The Jackson standard. [volume] (Jackson C.H., Ohio) 1847-1888, 1858-01-14
mandg precautionary measures against

supplied by banks, in the form of note
circulating as money The number 0
these banks, on the lst of January. 1856
was 1893; their capital, S343, 874, ,272
their circulation, 1896, TAT, $50; their de
po8its, $2l2 705 662; their other liabili
ties, &6l, l,947 1928; their specie $50 3l4,
063; their resources other than specie
$820,7l3,362. The number of banks a
;he present time probably somewhat ex
ceeds fourteen hundred. Their circula
ton is stated at $sl4,778,8 ,822, and thei
deposits at $3.50, ,358,352, and their spe
Gle at 100000, 900. 1t needs but
glance at this statement to perceive tha
a currency so expanded must greatly
stimulate hazardous speculation, and tent
to financial disorder; and that under th,
exigency of such disorder, the credit cur
rency must become, in part, or altogether
uncomfortable into Gdih
In our own State, there are ffty-fou
banks; thirty-six branches of the Stat,
Bank and eight Independent Banks, or
ganized under the act of 1845, and ter
Free Banks, organized under the act O.
1851.
According to their quarterly state.
ment, their condition, on the 81 of Au,
gust. 1857 was as follows:
Here follows a tabular statement
which we omit
A statement that accompanied the Mes.
sage show that these banks, so far as it
is testaed by comparison Of specie and
other cash means with immediate labili.
ties, was stronger in November than il
had been in August. The laws under
which these institutions were organized,
we're framed with especial reference to
the security oil the bill holder. All the
branches of the State Bank are made
Sureties for the circulation Of each; and
the convertibiIity of the notes of the 9th.
ers is required to be guaranteed by
pledges Of State or United States Bonds.
These salutary provisions have pro-
tected the people against serious losses
from depreciation the notes of the
banks ornanized under them, and it is
highly creditable to their management
that they have passed through the recent
crisis, made doubly perllous to niahy Of
them by the embezzelment of their cash
balances and collection bill at New York
without a suspension of specie payments
Sill it cannot be denied that the dan
ger OF general suspension has been i'm.
mlnenl, or that some ofthese institutions
have actually been in q condition ofe-
gal, while others have been in a condi.
ton Of virtual suspension. These facts
must be necessarily direct your atten,
lion to the legislation necessary to pro-
tecl 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
1915, will admit ot additional guards L..
gainst suspension, is matter of doubt.
The decesiou Of The majority of the Fed.
eral Supreme Court, that the charter of
a Bank by legislative enactment Is a con.
tract, and cannot therefore be modified
by subsequent legislation. flakes the re-
formatian OF evils in credit currency al
ways difficult and often impossible.
At the present moment, however, it
seems not improbable that an acl might
be framed acceptable TO these institutions
and beneficial to the community, by
which much larger specie basis would
be provided for circulation and deposits
than it is now required, and other add.
tional securities obtained against sus-
pension,
The act Of IBA1, under which the 9th.
er Banks are organized, Is amendabIe
at the discretion of the Legislatures
Their circulation is secured by the de.
posit Of equal amounts in Stale or FEEDER.
al Bonds. 1t is plain that in a financial
crisis, when bonds of all descriptions
are deprecated, this security becomes
inadequate. ! recommend the provision
of adequate guards against such con-
tingenoy by an increase of the proper.
ton 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 oocasioned by legally authorz,
ed banks OF issue. Most of the calami.
lies which have recently fallen upon the
business community OF this State, have
in the failure of private bank
srs and of the Trust Company, issuing
10 notes for circulation. Many Of these
,ankers, and perhaps the Trust Compa.
ny also, however, were borrowers, from
banks outside ofthe State, oftoreign notes
ltlow rates of interest, 10 be circulated
n Ohio, and redeemed, when returned
o the issuing banks, BY the borrowers.
rhe e.enect OF these arrangements was 10
Introduce into the State a mass Of foreign
,ank paper which expelled from circu.
alton not only nearly all the coin, but
llso nearly all the notes ofour own banks
md exposed the community 10 great in
and loss, | suggest the ex.
,ediancy of so modifyingthe act Of Feb.
.udry 24th, l548, relating TO the circula-
ion of Unauthorized bank paper, as to
prevent effeclually this mischief. Ad.
litional protection 10 the business com
as we'll as substantial benefits 10
he sound and strong banks themselves
would result from the establishment Of
4 4. r At.