Republican vindicator. [volume] (Staunton, Va.) 1849-1857, 1855-11-10
Tne Banks.

the old Banks wall come before
our next Legislature. II is question OF
great Importance. We were, a, one time
~ id'or oil the new system Of independent
b'hhs, but our iaith in their efficiency is
not so great now as it was eighteen
monts ago. Al that time they were un-
tried and had never been tested. Since
they have been tested aud found TO be
saoJec: to al least as many evils as the old
banks, they have not with>tood a tight
money market any better, nor have they
offered greater facilities to the public than
the old banks. SO far az our own obser-
vatioo goes, they have no. Wilfst0od tire
tight money mark ct Of the last year as
veal as the old Banks. The ehiet afgu-
meht urged Ill their favor Is, that they
would create home demand for our State
Stocks. The State of New York is cited
as an Instance in which they have worked
well. New York State 5tocks-al,hougt
money was scarce--sold at almost fabulous
prices last spring. 4 large amount was
sold at eighteen or nineteen per cent pre-
alum. when the Stocks of Virginia and
other States could MOI be sold Ter par
This was attributed 10 the fact that the
legislature Of New York had enacted C.
law mak!rg New York State Stocks the
only basis Tor banking in that State. The
md. btedness OF the State " as he. sufficient
20 furnish the requisite banking capital
aud all New Yerk State Storks thrown
upon the market brought mole Than they
would have been otherwise worth.
The question 10 be discussed aud salts
idctofiaily answered by the advocates Of
the system OF banking based upon State
Stocks is, would the enactment OF ii SINH
lar law By our legislature have the same
elect upon the price OF State Stocks as the
New York Law has had upon the State
Stocks OF New York. When II is taken
into consideration that New York is the
commercial centre OF the entire Union, and
requires an immense deal more banking
capital than Virginia without having
much larger debt, il is not reasonable to
suppose that the home demand for our
State Stocks would be near SO great as the
home demand for the State Stocks of New
York. 30 soon then as the demand for
ouI State stocks for banking purposes was
supplied, they would immediately fall to
tie old market price. This view Of this
question was varliiea the other day ia New
York Thompson, the Wall street broker
who took the entire can Of two millions
and half last spring at an average of
eighteen and quarter per cent, now 6nds
1t looslhs business. He expected 10 re-
sell 10 :he banks at an advance. Before
he could sell out, the Board Of Canal Com
missioners determined TO borrow two mil
lions more. This two millions additional
State Stock thrown upon the market eau
sed reduction i'll the price Of two and
quarter per cent. II. York State Stocks
instead OF selling at premium, are now Ola
y worth sixteen pes cent premium. The
effect oil this new loan is 10 make Ihomp.
son lose two and qiarttr per cen, upon
The amount he stil has Oh hand, and the
banks That Lave purchased from him lose
TIE saiae per ergl upon the amount OF
ther PURCHASES. ftom this bare state
saehi 81 single instance, ii is evident that
The stock holders of all Sat-. banks are IA,
all t'h,s liable 10 bs ruined By legislation.
ihes may buy Stale Stocks at high pre-
miuihs because OF the competition among
themselves. but 10 soaE as their own waits
are satisfied aud there is a suiiieiency Of
banking capital to meet the wants of the
public. the State Sseeas will fail dawn to
par or below 1t. n hen State Stocks fall
Bank Stocks viii necessarily depreciatr
TO the same extent.
The Virginia, Farmers and Exchange
Banks the three largest III the State, have
combined II capital O. he. quite eight mil
lion doliafs. We do hot Know the eon,.
bined capital Of the rsmainder OF the
Banks. We do not think, however, that
the entire banking capital of the State, is
more tran twelve or thirteen millions oil
dollars. The direct and indire1t indebt-
ed1ess O! The State greatly exceeds this
amount. It's not probable then that The
campe,ion betHe bankers tor Sia.e
Stocks would BIT SO great as TO raise them
much above par. The State would not
then be greatly benefited by The iucreas-
ed de'eand for her stocks.
The inability of Banls based upon State
Stocks to withstand a pressure in the mon
e,y market, is serious objection to them.
The failure OF Western Banks based upon
eur State Stocks has been, to very great
embarrassment Of the State. They failed
aud threw our Stocks upon the market,
aud had them sold for whatever they
would bring, for they were compelled to
redeem their notes. They were saerii-
eed and the credit of the State has not vel
recovered from lis effects.
These are few Of the objections to ma
king an entire and radical change in the
banking system c! the State as advocated
by some oil our contemporaries. We may
refer to this subject again. We are open
TO conviction, and would be glad 10 see
the abuses ofthe old system corrected; or
new aud more perfect one invented, bat
we are distrus,full, there is something in
it that
-'puzzles the will;
And make US rather bear those ills we have
Than q to others that We know not Of"
LyaehdaTs Repabhcan.