The daily union. [volume] (Washington [D.C.]) 1845-1857, 1851-04-03

night Among the mosl important enaetmenls Of d. II,
session was The adoption Of new free banking min,
ple-new al least in The State Of Virginia w. H..
never seen a copy of this banking law, and ,h..
fore we hesitate to speak Of lis leading ts..,
although we are thorough friends Of the cons,uo,
currency" We learn from the Richmond ENDURE, Al,
the following banks were established, OF authoi,, |.
be established, on the new plan
1.-THE Merchants Bank at Lynchburp, with e.n,.l. !,
not less than $500 900, nor more Than SSO0.Oo0.
.The Central BANK at Stauntoo, with capital or -
less than y 100 900, more than $500 600 Nv
" The Bank OF the Old Dominion at Alexandra viii .
The Traders and Mechanics Bank OF Norfolk slS. !.
TO $500, 900 WV
THE Bank Of Commerce at Fredericksburg, sl5o.n.
:" The Manufacturer and Farmers Bank a, Wbs,li,.
1850, 900 TO S30O,OVO.
" The Manufactnrers' Bank at Charleston, Ksnswh,
The Farmers Bank at Fincaste, Sl5O0OO TO sSo,o
"a bank al Portsmouth, 500, 600 TO $4,000
s.The Madison Bank at Fsirmount.
1.-THE minimum capital Of these banks is 81 900 600 IA
ma xlmum s. 3OO0O0 X is supposed that during Inc ps
ent yoar than 81, 900 OF the capial will E
operation"
principle on which these banks have been established
but we feel hesitation in saying that tho principle
radically wrong il it does not differ mos, essentially from
any principle we have as yet. known to be placed 4
the foundation of banking establishments. We have,
great disrust Of corporations and we can see no reason
or justice in permitting individuals to associate henssy,
for the purpose Of issuing fictitious currency unls,
every individual so associated is made liable personally
like partner in all agricultural or commercial partn
shps-for the liabilities and responsibilities Of the assoc
ton into which he has voluntarily entered. Even then
another grave question arises which we entertain
very fixed opinion, but which we do not think ar.
cessary to discuss now. ~
The comparatively modern idea OF basing bank Issues
on deposi,es Of State and United States stock heigh
rather than diminishes the inherent wrong Of the b.ut
ing system Some twelve months ago we gave our VIEW
somewhat at length to the ightfuness Of this dsy
opmen OF vicious principle. We have not time TO Il.
peat now what we then said on this subject; but il viii
require Blu, few words to expose the leading feature d
the new banking idea
A banking corporation is chartered, say with eapu
Of 100000, in State like Virginia, whose evidences d
debt pay six per cent. interest. We will presume
although it is violent presumpdon-that every doNu
of the capital is paid in specie That specie enables de
corporation to purchase Stale stocks, bearing III M
cent interest, TO the value of FIVE hundred thousand
dollars. The stocks thus purchased are d.posid
with the treasurer or comptroller, or whatever omca
is designated by law for that purpose, and receiva
100000 in notes countersigned by that officer Tha
notes are put into circulation If they are pu, into I
lalion by way of discount, the corporation receives
profit Of sir per cent on them, while il receives III M
cent interest on the State stocks depostedthe basis
the issue-thus realizing toeiue per cent profit This
the best aspect Of the But suppose the $500 O
countersigned notes not put into circulation BY u
of discount. but used for the purpose Of buying u
another $500,0O worth of State stock the bsaa d
another issue Of countersgned notes then the or
ration will have deposited 81 100000 OF State dai
and it will have 81 100000 OF notss in circulation
capital Of hall million, thus making profit Of 10 NJ
cent This may be carried ad infntsm until rsdsna
circulation is produced and ruin falls upon the coaa
nifty, while the authors of that ruin securely hs
in and fenced against harm The whole idea--whelu
frs, practically applied, if we mistake not, on the ndzl
mendation Of Mr.. Fillmore when comptroller Of MI
York-is cunningly-devised scheme to make =
national and State Indebtedness a capital for non M
ducing speculaors, and basis for corporation T1as|
tons. #s.ls