New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1853-02-02
RANKS AND sPECIR.

culstion il that it shall be redeemabls on de.
mard in specie II is not eas, to redeem a bill
in coin If the Bank issuing it has none TO DO IL
With We said the other day that we would
Ike to see the plan tried Of compelling the
Banks TO keep given proportion Of specie 70
their eircul:tion, and suggesting as proper
proportion 3 coin reserve of one dollar for
every three in circulation. The Banks object.
OfcOurse they do They viii always object to
restrictions upon their issues. But special
objection is made that Bank which furnishes
the State with securities for its issues, in the
shape of STOCKS, ought to be exempted from
any such restriction. on the ground that 1t is
furnishing double security for It's circulation.
The objection wears the appearance Of De-
ing reasonable. We shall show that it has no
good foundation.
All Banks are presumed to have capital and
leading object with all Legislatures granting
Bank charters has been TO make sure that
these corporations really possessed the capital
they claimed TO have. Thus they have stipl-
lated, that, before commencing operations,
their vaults should be examined By officers OF
the State. who should see that the corpora
tons did really have and possess, in the verisa-
be hard dollars, the capital alleged. With this
assurance the State has been content, and has
allowed those institutions TO issue paper money
to limited amount, that amount bearing d.
rect and specific proportion to the coin so
counted On this basis have they been allowed
to utter q paper currency But experience
has shown that the counting of the specie is
often mere farce that the dollars were often
borrowed simply Tor the purpose of being
counted on one day, and TO be returned to their
true owners the next. In this way numberless
Banks have been set going without any real
capital whatever, and have gone on issuing pa
per money without any better basis than the
notes of irresponsible Bank managers who get
up and use these institutions simply for their
own advantage and the disadvantage Of every
body else. This experience has driven our legis-
latOrs TO devise an improved method of making
sure that the Banks asking for charters really
possessed the capitals they pro(essed to have
The result is that the State has as, for exam
pie. in this State) insisted that the capital
stock Of the Banks should be real, and not fc-
titious, and, 10 the extent they are used as a
basis of circulation. should be placed beyond
their control while they were issuing paper
currency based on that capital; and so il has
carried out the idea of making good stocks
serve, in the stead Of specie, for Bank capital
see that so much of the Bank loan as is equal
TO the capital on which il bases a circulation
shall be made to solvent parties, and be heldin
good faith for the redemption of It's issues.
This Is a valuable improvement upon the old
plan of establishing Banks, no doubt. But
upon a Bank of solid capital that intends TO
loan money at the legal rate of interest, il i'm
poses no hardship whatever 1t is simply say
ing to the Banks, you must choose between
your loan applicants and lend 10 those who are
indubitaby solvent. IL does no more than
this and, therefore, the Bank which pledges
its stocks to the State for notes for circulation
stands upon precisely as good a footing as the
Bank which lends bona .fde specie capital TO
the ordinary class of borrowers
But We propose that the State should 80
further. We say that sound policy dictates
that every Bank which undertakes 20 issue
currency redeemable in specie should always
keep reserve OF coin on hand which shall bear
fixed proportion 10 its issues. Every well
conducted Bank does this Every prudent
Bank director regards il as a prime duty 60
see thar this is done. What We insist on, is,
that the State shall interpOse It's authority and
fix that proportion, and make al the Banks ad-
here 70 a common standard This we consider
TO bee 4 step forv ard in the work Of securing u
stable paper currency, which, as an invaluable
aid TO al the industrial interests of a nation,
We regard to be eminently deserving Of the Ia
vor OF legislators, and which should be protect
ed b. every reasonable guard against vita
ton and depreciation
Sir Robert Peel attempted and accomplished
this object with eminent success in the re-
charter Of the Bank Of England, nOtw.Ihstand-
ng the hoWlings Of the money and commercial
circles p.
PLEASURES OF ROYALTY.