The Ashland union. [volume] (Ashland, Ashland County, Ohio) 1854-1868, 1858-01-13

vertible into coin.
In our own State there are fifty four
banks; thirty-six branches of the State
Bank and eight Independents Banks, or
ganized unper the act of lS45, and ten
Free Banks, organized under the act of
1881.
According to their quarterly statement,
their condition, on the Sd of August, 1857,
was, of specie, S1,726, ,276 90; of other
resources, 3,577,230 O4; of bills discoun-
ted, State and United States Bonds and
other resources, SIS, ,s2e 75O 80; making
their total rscources, S2I, ,123 ,257 81.
And their liabilities at that date were
$2I ,123, ,257 40.
In November their total resources
amounted to SIS, 1884, 1928 So; and their
liabilities Of course to the same amount
not varying "a red,' and who ever saw
Bank Statement, however rotten the con-
Germ, that did not balance resources and
liabilities to fraction a. Union
It will be seen from the foregoing state
nsnt, that the condition of these banks,
30 far as it is tested by comparison of
specie and other cash means with imme-
diate liabilities, was stronger in Novem-
than it had been in August. The laws
ganized, were framed with especial refer
enee to the security of the bill holder. All
the branches of the State Bank are made
sureties for the circulation of each; and
the convertibility of the notes of others is
required to be guaranteed by pledges of
State or United States bonds.
These salutary provisions have protec
tod the people against serious losses from
depreciation of the rotes of the banks or
ganized under them; and it is highly cred
table to their management that they
have passed through the recent crisis,
made double perilous to many of them by
the embezzlement of their cash balances
and collection bills at New York, without
suspension of specie payments.
Still, it cannot be denied that the dan
ger of general suspension has been i'm
minent, or that some of these institutions
have actually been in condition of legal
while other have been in a condition of
virtual suspension. These facts must
necessarily direct your attention to the
legislation 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 admit Of additional guards
against Suspension, Is matter of doubt
The decis on of tho majority of the Feder.
al Supreme Court, that the charter of a
Bank by Legislative enactment is a con-
tract, and caanot therefore Be modified
formation of evils ia credit currency al
ways difficult and often m, oss b'e.
At the present moment, however, it
6oI l..f III oof ia
be framed acceptable to these institutions
and beneficial to the community, by which
3 much larger specie basis would be pro
yidcd for circulation and deposits than is
now required, aud other additional Sc
curities obtained against suspension.
The act of 1851, under which the 9TH
er Banks are organized, is amendable at
the discretion of the Legislature. Their
circulation is secured by the deposit of
equal amount in State or Federal Bonds.
It is plain that in financial crisis, when
bonds of all descriptions are deprecated,
this security becomes inadequate / re-
commend the provision of adequate guards
against such a contingency by an increase
of the proportion of 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
demonstrated, however, that the greatest
financial disasters in Ohio have not been
occasioned by legally authorized banks of
issue Most of the calamjties which have
recently fallen upon the business commu
nifty of this State, have originated in the
failure of private bankers and of the
Trust Company, issuing no notes for cir
culation. Many of these bankers, and
perhaps the Trust Company also, howev-
er, were borrowers from banks outside of
the State, of foreign notes, at lew rates
of interest, to be circulated In Ohio and
redeemed, when returned to the issuing
banks, by the borrowers. The effect of
these arrangements was to introduce into
the State a mass Of foreign bank paper
which expelled from circulation not only
nearly all the aoin, but also nearly all the
notes of our ewn banks, and exposed the
community to great Inconvenience and
loss suggest the expediency Of so mod
flying the act of February oath. 1913,
relating to the circulation of unauthorized
b2nk paper, as to prevent effectually this
mischief. Additional protection to the
business community, as we'll as substan-
tial benefits to the sound and strong
banks themselves, would result from the
establishment of Clearing House in Gin
cinnati for the banks of Ohio, Kentucky
and Indiana, either through the volunta-
ry action of the institutions concerned, or
by the concurrent legislation of the States,
In q former communication to the Gen
eral Assembly, while admitting the con.
venience of a mixed currency of coin and
convertible notes, and the improbability
that currency entirely of coin will be
soon adopted in the country, expressed
my own opinion in favor of currency Of
coin for ordinary transactions, aud Of
large notes for the convenieucs of com
merce, and at the same time urged the
necessity of the most stringent Legislative
guards against suspension of specie pay
ments, and against nero paper money
system.
Subsequent reflection and observation
have confirmed me in these views.
A leading object in all regulations O.
currency should be to secure the interests
of the masses of the people, by such pro