The daily crescent. [volume] ([New Orleans, La.]) 1848-1851, 1851-03-26


TO Hon. Charles Gdparrt, Secretary Of State
srR-My attention has been directed to paper you'll
signature and addressed bearing date New Orleans.
February 38th i85l.' had determined in own mind
reply in issuing from You in future
displaying the tone and temper of the preceding one but
sir, have taken into respectful confederation my
last communication, and as your last displays much more
ability than that have issued from at any former
period. will its and due weight, and proceed
point into which you have evidently
fallen.
desire enlarge upon my former in
the unconsutionaly of the Of 1885, renewing the
Branch of the State Bank Baton Rouge That law reads
follows:
That in case the Louisiana State Bank sha! establish
branch OF said institution the city of Baton Rouge
formally with the authority vested said BRANCH BY the six
hereby aotharzed directed keep deposit, in ssid
loan through branches shall be deemed diminish the
amount OF loans TO which It s limited by Us eaaer pron,
with respect its abiies snch qulred by the first ard
n % a % act e o New and for
gaIpos approved February fifth. eighteen hundred and
The article the Constitution l22. referred reads TINS
No corporate body shall be hereafter created renewed
or extended with banking or discounting privileges
BY close and analytical consideration of this article
will be as have stated in former that " BY
This article of the constitution the convention intended to put
end To the of the Legislature corporate
bodies with banking discounting privileges. 1t
intended to affect the then existing privileges of
the subsstng institutions All their responsibilities and priv
eges remain their entire extent. 1t to put end
all futufe IL prevent
the Of and the renewal Of the DID, and might
have added, the extension of the old. am happy 10 find,
sir. that in all this fully agree" But find that you
positively deny that ii inenced to affect
the Of the Legislature increase the capital OF the
subsng institutions, to widen and extend their opera
tions,"
BY careful reading of this article, it is manifest that s
whole force directed against the TO Charter cor
porae bodies with banking disc0unting privileges 1t
the corporate bodies that be " created.
newed extended, and the " privileges of those al
ready 10 existence. The EXPRESSION with banking dis
counting privileges merely descriptive or indicative OF The
character the corporate bodies, the creation, al
or extension which prohibited and prescribed by the
constitution This construction the manifest, when
consider that without the descriptive clause, the article
would and broad that the creation of any
body whatsoever would be unconstitutional let its
nature purpose be what night. Such evidently
the of the convention, for in the next arse
they the following language Corporations shall not be
in this State by special laws, for political
municipal purposes; but the Legislature shall provide. by
general laws for the organization OF all other corporations,
with banking discoantng privileges the creation OF which
sprohiblied.' -
Now appears that the reading of the article
make manifest the truth Of the Interpretation that
have given above This cannot, by
oust reasoning be tortured into restriction upon the Leg
iaure increase the capital well the sphere of opera
TONS of the existing banking corporations Such inter
preaon neither borne out by the letter spirit of the
ce 22 The word oreats intended to Limit, and doe
limit the power in future, 10 chartr corporations
ysssing these peculiar privileges. The word
tended te Legislature from the exercise of thu
power OF of these corporate bodies, after th
forfeiture of their present charter The wort
has relation Ii intended 10 strar
the of the Legislature to increase the duration OF these
bodies eopoae fired and limited by their existing charters
Neither expression has application whatever to the priv
Ieges these the creation OF new
the reas,oaI or eIsnon of the old This b
plain and Interpretation OF this article of the consu
ton Indeed it has been understood, by what you nigh
Tder high authority
Mr. Gamseleng, in the New York Convention. remarked
this original question, should prefer dsov
ing all between government and the banks
and recommend the provision adopted last by the con
vention of Lou lana The OF that Sate-wher
debt has been incurred of twenty millions by banking
has introduced the most sautay refOrm-they deny the
Legislature the pooer bank charter
indeed, what difference does make whether bank has
capital OF millions four millions. it she operating
safe principle. If she operating safe principle. HI
be considered to the slang OF the past
In former paper, held the following language which
see no ust to abandon; An act establishing
branch of of the banking corporations. pertains to Il
mother institution. 1t deeply concerns its interest," nnd
its control and nothing less ha
an agency" The OF 1850 did than esabl sh
branch of the Louisiana State Bank at Baton Rouge
II repealed law, parts of laws. as will show whe
come the discussion a ing under the lish article Of Il
consiituts0n.
