Lynchburg daily Virginian. [volume] (Lynchburg [Va.]) 1852-1861, 1856-02-19

chant. for his goodr. It's depreciation d.
frauds all creditors; its enhancement deffaods
oil debtors; its fluctuations affect every man :
contracts and the value Of every mans property.
Hence the high duty of government TO protect
the public against losses by the currency 1t has
laralized. II is this which is attempted in the
system proposed What i there 81 obnoxious IN
the character of the provision for this purpose
II i. thu simple announcement by government
Ia the banks: You may lend real money, YOU
may discount paper, you may receive deposit,
bnt you shall mot issue your promisSorg notes TOR
MONEY until YOU satisfy government ai your abili-
~ 10 pay them. II you wish to nuke currency
for the people if you wish to substitute paper Tor
puld nm silver con 10 sati-fy the hafd earned
wages Of the lnboring poor-to pay the mechanic
for his Toll aud skill, aud the hu>bandnan and
trader for the fruits of his honest industry, you
must deposit. in the hands of government itself.
ample security for the redemption of such pnper.'
The general law, referred to- provides that this
security shall consist Of bonds OF the State OF
Virginia. or bonds, guaranteed by the State, 10
be received Mt a rate not above their par value.
nor more than their current value III the market.
These bonds have already been issued al sold
10 an amount more than double the whole bnnk
ing capital in Virginia. A portion of then would
be bought by the banks. like any other prop
cry in the market and deposited with the treas
notes. Is this particular security objectionable!
If 80, let "A better be suggested. II any better
there be. None other is proposed; anl yet this
beniicent feature of the new system l. the one
which Is most yehemently assalrd by the trends
Of the old banks. Arguments against the new
system are adduccd, seemingly based upon the
idea that this particular feature constitutes the
whole system; that this particular security
(which il. fact, added 10 those previously cx-
isting.) is the only security which it contains,
either for notehoidor, or creditors 1t Is de
nonnced system of banking upon Siate
stock. rather than upon specie, though there
were -pecie basis, under the old system. not
required in the new. But it would be equally,
it not more Just. 10 dcnuuncc the old system "a, n
system of banking upon the acceptanees OF
Northern merchants. Ask Yourself what Is ihlS
specie basis, required under both systems. and
what it. value, as II security Ia the noteholdtr.
Sir If this Wanted specie basis were the only
security 10 the noieh"ldrr, the paper money
woul,. he worth ust twenty cents in the dollar
There Is not, properly speaking, specie basis
under either. Und BOTH the noeholder Is. to
n certain extent, secured by the specie, the dis
counted bills and notes, and other assets in the
possession of HE bank. But this is all the Sc
curly he has under the old system. Even this
security l. dependant upon the prudence and
honesty of tho bank officers who possess aud
control il; and, upon their rcfu al or evasion t"
pay speoic, the enforcement Of payment is be,et
with 81 many difficulties and delays. that the de
frnuded not'holder would have TO pay double as
much II, his loss to obtain legal redress. The
system proposed offers all the security nj the old
system, and in addition 10 this: first, trust
fund equal TO The whole circulation, and pledged
fpr lis redemption, not under the control Of the
bank. but in the hands of the Government itset;
and. secondly, the individual labty of the
Stockholders. to the full amount oi the capital
stock subscribed. What just objection can
there be to this Is not the noteholder, III fact,
II lender to the bank. receiving M interest on his
loan Should he be forced, under the operation
of orr laws, to lend WifhCW security, as UeH as
rrih0m interest! In pccunary transactions
between individuals, the money lender is not con
tut with security which the character and sup
posed fortune of the borrower afford linn. lie
requires, in general, other names upon the bond
tlnn the borrowers. and, IN additions, II mortgage
or trust deed 70 strengthen the bond Shall gov
eminent be less careful IN providing for the secu.
rlty of the whole community compelled by the
act of government seIf in authorizing the issue
of paper money. to he lenders. and lenders with
out interest. tJ the banks!
II should no: surprise Us, perhaps, that the
representatives of banking corporations Jealous
~ opposed limitations upon the lucrative priv
be wondered at that, notwithstanding all the
painful experience of the past government should
have - long neglected. in this matter, lis pain
aud Obvious duty to its citizens! It was not IN
ill Revision had followed upon revnsion for
long series of years, and millions upon millions
had been lost 10y the people through excessive
Issues of paper moncy.,that the first >ter IN the
right direction was taken. in the year 1857, At Il
time when ever bank throughout the vide limits
OF the Union had stopped payment BY the 60
neral banking law If 1888, in New York, aud in
England. in 1874. by the celebrated banking re
form Of Sir Robert Peal, the issue department
was, at last, separated fIom thu banking depart
ment and sach banks bankers rs issue notes
required tn secure them by providing and depns-
ling with government an additional capital he
sides the capital necessary for their ordinary hu,
sincss It's th, requirement, 50 eminpnlly Just
and proper in itself, aud which has worked 50
well III England aud New York. which eonsti-
taie> the distinguishing difference between the
system proposed and the old banking system Of
Virginia. Can there he any doubt then. which
of these two systems furnishes the best security
II the noteholdcr?
Enquire, nextwhich system will best guard
against expansions and contractions al currency
and the long train of disastrous consequences
which follow in their wake. If the new system
best secures the noteholdrrs would you not infer
without further proof, that it is best guarded a
ghinst expansions and coniracliunsl l. it not
just 10 infer that the same securities which pro
tect you against a worthless.will secure you from
Il redundant circulation a security against ei
Their i almost, to the same extent. II security II,
gainst the other. But the pInvi>nn in the new
system which the old banks warmly attack
contains direct guards, mutuaily neutrality-suspicious.
both. The capital invested in trust fund for
tln nacholder is withdrawn from the business
OF banking. Under the free banking law, repor
It'd at this session by the Committee on Banks
the capital must he paid up, and certificate of
the fac filed with the treasurer, before any cir
culaiing notes can be iSsued;nnr is the treasurer