Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1859-02-09

euoe Of personal responsibility. For as SIcCulloch
SAYS: The issue of notes is Of ali businesses that
which seems to hold cut the greatest prospect of
success those who attempt to get rich by preying
on the public. The cost Of engraving and issuing
notes is but an incODsiderable sum compared With
the sums for which they are issued SO that if an
individual or individuals of little or no capital
can eOnhive by fair promises appearances and
similar devices to nsinuate himself OF themselves
into the public confidence, and can maintain fifty,
one hundred, or two hundred thousand pounds ia
calculation he or they can secure good income in
the mesntsne and when the bubble bursts and the
the imposture is detected, they worse Of
than when they set up their bank on the contrary
be presumption is, that they good deal better
of aud that they have taken care at the cost OF
credulOHs and deceived public to a reserved
stock for theis future maintenance
There never has been but one bank in England in
which the stockholders not responsible as part
ners. That is the balk of England chartered, in
1894 All the other banks, private and joint stock,
stand en- the principles of partnership, each stock
holder being responsible for all the liabilities of
the firm just as other traders are, and subject
to have their estates thrown into the hands Of
as other traders are on the commission Of act
of bankruptcy. The law providing for the organ
zation of joint stock banks declares that the shares
shall be transferable, that the death of a partner
shall not dissolve the partnership, and that the
company may be sued, or that any ore of the sock
bo.ders may be sued There are six large joint
stock banks in London deposit and exchange
banks issuing no no'es,) in all of which all the
proprietors of stock responsible for all the lia~
blties. The London and Westminster bank has
100000 of pad up capital and 900 stockholders,
each Of whom are liable to the creditors for ihs
whole of the bank liabilities. These ba' kers are
governed by general ard standing laws just other
traders sre.-Roydseorh P. 40.
/ McCuOch says Every partner in joint stock
bank liable The public for the whole of the deb
of the concern aud this may be truly said to be the
saving principle of the whole system, without
! which it would be an unmxed evil
When the Bank of the United States failed it had
! an Office established in London in which English
men we're interested In regard to this Office he
says: a. This office has become English esab-
lishment, and the English partners responsible
to English law, and not to the law of Pennsylvania
If this was not so, Englshmen might get charter
| from some foreign State, get some hundreds of
! Thousands of pounds in debt, suspend payments,
and then laugh at the credulous dupes whom they
! had reduced TO beggsry and ruin. No doubt but
that it would be strenuously affirmed that the Insti
tuticn had several millions Of paid up capital, that
! it was conducted by gentlemen of the highest char
&C err and ability, that its balance sheets showed 1t
to be in a most fOurshing condition. aud portion
of the Press would net fail to call public attention
toths admirable principle upon which it was fOun
ded John Boil must change very much indeed, If
these representations combined with the advsnta-
geous terms that at first would be probably offered
to ose dealing with it, did not produce fer it
considerable amount of credit But in the end, 1t
weuld probably turn out that 10 body knew whether
it ever had any paid up capital or not and if it
had what is to biGder the managers from dividing
it among thfms elves
The legislature Of England has wisely refused
to allow of partnerships being instituted here with
limited responsibility; being well convinced that
despite of every possible precautiOu they would, in
many instances, be perverted TO the basest pur~
| poses. 1! the law of England allowed such exemp-
tons by foreign charters it is high time it were
amended and a check given to what must be By far
the safest and most profitable species of swnding.
The legislature of Pennsylvania may establish ira
ding companies with limited responsibility, or if it
choose with no responsibility at ali, but if they be
joined by Englishmen, and make England the thea
tire of their operations they will be held liable
the event of the concern becoming bankrupt, to the
last shilling of their fortunes"
There are in Scotland three chartered banks,
in which the prOprielOrs exempted from indi-
vidual liability. They were chartered more than
century ago and shortly after the bank of England.
All the rest of the banks private anI joint-stock,
stand on the footing of partnerships as to their
liabilities. The Scotch banks have been regarded
as stable as any of the note is uing banks A com
mittee of Parliament, appointed 1926 after the
great disasters in 1925, report the condition of
the backs of Great Britain say that the soidity Of
the Scotch banks is tracable TO the extra ordinary
facilities granted for knowing the abilities of
the partners in the banks, and to the pecu>
liar power granted by the Scotch Law to the
creditor to attach the real and personal estate of
! the proprietors of the cOncern I. Homons, 1l8
Mr. Guthrie says in his Report on the bank sta
tistcs of the United States that the monetary
vulsions in England are not go 81 dden so violently
nor so frequent those in the United States This
| is no doubt true, and results from the personal
liability CT their bankers from their bankrupt law
and from their prohibition of all notes under TWEEN
| ty-fve dollars
1t is evident that the people of the United States
have followed the Bank of England as model with
its corporate exemptions aud its exclusive privilege
rather than their system of responsible banking,
under the general rules of common Law.
But We are retracing our steps slowly but cer~
tainy, and shall again get back to the starting
point of equal rights and responsibilities in a much
shorter time than we have been drawn away from it.
Chancellor Kent stated befor, 1886 that the ten
denoy of legislation and judicial decisions in the
several States increase the present RESPONSE
biity of the stakeholder in various corporate
bodies and to give give them more and more the
character of partnerships with view to check im-
prudent conduct and abuses and add TO the general
security of the creditors
Since Chancellor Kent pennel the above, the
States of Missouri and Michigan have returned to
the English and Scotch basis. The State of Mis-
souri declared in her constitution that the stocks
holders in all private corporations, except those for
education and charity should be held liable for all
the debts of the corporation Michigan placed in
her constitution a similar provision as to banking
corporations. This is no doubt the true principle,
in matter so liable to be abused as the issuance of
notes and where the issues may be great and may