Lynchburg daily Virginian. [volume] (Lynchburg [Va.]) 1852-1861, 1856-02-22

MI r. H. n ~ee hsv the independent bank
stand Leaaiu, out tin fairm"nt Bank. which
: think has capital of sJO.OOo 10 sbo,o0o, and
8 the Trans Allegheny Bank / do not know wheth
~ that IL now in operation-it has made no re-
port during the present year the capital OF m
De pendent bailks In the state amounts I" 81
100. while their loans and discounts amount I"
abou, Il s69.0O0 itisproper that should state.
that my information has been obtained from the
newspapers. md not from any official source,
though doubt not. the facts are sufficiently ac-
eurate for all practical purposes
/ Sir So far a the industrial and commercial in
forests of the community concerned, 1t were
better that this capital Lad been loaned by one
man +. another. because end that their loans
and discounts are -i50.0O0 less than the amount
81 their capital; ind yet. sir, they can make II
profit because they have invested in State stock,
/ hearing an interest of six per cent. amount ex-
ceeding thai Of their capital.
Well then. sir, what proportion does their cir
eulation an coin bear ! Their coin i, 1886 SiS.
and their circulation SI.slD26O. Ehey always.
it seems 10 me- come to about the init prescri
bed by law, in the proportion Of Ave to one-one
! of coin to five Of circulation.
II j. supposed by some. and | may well say
il, for aln very decidedly of thar opinon myself
that there is generally "A supply of coin wanted
! just before the term of rendering the quarterly
reports. And the reason why ju dye 50. sir. Is,
that at the approach Of such periods, brokers
bring in larger amount Of our notes then Mt
any other time and nothing will answer in pay
ment thereof bat coin. while at other times they
take check IN New York in prefe renee to coin.
1t i only accounted for by the pressing neces-
sity incident to the approach of the period ndiea-
ted
This is a system which. it SEE rs to me, will
not work we'll even in Virginia. nd am very
confident of this factthat with Oiali discount
line u, they haye-oDy about equal To the
amount Of their circulations-wh enever rxehan-
Z-> against rs, and their cr' nlatons return
pom them for redemption, they viii not have tho
lntrol Of IL sufficient amount OF discounted pa
per maturing to meet the demand upon them
1t. will be found. also, that very often they are
brought Ia the position of bargain ing for forhear
ant', often by Experimenting 1e notes which
, they are called upon to redeem, and upon which
adul ee> vii be made by giving sufficient DOM
peu~ation. aud leaving suilcien margin. it bs-
ing known that stocks are hypo' .hecated to
cur tn ultimate payment of notes. | say it Is
s'stem that is liable to abuses Of this sor,, and
thai is the reason why take the liberty of men
ipHlng til ose facts To the Comm ttec. Moreover,
EXPANSIONS are not sufficiently guarded against
Myown opinion i, sir, that il Iirgini;. should
decide to grant the application s that are made
form renewal of the charters y 7he old banks.
-henught to grant them with ,nly such moditi-
interests If the State aud of th institutions seem
to rqnre. - far It's can oI serve, they work
wei. They are fairly profit si,le to the stock
hollrrs; they are safe to the eetnmunify, ant. IN
nnF notifications that might nade, care shoulI
be AIKEN ia see thai the ciC ,ietcy of these insti-
tutpnS Is MT seriously mpa ired. l do no. know
my~if any particular modi6 catans that are re-
qulrd, | wenld say. howe v+r, that | am in ia
y'rit the circulation Of col II tn meet a II Ordinary
"a, inc in a t,1l a.,
lhrl issue i.ote- "l even lower denomination
than five dollars. vet | approve heartily of the
/ lawot thc last session of the Legislature 10 get
mi pt tar circulation of u otes Of a >taal.er de-
nomination. than five dolla r. in Virginia Ii has
worked we'll. The lov,T denominations baye
herl pat out OF circulate on; tat there are sill
som 81 what W" ca odd Notes. | would sng-
70 Tat The circulation uf any note that i, not
hcnalhpe of five, be rohibted- believe he
community woud be he ,cfitcd by the circulation
a! ife dollar notes, and satisfied if the Leg
is'aaHe ilalaad" their circulation, they wanld,
att" some experience. iud it necessary to res
torelaem. believe Dat every desirable object
wop@ lac accomplished by making it imperative
nn T. banks L. Issp" notes that We're not the
lnuhple of five, and to prohibit tae circulation of
thcodd notes that nov current--such rs six
es tights, mines, &c.
'hY j., it., sir That this SYSTEM of free banks
wokedin NV York, and will not work in Sir
gina! Why. sir. 1t >inplv this that IN the
''i'e oi New York ~ banking capital is 33;},
0oa08o, while .hc circulation is onl s3i OO0o 1000.
anl The deposits 4: 3, ono 900. The stock, by
p"heeatrd only - DuD,003 and the mortgage
securities but $500 1000.
Veil, sir it is said that If this system be es-
th'a,hrd in Virginia, dollar for dollar of the
capie would be invested in stocks. !, confess
ihH this would he "A necessary result, sir, because
1 - the free banks in Virginia. with 81, :}00.oOO
invested in stacs,. limit their discounts to less
iharihe amount of thcir capital
HE bank, in New York have deposits amount.
lngio SS5,DiD00e. whethrir circulation j. on.
y 3a.OOu0U0. They had not to deposit dol
laF hr dollar If sticks, hrcause their business is
dom upon depo sits aud not upon circulation,
vhe III Virginia our business i, done upon civ
euldlon and not upon deposits.
~ reference 10 the statements which Won will
ind IN the repo'' of the SECRETARY of thu Treas
nry, YOU will tird that while our oifculasiop is
rievn er twelve millinn~ our deposit money is
only hive or six millions. In either words, our
,lep'ritmoney j. QUIZ half the amount of our cir
ruIa.ioa, whlr in New York their deposit money
i 'n'rt than double thn amount of their oircaa
ton.
VIII, sir. TAKE the cla-siGcatinns here and in
the middle ST al the Union a. composed of
NewN ork. y ew ersey.Deawarp. Penn ylyania
and Maryland. The circulation in these States
l. s3',295,W0. The deposits are sll7. i65. 900. |
'Ircdaton only eqa,l tn one half the deposit
nonet.
Tale Southern States. as composed of Vir- |
gina, North aud South Carolina and Georgia,
N contrast. Their circulation i, :3O.9lI 600 |
The deposit money SII65l.O0 which i. mneb |
lrSs than Que huff the amopnt of the circulation.
heretore We tind that The system that work, !
"Iih cas- IN New York aud ,me of those other |
states oul'l not work in Virginia and the nth.
Why, sir. if we attempt TO make these old banks |