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

effect saving III the precious METALS by tho
substitution Of a cheaper for more expen.iy.
currency. These. according To- their strnnge.,
advocates. are their highest. their only l.ei,,.
mate iunc,ions: and. under the system proposed
III Dir is full scope for the accomplishment, Of botL
these objects. The banks. organized under il.
provision, may lend out their whole capital. and
they may substitute. To the full amount of Inn,
capital, paper currency (but not before H.
public is secured against lis drpieciaiion,) tba
place of gold and silver.
What more than this should the banks desire,
When they lend tn the community beyond tbei,
capital stock. they are lending. not their rn.,na,
but their credit. And what have been tie cons.
quences of these expansions If bank credit H.
vicis>itudes of the faro table in the hu,ina..,r
commensurate -extravnpaut .,
pense--exces sive mrortations and. with beayv
burden OF foreign indebtedness, the loss Of nm
commercial and financial Independence. And
win what ih'a'iape fccoll'has every one of Thea
credit expansions been followed. .onner ,r ,a,,
by proprotionate revulsou! Those " bo oh;a..
to the new system. because of it, Gmit.ti, 49, -
loans and discounts, must have forgotten th. -
cent teachings Of our own history. Accordina =
Mr.. Cambreling, in twenty tive wears of nrof -
peace, from 1917 to 1899. We had no less ,ha'
eight revulsons or periods of partial ar tnta,
stagnation Of trade and suspension of labor
Look at any table which exhibits the condit,,- =
years. You see frequent ebbings and howinas
of bank credit;and. with these cbbngs and an5
ings, the whole trade of the country In. hoa,
violently moved backwards aud forward. md
widespread ruin and distress have followed nnon
every revulsior. In 1884. hank loans in tl'
United States amounted to 324 millions; in ls.,
they hnd reached the sum of - millions. in
lsl3, they had been reduced to Pol millions
What volume do such figures disclose Tbev
ALL 1.
laton. between '3l and III. unparalleled. since
the days of John Law, in the history Of modern
times; and during the last six years Of the peri
cd, they tell >ad tale If distress. equally nm
paralleled-trade paralyzed no circulating coin
no confidence ere dit-a government en-
bnrrassed In meet its current expenditures. with
a surplus OF forty two millions aud a hail. and a
laboring population. without employment, in II
country enjoying nneSampled ph, steal prospect
ty. In january. 1887, the loans and discounts of
the Bank of Nirginia, aud the Farms Bank of
Virginia, possessing capital of afiout five mil.
hons amounted to about fifteen millions Of dol
lars.-Here was an expansion Of bank credit 10
three times the banking capital Here were
CUISINES faciIltlrs to the community. with a
vengeance. and here were glorious profits To- the
stockholders. But, within the short space of five
months thereafter, the Bank of Virginia alone
made Withdrawals of between one and two mil.
reduced lis circulation from So 9G57U3 to So.
I3o. 30 90. and, no later than the ensuing Nav
both OF these banks stopped payment Of their
notes ! And how We're they, no. to effect n re
sumption of specie payments! In the opinion Of
sagaciouS men, examined before the Bank Com.
mittce of the House oi Drlega es;-"hy redoo.
ing The amount of the bank loans to very little
more than the amount of their Respective CAM.
tails Beyond this. sir under the provisions, Of
raj In. I. I'm, 4 Al.
never have gone; aud such restriciI Ms upon
bank loans, had they existed prior to 1887. would
have saved Us from the most disastrous revul>inn
WEIGH. ever yet. in time of peace, visited any
country upon earth.
III have succeeded. Mr.. Speaker. in .,,ab.
fishing the propositions which, in the fore going
remarks. have attempted to prove, then it most
be admitted that the old banking system Of Vir.
ginia ought not 10 be perpetuated. IT, as have
endeayored to show. the separation of the issue
from the banking department and the provision
of trust fund to secure the circulation in the
mode proposed, will add safety 70 our currency
health to our commerce, and stability to our banks
then it must be conceded that it will bring Us
nearer than we are to this hard money currency
intended in our Federal Con>iitution-and that
if does not remove. ii will at least mitigate. the
evils of IA system against which Washington, JEFF
ferson. Taylor ofCarolne, and all the great men
voice of warning.
But advocate no sudden or violent rcvolut ion
in our system of banking. We should leyi,ate
in this delicate matter, with cautious regard to
the peculiar circumstances of our situation and
to the important interests invovpd.and take carr
to produce no evils III the transition that may oat
weigh the final benefits of the chnngr--to giyr NJ
shock to commerce, and create AS little j>tur-
bance as possible i'll the business habits and re-
latIOnS II
all the old banks, as is urged by some upon the
expiration OF their charters, in 1857 to organic
under the provisions of a general law, and II
deposit public stocks as a security for their cir
culaton. fear TINT this would involve either
withdrawal of loans and discounts to an extent
disastrous to the community an increase in
banking capital IN Virginia greater than the
condition OF the money market would allow. |
would be willing, with additional restrictions and
prospect tive provisions for gradual changes in the
future to extend their charters for short periods
ana To different dates, But let Us auhurise 10
moro banking capital in Virginia, except under
provisions, which give adequate safeguards for the
security ot our paper circuation let u bring tho
existing independent banks of the state under
the ad'iitlonal restrictions imposed by the gene
raj law which ha- been reported this session. and
let Us so ieplshte that the system of banking
which 1t embodies may gradually take the place
OF that now existing in Virginia.
IL we do not this Let Us at least reform those
obvious abuses III the old system which urg' nj
ly demand correction. Let US separate the State
from the banks,-let us cxtirpate the "eurrsnt
Jands' system II. it is called let u make our
banks specie paying, like the banks of cur sister
States,-lei Us require them all. Old and new.
mother banks and branches, to pay out IL o notes
not redeemable at their counters, and let "a
break mp their ruinons practice of di>counling
time acceptance, from the North. except at short
dates, IN preference to the bu >inpSs pnprr Of