Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1854-04-04

"n.mo,ing 10 S77, l67 675i but In Virginia INC oomA oapnn
mounts ,h,n double the deposits, which arc but little more
> mos% i, millions of dollars. In the CITY ni View I oni
. "Sn there il a banking capital Of SID 3l5o=-, We ~ u.p" ~,
each to So. 702. 100. and the circulation Is Vn'y 40 much
u mi ONLY in proportion 10 Tho banking cap''ai, - 49,.
anesiaalion and wealth, than in New FORK II Is ,s s.'i nn "l
Iupor,snt TO the people oil Virginia. man IL = - ~. ~ nJv se.
mai State, that their paper currency shou'u u a"''
cured. ,l,,,o FIR IN. circulation, to-
,bo, with the auxiliary provisions when nave !,
,viII do more ,hnn give security TO tic no'e'hol"t.'
:; will give additional stability to The banks anu, ~ &C.
J., ,dJilional security to depositora ana o'her ~ sn,idi,v
' a s,Iyeucy OF The old banks depends upon 'o so"u I =
. ,hc n.per discounted The solvrncy OF Tie ne" w." No
~ - snd moi only upon the paper discounted eut a,sG H.; lna Al
onbIc stocks deposited WIN the treasurer ~ ,mronrri,l en-
,atii,y of The stockholders. In periods VI Wuain;;, n,
nN'ssmcnt, would the bunds OF the STATE D. rnsm" ~
-, ,,comm0dati ton papcr Ol individuals u oIa an','t
:" pab!ic confidence Under the oa sSson, !" ,Ionn.i,s
" rrhs creditor consists Of The paper dlscoun'eu, -. pDa'
p" ,bc specic in possession OF The bank. heis "oa".
,hs value Of This paper; and the paper eepo'' taun S Iinnn
ARE all in possession Of the managers u Nc !. T. nho,v de-
,hoir honesty as well as upon their prudence he - "o"5 =.
nsndeut, aud in their character consists, IN rum, ns . "'t
cuTiy. But, under the system pop9sea, tne rr :. d.mosj,s
80 in addition 10 the debts f,om Individual INC osPo"''s
hal i ;he snrcie. an additional security beyond the reach o.
hank officers, tqual 10 twice the capital s'0Ek % .G oIn
III. state bonds to the amount OF the capital, ana inc 'h'''l'
dual Enollly vi 'e w
Nv Ths orovislon of a trust fund for The %noteholder vii! also
add stability TO the bank, BY diminishing us iTa nnsa aau Of !.
cnnn,s. As a large portion of lie resources WIZ consis, on
,Iob, due by the Stale, the debt due by individuals ou9ht 10
hc smaller on this account. Such seems 10 nave ocen tae
effect of the provision where 1t mas been 10 opu,au"n: ~
M York, the loans and discounts OF the banks organizee
rnder the general law are much smaller in proportion 10 me
caGirul than the loans and discounts OF the incorporate
ks whose charters have not yet expired. Ihcfe Isl sun
grrater difference here between The proportion oi loans ana
Si-connts of the old banks and Of The independent oanhs:-
Tine FIVE old banks, Of which reports are communicated WIN
the Governors message, viz: the Bank OF virginia Inc FaI-
, . Rank of Virginia, the Exchange Bank. the Northwest.
crn Bark and the Bank OF the Valley, with a olnking caP',
tai Of $40 293 700, had an outstanding debt on The Isl o.
O,tjber, 1853, OF s22,G5l,iJG e., considerably more IMAM
double their capital, and exceeding by SlGo2Ois 81 the
limits prescribed by the Code. On the other hand, inc lonI
independent banks, OF which reports are communicated WIN
,hr .lc;e message, viz: The Central Bank OF Virginia, the
Merchants Eanl, The Manufacturers and farmers BINS;
and the Bank Of the Old Doni.Ion, with a banking capl'oi
of 81 0ST 800. had an outstanding deot ron lndlViauais, OF
only 1911, 300 IS, but al The same time, State b0nu2 ana
bonds guaranteed by the State, In the hands oil Inc treasurer
20 the amount uf q 0a6,2T0.
