The star of the north. [volume] (Bloomsburg, Pa.) 1849-1866, 1859-03-16
The New Banking Law.


the Objectionable features of the latter have
been omitted; but we regret to perceive
that others have been replaced by provi-
sions which are no improvement; and that,
in its present shape, the Committee have
admitted new errors which are quite as de.
lusive, ahd will be found to be quite as
pernicious as any we have pointed out in
our former articles on this subject
The Bill now proposes TO create new De.
partment in the State government the du.
ties of which shall be discharged by Su.
perintendent of Banks, with the deputy and
clerks. We see no reason why these duties
should not be performed by the Auditor
General, who is elected by the people every
three years, and whose other duties harmo-
nize with those created by this Bill Let
the Attorney General act in the grant of the
charter; let the Auditor General have
charge of the circulation, the returns and
the taxation of these Banks; and let the
Courts retain their full and appropriate ju.
risdiction in questions of insolvency, viola
tions of charter, and in all cases of remedy,
either for or against these Banking corpora
tions, acting upon the information OF the
iunctIonaries above named or of any indi-
vduals who may be aggrieved.
By this course, we.shall avoid the creatioH
OF new Offices and departments, and keep
the system within natural, harmonious,
and better understood line of administra.
lion. The people of Pennsylvania want
none OF these new-fangled schemes, which
complicate the machinery of government,
and interfere with well-considered and es.
tablished modes of procedure in the settle.
meni of questions of rights and remedies
They would prefer TO diminish instead of
increasing offices. Nosystem of free Bank
ing will be acceptable, in this State, which
does violence TO the sellled habits or no.
lions OF the people, in any ofthese respects
But the most striking defect OF the pend
ing bill, is tina, which authorizes the incor.
poraton of single individuals for the pur-
pose of Banking. Section eight provides,
that "any person or association of persons
may establish offices of discount, deposit
and circulation, upon the terms and condi.
tions, and subject 10 the liabilities prescIib-
ed in this act" Here we have the Corpora
tion Sole, the most odious form of this class
OF Legislation and with the privilege of
banking and creating paper currency, the
powers that, if granted at all, should be
most cautiously and jealousy guarded
What such corporation sole, for banking
purposes would result in. may be seen by
reference 10 the Seventeenth Section, which
says that ii need have no Board of Direc.
tors or Managers, but that its affairs may be
conducted by any one OF more of the Stock.
holders. who may be designated In other
words, 4. B. and C. or either of them, en-
| gaging in banking business under this law,
may own the whole stock, be President
Cashier. and Board of Directors, and, either
jointly or separately, discount, receive de.
posits, create and issue bank notes, and
declare dividends and all this. as long as
| they keep within the letter OF the law, with
out incurr'ng any personal liability. And
not dollar oil actual capital would be re-
quired 10 accomplish this; because the sum
invested in State stocks would speedily be
returned in bills receivable and deposits
and thus A, or B, or C, as Banking Cor.
poration Sole, could embark in the business,
without capital or liability, and do what
neither of them nor their neighbors can in
their personal capacity.
If we are 10 have corporations sole for
banking, why not also for railroad, mining,
manufacturing and ther purposes? There
are individuals in the community wealthy
enough TO undertake almost any of these
enterprises, however gigantic and if can
only be understood that in each and all of
these departments o. business, man may
shield himself behind his corporate capaci-
ty against individual liability, then will
monopoly begin its reign at once, and he
who possesses only moderate means or
capital, may prepare 10 resign them both 10
his richer neighbor. Such results are inev-
liable from such a system. And in no
branch of business would they be more
disastrous than in that which regulates the
capital and currency of the land
The theory upon which the Legislature
of this State has uniformly proceeded, has
been that Charters of Incorporation, in
these cases, should only be granted where
large aggregate capital was required to ac.
| complish what individual means were in
adequate 10; or where, from the nature of
the enterprise and the public interests in
volved, individual management could not
be relied upon. In both of these aspects,
the business of Banking, whether under
general or special law, should not be en-
trusted 10 Corporations Sole
The ASSOCIATION for this purpose should
be large enough in capital and numbers,
10 ensure attention from the shareholders,
and experience and responsibility in the
management. We see no reason why the
! Board of Directors of Bank should have
less than thirteen members, the number
required under the Act of 1850; and what.
ever reasons may apply 10 this rule, under
the present system, have even greater force
in regard 10 general or free Banking Law.
We have not time, to-day, 10 examine
more into the details of the proposed sub
slitute for Mr.. RANDALL's Bill. The publ-
|