Weekly national intelligencer. [volume] (Washington [D.C.]) 1841-1869, 1851-06-14

T. EGERToN BROWNE.
AuDlroR's OFFICE, p. o. D., JuNE IL, 1851.
INDEPENDENT BANKS.
FOR uaE NATIONAL ISTELLIGENcER.
There appeared the columns of the National Integencer
of the 4h instant article upon the subject Of free banking
transferred that paper from the Norfolk Argus by request
1t is proposed show that the statements and differences
tanned therein equally unfair and unenable. cannot
but remark upon the very opposite views held by the Different
opponents Of this free banking system, no, applicable
far the system sanctioned by tho late Virginia Le
gatue The designation is the independent banking
system The Editor Of the Union has sbored to show that
will great expansion to the currency, and give
profits the stockholders, whilst Whston and his
mentor in the article which is the subject Of this review,
deavors prove that the paper Of such banks cannot ccu
ate and that consequently the profits must be small They
each aborng in their vocaon and the writer Of the
cle signed Winston u.s. for best known to himself
evidently apprehensve of the Of system recommend
ed many considerations Of good and sound policy
Winston introduces the communication Of his friend with
remarks, doubt thought by himself very profound
and very philosophical but which apprehend read
ers will appear very sbsurd Whsons friend IT, BY bic
showing, friend TO banking SYSTEM and points
the advantages Of banks in very good but
place remarks but whick certainly gerane the
snbect which he undertook Discuss Indeed is bis
evident and only object 70 deter the mid from vesng their
money these Independent banks, it would have been well
have been less dnse ia his communication now pro-
coed to consider the objections urged against the Independent
banks. elf" quote the language Of the article, :"
have urged the profit consists in the of its credit then
that credit confined the Of the State stock deposited
with the treasurer hope for equal profit with the
present banks whose issues credits may extend five
times its specie, you choose, its stock capital II
receive but per its State stock whilst upon
the money necessary buy that stock the present bank by
aala IoanO
would perhaps make one-thrd more In another part Of
this Norfolk article 10 ssid $ This conclusion arrive at,
to the exclusion Of the circulation Of the bank, either
wholly such that the bank instead of recev-
ing greater than the old banks would perhaps
for the profits Of is State stock TO pay expenses The
object Of all this although expressed in very pepicuous
English, to lead to the conclusion that money vested in
the indeI endent banks will not payss;x per the
other hand The Washington Uno which has beer engaged
for time in attacking this SYSTEM maiaaas that they
tend to too great expansion Of thecurency, that they
will give ten, perhaps twelve cent "a the stockholders
It is evident that either Wilson's friend the Union is
greatly believe neither takes correct view of the
subject
II not to be presumed that the stockholders will invest
their entire capital in State stock They do So
they have hand least of their circulation
in specie The most plausible argument against the system
the difficulty Of keeping the notes the bank in circulation
But upon this subject experience is better than Theory The
banks the District Of Columbia and also in Baltimore
independent banks their notes not guaranteed by the State
and they make good better dividends than the banks
of Virginia and in New York. where this very system has
existed for years. they have given to the State the
paper currency and have proved profitable to the stockholders
The writer Of the article supposes that the of these banks
guaranteed by the State will be equal to gold and silver
such apprehend is not the fact is true, above ndi
Gated they would be equal to gold and silver at the place
where issued bot not places distant from their locality,
and no doubt that these noe secured by the State
and receivable for taxes would freely circulate all over the
State and even beyond it. They will to some extent be
boarded up in preference gold and silver being hoard
ers OF equal value and convenient Let suppose
independent bank with capital Of $500 900 and ed
ing S5OOO into operation, commencing at first with
200 OOOto $780, 900 capital The first named sinvest
edn State securities and deposited with which
couL tesgned notes received The bank then commences
operations receives deposes and commences business As
prudent bankers the managers and directors will Of course
take care that she compsl With helaw keeping the required
Of specie hand the circulation goes out fits
found necessary increase the subscriptions 10 the maximum,
them the bank get circulation beyond the 5000 0OO
the bank will I course buy State securities and deposie with
the treasurer for Just she circulate the profit BANK
ing increased The remainder Of the capital will be in money!
the same a. other banks end the difference between this and
the old banks 10 that gives greater security the note holders
and every holder Of independent bank interested in
uphodng the State credit and under this system holders Of
Stale securities make them available in increasing the
banking capital Of the State much needed in many
parts Virginia. Wheeling, Charleston, (Ks Alexands
Lynchburg, Stanton, and other points The question is
could the bank keep out sucent TO expenses
and with the interest derived from the State stock pay the
stockholders than six per That they could in
State where the branch bank system did not exist there
doubt and in the charters granted to these banks
gard was had to the prevailing system in Virginia The
writer Of the article in question is certainly mistaken in the in
depreciation which be places upon the provision Of the charter
which in these wods And the said bank receiving The
(hs H. its notes countersigpcd by the easurer may
hereupon issue its notes aforesaid the full Of the
stock bonds deposited and others what
soever There nothing in this clause that prohibits these
banks from receiving and paying the Of Other banks
and when motion made in the Senate incorporate
such prohibition, II received but vote that Of The
The author of this Interpretation is mistaken both
literal meaning and the spirit Of the law The obvious nten
Of this provision prevent the bank from issuing
notes. unless endorred by the State. Il e probably
that the Legislature looked the Of this new system
(new VTgnis) ultimately avoiding the issues Of branch
II not however, expected that this result could
occur whilst the branch hank system continued.
The article says Nor is il be forgotten that the stock
holders of the new bank be individually responsible
This feature whilst certsny adds to the security Of the
public coners benefit upon the bank and may be attended
with disastrous consequences especially when it is almost
possible that contingent fund be collected
from the profits under the system. What Is the
Of this responsibility Every sockholder is to be liable
ably Of his private for the circulation and efpres,
contract dts II said bank TO the amount Of stock owned
him. Th, Of course does include deposes and the
of