Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1856-06-03

and the aggregate circulation OF the Independent
banks has been increased only tn S22N,'W w, anf
the aggregate amount of their securities To S2iIiH
ST cents. Yet, banks might be organized under these
charters which could not be established under The
better guarded provisions OF the bill referred to-
| Under the free banking law of Massachusetts, NJ
buuks at all have been established because charters
more favorable to the extension Of bank fHcilt.c.
were still to be- obtained from the Legislature: and
notwithstanding the general banking law OF New J.r
s"y, the struggle for charters less stringent is a fierce
us before.
There is more plausiby in the opposite objection,
founded upon the checks and restraints which il i'm.
poses upon loans aud discounts. But il s on account
of these very restraints that give it my cordial
port. Under this system you will have no tributary
offices of discount and issue points not found upon
the map ot Virginia But capital Will he paid up and
banks organized wherever banks are needed, and
fast enough, certainly, if not as for the in.
forests of "rr Citizens. in New York, unlike New
Jersey and Massachusetts, the constitution closed the
doors tn all applications TOR special charters of ncor
poratinn and tn. recent history of banking in that
State fully confirms what is said by the Sup-rHrn-
| dent of the Banking Department III his report for
$50: That Notwithstanding the high price of stocks,
aud The difficulty of procuring them the increase OF
banking capital has been fully equal to the egiti
nare wants of the community" Since 1878 the in
cr.sss of banking capital under The free banking
| law of New York, has amounted (" upwards Of forty
mi lions Of dollars; while, un!rr the same law, from
1913 Ia 1913, before the influx OF California gold com
m.nced, il only $135Il2.
Tn. general law OF New York. and It's operation in
that STATE have been grossly mlsrepresruted. will
not now Repent the explanation OF tbs law which |
gave upon former occasion, ot it, original defects,
their subsequent removal in whole or in part and H.
present complete and triumphant success. IL Is still
open to improvements, | admit, and some manifest
defect, remain in il which the general law reported I"
THIS House does not contain. But with an unbiased
mud have honestly sought for information rs (" IT,
practical working and, AT point evidence and
nj az tp1 fn FISH liz Avn is
true thar under the law, rs originally framed, mere
banks of circulation, established for that purpose
aonc sprang up III some places III New York
Tnis abuse is now prevented there, and is still
more carefully guarded against in the bill before
The only os-' which n"-hod-rs have sustained
in New York have been thrOus h these "b1gUs banks,
H. they called. They have been small, and
would never have occurred, even with the 'bDgHS
banks, but for class of defective securities which
should never have been received. BY the report OF
the Superintendent for lScI. II appears that the mort
gage securities, allowed By the law Of N"w York.
had NOT averaged more than - pei cent. ia cash on
their par value. Bur the stock securities OF New
York, commanding away-a pcfInlum, have lessrned |
the per cen;ag-" loss. Under the general law says
the Superintendent in lsJj, mot failure has "c- |
Cured of any legitimate bank or banker within the
prs eight years the circulating notes o which have
not been r"dc"lneL nj par" Not So with the incor.
poratrd bank. By the Report Of the Superin,en-
dent tor January, lSjJ appears that, during the
year 1871, two banks in New York allowed their |
notes 10 be protested. One was III incorporated
bank No securities were held by the Suprrntcn- |
dcu aud 1t is TO BE- feared, he says "tha th. bills
will bc almost total loss 10 the holders" The other
Yns II bank under the general las OF 1888; and IN
this there securities III IN. hands Of the
Superintendent. which he sold under the law. The
mortgage securities defective usual, brought but
81 per cent. III cash their par value the stock
cur.tles sold al a premium. dividend Of ~ per
cent. paid Ia the noteIo!d-rs. who still had re-
course n" only upon the general assets oil the bank
bat against the property ot us st02E!:ade:s To
the full amount of lis capital. The present Su-
perintcndem says in his report o last month There
has no bank failed i'll this State having circulation
secured wholly by public stocks OF this State and ol
the United States, the circulation Of winch has not
been retcced the par value thereof, and III such
mauuer, without interruption, that the notes lost no.
thing of their efficiency aud value III circulation I'M
I'll actual redenptun." "The system now, AS Il
whole he says again, Operates admirably well, fur
nishcs paper currency equal to any IN the world.
and has answered the most sanguine expectations Of
lis friend" In all New York, have yet to or
hear of the first denial that this statement is true
Divided sccts and factions. and isms all parties
in New York agree in commenting the sanitary
change which the free banking law has effected IN
their currency and commerce. No Incorporated bank
hHS vet refused to organize under lis PROVISIONS
Charters expire each year. and. PhnniS like, new and
better institutions ARISE from tile ashes I" the old
Currr the royal regime IN France, there was clock
at the Palace OF Versailles whose dial plate always
indicated the hour of the last kings death When
sovereign breaihed his last there came one upon the
balcony be.ea,h this llolk, hreakIns his wand o!
