Lynchburg daily Virginian. [volume] (Lynchburg [Va.]) 1852-1861, 1856-02-22

/ B. ed "
| under .aeh a -y-ism any wi consequence ean
] ,,cenfl Ry thu arrangement. ! think, -ir. we
! h,y. almost an assurance that under no possible
cyenn stances can one halt of the debts OF these
; ios,itu,ionS ever be lost. and as long that u
! the case. no creditors, 10 holder Of note, can
| suffer any loss 10y the failure ofthese banks.
We'll sir. another advantage OF tis lim-
| IL ,re.crihed by Inv T. which have just advert
ed. is that loan- and discounts shall not exc ed
! donnie the amount OF capital. BY this means We
| cnari against expansions, aud We render 1t un-
/ necessary that at any time ~ Virginia there
should be- a harsh OF hasiy contraction. II seems
10 he forgotten. that law has been passed IN
Virginia II prevent expansions aud eoniraeflon@
and fbet Therefore evils which have resulted from
these causes IN other States entirely guarded
against If ! bank is not at liberty to discount
more than double the amount Of its capital. anj
II circulation If deposits increase. the bank not
being al liberty IL luan nut these excesses ara
obliged tn be held; aud when demands come up
On them they have this money 10 apply Ia their
discharge before they are compelled Ia call upon
their debtors Ia make payment. These banks
mus, have. under all circumstances. certain
amount 81 deposits and certain amount OF notes
ia circulation Ia meet the wants of the commu-
nifty.
Why. sir il /. MT probable that NJ any time
they will he placed in predicanent to mret
their own liabilities. which would not require more
than very moderate contraction of these lines
of discount. have adyerted 10 this fact. be-
cause il seems - be forgotten that Virginia has
law of this kind inrxl-ten"e.
Well. sir. these bank have always redeemed
their note. in specie at the counters from which
they were issued aud at which they were paya
bile. except AT periods of general suspension. and
these suspensions have Mt least been sanctioned
by the Virginia Legislature. under the elreum
~anees in which they occur. l. sir. arn one OF
those who. when recent suspension Of specie
payment took place, voted against the suspension
breaose believed the hank with which was cons
nceted. could hive maintained specie payments
by pressing upon its debtors. Some of these
ight have failed. but suspensions wonld have
been avoided. ! hive never seen the day, SIR.
thai the bank, could not have maintained specie
payments if u proper consideration for the deb
tors of the bnnks aud the general interests Of the
community had not prevented them from press.
ing upon the one to accomplish the other object.
II i very often sud. sir, hav" often heard it
stated, ~ an pbiectnn To- these banks. that hey
avoid the payment of specie by cxchnn ging notes
with each ether can only say that during my
connection with tho Bank OF Nitgna there has
never been any such exchange made. We nov-
cr paid out from our counter any notes of our
branches. of oth,r banks that we had not first
received IA payment Of debts due Ia the InstItu-
ton here. ~ "n deposit from the customers #
this opinion H. prevalent breause ! can say.
from my observation, II l. mol the custun,'f the
bnnks here Ia carry on business III this way.
We hare beard many complaints Ia how
brokers interiors with the btnN>' have never
been able t. enter into the feelings TINT seem IA
exist upon this subject. \ broker can max" 10
demands upon the banks unless the law gives
him The privil go t. do -; aud think it is tie an
" # the banks 10 meet these demands. II they
bring IN notes aud demand specie for them,
II Is our duty tc be- prepared 10 meet the de
mund<.
The State Itself has agreed to pay IL the
amount OF SSjao0O year in New York, and
Other parties have made engagements for goods
81 nhet objects IL hp paid out at the State and
puiies living out of the State, have taken obi
caiions to be paid within the state. Nov, -jr. If
the exports Of cur produce does not meet The
umount IL ho paid beyond our owe limits, be
balance must lie met by the transmission of CON.
The notes issued hy the hunks in Virginia. being
pavnblc ut thirty five different points. the Bro
krrs arr, employed to convert thcm into specie,
simply because il being their business, and their
arrangements being made for the purpose they
caa d. ut les expense than every man could
do il for himself.
II dnrs seem II me, sir that ought not to
lock upon this ANYTHING else than matter Of
course. We have agreed to pay onr notes IN
specie, Fit is demanded, must pny II. II
will not be called for unless there i need for IT,
aud II will not 20 "ut OF the state unless there
- II huliaIoe against Us.
Another point + be considered i, that these
hnnks of ours are not ut liberty 10 trade upon
surplu, funds without paying Il bonus 10 the
State. In other words, they are not ut liberty tn
accumulate u surplus OF more than ten per cent.
upon their capital, TO reduce their surplus
fund under five per cent. | suppose the object
Of the Legislature in adopting this was. that II
the public thai the capital of the oank would be
always unimpared, aud to prevent them from
using capital upon which they did not pay u
bonus To the State.
This system, Of hnnl. and branches. think
was wisely adopted in Virginia. II has worked
we'll. and, IN my opinion, it would have been well
| tor Der never To have departed from 1T. II had
/ The power 10 Il eide what ought To be done,
wonld say, with all dae respect to those enter
! tanning different views, charter no independent
| banks. We have an experience of nearly fifty
years which ustihes the fullest confidence liz the
/ practical efficiency and safety of our own system
of banking. We have now six or seven banks
III the State that have branches; three of these
haNe probably capital enough already. AMI they
have probably branches enough, But we have
got banks whose capital i yet small. for in
stance, the Bank of the Valley, the capital of
winch Is Sl,2l5,00D The Northwestern Bank
~e1l,W0. The Merchants and Mechanics Bank
has capital still smaller. Where additional
Imnking capital was needed in Eastern or Middle
Virginia. my plan would have been. II have on
grated branches upon the Bank of the Valley,
nnd IN Western NirL mia, upon these other nsli-
tntions. Well then, sir, If this did not meet the
wants of Virginia, and it was still thought that
other points required banking capital. new in
sntntion might be gotten up and branches en-
grated up,n il from time To time.
1t l., rhaps. too late now to enter into Il com
parlSon of the relative efficiency of the twp sys-
al '1nnk iutr un,y .,,nnnv -, ,nu.I, =