Lewistown gazette. [volume] (Lewistown, Pa.) 1843-1944, 1857-02-05
GENERAL BANKING LAW.


GENERAL BANKING LAW.
At a meeting Of the friends of a General
Banking Law. held at Erie on the 18th Jan
uary, the following resolutions were adopted:
Resolced, That the Banking system of Penn.
sylYanla, 50 far as it was intended to furnish
a safe and secure paper currency to circulate
as money, has totally failed and ought to be
changed.
Resoyred, That, in the opinion Of this meet
ing, no change will answer any good purpose.
or bring security to the billholder, so long as
the privilege Of making their own money is
conferred upon Banks This is a radical er.
ror. Banks should buy their own currency.
and give pledges and security for It's redemp-
ton, instead Of making it at will, as at pres
ent. The very privilege is an inducement to
It's abuse, and the continued losses by the
people the natural consequence.
HeS,ired, That the present system should
be got rid of as soon as possible and no more
currency manufactures established but in
their stead a system Of Banking organized,
limited only to the supply If capital and the
wants Of trade.
Resoicsi, That the continued losses By the
people on account Of the paper currency Of
the State, calls loudly upon the Legislature
for prompt and decisive action. No tinkering
or patching ot the old system will answer
Security to the bill-holIer should be the lead
ing element in the organization Of a new sys-
tenn, and Of this security the State should be
Tie holder
There IS a great deal of truth in these res
olutions, as almost every business man in
Pennsylvania can testify, for we doubt wheth-
CT one could be found who has not at some
time experienced the inefRcioncy Of our bank
ing system. Yet our legislators, instead Of
going to work in a sensible manner to devise
Jetta~ plan, commenced tinkering at the DID,
mending it here and there, but still leaving
holes through which rogues could creep and
escape both punishment and the payment Of
their Obligations. Instances Of this are too
numerous to need reference. Now what is
bank-uote? Webster defines it to be "a pro-
'missory note, issued by banking company,
" signed by the president and countdrsigued
"by the cashier, payable to tho bearer in gold
" or silver at the bank, on demand" Expe-
rience has thus far shown that in all instltu-
tions Of this kind, incorporated under the old
system, few men have managed 10 control
them-some honestly and for the good Of the
stockholders, but in a majority Of cases for
their own benefit II successful in their
speculations, everything went right-if not,
the innocent holders of notes were sure to be
the losers. The stockholders being themselves
a part Of the bank, it is their own lookout
whether their investment is safe, just as one
business man trusts another at his own risk
and Judgment. But with the note-hoIder II
is different. lie has no right to examine the
books-he sees business men and those who
ought to know freely taking and paying out
these promises to pay, and 1t Is tair pre-
sumption for him that the bank is rightly
conducted and able to redeem its issues; hence
he is clearly the party entitled TO protection
and against loss. The old system, events
have proved, is rotten-the individual llablli
ty has also failed, because under it there is
no security that the holder will get full value
for what he holds, it depending altogether
whether the stock is held in such way that
it can be recovered. To illustrate this, let us
suppose that A holds $4,000 of stock in
bank and B $4,000. A is worth l0,000 over
and above his stock-B $4,000. By the de-
csion of cur courts, judgment could be OBJ
tanned against A for $4,000, but having on
Iy $4,000 Of property besides his stock, that
is all that could be got while B, who could
pay, would cnly be liable for what he holds, to
wit, $4,000. If then we must have bank-notes,
it is apparent some system ought to be devils
ed that would do away with all risk to the
What that system should be, it
is perhaps difficult to say, yet it is evident
that an issue made by State Officers, for which
thew would hold L. S. Stock, Pennsylvania
State Stock, and as many advocate mortgages
IN real estate, would afford far safer guar
lnty than any we have ever had, especially if
the issue was restricted to say three-fourths
If the value Of such stocks and real estate |
The latter could be appraised by persons ap-
pointed by the court or taken at It's assessed
value, in which case we suppose there Is not /