Raftsman's journal. [volume] (Clearfield, Pa.) 1854-1948, 1859-01-12

woke, or annui, sny existing bank charter when
ever in its opinion the continuance of the
Charter, may be injurious to the citizens Of
the Commonwealth. Any other construction
of the constitutional reservation would make
the interests and safety of the public subser.
Went to the gain of the private stockholder.
Believing, therefore, that there is no want of
power. cannot refrain from expressing my
decided opinion, that whenever il is clear that
bank is insolvent, or in great danger of be-
coming so, or whenever its privileges are used
or abused as to seriously prejudice the inter-
ests of the public, it is the duty of the law
making power to protect the people, by des
troSiDg its corporate existence.
In this connection | deem it my duty to re-
iterate the views ex ressed in my inaugural
address ] then stated. as ms decided opin-
ion, that there should be no further increase
of banks or banking capital under the pres
ent system-expFessed decided hostility 10
the issue OF notes OF small denomination
and recommended such change in our laws
relative ~ banks, their organization and man
agement, as would at least secure beyond all
question the prompt redemption OF all bills or
notes put in circulation by the several bank
ing institutions of the commonwealth
Well satisfied Of the imperfectiOn of exist
ing laws relative to banks and banking, deem
il duty to inform the General Assembly that
I cannot give the Executive approval TO any
bills chartering additional banks without a
:
just to state that IN my opinion large major
ity of the banks of the Commonwealth are
well and safely managed, and in q perfectly
sound condition but this is due to the hon
esty and intelligence of those having charge
of them, rather than the efficiency OF the laws.
Under the management of incapable or dis
honest men, experience has shown, that there
is really but little il any security to the pub
lie il the regulations and restrictions now TO
be found IN our banking code. True wisdom
dictates reformation
The ruinous losses which have fallen upon
the people during the financial pressure OF the
past eighteen months, suggest the necessity
of preventing their recurrence Although
many causes may have combined to produce
these disasters, ii is too plain 20 admit of
doubt that our banking system has been one
of the most prominent. The value of the
precious metals-the price of property-and
the wages of labor-are always affected by the
abundance or scarcity Of the paper medium
received a substitute for gold aud silver
coin. The power OF the States TO authorize
a paper currency through the agency Of banks,
has been so long exercised, and acknowledged,
throughout the Union, thatit is no longer an
open question. But il must be acknowledged
that the power has been greatly abused. The
delegation of this attribute Of sovereignty to
a numhsr Of irresponsible corporations, with
out proper checks to limit its exercise, and
without providing any security whatever for
the redemption OF the issues thus authorized,
has been attended with evils of the most a.
farming character. These corporations are
practically made the exclusive judges of the
amount of paper currency TO be furnished to
the people, and have the exclusive power to
contract or expand their circulation at pleas
ure. Depositors and other ordinary creditors
of banks, need no legislation fer their protec-
tion.
Every one who has direct dealings with
these institutions, either as depositor or other
wise: enters into such engagements vountari-
ly. for his own advantage, and may be safely
left to his own vigilance, and the ordinary re-
medes of the law, for his protection. But |
the millions of people engaged in industrious |
pursuits, the farmer-the mechanic-thc mer- !
cbant-and the laborng man-are under an |
imperiouS necessity to receive for their mer
chandize and their labor, the ordinary paper
currency of the country. Ii is impossible for |
persons of this description to investigate the |
concerns of every institution whose notes are |
in circulation. But no investigation could /
save them from losses arising from the defaults |
and frauds OF bank officers and insolvency of !
bank borrowers.
The note holders of banks have peculiar |
claims to the protection of the government. |
They are involuntary creditors, who are for |
ced to receive the notes authorized by the /
government. They have direct dealings
with the banks. They do not trust the banks
from any hope of gain They have no profit
in passing the notes which they would not
have had in passing gold and silver coin.
They constitute almost the entire community |
and the humble and ignorant are always the |
greatest sufferers when bank fails TO redeem |
its notes. The whole people are therefore |
deeply interested in the security of the circu-
latioa allowed by law, although many OF them |
may never have had share of bank stock, or /
been within hundred miles Of its place of |
business. The Government that authorizes |
the issue of paper currency is under high |
moral obligation 10 require ample and aYaila- /
bic security for its redemption.
The certificates OF loan issued bv the Cen
eral Government, or by this Commonwealth, |
at value TO be fixed upon, with the power TO /
reqnire additional deposit OF security. from
time to time, IS the loans depreciate in the /
market, would be as safe and available as anv |
guaranty which would be provided.
a Law requiring all issues Of banks hereafter |
szxanized, TO be secured by the pledge Of 4
these loans, woald enhance the value OF tie /
present loans, and thus give the holders pre- 4
miRm not contemplated when they became /.
purchasers, and for which they neEer gaze any /
valuable consideration This enhanced value /
would be derived from privilege granted by I
the State, and the State ought, therefore, to 1
have the benefit of il, as far dc this may be Sc
cured by legislation The recent aRlendfn ert /
OF the constitution cireuz8seribes the power
OF the Legislature IN creating State debts. with
an exception IN favor Of the debts contracted /
tsto redeem the present outstanding indebted /
ness of the State" j law authorizipg new
State loans for the purpose Of redeeming the |
present over due debt, would be within the l
constitutional exception, and would be free
from objection On constitutional grounds.
The new loans thus authorized, regeenable +
at the expiration of twenty years, with the /
banking privilege attached TO them would un-
n }nr-t+ lf,--