Des Moines courier. ([Ottumwa] Iowa) 1848-1854, 1851-01-17
From the Bur. Telegraph.
Free Banking ian Illinois.


position on the part of our neighbors
across the river, after trial of severa.
years to get along without such facilities,
TO enter once more upon the experiment.
of banking. The Governor of the State,
as we learn by telegraphic dispatch, is
opposed to the movement. The people,
however, feeling the necessity of sotEe
protection against the thousand and one
issues of the banks of distant States.
chiefly of small bills, which are in circu-
lation among them and form their only
currency, will doubtless continue TO in
sist upon the adoption of such means
as will give Them not only currency of
their own, but proper control over that
which may be introduced among them
from abroad. g.. $751; ...a-a5asr
The OgaiCka Spectator, neutral pa
per edited by Col. Patterson, a stauncll
and talented democrat, comes out in ia
vor of Free Banking. We copy the ar
ticle entire below. The plan proposed
is substantially the New York system,
with the exception that the securities are
not 50 ample, which, were we an Ili-
noisan, we should consider serious de-
feet in the proposition of the Spectator:
"That the good of community may
require legislative authority in comforting
immunities, privileges and charters, to
any person or class of persons, which
would promote the general welfare, 10
guard against fraud and imposition, there
can be no doubt. Therefore, Banks
should be under the inspection of legis-
la,ive authority. Now, wha. we demand
of legislative authority, and what the
people have right to demand, is, in the
establishment of banking system. that
they guarantee 10 us that no bank shall
be permitted to Issue its notes until the
Stockholders have secured, by bonds
and mortgages, or United States stock,
to the State, for the use of The holders
of its notes, in case of bank failures,
sufficient amount TO secure such note
holders against loss.
The banking system in the United
States has been the theme of much dis
cussion, and discussion, has produced
|
the present day, it is considered as easy
10 adopt system that will prcvsnt fraud.
us former systems, now exploded, were
almost certain TO produce ii. We con-
slider it necessary, therefore, for the gem
eral good, that the Legislature pass gem
eral banking law, and submit ii TO the
people for their decision as required by
the Constitution, in order that they may
have currency Of their own, upoa sufi-
cient metallic basis, together with collat-
eral securities, which will, at al. times,
render it safe and secure.
The Constitution of our State, Art
X, Sec. and 5, is as follows:
Sec. 4. The Stockholders in every
corporation, or joint stock association
for banking purposes, issuing bank notes,
or any kind of paper credits to circulate
as money, shall be individually res7on-
sible, 20 the amount of their respective
share or shares of stock in any such cor
poration or association, for all its debts
and Liabilities of every kind.
SEC. 5. No act of the General AS
sembly, authorizing corporations or as
sociatlons with banking powers, shall go
into effect, or in any manner be in force,
unless the same shall be submitted to
the people at the general election next
succeeding the passage OF the same, and
be approved by a majority of all the
votes cast at such election for and against
such law. ~
Now, this is some security to the hol-
ders Of the notes of broken bank
but is it sufficient! lis beneficial effects
depend entirely upon the con ingoncT
that the stockholders of such an lnstitu-.
lion have the means, independent of the
amount Of capital invested in the same,
liable to legal process, to redeem the
notes of such institution.
In order to give the public as great Sc
curity as possible against the fraud or
Encouragement of such institutions,
we would propose the following as
indispensable features in any general
Banking law passed by our legislature:
l. Thatthe stockholders of all bank
ing institutions within the limits of the
State, be required, before they shall 90
into operation, to secure by mortgages
to the state, for the benefit of the holders
OF the bills and notes of any such insli-
tuition, unincumbered real estate to the
full value of all bills or notes to be at
any time in circulation. T7#
2. That the stockholders Of banking
institutions be required, before the issue
of any bills or notes. to deposite in their
vaults. one-third of the amount of stock
in gold and silver coin. aF
3. That at no time shall the amount
of notes and bills of such institutions i'm
circulation, exceed the value of the real
estate mortgaged to secure their redemp-
tion.
4. All notes or bills issued by such
institution. shall be registered and coun-
tersigned by the Secretary Of State, or
Auditor, before being put into circulation.
5. In case of failure of the bank
holders of the notes TO be preferred cred-
itors. " 15F laaH sb
The plan here recommended will have
two-fold object. In the first place, it
| will secure the note holder a1ainst lass