Additional stability Will be given &c banks under the pro
posed general law, by an addIIional. limitation LIoG the err
culalion. The only limit under The Code Is, mat me clrcu'
ls,ion shall not exceed i've times the amount OF the specie.
The same limit will exist under he 'aw proposed, and, IN
addition, il will be required that The c:rc4iliioh snail nGl e3
coed the capital utocE subscribed. There will iais &c also
a further Limitation upon iie .oans and discounts.
1t will b. objected that. Under such & system, thefo VIII De
too large curiailment Of bank loans ucd Issues. But This
cannot be conceded. The tendency OF banks has always
been &c produce ! scarcity Of specie by an undue subs;itu.
rion of their paper ior The 7rrcinus meiaIs. No legislation
has hitherto arailCd 10 restrain .Eia itnacncj. 80: !aieIeSt
has prompted them 10 evudc The !~eslfGiioGj OF tie law
Tc increase thei. profits, they have been ever pFone II ex.
lend l.cll lO60S Sud Issues OC}OTu Tile liNhlts Vi pIuacuCt.-
Hence have arisen lie n~dIESeilsss evils which they have In
fictad upon the community. Hence Il !; That the principal
banks OF riieIiaiiua in Europe have, at ditisrenL times, Ueen
compelled TO sIoI, spcci5 payments. II was mus :nat Inc
hank Of Copenhagen al hrst drove oil tho specie out OF the
country; that The notes OF the principal bank OF cNcGia'Ch
in Russia, though constituting The Chief currency Of Inc
country, depfca;ared to one.fuur,h OF ihLir nominal value;
and that lie nolcS OF to bcnk OF Vienna, allie! they had
swcliei 10 one thousand and sitty ""b!Gas et h'r'nS, hnu
deprecated 10 such an extent, that government was compel.
ed to reduce :hem 10 one f!lh OF their nominal value, ana 10
jssue n new DaCer ACCORDING 10 that scale. IL vas linus ina
even The great bank OF Easiand, s1ic ey Adam smith 10 DC
as stabin as the BRUSH government, hts ceei mere 'han
once shaken 10 It's foundations BY the evils when lis own
redundant circulation had mainiY produced, and compelled,
during the long period Of lwcnty-four years, 10 suspend
the payment OF lis notes. /! siis been mus laa' lH genera,
suspension and bankruptcies Of 1914 and 1881 were produced
in isiS country, Eumerous bank failures al other ti;hrF,
and general distress among ell classes, So often experienced,
when tie banks, after eycesJi"o i:suce Gi iactf paper, have
been compelled, by Z demand for specie, TO dsscGnt!nIc Their
loans and contract their circulation and II has bEeh thns
that The old banks OF Virginia, though lrcSidrt oyer by CHI
GERS Of rare integrity and ability, have, even now, al tne
very time thai tie: ere applying for legislative taSois' eS'
tended their loans end discounts greatly beyond the liI"'t"'
lions cf The Code. Indeed. the plat hisip'i u tanh!aG' 10
showing how unavsiIing for the protection CT tGa 9ao!lc,
have tccn the cstric,iOns r.tiOfOre imposed by government
upon lhr ipau5 Gnl Issues Of banhs, gives US rcus0n ratl!e;
to app:Gkend that tie rss'iiG;iGns no" proposed VIII also De-
evaded ar viulatrd. ll they Should nuV1 iar eject in,cndrn:
i. currency, Which law a Iva. pToycn " 90 r" Hn'Si to the He
public, II =US.d be the browning merit OF the system. Inr
power which baEaS nae possessed and cxcrciseI, 10 eXpaUd
and contract al pleasure the curren.y .! the country. has
wv" 10y emu = SS W. PpnS' " Sl'ihSS g. ~'' '"% '"'"S
Of every mans property. Neither individuals nor corpora
tons nor governments should POSSESS II. Such changes
mike the fortunes Of 0~Eccplators and srUCk lobbers, bur tacy
make begg1rs OF widows and orphans, aud Involve the whole
conmrEIly in em5a ;rIssmcnt aud distress. /! Is ocly by
Imposing t,e! and ininutable limits 10 bank lonns and is
sues, that these disasiroGs fcvuisions can BE- avoided: and In
comparison with an obiec, Of such vital Importance ID the
people, how petty Seem 10 be the interests OF banking cor
porationsi How lille d. BANGING facilities, Dc Ihcy are
called, compensate for the evils aud Inconvenience oil ihelr
sudden Withdrawal, and how often DO these very banking
facilities prove the ruin OF lhose who receive Ihcinl Can We
consent. then, 10 give up restrictions caicnlntcd 10 preserve
OF. paper currency from the disastrous e1sct OF alternate
expansions snG contraciions, In order that a portion Of the
community may enjoy ;!c questionable bench: Of being al
wa Us in debt 10 the banksf
Ii has been objected TO The proposed aysleni, Tint tie pro.
