The Gonzales inquirer. [volume] (Gonzales, Tex.) 1853-current, 1853-08-06
FREE HAHXIxo

N" P'""'osJ c'aiIh TIC consideration Of the
next Legislature, there will doubtless be bin
or resolution introduced, to ascertain the wishes
Of the good people Of the State of Texas with
regard to the propriety or ~cxpcdiency of
amending tho constitution in such a manner
AZ to allow banking within the limits of our
State.
whether such an amendment will meet with
the appreciation of u majority of our citizens
VIII he determined in due course of time. We
arr not prepared TO say that Il will or will
not, but IL il an indisputablc fact that This
question, however obnoxious it may be- 10 the
ears of "old fogics," is nevertheless gaining
favor among tho more progressive and enter.
prising portion of our population. Nor are
We prepared to say what kind of a banking
scheme would be likely to meet with most
favor, but VIC verify believe, that, were the
principles upon which free banks IRE conduct.
Gil in some Of the older States more generally
and thoroughly understood by our citizens.
tlnt system, above all others, would take pre.
ccdcncc.
In order, therefore, that this system, which
is IN successful operation in many States In
our Union, and which will undoubtedly. at no
very distant day, form a very interesting tonic
OF discussion among the people of Texas. we
propose publishing, from time to time, such
information connected with free banking ms
We can gather from authentic sources. and
which will enable those persons who are not
thoroughly acquainted with the subject. 10
form their own opinions and draw their W
conclusions before the time shall arrive when
they will be called upon to give their views
concerning the same through the ballot-box.
We commence with the following article,
taken from the Alexandria Democrat, which
will give the reader aa insight into the free
banking system of Louisiana:
Our readers are aware that tho last Icv;sl,.
tnrc passed n Free Banking Law, which has
been well received by considerable. prudent
men. The gentleman who framed it-Mr.
Wilson, editor of the p~icayunc-is' an able
f%nancier, thoroughly practical In his views,
and, from his habit Of intense application and
investigation, as well, il not better qualified
for such a work, than any other citizen of the
State. lie had before him all cotcmporancous
legislation upon the subject of free banking,
and drew up u bill, free from objections and
faults time had developed, which met with no
organized opposition in either wing of the
Capitol,
This bill, not a law, is stringent to n dc.
gree. The basis for FREQ banking must Inc
Louisiana State stocks of the United States,
or New Orleans city bonds. No other sccuri.
ty can be received. The formula to be oil.
served, we will cndcavor to explain, in n man.
ner that may render ii clear and distinct.
We will suppose ten citizens wish to bank
upon surplus capital in their hands 10 thc
amount OF one hundred thousand dollars
which is the smallest amount permitted bv
the law. The first step to be taken is to pur.
chase the designated security. This done,
they so with their bonds tslsaton Rouge. prc.
sent them to the auditor of the State, and re.
ceisc from him endorsed bank bills TO this
amount. These bonds, bearing interest. vary.
ing in amount, and secured beyond the nosssi.
bility of n doubt or mishap, arc retained as
security for tho redemption Of the notes IL.
sued. In addition to this, each one of the
stockholders il bound for tho redemption Of
his amount OF stock, say ten thousand dollars.
Here we have n double security. In casc Of
q failure or suspension Of the bank. the bonds
named are sold by the auditor, and the bro.
ceeds devoted to the redemption Of the notes.
Eight per cent, interest, from the time OF do
mand, is given to all holders Of bank notes or
obligations.
In addition TO this basis, a bank must nj.
ways have on hand onc-third of tho amount
of her circulation, in specie, and make pcri.
odical returns, under oath, of her real condi.
ton, transactions, etc. For a violation of any
OF the DEGREES touching hor management. in
which there is a compromise of honesty, the
penalty is n residence in the pcnitcntiary.
II men having idle capital are disposed TO
bank upon legitimate principles and for lcpiti.
mate ends, they can do SO eftcctuallv under
the provisions OF this bin, stern and direct NJ
they are, Those who contemplate ,obbin,
and swindling operations will treat this law as
Greedy did the Baltimore Wing platiorm-spit
upon it-Or II cannot, by any stretch Of In.
gcnuity be madc subscr,icnt to their neGari.
Gus ends,
Within the past month. Ave banks in New
Orleans have taken the initiatory steps Cor or
gauising under this law. More will doubtless
ho a'idcl to The list. That they viii do a
sound and profitable business, hy dealing in
exchange, receiving deposits, aud discouniine
short business paper, admits of no doubt what.
ever TIN power Ia issrc bills and discount
paper upon the authority Of such an seercdi.
ted SHAREHOLDERS as ;ho State Of Louisiana. l.
a sufficient, guaranty for profitable returns.
and this will hc the more clearly perceived
whsn wc reflect that MI the pitfalls and hogs
~ chartered banking are avoided in this law.
II can. at course ip like am, pc,al enact.
n,ent, violated, tgt the ~petalty Is the scycrrst
known 20 Christian i~utislsudsncc No lcvis.
la,'ca can nd the Norii OF ~,,llainy hat Ii il
FAIR sn presume that men who engage In fee
banking, ia tlsts state, VIII hc reluctant 10 In.
cgt tlv peaaity 81 the isw-te bring down
uton themselves q dangeoa. and iha, inf.sny
which survives the grss~
Within tlE las, few DAYS VIC have hear, the
VEvJyVv Vt TIN utssssss44s ssE,Ss.t. - : hank Ia this
INrssh, Ia cont,itiss with the provisions ~
tbis iree lsSuking law, nxely discussed hy
.,,Y gttoe ,ft,e.ns a. 49, gt..h ,h4. .~.St