328 



THE FARMERS' REGISTER. 



mit their want of acquaintance with practical -bu- 

 siness matters of trade, and of bankintr, and to 

 lollow the guidance of their fellow members who 

 assume to be so much betier informed. If a larire 

 stockliolder and mere capitalist has a seat at the 

 board, he is still the more ready to yield to the 

 others, because all their objects of expanded cir- 

 culation and extended loans, which the others so 

 much desire, will add so much the more lo the 

 immediate profiis of the slock. And thus the di- 

 rectors of ihe borrowing class will do all the busi- 

 ness, and direct, all the policy of the banks; and 

 most assiduously will they attend to the perlorm- 

 ance of these nominally gratuitous, but really very 

 highly paid services. 'I'iiere is no office of honor 

 or profit in our country, ol which the duties are so 

 strictly and regularly perlormed as that of a bank 

 director — which brings no pay, and certainly no 

 Jionor. Yet who ever heard ot' a board of bank 

 directors tailing to make iheir staled meetings — 

 or tailing to go through the regular business of 

 lending out to applicants the Hind lor discounis, 

 and ol which amount the directors can take a 

 very large and undue share lor their own use, or 

 for that of other persons whom they desire to 

 serve. 



Now we mean to attach no stigma to the indi- 

 viduals who fill these otfii-es in Virginia, and 

 wherever else that banks have not acted loorse 

 than in Virginia. Most, if not all, of these indi- 

 viduals are o! respectable, and many of them of 

 very high standing in society. Few of ihem 

 would permit any debt to be made by iheir favor- 

 ed friends, that they did not believe to be secure. 

 Most of Ihem would avoid, as they would death, 

 any individual act, for their individual gain, which 

 they and ihe w^orld would (ieem dishonorable; and 

 ihey would think themselves disgraced forever, 

 and deservedly, if guilty, individually, and lor 

 their own private and exclusive gain, of any such 

 acts of duphciiy, bad laith, lalsehood and fraud, as 

 they readily advocate and maintain in the action 

 of the banks they govern. But these individuals, 

 however respectable and virtuous as individuals, 

 are, as bank directors, acting for their own inleresi 

 disguised under the plausible and always delusive 

 semblance of public interest; and tempted and 

 urged as they are — and seeing things through a 

 false medium — supported in wrong measures by 

 the most noisy and busy part of the public, and 

 opposed by the same, if indicating any intention 

 of doing right — it would be a matter of astonish- 

 ment if such bank directors were to act differently 

 from their usual course. They would possess more 

 virtue and wisdom than belong to ordinary men, 

 if they did not serve their own interests as bor- 

 rowers, when they thus had persuaded themselves 

 that to do so was required by the public interests. 



These remarks apply to such general measures 

 ae making excessive and unjustifiable issues of 

 paper money, stopping payment, and using means 

 to still more deceive the public, and command its 

 misplaced confidence, by professing to pay specie 

 promptly and fully, when it is not done truly or to 

 any useful extent; or promising to meet that 

 and other obligations at future times, when they 

 have no expectation of its being done. But there 

 are sundry other acts, of frequent occurrence, in 

 which nothing but private and individual interest 

 can be supposed to induce the movements of par- 

 ticular directors. These are, the partial favor 



shown in making discoun's, or continuing stand- 

 ing "accommodation" loans, to themselves, their 

 relatives, or their business connexions. And still 

 worse, of profiling by their official influence to ob- 

 tain large sums, on sudden calls t()r speculation, by 

 " over-checking," (that is, checking (or and draw- 

 ing as if (rom deposites, when they have no mo- 

 ney deposited in bank,) and of ining these re- 

 sources tor the purpose of practising indirect and 

 extortionate usury upon persons from whom pro- 

 per and legal banking facilities are withheld, per- 

 haps by the votes and influence of these same di- 

 rectors. But these loorst cases of official treachery 

 and individual extortion, though iliey have been 

 common enough elsewhere, we trust have not yet 

 served to make still mcire black Ihe banking ope- 

 THtions of Virginia. Both here as well as else- 

 where, however, ihere is ample opportunity for 

 bank directors to abuse their trust ; and lo a 

 very blamable extent many of them here, as well 

 as elsewhere, have profited by their opportunities. 

 Another great abuse in the constitution ol the 

 directories of banks is in the manner of the ap- 

 pointment of the members. About half the mem- 

 bers of each board are nominally appointed by the 

 votes of the stockholders, and the oiher members 

 by the executive branch of the goverment oC Vir- 

 ginia. But in truth the appointments are almost 

 always made (or each bank by the luiseen and se- 

 cret recomniendaiion of the president, or some one 

 oflicerofthat bank, or at most by the combined 

 influence of a i'ew secret advisers, of those who 

 already hold and exercise the power of the bank. 

 The governor of the state, of course, can know 

 nothing as to the peculiar qualifications of, or ob- 

 jections to. men (or these places (or every bank, 

 and in every town in Virginia ; and he must neces- 

 sarily rely upon the recommendations of Ihe most 

 prominetit men of each bank. As to the election 

 by stockholders, there is in thit even still lesa 

 chance (or (I'ee and uninfluenced appoiplments. 

 Most stockholders leave the business of the gene- 

 ra! meetings to be managed by others — and those 

 who act ai all, generally act by proxy — and, until 

 recently, the |)resident of each bank held almost 

 every proxy. The stockholders wfio actually at- 

 tend are residents, and generally of the borrowing 

 class, and thereibre much under the influence of 

 the man, whoever he may be, who has most in- 

 fluence in giving '"accommodation" to borrowers. 

 There(bre. it comes to this, that directors are ge- 

 nerally the mere secret nominees of each other, or 

 oC a single more influential member of their board, 

 or officer of the bank. Hence it is not strange 

 that one of the strongest claims which can be 

 presented (or the appointment to the otHce of a 

 bank director, and the qualification which a di- 

 rector most generally possesses, is that the indivi- 

 dual needs to borrow a great deal of money, and 

 therefore that a seat at the board will be particu- 

 larly convenient to his private interest. 



XIX. Abuse of banks acting as exchange brokers. 



Another great and shameful abuse by the banks, 

 and altogether an illegitimate and unnecessary 

 branch of their business, is their dealing in ex- 

 change for profit. It is altogether false that this 

 is necessary for the convenience of the public. 

 The system of bills of exchange was in opera- 

 tion, and its benefits for translerring funds fully 