fs would be TOO email 10 encourage Investments in banking
1t has not been 50 in New York. In that Stale, Lie bGnk-
ing capital has Increased. aud Ycry large profits have been
realized under The free banking law. Under the law hereia
proposed, the profits would prpbubiy b. smaller in Virginia
than they have been in New York. Yet ;he:a would BE no
tear thai sufficient capital would moi Sect nn Investment
where legal interes. might be reviewed upon il twlce-uP0n
the whole amount OF The capital liz the pape' discounted, as
we'll as In the securities pledged. Ia periods Of general pros
petty and expanded issues, the profits OF the old banks
might be larger Than the profits OF the free banks, because
of The additional restrictions, upon the circulation ad dis,
counts Of the latter. But for this very reason, II IS believed
that the average profits OF the latter would be larger io. a
long series Of years. II, however, they were smaller, :till t
shorll be borne in mind that there are other interests In Inc
community besides The interests OF banking corporations,
and that 4 diniinution in the semi-aonual dividends OF banks
might well be tolerated. In consideration ol the Improved
currency Of the State and tbs increased stability OF the
banks themselves.
1t is urged against pledeIng State stocks 10 secure the cir
cuAliop, that the credit OF the State might be effected by il,
and that the general failure CT bauks would depreciate Viz
giria bonds by forcing them into the market Bnt other
States may bank upon our STATE bonds as well as Virginia,
nor can we prevent il. BY the general banking law al Yer
mcnt, ard perhaps OF other States, the bonds Of Virginia
are now among the securities authorized 10 be received as a
pledge for The circulation of their banks. They have been
recommended for that purpose 10 The Legislature OF New
York by Mr.. ST. john, iie bank superintendent. WIN the
increase CT banking capital in that State and in otter States
there is strong reason 10 believe that Virginia State ciock
will be admitted among the securities 70! the circulation ci
banks beyond our limits. II il has not been done already,
or If il be not done sooa, Il will bp only because Of the c1-
travagant appropriations Of our Legislature and the cnor-
nous increase of our publ: debt. Andi our stocks are la
bic To b. deprecated, because pledged for a paper circulation,
will the haznrd Of such depreciation be less with other
banks Than wish our o%n7
But if the whole circulation Of all Or banks were secured
By 4 pledge OF State stocks. and the simultaneous failure oil
them ail should expose 10 sale all The pledged securlNea al
once, Inc amount offered 10 purchasers would no! Greatly
exceed Inc amount of state bonds no~ brought into the mar
ket BY the legislation Of a single winter. Even uron the
that the whole circulation of our banks were Sc
cured BY a pledge Of stocks, and tina, all tho banks OF The
State should fail together, IL can hardly be supposed lhat all
the securities pledged with the treasurer would be required
10 be sold, and that The whole paper currency OF the State
thus securcd-a currency ultimately good Tor every doili',
uni. 90 Virginia repudaie-would be Withdrawn from circu-
lalion at a time when currency would most be needed. The
stmui,arsous fiilurn of all the banks, or OF any considerable