise that the persons who set
Up such claims should reject the terms of the exist
ng laws, and even pronounce them lmpractcabe.
How far these high prerogatives shall be conferred
nd by what restrictions and safeguards the COM
,unity shall be protected is submitted to the wis
ON of the Legislature. The banks themselves, or
hose directly interested in them, are certainly not
ne proper persons to prescribe the terms on which
hey shall obtain extraordinary privileges and ex-
mptions. Reflection and observation have tended
, confirm my conviction that time and experience
'ill prove the wisdom of the provisions of the gen.
raj law, now in force, for regulating the bank
'g system. Banks of issue, if permitted to exist
all, cannot be too cautiously guarded by restric-
ons.
The great error which prevails on this subject has
s origin in the common vague impression that we
lna A. L..