Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1854-02-24
For the Enquirer.
BANKS AND BANKING-INDIVIDUAL AND STATE
CREDIT

Messrs Edi;ors,-It be obvious the casual
Observer that In and 10 many respects happy
und hopeful condition. At the same time Il Is equally GER
tain that there pers and disasters ahead that IL will
oure ell prudence and caution that command 10
avoid All the indications aro that sha reap rich har
shadows thar coming events ,hen enter
ing upon taller prosperity than this country has
known and which oveangs deeper abyss of iaery and
ruin. The discovery of gold 10 California and Australia has
produced lis le2lmne effects upon prices Soon
after ite discovery evulson took place In England, which
required all the gud received from California prevent
from fe ling disastrous effects Of Wo just be-
ginning fairly from that when the drain Of
specie In anticipation OF war; commenced 10 the continent
Of Europe and again has required all the gold 'ha:
could get from California TO prevent disastrous effects from
In spite. however OF both these checks prices
have steadily rising, and az the effect OF both these
10 fast wearing OH we may expect still greater and
rapid rise In prices. As prices rise, will become
eager purchase and purchasers become fire.
ouen money will &c In greater demand banks will!
greater profits and OF they will be increased and
their clrcul1 on and that ite increase prices
fne gold will continue 10 and lhu, will give the bank
greater powers Of expansion that every thing will rise
rapidly which will rngend.r spirit of speculation which
may become runous TO the country Would It not be wise
in US commence al counerac, that tendency1
The great be avoided is the tension Of credits Tho
will extend her credit and individuals theirs until both
may be ruineh and prosperity become Instead Of
blessing The tlndes that the Stale is pressing
credit 70 runous length and the great Gull for banks
proves that The community s itself 10 danger. This is the
favorable If 1t bs the last opportunity that will
pceentcd for In measure relieving the community
II the Legislature shall charter the old Banks and charter
III The that called for without at the time
doing something check the extension OF credits upon the
uinous principles present in vogue shall have ground
10 look with fearful appehensons to The futuro um
enemy Banks credit They both great goods II 10
behind the age 10 say we Banks est
them and ruin Themselves We might as well say
would have lest men purchase goods until they
ruin themselves Let have Of them the COM
muniy DESIRES but let US have them upon true principles
The Idea appears be prevalent that we have found re
1e Td a soc, e tsS N should Be
Ibis invention OF recent dae and has not heen larry
ed Ii appears me- that II must be more liable 10 sus
pension of specie payments he great evil OF oans,ng)
than The old principle II the notes Of Bank on the
principle back hem hey can, not only pay
of with the cash funds on hand but hey can ca on
the borrowers of their capital 10 assist Them by curta-
nen, Blu. the Banks foundes State stocks cannot call
on their capital to sustain hem but depend upon every
crisis upon ordinary banking funds They cannot call
On The State fo five twenty per cent upon he!r
bonde 20 ass! them. As to the security OF note holders
from having OF State STOCK pledged equal 10 their
noes consder one of The thousand plausible fa!a
ces The banks will always sbe pay their notes bu
uEde, erea; monetary pressure and then the State
stocks cannot 5e sold but at great sacrce AT ;e rcVr
sion in 1891 believe State stock got down 10 seven
Ave or eighty end ihc 10 lredeemabie bank paper
hundred doa! note would be worth twenty or
twenty Eve dollars more than the hundred dollar State bond
,hs, The note holder will the power for and
cover Can expect Stale Stock TO be higher any sub
ucn, reyusou the State debt has been greatly In.
creaoed and when they arc 10 go Into the hands OF e
note holders, tacy may oe expected " oe p'e0eea uP VIC
marketl -,
that s throw upon them the responsibility OF lenoinR 70
irresponsible persons. TaeY lend The money enc get lie
oruht nothing bIt that they shond pear 'he
responsibility This may he Done by prohibiting he oanas
from taxing endosers their paper. sao~ hsl such
schrme will produce terrible out5nrst OF benevolent
indignation against the proposer Tor wishing 70 lne
credit Of poor young OF buainess "o nnt or inc
his friends would be able to get foF.
ward In business. know hia 20 be eGs plausible pre-
test have been poor, and ~!hoa. ',e assls'ance o
banks got credit !or much as wanted and conld have
had great deal more There are many, aou, lear 200
many ways Of extending credit, without 'esoIllne en-
doscrs in bani which is certainly e mUss Nv way nsu
was devised for The community IL thfo"s tHc iesponeo'
" OF lending upon tho principle oil oereVoence instead oil
that of interest Merchants credit men upon their indiv
dual responsibility and Why not oanksf why should The pro-
the los 20 into the Of and The risk be
laid upon the shoulders OF another Inc oanas nine times
out OF ten, are better acquasea % as @ as e s ~
loan and Ia Justice they ought TO bear tho risk Let no
an. feel apy uaeasness lest The prudent Industrious and
gel etsS a ,S ss ana an %
o,hs s. Credits will bo extended too ar under eys
teri I:!s great misfortune Tor cs 20 be e-'eaded toe
a. n .rm.:e Tery different thing for trading
~ hn broken up country Tracing oreaS
nm and sill; in few weeks they will haze thef affairs
ranged an be going on n business as nothing had hap
ncned But II country broke, he and his family
s;nk into hopeless poverty and wrechedness know of
scarcely any misery Intense than the ceiling out Of
b:ok.o farmer; tie stroke falls with stunning killing esc,
uocn him and bis family and the agony and euer-
pc is immense. MY Lord Coke said long time ago that
had souls The banks care 70! none CT ;hese
sueroga They may have known .t !hs :ins the loan was
n,sde that The principal would break but they knew INC
surety good and what they II heart of bene
soca, be b:skcp and the happiness Of his WIFE ano
Children destroyed7 Let him be more PRUDENT say neJ;
But why should the Legislature compel those TO
the prudence make the pro.s and who are tne o
tou,p:.d TO extend credits II the banks wers pro2eo
from taking eacosers and the State were 10 o
tho t.ss we should nave vastly security fo e gooo
conduct Of the hsnks II but borrowers He.e ue
he hanks would lessen considerably Inc huhot VI ns
vdrsls over whom the banks exercise innu
euce md f The Staewere to cut ioose oh nem, lney
they had Os. much Of Hs r. snss
the Legislation of the State that they ~oG DC ~
70, tbs s,sts 10 Gu, loose o the banks, stocks Of all