proper interpretation of the article is covered
by the provision which the committee have
reported.
Mr. PUGH. I do not propose to enter into
this banking question at all. If we did so,
we might spend a week or two upon that sub-
ject. But I wish to state my reasons for
wishing to throw this additional guard around
the people, and against the banks. I wish
only to state as a mere matter of fact, which
the gentleman from Baltimore city can ascer-
tain if be inquires, that a large portion of
our troubles to-day are traceable to the fact
that the State banks of this State, and of all
the States of this country, are to-day issuing
about three dollars to one of their capital. I
take the ground that if this guard was thrown
around the people and against the banks, they
would not be issuing so much of their circu-
lation upon no capital whatever.
Mr. STIRLING. With this provision in the
Constitution, the backs have issued three
times their capital in currency. What good
has the provision done, when written in the
law?
Mr. PUGH. I want a better provision. If
the interpretation I give to it is not sufficiently
clear, I want another which shall preclude the
possibility of any such interpretation as the
gentleman gives it. I absolutely disagree
with him in his idea that there are eminent
lawyers in the State who give it such an inter-
pretation, I believe the intention of the article
wag to curb the excessive circulation of the
banks of the State, I believe there is no one
source of graver disaster to the State than the
extensive circulation of paper money. The
gentleman knows that to-day one principal
difficulty that the government has in sustain-
ing its money power, originates with the
State banks through the country, I know of
my own knowledge that there are to-day in
the State of Maryland, banks issuing at least
three or four dollars to one of their capital.
I wish to state my belief that if such an ar-
ticle were incorporated in the constitution of
the State, an article which should not admit
of the interpretation which the gentleman
claims that this article is capable of, but which
I deny, we should be to-day stronger finan-
cially. I shall always, here and everywhere
else, be in favor of protecting the people
against the issuing of paper currency without
any regard to the capital which sustains the
institution.
Mr. STIRLING. One "word with regard to
that. If it is wrong to issue currency to
three times the amount of the capital, then
prohibit it. If the gentleman from Cecil will
introduce a proposition that they shall not
issue any paper money at all, I will vote for
it, I am willing to make them merely banks
of deposit and discount. If you want to
reach that, why not do it directly, and not
by indirection, and thug stop the issue of pa-
per money ? |
Mr. MILLER. One word in regard to the
construction of the present article of the Con-
stitution. The gentleman from Baltimore
city (Mr. Stirling) says it has been construed
so and so. There has certainly been no ju-
dicial decision of the State so construing it.
It seems to me that the plain provision of the
law is this; the gentleman knows very well
that if he and I were to go into partnership
to transact business together, and we con-
tract debts—he putting up a thousand dol-
lars and I putting up a thousand dollars—our
creditors can come upon us, not simply for
the thousand dollars each we put up, but for
the whole amount of our private property;
they can take everything we have to pay our
debts.
Now, In reference to banking institutions
under the old provision, before the present
Constitution was adopted, the stockholders in
banks, who were corporators, and in one
sense partners, too, were liable only for the
amount of funds they had advanced to that
institution. This provision was adopted, and
made them liable, not to the extent of all
their private property, but to the extent of
the amount they had subscribed and paid
into the institution. That seems to me to be
the construction of the provision as it at
present stands. But if there is any doubt
about it I would like to have the article altered
so as to make it clear that in addition to the
amount of stock which they have paid in,
they shall be liable for the amount for which
they have subscribed. Because, as I said be-
fore, these banking institutions got their char-
ters from the State as a favor. They have
privileges which other people in the commu-
nity do not enjoy. They have the privilege
of issuing paper money, and the creditors of
the bank and the people in the community in
which the bills are circulated, ought to have
some guarantee beyond the mere fact that A,
B, and C, have put in go much money; they
ought to have the security of the personal re-
sponsibility of the stockholders, at least to
the extent of the stock they had subscribed.
There was a memorable instance occurred
tinder the old system in the State of Mary-
land. The Bank of Maryland failed. Its
issues were large, and were scattered through
the community. Poor people held the notes
of the institution, and they could not get one
dollar, because some of the officers of the
bank had squandered the entire amount of
the capital of the bank, and they had not
property enough, under the bonds which they
had given to the bank, to make up the defi-
ciency, and the bill holders had to suffer.
And I have no doubt that it was the influence
of the disastrous failure of that bank which
induced the Convention of 1850 to put this
provision in the Constitution, I do not think
there can be any doubt about the construc-
tion of this section; if there is any let it be
made perfectly plain and clear. |
