Minnesota weekly times. [volume] (St. Paul, Minn.) 1854-1859, 1854-12-19
WEDNESDAY, DEC. 13, 1854.
THE BANKS.


easier asked than answered. Our own opinion
is, however, that a large portion of the banks
now discredited will so far recover their credit
that their notes will again become current. Will
they then be able to sustain themselves? We
think not. The cause of the present financial de-
rangement is easily traceable to two causes, viz
our banking and tariff systems, for the latter
causes the specie to flow out of the country
diminishing the amount far below what is neces-
sary for basis for banking and business opera
tions and this it is that caused some shrewd
fnancier to conceive the idea of substituting
stocks as basis for a circulating medium, and
found a system of banking upon the security OF
what we owe-for this is the basis of stock-se-
cured system, disguise it in any way you will
turn it which way you WILL it at last resolves it
self into this.
Stock secured banking is but the Legitimate
fruits of the currency tinkering commenced by
Gen. jackson in his attack upon the United States
Bank, and an instructive lesson may be learned
by any one who will take the trouble to trace the
efforts of politicians to establish system to sup
ply the place of that destroyed by their folly in
the war they waged against that institution.
FIRST came the pet bank and safety fund system
with Van Buren, for its father and Gen. jackson
acting as sponsor. Under this system the paper
currency expanded enormously went up,
everything went up; and finally blew up-lcaving
the whole country bankrupt. After various mi
nor cxpedients had been tried I, and proved un-
satisfactory, the public mind seemed to settle
down upon the present stock-security system as
10 ry
affairs. We have never so regarded it, but have
always looked upon the system as being as much
weaker than the safety-fund, or the old State
bank system as these systems were weaker than
the United States Bank.
There are defects in the present banking sys-
TEN that, in our opinion will work Its speedy
downfall, for though the banks may weather the
present crisis, think most OF them Will,
still it is but u question of time-the crash must
come, for the supcrstructure rests upon false
foundation which the slightest tremor i'll the f.
nancial world will at any time shake from under
it.
From the very nature of things none OF these
banks can stand a run upon their vaults. The
law under which they established does not re-
ouire them to keep any amount ofspecie on hand;
and experience has already shown that they avail
themselves of the privilege thus given to invest
almost all their available capital in stocks, IN Or
der to render their circulation as large as poss-
Bile, and thereby increase their profits. Conse-
auentlv when run is made upon them they are
without the specie to redeem anu must close.
Now let us inquire what is the fate of the note
holder is case of the suspension of a bank. A
stock secured bank in Indiana or New FORK goes
into liquidation, and a statement is made that the
notes are ..abundantly secured" by par stocks
can the note-holder in Minnesota get any thing
like the face of the note he holds? he cannot, but
must submit to a shave of from Is to so per cent.
This is most favorable result for comparatively
few of the stock-se secured banks are doing busi-
ness on par stocks, and in the case of anything
like a general suspension, the best State Stocks
would not realize over 20 cents on the dollar,
while second class would be almost worthless,
and the suspended banks could by their agents
buy up their securities Mt a nominal rate-when
they would be gamer, and the public looser, al:
most the entire amount of their circulation.
We do not treat this matter in n political point
of view. For though are not OF those who
believe a United States Bank an Sc obsolete idea,
we are content to let things take their COURSE
We have always believed that the currency tink-
ers would finally run the thing into the ground
and be obliged in the end to return to the point
from which they started, and such We still believe
will be the case. The stOck-security banking
system we look upon as the last card,-it cannot
win, and when this fact shall have fully impressed
itself upon the public mind we shall expect to see
some more rational action taken, irrespective OF
party politics, than has distinguished the history
of this country for the last twenty-four years.
CJ The New England society at theo meeting
on Saturday evening last elected the following
gentlemen officers:
Chas. Ii. Oakcs, President.
IL. Fuller, j. w. Bass, W. L. Ames, Vice
Presidents.