The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1857-12-08

am proud to say that had the utmost copfideuc
10 tne integrity and intelligence In general Of on
pank omcers throughout the state. 1 regretted
D. compelled to prohibit the receipt of the note
OF the hanawha Bank; but II was not for want Z
coincidence TN its officers. had to send a eommi,
sloner there, who promptly and efficiently made
report. which accompanies this message and ey
plains the reasons Of the proclamation. Beside
formal report, he stated verbally In part at frs
and since in writing, that he required, in hfs in
vestigaiion, that the assets as they are called Il
tue balance sheet. should be ssolon to him Th
nrst item of "stocks and bonds,' s2BlS8 o. n
was informed were stocks and bonds Of raiI ,oa,
companies In Ohio, and the cashier was absent
ana mad taken them with him to Cincinnati. s,
also when the item of bills receivable, &C. was ex
amineo; the commissioner was told that the cash
ier mad taken with him snndry bills Also an,
THESE amounted 10 81, $50. The commissioner no
ted these bills at the time, and hence he coult
state the amounts lie was informed that thes,
assets were taken to Cincinnati by the Cashier fo
me me purpose OF negotiating loan for the bank
but, he was struck with the character of that Dor
tlon OF the bills receivable which came under hi.
inspection, being such as had not been vet for
Warded by the bank to the point where they wer,
msae payable. They amounted to near $4,000
and were all payable out of the state and unlike
all usual business paper, were chiefly composed q
oraIts signed by two or more names of drawers on
names out of the commonwealth (mestIy however
on New FORK or Cncinnati,) nth endorsers and
ne tPinks that in almost every case the bills OF
TO the inference that the drawers had nothing In
hand belonging to the makers of the bills. and
that they were made for the specific beneft Of bu;
."o parties-on the one hand that the makers oi
the paper might raise money, and on the other
tnat the bank might put its notes into circulation
ne was informed that 1t was customary there for
banks to use such bills. A considerable portion OF
the assets OF the bank, consisting of these bills OF
eHcnange, presumed to be similar to those shown
to the commissioner, had been sent for collection
TO the OHIO life insurance and trust company both
10 the parent concern in Cincinnati Ohio, and
10 the Office in New York. Both of these insti.
.elions had Jailed, and it was not certain that
the kanawha Bank would ever get its bills -
But, the bills were beyond the limits of the
state, and he doubted their safety. He did not
Design TO reflect upon the management of the bank
IN thus sending forward their bills for collection
lor that was necessary; but he on his part could
not ut report the whole truth which he had bsar
appointed to investigate. He stated also that the
STOCK oil the bank was owned entirely by persons
living out OF the state, Sare ten shares and that
Por'loh belonged TO one person in kauawha. The
directors OF the bank did not own a share of it,
It's assets are owned ont of the state: a large
portion OF them were removed for collection out of
reach OF our process and our revenue WEE at risk
without any profit to any portion of our people
ana this ls warning not to charter such an in
stitution IN future as will expose our people To
FISK and our revenue to loss, without a profit or
Deneht accruing to any but few in our own lin.
its. Ihese considerations induced the proclama-
Non, ana my airectlons were expressed to the sec
retary oil state to guard against any reflections
upon the officers of the bank in making it, He
thought that he had sufficiently done so by insert
ing the words "that the said bank has CEASED tn
roaeem It's notes iu gold or silver coin, after hdr1n0
maze erery r7Ort to do so - vet re ret to add thai
notwithstanding this some of the officers misan.
