Republican vindicator. [volume] (Staunton, Va.) 1849-1857, 1856-01-19
Free Banks

We have received small but ably written
pamphlet entitled Free Baulks: or Val Street
Us the people," III when the writer undertakes td
show he inIschsvous character aud tendency oil
/ the policy which party in our Legislature VIII
attempt during the preseli, session to inlrodnce
! in It's tuIIness into the Commonwealth. The
contemplated scheme Of revousiopizlng oui
Banking system is explained by him as follows
at confers upoE any association OF individuals
] W DO shall unite together for that pupose, all
the privileges OF banking OIL certain terms and
conditions, and further authorzes them W hen
| they shall deposit with the Treasurer OF the
Stale the bonds Of The Slate to any given amount,
to issue thew notes as money TO the amount oil
stock 50 deposited. This is the Basis Of NE
rev system sought TO be introduced INTO VIZ
| GINA aud populaEy designated as Inc FTee
! Banking system" The writer after thus sta
ting the question proceeds to argue against SUCH
a change, and with great force aud facility expo
ses The dangers and injuries which II threatens.
| The fundamental objection, in our view, to such
a sweeping experiment, Is the lact that 1t Is 10
be based upon State indebtedness -for ths ope-
raions of the New Banks are predicaled upon
all issue Of State Bonds 10 a very large addition
al amount THUS, if there should be fifty banks
orgalIzed under the proposed law (snpposing il
to be passed) with an aggregate capital OF 81 5
y require heavy supply Of bonds in oder
TO comply with tile terms and conditions pre-
.scrlbed. Hand-in- hand, iheE, with this scheme
must &c the accumulated Indebtedness OF the
common wealth, and, Of course, The. accumulated
Ia Xalion which the people have 10 enduie.-
/ This singular feature is sufficient to invalldaie
all the claims which Free Banking in lis con
templateJ form aud Latitude, has 10 pubic favor
in Virginia where there is alwaysa debt oneious
enough i'll all Conscience, for the shoulders oil
her people. Bal there is anot .er reason for
our opposition Which is welgny and impregna-
BILE. The scheme would, III efe,t, substitute
the bombs OF the State for specie, as the basis oil
issue. Ii is true that soaie Of its advocates deny
this, and say that the bonds are designed 10 be
merely additional. OF collateral security 10 the
c0in-aud by siecious, 5ut unsound argu-
| menis they endeagor To delude us into a be-
lief that the condition of he new Banks world
be vastly Strengthened. and improved by the
bonds. The faacy OF these arguments is pal.
pasle-o If an association OF individuals should
be iormed under the law Tor The purpose oil con-
Quoting Flee bank, with capital, say, oil
500 ,oOU, ihe very 1rst thug they would have 10
do, IN order to enjoy u privilege legally, would
be TO purchase certain amount OF bonds at Their
par value, say, S5Q, 600, and deposit these bonds
with The Ir,as ,ler. Well-the whole original
capital OF bank, we believe, is cusomarlly IN
sprclc-aAd on this capital II Is deemed pru-
dent TO issue in the proportion OF abont three
dollars al circulation to one Of coin. Now, in
the case Just supposed, 900 OF the capital
will have TO be paid out for the bonds, lea ing