Meigs County telegraph. [volume] (Pomeroy [Ohio]) 1848-1859, 1858-01-19
EUARY l9p 1858. ..'l +

10. 1853. 8 aea
..s... -. - .-....... :.
as it is tested by 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 espacisl refernce to the
security Of The bill-holder. All the
branches Of the circulation Of each; and
the conyertility Of the notes ofthe others
is required to be guaranteed by pledges Of
States or United States bonds.
These salutary provisions have pro-
tected the people against serious losses
from depreciation IF 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 doub.y perilo1s to many Of them
by the embezzlement of their cash bal
lances and collection bills at New York.
without suspension Of specie payment.
Still, il cannot be denied that the danger
Of a general suspension has been imminent,
or that some Of these institutions have
actually been in a condition of legal,
while others have been in a condition of
virtual suspension. These facts must
necessarily direct your attention 10 the
Legislation necessary TO protect the people
against tie hazard of so great an evil.
,. BANK CHARTERS ARE CONTRACTS.
How far the provisions Of the charters
Of the Banks organized under the act Of
1845; will admit Of additional guards
against suspension, is matter of doubt.
The decision Of the majority of the Fed
eral Supreme Court, that the charter CT a
Bank by Legislative enactment is con-
tract, and cannot therefore be modified by
subsequent legislation, makes the reform
alton OF evils in credit currency always
difficult and often impossible.
At the present moment, however, it
seems not improbable that an act might be
framed acceptable to these institutions and
beneficial to the community, by which a
much larger specie basis would be provi-
ded for circulation and deposits than is
now required, and other additional securi-
ties obtained against suspension.
The act of 1851, under which the other
Banks are organized, is amendable at the
discretion of the Legislature. Their cir
culation is secured by the deposit of equal
amount in State or Federal bonds. It is
plain that in a financial crisis, when bonds
of all descriptions are deprecated, this Sc
curity becomes inadequate. recommend
the provision of adequate guards against
such a contingency by an increase of the
proportion of bonds to circulation, and by
a prohibition of the deposit of any other
bonds than those of the State or of the
United States.
FOREIGN NoTEs-oLEARING HOUSE RECON-
MENDED. '-..t ..|
The experience of the last few years has
demonstrated, however, that the greatest
financial disasters in Ohio have not been
occasioned by legally authorized banks OF
issue. Most of the calmities which have
recently fallen upon the business commu-
nifty of this State, have originated in the
failure of private bankers, aud of the Trust
Company, issuing no notes for circulation.
Many of these bankers, and perhaps
the Trust Company also, however, were
borrowers, from banks outside of the State,
of foreign notes, at low rates of interest,
to be circulated in Ohio, and redeemed
when returned to the issuing banks, by the
borrowers. The effect of these arrange
meuts was to introduce into the State a
mass of foreign bank paper which expelled
from circulation not only nearly all the
coin, but also nearly all the notes of our
own banks, and exposed the community
to great inconvenience and loss. / suggest
the expediencv OF so modifying the Act oi
February Gath, 1848, relating to the cir
culation Of unauthorized bank paper, as
to prevent effectually this mischief. Ad-
ditIonal protection to the business commu-
nifty, as well as substantial benefits to the
sound and strong banks themselves, would
result from the establishment ofa Clearing
House in Cincinnati for the banks of Ohio,
Kentucky and Indiana, either through the
voluntary action of the Institutions con-
cerned, or by the concurrent Legislation
of the States. XXI, ~. ,....... -.
In a former communication to the Gen
eral Assembly, while admitting the con-
venience of mixed currency of coin and
convertible notes, and the improbability
that currency entirely of coin will soon
be adopted in the country, | expressed my
own opinion in favor of a currency o.
coin for ordinary transactions, and Of large
notes for the convenience of commerce
and at the same time urged the necessity
of the most stringent legislative guard:
against suspension of. specie payments
and against mere paper money system
Subsequent reflection and observation
have confirmed me in these views.
A leading object in all regulation of cur
rency should be to secure the interests o
the masses of the people by such provis
lions as will ensure. to labor Just compen
sation in actual value. This cannot be af
fected while the laborer is paid in paper
subject to continual fluctuation, and ex
posed to all the hazards of financial disor
der: 'Dq8f aai ehApd s|a -lt'.'|*
Whatever can be eonstitutionally effecte'
by State legislation, toward the exclusion