Belmont chronicle. [volume] (St. Clairsville, Ohio) 1855-1973, 1858-01-14

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embezzIement Of their cash balances aud
collection bills at New York. without sus-
pension Of specie payments.
Still, it cannot be denied that the danger
of general suspension has been imminent,
or that some of these institutions have ac-
tually been ID condition of legal, while
others have been in condition of virtual
suspension. These facts must necessarily
direct your attention to the legislation ne
cessary 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 sus-
pension, is matter of doubt. The decision
Of the mtjority of the Federal Supreme
/ Court, that the charter of Bank by LegIs-
lalive enactment is 4 contract, and cannot
therefore. be modified BY subsequent legis-
laiion, makes the rtformation of evils IN
credit currency always difficult and often
/ impossible.
1 At the present moment, however, it seems
not improbable that an act might be framed
acceptable to these institutions and bench
cia, the community, by which much larger
specie basis weud be provided for circula-
tion and deposits than is now required, and
other additional securities obtained against
sus pension !
The act of 1851, under which the o;her
Banks are organized, is amendable at the
discretion OF the Legislature. Their cir
culation is secured by the deposit OF equal
amour. in State or Federal Bonds. Ii is
plain that in financial crisis, when bonds
of all descriptions are deprecidted, this
security becomes inadequate. Recommend
the provision Of adequate guards against
such 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 las, 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 calamities which have
recently fallen upon the business communi-
ty OF this State, have originated in the fail
ure Of private bankers and Of the Trust
Company, issuing no notes foi ciculation.
Many Of these bankers, and perhaps the
Trust Company also, however, were borrow
ers, 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 bor-
rowers. The effect OF these arrangements
was to introduce into the State mass of
foreign bank paper which expelled from cir
culation not only nearly all the coin. but
also nearly all the notes of our own banks,
and exposed the community to igreat incon-
venence and loss. | suggest the expedi-
ency of so modifying the act OF February
oath. 1913, relating to the circulation of
...aanthorizad bank paper, as to prevent eff
eclually this mischief. Additional pr2tec-
tion TO the business community. as well as
substantial benefits to the sound and strong
banks themselves, would result from the
establishmeu. of Clearing House in Gin
cinnati for Z he banks of Ohio, Kentucky
and indiana, either through the voluntary
action of the Institutions concerned, or by
the concurrent legislation of the States.
In a former communication TO the Gen
eral Assembly while admitting the conven-
renee of mixed currency of coin and con-
vertbla noles, and tie improbability that a
currency entirely OF coin will be soon adop-
led in the country,i expressedmyou opinion
in favor OF currency of coin for ordiEary
transactions, and of large notes for the con-
IF and NJ tho tim
urged the necessity Of the most stringent
legislative guards against suspension of
specie payments, and against mere paper
money system.
Subsequ mt reflection and observation have
confirmed me in these views.
A leading object in ali regulations OF cur
rency should be to secure the interests of
the masses of the PEOPLE, by such provisions
| as will ensure 20 labor just compensation in
actual value This cannot be effected while
the laborer is paid in paper, subject to con-
tnual fiuctualion, and exposed to all the
hazards OF financial disorder.
Whatever can be constitut onally effected
| by State legislation, towards the exc .us;on
o. the smaller denominations of notes for
circulation, and the substitution OF coin in
their place, should be earnestly attempted.
! The quantity of coin in the country is now
SO great, and SO steadily increasing, tnal no
| injury and almost no rconvenince could
arise to any interest from judcious :egisia-
tion for this object. On the contrary, 1t
seems to me certain that the increased Cir
culation OF coin which will thus be secured,
cannot fail to result in most substantial
benefits to all interests, by additional secu-i-
ties against fluctuations and revulsion.
These benefits seem to me obvious that |
should hope for the assent of the banks Them
selves 10 the legislation necessary to secure
them.
The existence of this decision already re-
ferred ta, the uncertainty of obtaining the
assent of the banks to the necessary legis-
lation, the fact that we are surrounded by
States whose banks issue such notes, and
the practical difficulty ofexcluding the notes
of these banks from circulation in Ohio.
created The apprehension have heretofore
expressed, that comparatively little can be
accomplished in the direction OF the pro-
posed reform by State Legislation. These
apprehen> ions yet remain. The effectral
remedy is with the FEDERAL Government.
Looking at the manifest intent OF the Con-
s;itulion 10 protect the people from the evils
of paper currency, as well as 10 the sPsc;-
/ fic powers granted to Congress, cannot
doubt the power of the National Legislature
to prohibit the circulation as money of any
substitutes for coin. Nor can doubt thai
the exercise of that power by the gradual
prohibition of notes Of the smaller denomI-
nations, under twenty dollars, would be se
and salutary. The denial o! this power vir-
tually submits the regulation of commerce
in its most instrumentalty TO the variable
and conflicting policies OF thirty-one States,
and defeats one of the ma n purposes of the
! Constitution.
Entertaining these views, have observed
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