Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1856-01-04
TIE BANKING SYSTEM.

TIE BANKING SYSTEM.
An impression, We find, obtains 10 some exten, that
a change of the banking system Of Virginia, to the
State stock basis, is designed, will have the prac-
tcal effect of relaxing the specie sec"Hy. Such is
not the fact but the contrary. Tho purpose OF rho
general law is to add 10 the usual spcce bRr. the f
dh"nai security of deposit of State stocks IN the
Treasury. This deposit being at all times suliec, To
Immediate and summary use, would Of ITSELF cou.
stitute strong motive with the banker to keep Il,
command liberal specie reserve lie would cs"
be subject TO the sacrifice Of the difference between
the first cost of his stocks, and their market cash
price under forced sale. Of course tn. law is Tx-
pccted TO provide ample guards against using tine
stocks to the full measure Of their cost H. the crcn
lating basis. In Now York the usual difference is /!
to Is per cent.
| The truth is that banking by State authority Is
rightly divisible under two distinct heads, Of very
different importance to the mass Of the people: lat
The power of isSue in which every man in the Com
nonweuth who handles money is directly Interested
And ID. The authority to bank for the mercantile
manufacturing and other business Interests, by dis.
counting notes and receiving and Disturbing deposits
|
ercnt sections of our own State. To delegate TIE frs!
to incorporation by special charter or 10 an asso'
citation under general law, is 10 transfer from the
State one of is most DELICATE and responsible duties
that of regulating its paper currency. The author
| ity is one which should not be wholly delegated
without the most ample security, if Ht all Our own
opinion is, that no patent to make paper money sho"
be granted, irrepocably, under any circumstances
whether by perpetual charter or an act Of specin in
corporation comforting vested right Of issue for
long term of years. Least of ALL should such power
be granted where the right of the Slate 10 contro
and direct the security is parted with a general
law would of Course be made subject To repeal ~
amendment, whereas, special charters would invoiv,
the nice question Of State interference.
The other branch Of the business of banking
though highly important, devoves, comparatively
less responsibility the State. That should not
in this enlightened day OF Democratic progress. bt
committed exclusively TO close corporations, hold
to be as true, as that monopocs generally ncon
siseu. with the Democratic principle. 1t is not upo:
tLis point however, that controversy between III,
special and general system Of banking is likely t,
hinge and We, therefore, return TO the question of h'
currency.
The State may to be sure, very properly prescribe
even in close oharters the obligation To keep nnd
a sufficient of specie to protect the circula
ting notes of the Bank, and penalties may he i'm
posed for hi abuse of tho high and very profitable
privilege Of exceeding such measure by three, fou
or FIVE fold, AZ the ratio may he fixed. But thi
does not amount to security TO the note holder whci
should not DC left unguardcd by a mere command Il
pay specie for the notes when presented Ii should
in no sense be parted with, delegated by the Com
monwealth, if the means are conveniently at hnn'
to make the circulation d1YMy secure, without dinln
ishing the reasonable profits of the banker Sucf
means, we submit, at hand. They are nearly al
lied to the credit of the Siate, and based on the tax
ables Of the people. In one sense, Virginia bonA
are first mortgage upon the entire property OF iht
| Commonwealth. When placed with tho Treasurer
by the banker as security in addition 10 his ordinary
capital, for the currency which he makes, they are
pledged for this purpose; distinct from all Other
asseis: having relation to no other liability than tht
full and prompt redemption of his circulating notes
In this respect it differs from the specie security, and
although the general law is not Designed to lesser
this it extends alike over all the liabilities OF the
banker, whether in the shape Of deposi:s. ba Of
change, or balances duo to other banks The State
has no separate lien upon it, have the note hold
ers.
An attempt has been made to raise q direct issue
between a general law and the old 3,.mks ol the
Commonwealth now applying for re-c2nrtcr. This
cannot reasonably be made The present Banks
will be free to re-organze under the general law,
they may be- re-chartered, subject, in the article of
currency, to its provisions. The profits Of cir
bv hpn n1u 70 nj le6g
ten or twelve per cent. year. This should content
tho present bankers; especially "a no purpose that
we are aware Of is entertained to drive them TO the
immediate or abrupt withdrawal of their present Cir
culation. We take it for granted that, i'll changing
from one system to the other the Legislature will
az in New York, when the general law WAS subatiiu.
ted for the old safety fund.- allow from TO three
years to retire the old notes.
There is one other m.apprehenson on this subject
which we beg to notice. 1t is charged that the pnr-
nose Of general law is to create fictitious market
for Virginia bonds-to "manufac.ure Market" ms
some express it. Ths error can scarcely derive even
show of plausibility from the facts Of the case
market for Virginia bonds has never been wanting,
here or elsewhere at some respectable PRICE II
thought desirable to force them on sal" below par u,
order to prosecute the works of internal improve
ment more vigorously, the markets Of New York AMI
London are already made TO our hand. There Ia no
difficulty on this score. Indeed, from the present
look of the money market, we may expect SOON I"
see Virginia stock up to pnr again, without Legislative
action. The real question is of much higher imp"r-
ance to the people than the one relating to the cnnve
nience ar profit ofhe enternal improvement cnmpanes
lis whether or not we should take the best care and
manifest the highest appreciation of our credit a.
home. In regulating the currency, the State lus'
now, has it in her power to bring this confederation
to bear upon every citizen of Virgns IN" c'Frn'aes
Virginia bank note. She has the ,.2aouhted rlgh
to make her banking system an auxiliary to inc pre-
servatiOn of her public credit. The dependence
mutual; the one douby secured by pledge OF thf
stocks; the other made important 70 every man II
the Commonwealth by its identification with the cur
rency The effect ia frat TO increase Legislative v'g
lance and popular watchfulness over The public rred
and, secondly to command additional conhdrnce III
mir stocks abroad and oven from private buyers al
| home. in Virginia. There s no doubt OF this Nc"
York State stocks are sought for all hands, because
thew constius the first care of her Legislature and
banking department. The savings institutions
guardians of estates, trustees, nnd retircd c"l''
ists, all invest in her five per cents ut moderate pre-
nium or in her six per cents at lis or l2o because
there is doube guaranty in the domestic poey o'
the State that the public credit will be kept good
repeat therefore, the question is not OF MARKET o"
OF security and confidence.
| -sSs---
DEATH OF w. NJ. OVERTON.
1t gives us deep pain to announce the death OF
VIM. NJ. Overton, Esq, some time since connected
With the washington Union, but recently one OF the
editors OF the Washington Sentinel. Iie died yos'er'
day morning, between and o'clock, at the resi-
dence of his father-in-law, Col. Robt McCandlsh il