Holmes County Republican. [volume] (Millersburg, Holmes County, Ohio) 1856-1865, 1858-01-14

Ii Will be seen IrOm Tue aOOFe SCtCe-
ment, that the condition of these banks
so far as it is tested by comparison Of
specie and other cash means with immedi-
ate liabilities, was stronger in November
than it had been in August. The laws
under which these institutions were organ
lied, were framed with especial reference
to the security of the bill-holdel. All the
branches of the State Bank are made sure
ties for the circulation of each; and the
convertibility of the notes of the others is
required 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
lied under them; and it is highly credita-
bic to their management that they have
passed through the recent crisis, made
doubly perilous to many of them by the
embezzlement of their cash balances and
collection bills at New York, without sus-
pension 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 others have been in condition of
virtual suspension. These facts must nee
essarily direct your attention to the legis-
lation 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
IS45, will admit OF additional guards
against suspension, is matter of Doubt
The decision of the majority of the Federal
Supreme Court, that the charter of a Bank
by Legislature enactment is contract, and
cannot therefore be modified by subsequent
legislation, makes the reformation of evils
in credit currency always difficult and Of
ten 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 provided
for circulation and deposits more 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 circu-
lation is secured by the deposit of equal
amount in State or Federal Bonds. 1t 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
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 calamities 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 circulation.
Many of these bankers, and perhaps the
Trust Company also, however, were bor-
rowers, from banks outside of the State, of
foreign notes, at low rates of interest, to be
circulated in Ohio, and redeemed, when re-
turned to the issuing banks, by the bor-
rowers. The effect of these arrangeme-
ment 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. l sug-
gest tho expediency of so modifying the
act of February oath, 1s4s, relating to
the circulatin of unauthorized bank paper
as to prevent effectually this mischief ad-
ditional protection to the business commu-
nifty, as we'll as substantial benefits to the
sound and strong banks themselves, would
result from the establishment of Clear
ing House in Cincinnati for the banks of
Ohio, Kentucky and Indiana, either through
the voluntary action Of the Institution con
cerned, or by the concurrent legislation Of
the States.
In former communication Of the Gen.
eral Assembly, while admitting the conve-
nience Of mixed currency Of coin and con-
vcrtible notes, and the improbability that