The Lansing state Republican. [volume] (Lansing, Mich.) 1855-1874, 1859-03-08


reads as follows:
y" heneVer any person or association {
persons formed for the purpose Of bankin
under the provisions Of this act, shall legai
ly transfer to the State Treasurer any poy
ton Of the public debt now created or here
after to be created by the United States
or the funded debt Of this State, or tha
hereafter may be funded. or the public deb
now created or that may be created By tn
State of New York, either of the New
England States, Pennsylvania, Indianna
Illinois, Ohio or Kentucky, bearing inter
es: and rron which eutercst is pale; such
persoes or associatiod of persons, shall b.
entitled to receive from the State Treas
urer All amount Of circulating notes Of differ
ent denominations as may be desired by
such persons or association, equal To out
hundred per cent. OF the securities thu.
transferred; and such securities or public
debt shall in all cases be or be made euua
to stock of this State producing six ge,
cent, per aanuna,. and it shall not be law
ful for the State Treasurer to take sucL
stock at rate above % per cent. of it.
par value, nor above % per cent. Of it.
current market value, to be determined by
the average value Of such trst funds. at the
Stock Exchange III the city of New York,
four weeks next preceding the time Of the
receipt thereof by said Treasurer"
Standing by itself unqualified and unre.
strlcted by any other in the statute this
section would perhaps authorize the issue
of an unlimited amount Of bills upon an
unlimited amount of Stat, s,oc';s But
those who seek, from interst, to give it thi.
effect, disregard the common sense rule
that IN constituting and applying a statute,
the whole of it must be read and each pro.
vision considered, in order to arrive at the
intention Of every other provision ; and
that the generality Of the language Of a
provision upon a particular subject matter
is limited and restricted by language less
general and more specific in another part
of the statute upon the same subject mat
ter.
Now the first section restricts the amount
of money which the bank may own as cap
ital If it cannot lawfully own more than,
say 100000, how can it purchase State
stocks to the amonnt Of Sl00,000,000 >
The answer is obvious. Such purchase
would be cttra rireS-beyond its corporate
faculties And if it cannot purchase them,
then it is equally evident that it cannot
'fraRIer" them TO the State Treasurer /;
but ,,,uc. IS l;,n;taJ 18th "a, ., Tho ,,,,,,p,
it may transfer, to the amount specified in
the FIRST section, i. e. to 81 of the amount
Of its capital And we ever supposed it
to be the intention Of the Legislature to al
low bank, with a capital Of only $4,000,
to issue an unlimited amount of circulating
notes. based upon State stocks and indt-
riduaI Na5iiity,' Who is SO ignorant as
not to know that even States may stop
payment; and that in the event of war,
reputation. or other great public calamity,
the value Of State promises to pay. may
sink to as low an ebb as the credit Of many
private person, and even to a lower one
Aud who is so credulous as to suppose that
the iadiridudi HabIAtYoC SOckh0iders,
bank directors and officers. will ever pr0c-
tic0ity supply the place Of actual cash rap-
ital on hand
\ notion seems to prevail with some per
sons, (how extensively | know not.l that
under our general banking act, bank may
become organized" and 90 into operation
without dollar of Its capital stock having
teen PAIL in, otherwise than rs invested
/ in its State stocks in the hands Of th,
Treasurer that having, as required by tn,
2Oth section, deposited S25,00O in sucl
stocks, it may commence business-may is
sue circulation TO that amount, less fr
per cent, receive deposits and discount pa
per. Ii this construction be put in prac
tice, an association may become orgauiZc(
and proceed TO business upon an actual de
post of only $4,000 with the State Treas
urer, and that held exclusively Tor the re
demptiOn of it, circulation, without dol
lar of specie to redeem its bills at the coun
ter. Let us imagine j state of facts -
Suppose bank has ayailed itself ct thi
strange liability, and has not to-day on hanC
a dollar in money to redeem the notes 1t /
issuing; and suppose it discounts pape
this week to the amornt, say $4,000, a
90 days, and pays for 1t IN Its own bills
The paper it thus discounts will not redeem
its bills That is certain. Suppose tha
at the end of 10 or 20 days its circulation
thus issued, returns upon i; for redemption
The bank has not 4 dollar in cash cap tai t
redeem with, because the paper taken ha
not yet matured-and even If it had
might not be paid What is the next step
You would be required by section 1t, I
advertise the State stocks for twenty day
and sell them to sufficient amount to T,
deem the entire circulation. But II
said that the bank, III the mean time, wo'
Of coarse protect the circulation. How
: Ii has no capital stock paid in, with whic
: to do It, and how is it to raise the mnncy
There Is no way, except to seize nron ii
money Of dcpo>ltors, and use II 10 redee'
/ the circulation aud thus compel them TO ru
: all the risk of getting their pay, throug
4 the bank. from the parties whose names a
, pear on the discaunt paper. This inse
5 icus process would operate very favarab
G to the stockholders; for while it paid Il
: bill holder cut of the funds of the deposi
c or. it would, TO the extent OF the circulate
? 50 redeemed, relieve the hypOthecat'
!. bonds. upon which the Gepositor Is SO unfu