Carroll free press. [volume] (Carrollton [Ohio]) 1834-1861, 1858-01-14
The increase Of bank notes


The increase Of bank notes
was s6272IsI
The rapid augmentation effected by The
increase Of coin alone, could not fail 10
produce marked effects in the rise Of prices
10 the multiplication Of transactions, 10 TIE
enlargement Of credits, aud in The inereas,
Of debts The additional stimulation o.
this tendency by the further introduction
Of S96, ,233, III Of credit currency, sufi
cientiy accounts for alI the effects which
have been witnessed.
No system Of currency can insure CON-
plete protection against speculation, debt
and revulsion; but that system, which
more than any other, directly tends 10 pro.
duce and inhame these evils, is, without
Question, the systerTof credit currency
That system, therefore, chiefly demand,
Precautionary measures against such results
Credit currency in the United States i,
supplied by banks, 10 the form Of notes
circulating as money. The number Of
these banks, on the 1st Of January, 1856,
was 1893, their capital S3i3,874,272;
their circulation, sl95,74I95O; their de-
pasitcs. S2l2,7O5, ,662; their other liabii.
ties, SG4,94T323; their specie, s59,9ll,.
COS; their resources other than specie,
S820,7l3, 352. The number Of banks at
the present time probably. somewhat ex.
ceeds fourteen hundred. Their circulation
is stated at S2l4778,s22, and their depos,
ties at $3.50, 35s,352, and their specie at
S60,000,0O0. 1t needs bnt glance at
this statement to perceive that a currency
SO expanded must greatly stimulate hazar,
dous speculation, and tend to financial dis.
order; and that under the exigency oI
such disorder, the credit curr0Dcy must be
come, in part, or altogether inconyeEtibi,
into coin.
In our own State, there are ffty,foul
banks; thirty-six branches of the State
Bank and eight Independent Banks, or.
ganized under the act of 1851, and ten
Free Banks, organized under the act oi
1851.
According to their quarterly statement,
their condition, on the Cd of November,
1857, was as follows:
RESOURCES.
In specie. SI,sl6.255 l3
Cash resources. 3,O22, 55l &c
Bills discounted.
aud U. S. bonds and
other resources. l4,63O,945 85
Total resources. 1925. .328, SO
LIABILITIES.
In circulation. s7637955 so
Uud to bank and indiyidu.
al depositors. S,738,65t 95
Capital stock and other IL
abilities. 7s9573l O6
Total liabilities. I0.282,32S 80
1t will be seen from the foregoing state.
ment, that the condition of these banks, 70
far as it is tested by comparison Of spe.
Gle 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
the security Of the bill holder. All the
branches Of the State Bank are made sure.
ties for the circulation Of each; and the
convertibility of the notes of others is re:
qnired to be guaranteed by pledges of State
or United States bonds.
These salutary provisions have protected
the people against serious losses from de-
probation of the notes of the banks organ
ized underthem; and it is highly creditable
to their management that they have pas
SD through the recent crisis, made doub.
ly perlous to many of them by the EN-.
bezzIement of their cash balances aud col.
lection bills at New York, without suspen-
sion ufspecie payments,
Still, it cannot be denied that the dan
ger of a general suspension has been immi-
nent, or that some Of these institutions have
actually been in condition of legal. while
others have been in a condition of virtual
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
l845, will admit of additional guards
against suspension, is matter of doubt
The decision of the majority of the Feder-
al Supreme Court, that the charter of a
Bank by Legislative enactment is a con.
tract, and cannot therefore be modified by
legislation, makes the reforma.
lion of evils in credit currency always diff.
fcult 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
much larger specie basis would be provi- |
led for circulation and deposites than is
low required, and other additional secuT- ,
les obtained against suspension.
The act Of 1851, under which the other
Banks are organized, is amendable at the
discretion of the Legislature. Their cir
,ulatiou is secured by the deposit of equal
n State or Fedr Bonds. 1t is plain that
n financial crisis, when bonds of all de-
icriptions are deprecated, this security be-
comes inadequate. Irecommeud the pro-
Vision Of adequate guards against such
contingency by an increase of the proper.
ion of bonds to circulation, and by pro-
libition of the deposit of any other bonds