The first section of the of ls42 reads thus: That Il
charters Of all the Incorporated banks in the city of Ne
Orleans be- and the hereby severay and respective
revived; and all the rights privileges. immunitie
limitations prohibitions and restrictions contained in sa
hereby
in fn each of said banks. respectively subject
limitations and provisions hereinafter contained provided
etc
In 1896 the banks by the suspension of specie paymen
forfeited their several charters. 1t necessary, the
in order that they should again have legal exister
and exercise all the privileges and franchises ighfu
belonging to them, anteceden to said forfeiture; Il
they should again be called into existence by act of
sovereign pow exercised through the consttu ona form
Prior to the act of 1872 all their privileges and franch
extinct without any vital force In calling them aga
into existence. the Leg stature thought to remove
restrictions formerly existing in their several charters
ampify their sphere Of action. Whether this wise
nnwse legislation is not to be considered as am
discussing the policy of the law, but merely laying do
what the In removing these restrictions and amp
ing their sphere of action, the Legislature contemplated
certain contingency.
They considered it probable that but few of the ba
would ofthe oflS4a Under this anticipation
the necessity of enargng the scope of their operatO
The whole country in state of bankruptcy. The CT
merca agricultural and mechanical interests prostr
and depressed to the lowest ebb They imagined that
expanding the operations OF the several banks that mi
accept, they would nstil life and vgor into all
branches Of trade and industry. Whether or not the eA
deni hsd the desired effect the result before the conn
ny. They proceeded repipe the charters of the
banks, with all Their privileges limitations, rictions
'subjee' however, to the limitations and provision
OF the that brought them again fe Seeing. howe
the evils and. k.qisasers that had flowed, and likely al
flow, lr 81 great expansion in the operations, d
the act, constituted the Board of Currency. def
and prescribing duties. These duties embraced by
second section oil SAID act ana among them ind the
lowing " to take that the money issued u
the authority of the State be not depreciaed." Our
consists, then, by Of constant vigilance and
emens to maintain the banks a safe line of operat
BY the above quotation from the act of 1912, find
the provisions the of 1918 and 1884 subject
dna,e to those contained in said act of 1872 In iac tn
of iSi2 together with the two former acts constitute the
ter Of the bauk The provisions of the act of 43 whe
conflict with those Of 1878 and 1884. remain steadast
they yield This in strict conformity with every Just
of interpretation The existence Of The rule is coeval
that of common sense.
Now, doubt rests upon my mind but that the sc
paragraph of the first section Of the act Of ls42, grants
banks Unlimited powers of expansion in their short p
subject and submissive. however, the restraining
vested in the Board of Currency 1t seems that we uni
naIely differ essentially with regard to the mode of
cising that power You imagine that the act defining
duties authorizes you alarm the community by the
cation of statements, thereby depreeidting
money issued under the authority of the State
you were appointed to protect And what is still mo
uaordlnary, assume it to be duty thus to act,
time when the condition of the bank is both sound and
The short paper of the bank is viewed cash in fl
use the language oil the law itself, forms acomT
parto the specie basis intended to meet the eircaatio
deposns The short paper insures rapid movement
daily receips lndeed. under the present operations
State Bank. this rapid movement in the daily receipts
only auickened but doubled-inasmuch as her loans
only forty daysio rua Indeed the idea of her pros
under commercia al crisis, is the more diminished VIII
consider the dfusveness of her operations oans.
will remember that TIL very point not only q ma
conversation. but Of examination with u.s.
How much more would it havs comported with the
Of our stadons-wh the interests of the community