The Perrysburg journal. [volume] (Perrysburg, Ohio) 1853-1861, 1858-01-14

1t will be seen from the above statement, that
the condition of these banks so far as it is test
ed by a comparison of specie and other cash
means with immediate liabilities, was stronger in
November than it had been in August. The laws
under which these institutions were organized
were framed with especial reference to the secu-
rity of the bill helders. All the branches of the
State Bank are made suretes for the circulation
of EACH and the convertibility of the notes of
the Others is required to be guaranteed by pledg-
es of State or United Statss bonds.
These salutary provisions have protected the
people against serious losses from depreciation of
the notes of the banks organized under them !;
and it is highly creditable to their management
that they have passed through the recent crisis,
made doubly perous to many of them by the
embezzement of their cash balances and collec-
lection bills at New York, without suspension
of specie payments LIZ.
Still, it cannot be denied that the danger of a
general suspension has been imminent, or that
some of these institutions have actually been in
a copdtion Of legal, while others have been in a
condition virtual suspension. These facts must
necessarily direct your attention to the legisla-
ton necessary to protect the people against the
hazard of so great an evil. ....
How far the provisions of the charters of the
Banks organized under the act of lS45 will ad-
init of additional guards against suspension, is
matter of doubt. The decision of the majority
of the Federal Supreme Court, that the charter
of Bank by Legislative enactment is contract,
and cannot therefore be modified by subsequent
legislation makes the reformation of evils in
credit currency always difficult, and often impos
sible.
At the present moment, however, it seems not
improbable that an act might be framed accepta
De to these institutions and benefcialto the com
munity, by which a much larger specie basis
would be provided for circulation and deposits
than is now required, and other additional secu
rites obtained against suspension.
The act of 1851, under which the other Banks
are organised, is amendabe ut the discretion o.
the Legislature. Their circulation is secured b,
the deposit of equal amount in State or Fedora
Bonds. 1t is plain that in financial crisis, wheI
bonds of all descriptions are deprecated, thil
security becomes inadequate. / recommend the
provision of adequate guards against such a con
tingency by an increase of the proportion O
bonds to circulation, and by prohibition of the
deposit of any other bonds than those of the
State or of the United States.
The experience of the last few years has dem
onstrated, however, that the greatest finaucia
disasters in Ohio have not been occasioned by le
gally authorized banks Of issue. Most of the ca
lamities which have recently fallen upon the bust
ness community of this State, have originated il
the failure of private bankers and of the Trus
NOihpdhg, issuing no HoleS lot clfCulatlOn. Mdnl
of these bankers, ard perhaps the Trust Compa
ny also, however, were borrowers, from Bank
outside of the State of foreign notes, at low rate
of interest, to be circulated in Ohio, and redeem
ed, when returned to the issuing banks, by tn,
borrowers. The effect of these arrangement
was to introduce into the State mass of foreigI
bank paper which expelled from circulation no
only nearly all the coin, but also nearly all til,
notes OF our own banks, and exposed the commu
nifty to great Inconvenience and loss. sugges
the eKpediency of so modifying the act of Feb
ruary "a, lS4S, relating to the circulation of un
authorized bank paper, as to prevent effcctuall,
this mischief. Additional protection 10 the busi
ness community, as well as substantial benefits t,
the sound and strong banks themselves, woult
result from the establishment ofa Clearing Hous
in Cincinnati for the banks of Ohio, Kentuck,
and Indiana, either through lie voluntary actor
of the Institutions concerned, or by the concur
rent legislation Of the States. ,s, .ri, F.. ~