Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1856-01-25

t.r. with tho superintendent OF nj loas, %"
,.. ~. nt rni,.,c stocks or stocks ana n'"'-I
gr,; anu prohibiting Uatcr severe pans """ ism.
ties the Srpcr r.rn'.r!t ir":ii counter H.",,,I hnnkr 81
i'm tn any "a a. ~: a--,rrniihil or l'ur' Vs., s....i,
rirruIa,in" r.:r. Ia IN nruuunt exceeding ''n I'
,irs III dcro,it. ly Tbs m"nn+' n."ern 'Lr "r hnni;
rst administration ot tie ~y>!ciii' Nv ~ IarL.:,, l.,
y,,,es are fully p.n;rct"I from l""S' -, 49,
.1;,ut;nus ot ,,,. ,ns.irv, aud the circulating ih'u'"'
uroyidcl bv them. !iav" become S"ch e,Se"''r' CIV :"
hsn.usuhir elements IN the c"iiiilerc!al IN" n"s'iics'
,r,rrs,r,;,us a.: fH. community. that the Legislature
80. tnn r;,ij:v ..!i perfectly guard and provide
rn, rb.ir sc,rri'v. T.!ry have. therefore, win me
view of havinS heir utir;s!"n annually called L" 'ne
,rbiect, nIi t"c operations AMI defects al Inc System
made il the duty al tn superintendent 10 report a'.
nrally, and swSg,s; ANY amendments To the oanH!hS
laws by which the system may be ltnifoFe"' "'u 'He
security OF bill holders aud dsp"sit"rS 'ncfe"seu'
Tur BANNING Htsls.
In the early existence ui liz" present bafiKiH% SyS-
TEN the pub!ic lost much, and the reputation OF ihe
system suffered muyi, by The admission oil SECURITIES
lie 4 bankim. bass, issued By some o. the siS'er '.".es
ia the coultlrrary. wh". laIililes> 10 Their Obligations
or bankrupt in iliei. treasures, failed III tie perform,
ancc If their contracts. 10 nbviate Il recurrence Oh
In. same difficulty ia future. the Legislature nnte
wisely excluded all other STOCKS than those OF 'ne
United States and nj tbs STATE. There has no pn'ih
failed i'll this S:atc, !'aTInG IL circuihl,oh se'T y
wholly by publ, stocks uf tbs State and OF the Uni
Ted States, the circulation o! which has not Deeh re-
deemed at the par vain" thereof, and III such manner,
without Interruption, that The notes lost morning 0!
their etilrir.!cy ani NG.ac III cncu'a'Ioh "'i'h "o'""'
redemption.
On the other hand, during the existence OF the svs-
| TEN, there lius only hc.i II single instance III which
the circulation oi Il tni:ing bank has been redeemed
Il; par when their circulation was secured Dy oonas
and mortgages, ard not any where II was secured by
The stocks uf other S'V'"s. In such cases, also, the
| failure has been invariably attended by at least n
short space OF time, daring which rodemptions were
not mnle while awH,.i'- the satr "t the securities
The notes in the inran:iinr iusiug their value as II CIR
,ulIt;np lnlIiM,,D have hr.D dismissed Of ut a great
Joss by the ii,ad and rrccssituus. While the stocks
which are now received meet with an immediate and
READY sale IN the ;nark", at prices varying from par
IL u large premium, on the other hand mortgages
have brought On All average, nj security sales, only
about seventy.livc per cent. This fact itself exhibits
a great superiority OF the stack over The real estate
basis for banking circulntion, and Il defect IN the
mortgage security a. al present arranged. Such de-
feet should be provided against il practicable, for the
Improvement u; the system. 1t il the more irnnur-
:ant that il should b. done, berauSe the anuan. OF
mortgages Hs a security in" circulation Is increasing.
in a greater ratio than sturks.
During the last fiscal year, viii he amount OF
mortgaged securities III this department have increas-
I'd Sl3O.i1S; thr stock SECURITIES have diminished
1851, ZAP.
The defect in mortgage as n banking basis does
not arts" from the inSa!:!rIcncy Of mortgages us secu-
ri.y for tho iloncT iuau,i, iur no safer security for an
investment. can be furnished than the farming lands
Vt our State. Bat il arises from the fact tina. mort
Cages are not, al all times, cash Securitics III the mar
ktt, and VIII not II stringent times and when there Is
a pressure for money IN he community, demand par
at u forced sale, no matte! Ia what extent the value
Of the m"rigag,d property may rXcec! IN" amount
Of the mortgage. fnr purchaser AZ such times can
do better with his mn!ey i!.an invest il At seven per
Cent and buy mHg:@ar-> q; ii rnic ut which he can
only realize the amount he advances with Interest,"
il has therefore been found that mortgages must in all
such cases hc sold III a discount. This difficulty can
he readily obviat.d b. restricting the circulation In
be issued upon mortgages 20 eighty per cent Of their
p,r inut.u al ,,o- .,l ,,.rtoitfinr than o. b.
taken upon farming lands 70 the extent Of une.hai!,
instead OF two-tittl,S al their value, exclusive of i'm.
rrovements, MS now provide! by law. Tn" margin
thus reserved in III" is-Ur ct circulation would, except
in very extraordinary cases. furnish al ample guaran-
tee tina, An amount sufficient H. cover the circulation
would be- realized AT II forced or any other sale.
The greatest loss sustained upon mortgages has
usually been upon those covering village aud city
lots. The reason Of that il obvious. The value Of
farming lands rs such i, cgn and stable, intrinsic and
not tict tious. md furnishes all abundant security for
one half its fair valuation. On the other hand, viii
lage and city lots bear more u; q fictitious than in
triusic value. dependent upon the current of trade or
fancy, both OF which Grr liable 10 fluctuations, and
40 constantly huciuat;9g "a 20 make the desirable
property of to-day III" drug OF Tomorrow. Such
property, therefore. by reason OF lie fuctuating char
ncter as 10 price. and is value depending. upon
changing circumstance, does not form the safest or
best basis tor Il mortgage security. Ii cannot always
be relied upon. e!tlir; al u security sale or mortgage
tOreclosu re, 10 iurMish q :"lInrcratirg return Tor the III
SUst"nSl.. tHc 'NH:'t'''ii !'''iII, Ii.ticIpTt' TcCUiil-
m.tls that the mr::ra"r security ha limited 10 i'm.
lowed ard productive iIrtH!lg !a;:siS and thu an,uurt
., the iuvestn-r: controlled by their value liz farm.
inc lands and fcr farming PURPOSES.
20 - rrp,t,,r rc
c,rn,%n ,>rn.rn., rrr r,xr.
The Legislature in iSi9. :c the benefit of the stock
holders Of incorporated banks whose acts "f inc"r-
rn.,.;,, ,r.r. ,j,ou. ,yyir;,, and =, afford them nm
49, trar.;,;nn ,r,.n .1a s"~i.m of ba,;;ipr 10 the
,,,Ly.- Lv ,i,.,trr ~ nf rh. lava If that y,sr. re-.
liaynI t!,.rI from !t. Immediate. Oycrnt,Dl of those
v '.'' -, ,t' ,,,rr; min, Iarr. uE;nh r.n,;re
w. - .,as;, -, .,,,,r. 70. a.. , h,nl,,n, ...,c;u,inn ~
49,. a,,,rr. nf sim! rr,I h.frr,. c,n,narci., tb. Inn.
'' "a,