Richmond daily times. [volume] (Richmond [Va.]) 1850-1853, 1851-03-12
FREE OR INDEPENDENT BANKING.

CAPITALISTS of and introduced into New York to
be extending its influence 10 other States. The Legs
latures ,of Ohio and Pennsylvania have now under con
sderation General Banking Bill, and here in Vrgi
MIA where new ideas arc not famed for taking root, the
system finds many advocates.
On Tuesday evening, March 4th, bill TO incorpo-
rate the Merchants Bank OF Virginia at Lynchburg,
based upon the free banking principle passed the House
Of Delegates, aer encounerng Strenuous oppositlon,
BY clear majority of 81. The earnest efforts and
common-sepse arguments OF Mr. SPEFD, the delegate
from Lynclburg, disarmed for the nouce, the oppo'
nens of the measures we say for the nonce because
the following day the House rejected by majority OF
u bill of precisely similar character to establish the
Potomac Bank ofVrgpia at Moorefeld in the county
OF Hardy There yet pending several applications
from various sections of the State, for Free Banks
The decisions above recorded, would seem to indicate
an even chance for the success of these applications
But we incline to the opinion that maiolity OF them
viii ultimately pass the House. As to their fate in the
Senate we are not prepared to speak, though we tain
would hope that body may not be ndposed to give the
system ia r trial.
The delegate from Orange and Green, (Mr. WlLLIs)
has set his face against the system, and notwtstand-
ing the cast gaton he received at the hands OF
Mr.. Speed Tuesday, we find him on the following day
not only opposing but defeating similar scheme The
ground which this gentleman takes is this: He regards
banking practised in this State, unmitigated evil
and goes for thorough reform. He contends Tor the
principle, acknowledged to be correct in the abstract
that every bank should be held responsible for the paper
issued at its counter and ought to be compelled to
deem that paper in specie, demand. He illustrates
the practical working of the free barking system thus:
bank in Lynchburg, for instance, enters into ar
rangement with similar bank in Saunon, (where, by
the bye, has been establshed,) to issue con-
Jointly S2000C0 in paper-each issuing 100000 in its
indvidu al capacitythey then exchange their issues
that the people of Lynchburg will be supplied with
notes redeemable in Staunton whilst those in Staun-
ton will be, in like manner, supplied with currency
edeemable only in specie at Ike of the bank
in Lynchburg. This objection MIR. Willis proposed to
remedy by offering proviso to the bill establishing the
bank in Lynchburg, compelling said bank to pay spe
Gle for all issued at its counter, without exception
Mr.. Flournoy assured the delegate from Orange and
Greene that his provso clashed with all pc renee
the subject OF bank ng-that its effect would be prac
cay to compel the bark in Lynchburg to redeem in
specie the notes Of all other ba INKS received either de-
posite in the payment of obligations falling due in
that bank, and that nc bank in the Union cou Id with
stand provis ion stringent twentytour hours. Not
wiihstanding this lear calculation OF the deeterous et-
iecs OF Mr. Willis proposition, still toryftco MEM
bers of the House voted to eugraft it on the bill
Now without pretending to thorough knowledge
of the subject of banking, yet free to confess
that apprehension, the free banking system is the
safest yet devised so far the bholder if not the
sockholder, is concerned. As the principle appears
not to be fully understood shall at the expense OF
space attempt TO explain it by stating the substance
of the provisions which the bills for the
establishment OF free banks
CAPITAL Stock AND CIRcULATIoN.--Wh whenever any
bank proposed to be established the free banking
system, shall deposit with the Treasurer of the State
certificates of the public debt of the State or the bonds
OF any improvement company or companies guaranteed
by the State, bearing six per cent interest, the
of 800 900, said Bank shall be authorised to deliver
notes of any denomination ii may select not under five
dollars the treasurer, in the usual form Of bank notes
intended for circulation the full amount of the stock
so deposited upon the face of which shall be written the
words secured by pledge of the State securities and
such bank notes shall be counersgned by the Treasu
rer, and numbered and registered in proper book, to
be kept for that purpose And such notes, counter
signed shall be redelvered TO the proper officer OF such
bank and the bank receiving the came shall there
upon issue its aforesaid the full amount Of the
stocks thus pledged. And from time to time upon fur
ther deposits such certificates of debt or guarantees OF
the State, by such bank in sums less than $4,000
said bank shall in like issue notes. counlersgn-
ed as aforesaid 10 the full amount go deposited, but
such issues shall in event exceed 100000 in the ag
gregate. In addition 10 the safeguards above descrb.
ed the bank is to receive subscriptions payable partly
in money and partly in the stocks above named, and
10 issue only dollar lin paper for dollar either
in specie good inerest-pay stocks and is farther
CURED always to keep certain amount Of specie on
hand for the redemption Of its notes.
EAJr prOp In rese
such bank shall at any time, lawful demand, during
its usual ours Of business, at the place where such
notes are payable, ia refuse redeem any such
note notes in the lawful money OF the United States
che holder OF such note or notes making such demand
may the same tobe protested for non payment,
in the usual manner, and the treasurer, receiving
and filing in his office such protest, shall forthwith give
notice in writing to the president cashier of said bank
to pay the same; and il he they shall omit to do
for ten avs after such notice. the treasurer shall mme
diaely thereupon unless he shall be satisfied there is
good and legal de fence against the payment OF such
notes give notice in at least three newspapers
published n the State that all the notes issued by the
said bank aforesaid will be redeemed out of the trust
property in his hands deposited aforesaid. And it
shall be lawful for the treasurer and he is required
apply the said trust property to the payment of such
notes with cost OF protest and interest and to adopt
such measures for the payment of all such notes as will
in his opinion most eectnay prevent loss to the ho
ders thereof and to this end he sha II have power to
sell the same or much thereof as shall be necessary
at publ ic auction.
RESTRICTIONS AGAINST OvER-IssuEs.-The act incor-
porang free banks, provides that should the
countersgn noes Of such bank 10 greater amount
than the stock guaranteed bonds deposited, will
fully reduce the amount OF such securities in any
below the of the outstanding notes OF said
bank he shall, upon conviction, be adudged guilty of
felony, and shall be punished by fine OF not less
than one thousand nor more than ten thousand dollars
and by Imprisonment in the penitentary house Tor not
es than three nor more than fifteen years.
Thus, it seems TO u.s. every safeguard has been thrown
around these Institutions, Their circulation is based
upon the best OF all secuties-spece and nierest-pay
atocks--ha in stnol.a th.u