THE FARMERS' REGISTER. 



685 



ble in DecembRr ; and if paid, there will be no [ 

 money lel'i in the treasury, by January, and the 

 easy, but ruinous mode of icplenishinjf it, by 

 acrain borrowin;^ what it costs the banks nothing 

 tofiirnish, vvill be doublieiis resorted lo again, 

 instead 01 siiffii-'ient taxation, or (what would be 

 far belter) the selling of bank stock owned by 

 the state. The great ohjeciion to borrowinu: ol 

 the banks is that stated above — its being equiva- 

 lent to a renewed indulgence to the irredeemable 

 paper currency. But independent of that all- 

 important objection, the policy is one of the most 

 absurd, stupid, and injurious to the borrowing 

 commonwealth, that could be devised by the 

 most ihorouixh-going and unscrupulous supporters 

 of a fraudulent banking system. 



For the loan made last winter, of $360,000, 

 the treasury has lo pay, at 6 per cent., at the 

 yearly rate or.S'21,600ofinierest ; and the state or 

 peopit" have also lo suffer all the loss and damage 

 caused by a year of bank suspension, and depre- 

 ciated currency, which is very far more than both 

 the principal and interest of the loan. Now let 

 us see what the banks gain, and what they have 

 to pay, by making the loan. Their gain is all 

 the profit of a year's suspension, (if indeed, as 

 they pretended, the making the loan made the 

 suspension necessary,) and that profit is at least 

 equal to all the dividends declared in the year 

 on their whole capital stocks. For if they had 

 truly and honestly resumed payment, there cer- 

 tainly would have been no profits to divide. Now 

 to lend .^360,000 in irredeemable paper, or even 

 as many millions, would obviously cost to non- 

 paying banks not one cent, except the bare ex- 

 pense incurred -for the paper, printing, signing, 

 and delivering. If the constitutional objection 

 had not forbidden, the legislature might just as 

 well have manufactured and emitted the bills di- 

 rectly, and thereby saved paying the interest, 

 which is almost entirely a gratuitous boon to the 

 banks. And why should the state not have is- 

 sued so much in paper promises to pay, (either 

 redeemable or irredeemable,) without the useless 

 and costly intervention of the banks'? The uni- 

 versal answer will be, "Because a stale is for- 

 bidden by the federal constitution to issue bills of 

 credit.''^ Very true; we readily admit the force 

 and application of the prohibition, and acknow- 

 ledge its wisdom. But this we maintain — thai 

 what a state in this respect cannot do directly, 

 and by its own action, it cannot do indirectly, 

 through its own agent and creature, a bank. And 

 an emission of paper thus made, as a loan Irom 

 the banks, besides beinor a most cosily and absurd 

 policy, is just as unconstitutional as an emission ' 

 • of bills directly from the treasury. And rather 

 than this wretchedly stupid and dangerous mea- 

 sure should be repeated, or the last loan con- 

 tinued, we trust that a direct emission from the 

 treasury will be made, so as at least to avoid the 

 enormous cost of interest to the banks, and, what 

 is far worsf», the permission of continued bank 

 suspension as a super-added condition. 



The making of any permanent loan is alto- 

 gether opposed to the principles of sound bank- 

 ins. And if the banks of Virginia were bona 

 fide paying specie, and had not lost reputation 

 by their prior and long-continued refusal to pay, 

 it would be not only contrary to sound banking 

 principles, but also dangerous to their standing, 



lo lend a large amount to the state, or to any 

 other borrowers, on long lime. If not paying 

 specie, and not intending lo pay it, of course the 

 banks could lend niillions in irredeemable paper^ 

 as easily and cheaply as ihey now violate all 

 other obligations. But our supposed case is ol 

 banks paying 6()ecie, or truly designing soon to 

 pay. In this case it id obvious that every per- 

 manent loan, made in paper, increases just so 

 nmch the liabilities of the bank, or claims on it 

 lor specie ; and as the loan is not returned speedily, 

 or at the will of the bank, or at any fixed time, 

 the debtor furnishes to the bank no resource lor 

 complying with the increased demand lor specie. 

 It is certain that the Virginia banks have not 

 lessened their loans to individuals because of the 

 loans lo the state — nor vvill they do so. There- 

 fore, the banks having lent 8360,000 to the state, 

 has created just so much the more of paper de- 

 mands for payment, and of lessened ability to 

 meet resumption, unless, indeed, the unlooked for 

 and supposed "impossible" case should occur, of 

 the state debt being promptly paid, and no other 

 incurred to the banks. In the following article 

 that contingency will be considered, and sugges- 

 tions submitted of means for that and other ends. 



THE QUESTION' OF BANK RESUMPTION, OR 

 CONTINUED SUSPENSION. 



No. 2. Plan for supplying the deficiency of the 

 state treasury, without renewed loans or in- 

 creased taxation. 



At the last session of your honorable body, the 

 contingency of an empty treasury was in certain 

 prospect. There had not been before, and was 

 not then, a majority daring enough, and ready to 

 risk their popularity thereby, to raise the taxes 

 sufficiently; and still less was it thought of lo 

 use for the purpose the bank slock of ihe state, 

 though the entire and known loss of it would be 

 an absolute and great gain to the commonwealth. 

 The resort was to a loan from the banks, as 

 stated in the preceding article. The resort suited 

 the members who are too timid to impose even ihe 

 most necessary taxation ; and it still better suited 

 the concealed views of all advocates of the longest 

 continuation of bank suspension. V^ith the com- 

 bined support of these two classes, aided by all 

 the out-of-doors bank influence, it is no wonder 

 that the borrowing from ihe banks, abominable 

 as was its policy in every aspect, met wiih no 

 serious opposition. The loan fixed and made 

 legitimate the continued bank suspension of pay- 

 ments ; and the bankites were sure that the same 

 means would be as much needed, and be even 

 more ready, at each succeeding session, to main- 

 lain suspension. It will be for the present legis- 

 lature to give certainty to, or to crush these ex- 

 pectations. 



Wherever increased taxation is really needed 

 lor the current support of government, or the 

 performance of prior obligations, we will always 

 be among the most forward of the advocates for 

 heavier taxes. And such would have been our 

 position last session, and would be this, in prefer- 

 ence to borrowing from any quarter, if we deemed 

 the necessity for either lo exist. But there was 

 not, and is not, any such necessity, and will not 

 be, so long as the state ia a bank stockholder, and 



