Year: 1860

storing specie circulation without the conplete
prohibition OF ali notes Of a similar denomination


from the surl ounding Sates which flowed IN on the
suppression OF our notes. and 70 that extent pro


hlbited the entrance Of specie. Them while am am


advocate of a well regulated banking system have


hoped that the banks would be prohibited from is


suing any note Of less denomination than twenty


dollars, and that q law would be passed prohibitiur


the circulation Of notes Of similar amounts from


the surrounding States. This would furnish the


poorer classes with specie circulation az least for


all their small transactions. and therefore render


them far less subject 70 loss from bank failures.


Since have been an observer OF banks and banking


have often seen the poor Of the country robbed Of


their means Of living by the failure Of banks, and


tits for the protection Of that class that desire the


suppression OF small notes. II we must have banks


for the convenience Of the mercantile and specula-


ing classes. let US according TO our pledges limit


their issues to notes OF a large denomination, SO


that we VIII have specie circulation adequate to TIE


wants Of the great mass of the people, who do nor


need or desire banks. Then if banks viii fail and


carry with them the nOnprOducing speculatng class


es who i've in the sunlight Of bank favor, and who


cannot live day outside Of that favor, let them


go, but let them not bury in the ruins they make the


poor Of the country.


am il favor Of making the stockholders ia all


private corporations individually liable for all the


debts OF Liabilities Of such corporation when or


however made And II cannot see upon what grounds


any man can oppose it. / can not see why stock


holder in banking corporation should have his


property exempt from liability when Of all the bu-


sness Of the country that Of banking holds out the


greatest opportunity for money making and for


fraud. And sir [ think chat the policy Of granting


banking privileges TO capitalists with limited liabili-


ty without liability az s IS contrary 10 the spir-


It Of our Institutions, and has done much to inure


the citizens Of the State in thus enabling men under


chartered privileges and exemptions to embark IN
the wildestand most reckless systems Of speculation
and oppression for it is plain to ny mind chat not
only affords opportunity but absolutely 1cds ont
an inducemert TO such may choose TO avail them
selves Of tn sasne, to embark IN the widest sys-
tenn Of banking; for, net being Individually Liable
they may and do extend their credit to the largest
amount possible, as by doing their profits are in
creased. and profit is the object Of such institutions
And if in thus Teckessy extending their credit the
bubble should burst their individual property se
cure being protected kbV an act of incorporation
and the people who have bcen made their dupes are
left without remedy, The worthless circulation Of
such institutions is scattered all over the country
and IS in the hands Of the poorer classes who have
not the opportunity Of knowing how the affairs
Of such institutions are managed who are depen-
dent on their labor, and upon that alone for a sup
port, and who in many instances by the failure
of such banks, robbed Of the proceeds Of their Ia
Dor and left without the means Of supplying their
families with the necessaries of life. Whilst this is
the conditions of the note holder I would ask what
IS the condition Of the st0ckhOlder Of such broken
bank? Sir, his property is protected by special
act of Incorporation and he can in the face Of the
desolaton and ruin he has created, enjoy his for
tune. and 60 dashing along, it were, over those
that have been made the dupes Of his bank. Sir,
l am IN favor of well secured and well regulated
banks, but | am opposed to any system that opens
up such field for speculation and swindling as
does such acts Of incorporation as exempts the in
divdual property of the stock-hOlder. As one who
admits that banks are convenience / desire to
see such steps taken as viii secure a safe and CON
yertible currency, and in my opinion the policy Of
granting bank charters with limited liability has
done much to make our present system odiOus and
imperfect. But it has been said that if stockhold-
ers of banks are TO be made Individually liable I
that u VIII result IN uie destruction Of our bank
ing institutions, that one would take stock under
charters that make them individually liable for the
debts Of such corporations


This is the perpetual and always ready objection
10 any reform in our rotten banking system. You 1
'an propose no reform that viii not drive OUT cap
tai nothing but system that authorizes successful
swndling VIII invite capital according to SOME gem
-emen. Woods, Ieatnan 4 Co, prosecuted the bu- /
siness of banking ten twelve years in Tennessee
IS partners without any charter at all. and there
has been or two ether banks IN which the stock
holders were liable, one Of them in existence.
But let Us see how it is in other States Of this Union
This State Of Missouri has declared BY her Constitu
lion, that the stockholders in all private corpora
tons except for the purposes Of education and /
charity shall be responsible in their individual and
private capacity for al debts and liabilities Of every
kind incurred by such corporations


