Wheeling daily intelligencer. [volume] (Wheeling, Va. [W. Va.]) 1852-1859, 1855-11-07

WEDNESDAY MORN: NOVEMBER I, 1855.
uwe copy the following able communication on
the Bank Question from writer in the Richmond
Enquirer. 1t should be carefully read by those
interested IN the Banking system Of Virginia:
State Banks.
As the charters Of most of the State Banks will
soon expire, it viii become the duty of the next
Legislature to decide whether the present system
of banking shall be continued with slight modf-
catiOnS, OF whether they shall be superseded by
banks based upon entirely different principles.
The currency is a subject of peTvadng interest,
aud the best mode oil organizing State Banks is
delicate and complicatedquesIion, demanding thor
Oueh investigation AMI requiring mature reflection.
Abstract reasoning and plausible theor eS alone,
will BIZ inadequate and unsatisfactory gnideS for
those who are called upon TO decide question
which directly or indirectly concerns every free
man in the Commonwealth. Experience, which
the spacious Burke pTo.ounced TO be "lhe wiSeSt
OF teachers" ought 10 be consulted and respected.
1t may be deridetl by the adventurous and the
young, the sanguine and the unrenecting, but It
never has been dIsregarded by cautious and prn-
dent statesmen socIIous of adopting the best po-
Icy.
Virginia has had chartered Banks for more than
half century. We believe that not one of them
has even broke and that during the last fifty years.
no State in the Union has suffered less from the
Casualties incident to the banking system. The
Chartered Banks have not only paid liberal bo-
nus, and often freely accommodated the Suite by
loans, but they have paid to the State better divi
dends than she has ever derived from any other
stock owned by the Commonwealth. That these
Banks sre perfect, will not be asserted. We con-
tend, however. that the Banking system Of Viz.
gina, ICheH judged by its practical results, in the
long ran, will compare favoIab!y with Inc Bank
ing system oil any other State. 1t will not do 10
attribute the success of our system mainly sole
IN ,1ff fbs.Il
good conuct Of Bank officers can never correct
the inherent and Tadical defects of badly organ
lied Banking system. 1t has recently been pro-
posed 10 revolutioniZe the established policy OF
.the State, aud 10 create Banks npon the State
stocks. The prominent reason assigned for this, Is
tue expectation TINT there would be an Increase!
de malEl for Stale stock, and that lis value would
be permanently enhanced. A much more eftca-
cIouS plan for maintaining the value ofSiate stock
and preserving State credit can readily lie found,
without Recourse 10 comparatively untried sys-
TEN OF Banking. By abstaning from ex,tavagant
appropriations, and providing ample iunds (thro'
increased taxation instead Of oanS) for the prompt
and punctuaI payment OF the semi annual interest
on the public debt, as we'll as the principal at ma
tunty, the Legislature will do more 10 invigorae
the Stale credit, than the artificial and circuitOuS
mode oil erecting State stock Banks can accom-
plish. Y y E-stt K
1t has been maintained, that Banks based upon
Stale stuck possesses graler stability aud are
awe " WlkHSldHu lHOHey pIeSSuIeS lnan ON
erS. During 1854 the imports into the United
States greatly exceeded the exports. Large ship
InentS OF specie became necessary, and the Banks
were required to redeem their notes. Several Of
the free Banks in the NOrth-W Western StateS-Or-
ganIzed upon the much Landed State stock prin-
ciple-suspende specie payments with prompti-
hIde, II not with aacrity. ltthen became neces-
shIY that the State stock held by these Banks,
and upon the faith Of which their notes were is
sued, should be sold. The stock held by these
Banks was Virginia six per cent stock. Large
quantities OF Virginia six per Cent stock were thus
Offered FOR sale III New York; and, such was the
depreciation, that the stock sold MS low, think,
as 1856, and Tor several weeks, fluctuTate between
50 AMI $780, We believe that the State of Virgin
Ia has lost considerably, in the credit and vae of
her stock. by the unfortunate events to which we
have thus briefly adveIed. We have some State
Banks III Virginia. During the last fall and VIM
Ter, were there not abundant reasons for The ap-
pIehenSIOn that two of these banks in Western
Virginia were on the verge Of suspension II not Of
taIlure1 Were not the notes Of one circulating \
nj discount Of ten per cent, and those of the
other nj a still greater discount? If banks based
upon State stocks suspend or fall from money
pressure comparatively SO slight. as that of 1884,
how can we expect them 10 Withstand those CONF
merclal TeVulSlOnS which we may anticipate in
the [uture2 Abandon our preaent aud tried system
Ol banking, pass free Bank law, establish many
Banks upon the State stock, and what may
anticipated Is it not well known that Banks OF
tins character never have much specie i'll their
vaults, because they rely upon their Stute stock as
the ultimate security for the redemption Of their
notsSf When commercial TevuISion enSueS,
these Banks are not only soon drained of their
small supplies Of specie, but their State stock
their dernler TesOTt-IS sold at great sacrifice
When money pressure occurs, States are often
III want al money ns well as individuals, and il
Virginia had the State stock Banks i'll FULL blast
and wished 10 borrow oney by the sale Of stock,
at the time when the stock owned by some of the
free Banks was in market for the purpose Of re-
deemIng their issues, the Commonwealth could
not dispose Of her stock except at great loss.
We are invited TO follow the example of Massa-
chusstts and New York, in which State it has been
asserted that Banks based upon Slate stock have
succeeded admirably. II so, the argument Is not
entirely conclusive. Virginia is essentially an ng-
ncultual State, while Massachusetts and New York
are geat commercial States. The extensive foreign
and domestic commerce carried on by New York
and Boston, aftorl great advantages and facilities
for obtaining supplies OF specie, aud thereby pro-
tectlng the Banks OF New York and Massachusetts
cgainstthe ordinary fluctuations of trade. When
our Banks calle, upon lOI specie, not the <pe-
Gle almost invariably taken to New York? But
where is the proof that the free banking system has
succeededin New Yotk2 Did not the Governor of
New York in his annual m SSage TO the LegiSa-
tuEe in 1853 or 1854, enphatcally condemn The
system, aud warn the Legislature against the crea-
Iiun Of any more Banks based upon State stock
have not the message before me, but if my mem
Oty liz not greatly in erUr, such the purpOrt Of
that part Of the message. Be that it may a
distinguished citizen OF New York, whose name aud
fame are coextensive with the Union, and who has
long been conVerSamt with subjects OF finance and
Banking. has expressed opinions which Indicate
no great Partiality for Banks founded upon State
stock. The Free Banking Law Of New York was
passed in 1898. The several provision OF the law
are explained by Mr.. Albert GalIatn in his work
on Banks and currency: ''Hhe Bank notes (Says
MI c. which any asSocistinn my ISSUE must {
prepared and coumterSign,d by the Comptroller of
the State; and he is not TO deliver any ASSOCIATION
notes to greater amount than that OF States stocks
or of mortgages. previously deposited with him by
the associations respectively. The stocks, &C.,
thus deposited are pledged Tor securing the pay
Inent Of the notes put into circulation, and shall
be sold accordingly. whenever required for that
nntposs. No association, Shall tor the space Of