prehended the motive OF the proclamation and al,-
plieu IL as reflection upon themselves A full in
'es''gatlon Will show that the proclamation was
none too soon to save loss to the treasury
treasurer thn, 6
except those of the Kanawha Bank and those
which the deposit banks would rot place to the
creult OF the commonwealth, he deposited with
them as special deposit
Inc deposit banks were confident that thew were
wen iorlihed in their condition to meet a crisis
ihey nad ample specie aud "specie funds AS they
thought, and as they had reason to think, Judging
holA thelr reports, to meet run upon them for
checks ana circulation. They too counted on the
balances In their favor upon New York Rur this
proved. az L say, their very weakness After a
bona hue effort to maintain specie payments
'nohgh the country banks had generally suspend
eu' the Exchange and the Farmers Bank SUSPEND
co. ana the treasurer gave me official information
ol the Iact. L directed him to follow the law as
prescribed by the 18th section of chapter as nj
the Code, In instructions dated October 18th
hereto appended. In another day thereafter. the
BANK OF Virginia also suspended. And when nei-
!t !her deposit bank redeemed in specie, and when
there was no longer a specie paying bank left i'm
winch to deposit the public funds then it was nv
duty TO direct in what other place they should be
kept and to decide whether the deposits should be
removed! Thus in every case found it was laid
on the executive to act only when il was too late
to act with efficiency or to any good end | couId
proclaim against the notes of no bank until it ac-
tuty refused to redeem it's notes in gold or silver
com. distant bank could so refuse and its notes
De an received for taxes, before the intelligence
couio De received here in a reliable form time
enough To prevent the mischief. And if proclama-
ton was made in time. there was no means of AS
certang whether sheriffs received the notes before
or after proclamation. And thus, by the time the
deposit banks suspended, then all had suspended.
for they could hold cut longer than any of the rest.
being central and having the deposit Of the public
money. And to remove the deposits was to re-
move ,otdt' Speciey If SO, 1cafref To the trea-
surer of1ce! The sub-treasury of the federal 60
verhment in this city had Just then been robbed of
thousands, out of iron safei The capitol is
highly infammable. and to put specie in it is to
tempt burglars to risk all our archives! But no.
there was no expectation of having to remove spe-
Gle. Bank notes then? Why they were SUSPENDED
bank notes! And where were they to be kept but
there was question whether the state wonld have
gotten bank notes even The banks would have
handed the treasurer the states own treasury
notes! 1ae commonwealth had issued paper uoasy
too, and the law allows it to be '.receiyed by way
OF set off in liquidation of all taxes and debts due
TO the commonwealth after the 3Oth day of Septem
ber 1906. Instead of removing deposits, then, |
would just have paid part of the floating debt =
That, perhaps, would have been some relief to the
banks, but where would have been the revenue to
meet current expenses? And, if the removal had
been available to any good end of safety or of good
example even, was it, without some certain good.
for the executive TO add to alarm and panic already
fearfuliy existing, and to destroy the only hope
naming OF relief, by maintaining a calm public
confidence? But, above all, the commissioners OF
the Sinking fund had advertised to redeem SIS4-
600 Of public debt, which, of course required spt.
cle and the interest on the public debt was to be
met in specie, at New York, on the 1st day OF
January next, and the only agents to accom-
plish that end, which the state could employ in
these times, were her own banks, and chiefly the
deposit banks. They had been created, chartered
ss they were by the commonwealth; they. as they
are, were part of her policy they had acted bona
fide; we're in as sound aud healthful condition as
any banks could be in time of general pressure
beyond their control, they had embarrassed them
selves In part by accommodating the states own
wants and necessities; and had done their full part
i'll maintaining the credit of the states own issues
Of paper; they were willing still to do all in their
power; the public credit still dependent upon
their efforts to maintain it; and was it for the
state executive to discredit them for q necessary
act OF setpreseryatIon and all honest sacrifice tt
protect our ON n communities against the effects
of general pressure and suspension did not
feel it imperative on me to do So and accordingly
gave final order TO the treasurer to eontinne 4
deposit the public funds in the three dnpositoriet
| as usual. provided they would receive the note.
Of the other banks aad credit the same to the com
mopweelth.'
1t first, it was understood that. after tn,
deposit banks themselves suspended, they woult
longer discredit the notes OF the other suspend
Ell banks. But the Virginia and Exchange Bank
soon refused to receive the notes of the other bank
aud 10 place them to the credit of the common
wealth; and the Farmers Bank alone continued t,
do 20. Ia that event the business of tht treasur,
began to be done with that bank alone. But, in
short time the Farmers Bank, seeing that it wa
| assuming too much burden upon itself to under
take to copy.rt the notes of the suspended banks
| at the end of every fifteen days from receipt o
notes, into specie, notified the treasurer that /
also would be compelled TO decline to receive thos
notes aud place them TO the credit of the common
wealth. Aud on the I'd of November the treasure
informed me that the deposit banks all had so re
solved. Immediately, by the aeco npanying lei
ter of that date, directed him to receive and pa
out the public oneys provided in the 10Th sec
tion of ch. IS of the Code-to be received or pai
on the warrant of the proper auditor, requiring th
4f.as