office aud annuuncing-"The King is dead Then |
srizinp another wand nnd crying-"L Long live the |
King So in New York, nj the very instant an old
bank expires, lie successor appears III lis place. But
happily in this casr, the bank monarchy terminates |
forever. King Monopoly dies, aud is Succeeded
by the republican principle OF free trade and e4ual
rights. i
We are told that every year free BANKS are close
IL. Sew io.k. But he" CU.rd ID rcdreinihS ~
per cent. oi :lcir circulation. and drp'aitinS unds
with The Treasurer 70 uIre; the residue. AiId why |
closed Because il Is found by experience that bank
ia. capital WAS not nc-Gr'! where they w"r: csab'
lsi.i az! could be othevwisc more proltgbiT en- ;
pl"y-,l. There are "ahy banks III Ne" l"rk' dis
pere-d throughout the State here beginning ana mere
closing their business, the laws OF trGic may de-
nand. In that State the winding up ot Il bunk Is
hardly n more serious affair than the closing OF any
other partnership. But, IN Virginia, it seems /" b.
regarded that the winding up of one OF thee great
banks with its many branches. would be Ike wind
ing up the whole country. They have gro"n upon
us Ike u fungus or cancer, until we are told ut last
thar death would ollcw the knit OF the snrgeon, anu
the rernc,i; l.. wore thaI tie disease.
But the OF the syateiH III New York II con ]
coded by some who shy that 1t will not succeed IN
virginia, because in New York deposits are proper.
tinnsby larger and circulation pr"porilonnby small
or than in Virginia; because in New York business
- done more upon deposits than upon circulation,
wilhelm virginia il, is done more upon circulation than
upon deposits But this is Of the banks
ct Virginia than Of the country banks OF New York.
wLu! hay6 succeeded 50 veil under The new system.
What are i'll fact, the uat unugUsuii. To be e,.Lcr
from this difference! That il III: circulation be pro
mitch larger in Virginia il is much
the important To make II satr and secure; aud
that il deposits which constitute bank Indebtedness,
are to great extent the basis of loams i'll New
.rk then l'u system in , State would be safer aud
better guarded against the danger OF expansion.
Il is also uIsr u nj aIguineIt against the EPSTEIN,
that the example OF New York has not been more
generally followed. Bat is II not rather conclusive
evidence Of It's merits. that ii shou have made such
rand advances -ncouurrrng everywhere. ~ ~ Vir.
gina, the combined opposition Of long established
AMI powerful! Inou"yei corp' atoms. As many Il.
ten States have, recent constitutional conventions.
>. III .iei their Legislatures from grant ng special
thgrtrrs 20 bank. The .rh mic law CT l. III -ians
makes il imperative upon the Legislature - pro.
yide for the registry o! all circulating nne5 and re.
our. ample "'ur.ty TOR th-lr re lem I'll III y Free
brnkiu. laws hav- been actua " adup ed with The
~ few years, by nearly nlf the States %! tie L
l.t their ADOPTION, except III the S;nc o! " York.
In. Ell loo recent t.ry I" 'ast then operation
Improper securities have been son-li'n.' n!lGw"d;
som. OF the.e laws are loosely guare! md objective,
l. ks the first free banking law of Now York: aud
hencs i'll some instances. mare bank Of circulation
have arisen in inaccessible places. an! il ha been
res:lry 20 dispose 81 tho trust uni to reiern thor
notes. In some or tho Sins-, loo, the incorporated
banks have. by waglmg fierce and Lnrs!-nins war
against the banks impaired their etic!en'y aud
usefu!nrs.. Such has been the Stae ~ things III
New .Jersey and tennessee; aud the GuvrTnors {"
both nc these States recommend in recent meseag
that NJ more sp cia charters b- grao oil, and thai The
incurpur ated banks be authorized 10 organize, when
their charter. expire under the prov- %; N" Sn
eral law Wter. hay. institu'e ell inquiries III other
atrS tn new syse'n i, represented a up-ooti"S |
the old Us unpopular every Yher" with the Old eInk-
in. III orcsts bu; highly puIar. ani rsp!iy boc'n
III. more with the masses OF the up'" bbcaus:
q, the unmistakablr security which II affords them
ngain,t tn. sa Consequences o; fraud aud mis- MN
areneni in their bank. Wherever thu sys''m la.
been fairly nauguraed, it il undergoing per'ecng
p-ores4 from year t. year: nor IL there an INSTANCE
in wh..l free banking Law, once passed, has ever
4. ia. r. go.