Saint Paul weekly Minnesotian. [volume] (Saint Paul, Minn.) 1858-1859, 1859-02-05

The Danking Din and. the Currency
f9A Question.
At the great Court House meeting at Min
neapolis, on Saturday evening, the 18th Of
Jan. inst, to consider Railroad and kindred
matters, after full and free discussion, the
following resolution, amongst variety of 9TH
ers, was deliberately adopted as the sense of
the people in reference to our Banking sys-
TEN:
9. Resolued. That the people of Minnesota have
not realized the benefits expected under the gene
raj Banking Law of this State; that this is attri-
butable to the untcise preference iuen to the Rail-
ROAD Bonds as Ranking basis, over the good State
in this respect will be changed at the next session
OF the Legislature. ' ~ =
That the people of this State have not
realized, as the people of Minneapolis say, the
6enetts expected under the General Banking
Act, is truth which cannot be gainsaid and
we think the people there have hit upon the
exact reason WHY they have not done so, and
that is, "the unwise preference given to the
RAILROAD State Bonds as banking basis over
good State Bonds of other States ~ Roao
this "unwise preference" came to be given,
thus preventing our enjoying as good and safe
currency as they do in Wisconsin, Illinois,
or any other State, and our seeing money here
comparatively plenty, and interest loo, it may
be well to inquire: -ao.. E ..t ,.s.
I. At the first session of the last State
Legislature, in the winter and spring Of
1878, the members of that body address,
ed themselves to comply with the following
provision Of the State Constitution in refer
ence to General Banking Law:
ARTICLE g.: Section 1s.-The Legislature may,
Gc '''0-'"''s '0's pass General Banking Bill
The Legislature, in accordance with this
constitutional provision, did pass General
Banking Bill, and that, too, by taco-thirds
cote but like all the work done at that session
Of the Legislature, the whole act was crude
and slovenly performance, as well as unneces-
sariy stringent, and nobody choose to avail
themselves Of its provisions, or organize a
bank under them; hoping that when the
Legislature again met in June, the law would
be properly amended, We may remark, that
one principal reason why better and more
liberal bill was not passed at the FIRST session
was, that the Railroad interest had a majority
in each branch, and as the bankers and CAPT
talists generally opposed the s., 600, 900 Loan
they were avowedly spited by the passage Of
an impracticabls Banking Lao under which
they sooald not be likely to organize! There
fore, if we had no Banks started in Minnesots
between the adjournment of the first session
of the Legislature of 1858 and until the ad
journment of its last session, the fact is di
rectly chargeable to the controlling influence
of the Railroad companies at the first session
of the Legislature. This is harm No. /, thai
the $5,OOO,OOO Loan measure did to Mime
sofa
II. When the Legislature re-assembled il
June, 1858, almost Immediately new, fair
liberal and safe bill was introduced and pu
through both branches by the Constitutions
majority ola t,oo-thirdsuote, and was approved
by the Executive, July 26, 1858. This bill
established the Banking Basis as follows:
"SEc. 5. Whenever any person or association o
persons formed for the purpose Of Banking under
the provisions of this Act, shall duly assign OF
transfer, in trust, to the Auditor of the State an,
portion of the Public Stocks issued to be ISSUED
by the United States, the Stocks of any State O
the United States ON Ohich full interest is semi-an
nuaAy paid, said stocks to be valued at rate t,
be estimated and governed by the acreage rate a
which such stocks haze been sold in the city of New
York within the meet sac months preceding the tim.
when such Stocks may be left on deposit with tn,
Auditor of State" &c.
The people will notice that under this basi.
we should have had an admirable Banking
system, and currency which would have
been received in every State in the Unior
without difficulty or demur! But no 1T die
not suit the Railroad folks for under its pro
visions, their State Railroad Bonds issued un
der the S., 0OO,0 900 Loan, would have first tt
pass six months ordeal in the New York
money market to determine their Average valu.
before they could be made the basis or secur
ity on which to issue money to the People
This most wise provision the Railroad inter
est Immediately set themselves to nullify and
destroy:
III. In the State Senate, accordingly, was
introduced Bill No. 267, entitled, "a Bill 70,
an Act to amend an Act entitled an Act to au
thorize the Business of Banking: Approved
July 26, 1855"
"SEc. l. Section FIVE of said Act is hereby
amended so as to read as follows: Whenever any
person or association of persons formed for the
purpose of Banking under the provisions of this
Act, shall duly assign or transfer in trust to the
Auditor OF this State, any portion of the Public
Stocks issued to be issued BY the United States
or the State of Minnesot, at their current ualue OF
the Stocks of any other State of the United States
ratue at the stock exchange in the New York, with
in the neet sac months preceding the time when such
stocks may be left on deposit with the Auditor Of
state, such person or association of persons" &C.
~ ~ Procided, That, if, in the opinion
of the Auditor and Governor, any stocks offered
shall be deemed insecure, they shall not be receiv
ed as such securities under the provisions of this
Act"
This bill was put through the Senate with
rush, Senators SMITH, Bates, HUDSON, and
others condending against it, and Senators
CowAN of Nicollet and SKINNER of RICE (Rail.
road DIRECTORY leading off in its favor; it pass.
ing at last the Senate by the two-thirds vote
of Yeas 81 to Nays 8.
Our readers will notice, that the effect of this
new banking bill was to alter the aolole basis
or security for the redemption Of the bank
notes which might be issued: allowing in fact,
the Railroad State Bonds to be deposited at
what might be called their "current calue"
ANYWHERE, phrase which the Railroad folks
have since interpreted to mean their current
value" at which they were received by the
contractors for the grading!
Another effect of this new bill was, to Ex-