cient capital will accumulate to impart a healthful activity to the business operations of the country.

Wisconsin, thus far, has suffered materially for the want of sufficient business capital. For several years we have been without any bank of discount and destitute of any local currency, except what has been furnished by the insurance company located in this city. Having no bank paper of our own, we have been dependent upon a foreign currency and while we have often suffered from its depreciation, we have been compelled to pay to eastern bankers a heavy rate of interest, which, under a different system, might have been retained at home. Our merchants, wheat buyers, forwarders, and all, in fact, who have had occasion to borrow money have been compelled to pay a high rate of interest because we have not possessed those moneyed institutions which would have introduced capital and by competition reduced the rate of interest.

We are aware of the strong prejudices existing in many quarters against banks, and as these institutions have heretofore been conducted in some of the states these prejudices are not without good foundations. But because one banking system has been found defective or vicious, does it follow that all others are necessarily and equally bad? Because the notes of some moneyed institutions, through fraud, mismanagement, or defective organization have proved worthless, must an indiscriminate warfare be waged against all bank paper? Is it not possible to devise a system which shall be free from the well-founded objection of conferring upon any man or any set of men, peculiar and exclusive privileges and which shall furnish the circulating medium necessary to carry on the business of the country? We must remember that the question is not now bank, or no bank, but whether Wisconsin shall have moneyed institutions of her own, subject to her own supervision and control, and in which her own citizens can take an interest, or whether we are to remain, as heretofore, dependent upon banks scattered all over our country from Lake Michigan

to the Atlantic sea-board, of whose solvency we can know comparatively but little and in whose management we can take no part. We cannot destroy bank paper. We cannot even drive it from our borders. In spite of the most stringent laws that we can adopt, the bills of Michigan, Ohio, Indiana, Canada, and the eastern states generally will continue to circulate in our territory. The question then resolves itself simply into this: Shall we have our own bank paper, convertible always into specie at our own doors, or shall we be compelled to take up with that over which we can exercise no control, and around which we can throw no safeguards?

Bank paper, or, in other words, credit is so closely interwoven with our commercial, agricultural, manufacturing, and mechanical pursuits that you cannot dispense with it, without severely crippling each and all of these great interests. The experience of others on this point is full of value and instruction to us. In every one of the older states there exists a banking system. In New York and Massachusetts, perhaps the two most prosperous states in the Union, there are numerous banks, furnishing a local currency of known value, redeemable in specie on demand and of immeasurable service in simplifying and expediting the everyday transactions of an active, enterprising, busy people. Fancy all these banks suddenly or even gradually blotted out of existence, and a positive prohibition made against the circulation of any more bank paper. Who can calculate the confusion, distress, depreciation, and ultimate ruin which would follow in the wake of so fatal a change? In each, if not all, of the older states the banking system has undergone great and various modifications. In each of them the people have suffered more or less severely from revulsions, suspensions, and occasional failures. But the experience thus dearly bought has prompted them not to destroy, but to amend. If abuses have been detected, uses have been discovered. If one system has been found, on trial, to work badly, another, by the same test, has been

found to work well. It may be regarded indeed as a most striking proof of the conceded value and indispensable necessity of a well-regulated banking system that in every one of the older states such a system is in successful operation, regulated and controlled by laws adopted by the several local legislatures, approved by the people and confirmed by time. And whether it be in Maine, New Hampshire, or Virginia, where the Democratic party has almost invariably borne sway; or in Massachusetts, Vermont, and Connecticut, where the Whigs have usually been in the ascendant; or in New York, New Jersey, and Pennsylvania where each party has alternately succeeded to power; in not one of these states do we find either political party, or any portion of either party, contending for bank destruction or calling for the extinction of all bank paper. Must not the united experience and unanimous verdict of all the older states on this point be deemed and taken as entirely conclusive?

What then, will our convention do? Will they heed the testimony and profit by the experience of the older states, or will they carve out a new and untried path for themselves? Will they discard all moneyed institutions, thus bringing us down to a hard-money currency, or making us dependent upon foreign banks, which are strangers to us and to our interests; or will they vest in the legislature power to establish such a system as our growing wants, enlarging trade, augmenting population, increasing productiveness, and yet undeveloped resources imperiously require? Will they, by stringent and unwise restrictions, deter moneyed men from investing any portion of their surplus means in this territory; or will they, by wise, well-considered and salutary provisions, encourage the introduction of capital, invite the aid of credit, foster the spirit of enterprise, and secure the wages of labor? Will they, in a word, listen only to the supposed requirements of party, or will they consult the wishes and act for the interests of the whole people? It is a high and honorable trust which has been confided to their hands; let it be worthily, honestly, and conscientiously discharged.

THE BANKING SYSTEM IN NEW YORK

[ October 9, 1846 ]

The New York constitutional convention, in the progress of their labors, have at length got through with the provisions which related to the business of banking. The article as adopted by the convention is in the following form:

1. The legislature shall have no power to pass an act granting special charters for banking purposes, but associations may be formed for such purposes under general laws.

2. The legislature shall have no power to authorize, nor to pass any law sanctioning in any manner, direct or indirect, the suspension of specie payments, by any person, association or incorporation issuing bank notes of any description.

3. The legislature shall provide by law for the registry of all bills or notes issued or put in circulation as money, and shall require ample security for the redemption of the same in specie.

4. The stockholders in every corporation and joint stock association for banking purposes, issuing bank notes, or any kind of paper credits, to circulate as money after the first day of January, 1850, shall be individually responsible to the amount of their respective shares of stock in any such corporation or association for all its debts and liabilities of every kind, contracted after the said first day of January, 1850.

5. In case of the insolvency of any bank or banking association the bill holders thereof shall be entitled to preference in payment over all other creditors of such bank or association.

6. The legislature shall limit the aggregate amount of bank notes to be issued by all the banks and joint stock associations in this state, now existing or which may be hereafter established.

Such is the banking system recommended by the New York Reform Convention. It was adopted by very decisive majorities and embodies the views of four-fifths of the delegates. A motion to amend the first section so as to declare that "the power of issuing paper money shall not be granted by this state" was voted down by seventy-eight nays to eleven ayes-nearly seven to one. The delegate who offered it is one of the very few persons in New York who contend

for the extinction of all bank paper; but in a convention composed of 128 members, a majority of whom profess to be, and were, elected as "Radical Democrats," he could obtain only eleven votes for this "anti-bank" proposition.

The provisions we have quoted seem to us wise, equal, and impartial. The business of banking is thrown open, as it should be, to all who choose to embark in it, the state taking care, however, that no individuals or associations shall issue notes as currency unless ample security for their redemption in specie shall have been previously deposited with the proper authorities. Thus protection is ensured to the bill holders and if through any mischance or mismanagement any of these banking institutions should fail, the bill holders are made preferred creditors. Why cannot this or some similar system be adopted for Wisconsin? Why should not our convention follow, in this particular, in the footsteps of their New York predecessors? Are not the authority and experience of New York of some weight and value in the premises? Can we reasonably expect that there will be more talent, more experience, or more "democracy" in the convention now assembled at Madison, than in that which has just closed its session at Albany? And if not, why should Wisconsin hesitate to receive the testimony and profit by the experience of New York?