The Constitution Of Florida declares that stock I
holders in a bank, when an act Of forfeiture Of
sarJ5r ssoasilitse,l zVheni IS dissolved or ex
Dires shall be individually and severaly Liable for
the payment Of all debts in proportion to the stock
owned by EACH


The Constitution of Michigan declares that the (
)ficers and stockholders of every corporation or
for banking purposes issuing bank /
notes or paper credits to circulate as money shall
be individually liable for all debts contracted dur
ng the time Of their being officers or stockholders i
If such corporation or association"


The Constitution Of Iowa declares chat every /
in banking corporation or institution 4
hall be individually liable to its creditors and
.bOve the amount Of stock by him or her held, to 1
IN amount equal to his OF her respective share so
led, for all its liabilities accruing while he she
remains such stockholder.n


The States of Mass achusetts Rhode Island, Louis
ana Ohio, Virginia and other States Of this Union,
,ither by Constitutional Legislative provisions,
lave imposed this very wholesome liability on
stockholders.


he Stockholders 20 individual liability, if such 4
provisions had expelled the capital from all Of them
{ would have driven nearly all the capital out Of
he United States or all would have accumulated IN 4
ome few States. But most Of those States which /
lave not subjected the StockhOlder to individual i
liability have adopted still harder restriction Of


ther requiring mortgages of real estate to be put
n the hands of public officer, bonds to be sold if
heir notes were not redeemed.


That celebrated writer Mr.. McCulloch says in /
rs work on Banking, There has been until lately /
few failures among the Scotch banks.
n 1898 and 1925, when SO many Of the English 1
,anks were swept off there was not single estab- /
ishment gave way. This superior sOidity appears \
o have been owing to various causes, partly for Il
he banks having for the most part large bodies Of /
partners who being conjOintly and individually 4
pound for the debts of the companies to which they
)eong 90 far to render their ultimate security all
jut mquestionable, and partly TO the facility af |
orded by the law Of Scotland of attaching a debt
lrs property whether Il consists Of land OF nova
1les and making Unavailable for the payment Of his
lebs" Again he says "lt has been some times pro
posed to allow banks to be constituted with limited
liability But that's in every case vicious principle
essening the natural responsibility under which Z
every man ought to act and tempting parties to en-
gage in all manner Of desperate adventures. In
banking such principle would be especially mis-
ehievOus for it IS a business tnat requires great
caution and prudence the very virtues with which
The principle Of limited liability is most at variance.
It may indeed be said that the numerous instances
Of mismanagement and embezzlement that now pre-
vail show that even te principle Of indefinite Ii
ability is not enough to make JOINT stock banks be
prudenty and honestly. But however
defective, still it is the only principle upon which
any stress can be srfely laid, and the instances re-
ferred to, bear, after all, buta small proportion to
those of an opposite description The great major
lty Of banks are discreetly and faithfully managed.
And if knavery and folly be sometimes found to
prevail whsre every partner Is deeply interested in
their prevention and IS liable for the last farthng
he possesses for the consequences, the fair pre-
sumption IS that they would be ten times more
prevalent were the partners liable only for the
amount Of their shares in the bank To suppose
the contrary would be contradiction; it would be
equivalent to supposing that man is to be much


interested in the safety of el0 or el00 Of el,000
or el0000 Of his entire fortune however great it
may be.


Whatever may be the effect Of the late disclo-
sures of acknowledgement fraud and robbing on the
part OF directors and secretaries Of JOINT stock
banks, it can hardly fail to make the partners N
those associations more alive to the dangers Of their
situation and to convince chem that if they would
provide for their own safety, they must be more
cautious than hitherto in regard 70 the person they
elect to fill these situations and less disposed TO take
their statements for granted. Sueh, however, Is
the eareessness of most people, even IN regard TO
tbose matters which most nearly concern them,
tat these antiepations. though reasonable may not
he fpIlv realized But Ia the case Of hanks with
Ip,ited liability they must be sanguiRe indeed who
Iool- for Improvement The partners in these asso-


iotions have 10 sufficient interest in their prosper
itv to make them take any unusual trouble about
f6e ,yav in which they are conducted and they
neifber fear ruin nor any considerable inconYeni
enee from their fauRe. The chances are ten to one
that their managers VIII be left without let OF him
drance to pursue their own schemes and when
such is the case, what but abuse can be expected 90
be the result But it is argued that wheasver may
a. e.aa n