Wheeling daily intelligencer. [volume] (Wheeling, Va. [W. Va.]) 1852-1859, 1855-11-23
The Banks.


Itiswet! known that the question of reehartering
the old Banks will come before our next LeglSla-
iure. Ii Is as a question of great importance. I'VE
were, at one time in favor OF the new system otIn-
dependent Banks, but our faith in their efficiency
IS not So geat now as il was eighteen months ago.
At that time they were unIried aud had never been
tested Since they have been tested aud found 10
he subject to atlesst many evils astheuld Banks
They have not witnstood tight money market any
better, have they offered greater facilities TO
the public than the old hanks So LAT as our own
observation goes, they have moi withStoOd the tight
money market Of tie last years as well rs the old
Banks. The chief argument urged in their favor IS
that they would create q home demand for our
State Stocks. The State Of New York is cited as
an instance in which they have worktd well. New
York Stale StockS-allhUugh money was scarce
sold at almost fabulous prices last spring. large
amount vas sold at eighteen or nineteen ptE Cent
premium, When the St0cAs of Virginia and other
SlHtes could not be sold INT pr. This was attn
bue1 to The fact that the Legislature OF New York
had enacted law making New York State Stocks
the only basis for banking IN that State. The III
dehtedneSs OF the State was not sufficient 10 fur
nish the requisite banking c'pitaI aud all New
York State Stocks IlIcrwn upon the market brought
nlure itnan they would have been otherwise
worth.
The question TO be Discussed anLisatis 'actorilly
answered. by the advOcatesof the system of baak-
ing based upon State Stocks is, would the enact
ment of simiiat law by our legislature have The
same effect upon the price OF Stale Stocks the
New York law has had upon the State Stocks OF
New York. When it Is taken into consideration
that New York is the commeEcial cenlre ut the
entire Union, and requires an immense deal m"re
banking capital than Virginia without having
much larger debt, Il is not reasonable 10 suppose
that the hoHe demand for our State Stocks would
he so great as the home demand for tie State
Stocks OF New York. So SUon then nS the demand
supplied, they would Immediately fall 10 the old
market price. Tits view OF this question ~ as
verified the other day in New York. Thompson,
the Wall Street broker, who took the entIIe loan
of two millions and half last spring, at aver
age OF eighteen and quarter per cent. now finds
it looSimg business. He expected 10 re-SeII lU
the banks at an advance. Before he could sell
out, the Boarti of Canal Commissioners determined
10 borrow two millions more. This two millions
additional State Stock thrown upon the maIk.l
caused reduction IN the price Of two and quar-.
ter per cent New York State Stocks inStea,t Of
selling al lS4 premium, arE now only worth sixteen
per cent premium. The effect oil this nav loan
IS TO make thompson lose two and a quarter per
-cent upon the amount he still has OH hand, and
the banks that have purchased from him lose The
same per cent upon the amount OF their purchases
From this bare statement OF single Instance, ii
IS evident that the stockholders Of all State banks
are at oil times liable to be ruined by legislation
cause OF the competition Among themselves, but
so SCUn as their own wants are satisfied and there
Is suffiCiency Of banking capital 70 meet the
wants Ut the public, the State Stocks will fall
down to par or beIowit When State Stocks fail
Bank Stocks will necessarily depEecate TO the
extent.
The Virginia, farmers and Exchange banks, the
three largest in the State, have combined capital
Of not quite eight million of dollars. We do not
know the combined capital Of the remainder Of
the Banks. We do not think, however, that the
entire banking capital of the State, is more than
twelve or thirteen millions of dollars. The direct
and Indirect Indebtedness of the State greatly tx
ceeds this amount. II is not pr ,babIe then that
| the competition 6etween:bInkers for Stale Stocks
would be SO great as TO raise then much above par.
The State would not then be greatly benefited
| by the increased demand for her stocks.
! The INABILITY Of Banks based upon State Stocks
to withstand pressure In the money market, is o
serious objection to them. The failure OF Western
Banks based upon our Stale Stocks has beer, to a
very great extent; tie cause Of the present fnan-
clal embauasSm, Mt oflhe State. They filled and
the our Stocks upon the market, and had them
sold to! whatever they would bring, for they were
compelled toredeen their notes. they W, re sue
Iiiced and The credit of the State has not YET Tt-
covered from its effects.
These are a few of the OH ctions 10 making an
enllre Snd radical change III the banking system
OF the Stale as advocated by some Of our cosem.
potaTleS. We may reler TO this subject again
We are open 10 conviction, and would be glad 10
See tue abuses of the old system corrected; or IA
new and mcre perfect one invented. but we are
dIStruSlIul, there is something III that
-"puzzieS the will,
And makes US rather Dear those ills we have
Than hy to othe,s we know not Oh
Lynehburg Republican,.