THE BANKING LAW OF VERMONT. The chief items of the Free Banking Law recently adopted in Vermont are as follows: 1. Banking Associations to consist of not less than ten persons. 2. The State Treasurer to provide circulating notes to such association to an amount not less than $50,000, nor more than $250,000, upon receiving a transfer of an equal amount of the public stocks of the United States, or the States of Massachusetts, New York, Maine, Connecticut, Rhode Island, New Hampshire, Vermont, Ohio, New Jersey, or Virginia-such stocks to be made equal to six per cent stocks; or upon receiving half the amount in such stocks, and the remaining half in bonds or mortgages on productive real estate in this State, reckoned at not exceeding two-fifths of its value, excluding buildings thereon: which stock or bonds and mortgages are to be held by the treasurer as security for the redemption of the bank notes issued by him to such associations for circulation. 3. As additional security, the directors and stockholders of such associations are to give bonds equal to the amount of notes received for circulation, to make up any deficiency in case the stocks, bond and mortgages before provided, shall be insufficient. 4. The banking associations are required to redeem their bills at par in the city of Boston. 5. The existing banks, upon the assent of the stockholders, or upon paying of such stockholders as dissent, may come in under this law. THE THREE-CENT PIECES OF THE UNITED STATES. The last section of the Act of the last session of the 31st Congress, "to reduce and modify the Rates of Postage in the United States, and for other purposes," (see Merchants' Magazine, for April, 1851, vol. xxiv., page 384,) authorizes the coinage at the mint of the United States, and Branches, a piece of the denomination and legal value of three cents, or three hundredths of a dollar, to be composed of three parts silver, and one fourth copper, and to weigh twelve grains and three eighths of a grain. The die for this coin, as we understand, has been purchased, and the coinage will be proceeded with at once at our mint in Philadelphia, but for a defect in the law, which makes no provision for procuring the silver and copper to commence with. In consequence, the coinage will be delayed until the proper steps are taken by the authorities at Washington to remedy the deficiency. The new coin is decidedly neat and tasty, and will be in a measure a convenient substitute for coppers. In size it is between the gold dollar and the five cent piece, but it is so much thinner than either that a blind man can easily distinguish them apart by the touch. The face of the coin has a capital C, with three numerals indicating the value of the coin embraced within it. Around the edge are the thirteen stars for the original states. On the reverse is a star having in its center an American shield, and around the edge, "United States of America, 1851." OF THE REDEMPTION OF BANK NOTES. The Attorney General of the State of New York has addressed the following circular to the country banks of that State : To the President, Directors, &c., of the Attorney General's Office, November 25, 1851. Section 9 of the Act entitled "An Act relating to the Redemption of Bank Notes," passed May 4, 1840, prohibits any Bank, Banking Association, or individual Banker, from purchasing, buying in, or taking up, directly or indirectly, their circulating notes, at an amount less than what purports to be due thereon, at any other place, or in any other manner, than is directed in and by this act. The act authorizes the appointment, in New York or Albany, of a Redemption Agent, who shall redeem the circulating notes of the country banks, at a rate of discount not exceeding one half of one per cent. This appointment must be in writing, and filed in the office of the Controller. A bank may be appointed the redemption agent, but no city bank can redeem the circulation of country banks without such appointment. Complaints having been made to me, duly verified by affidavit, that a large number of the banks of this State, including the bank under your charge, have entered into an arrangement with the Metropolitan Bank of New York, to "purchase," "buy in,” and "take up," their own bills, at a discount of one-eighth of one per cent, I feel bound to call your attention to the subject, and to suggest that in my opinion this mode of redemption is unauthorized, and is in direct violation of the statute of 1840. My duty requires me, in all cases of violation of law by moneyed corporations, to proceed against the offending institution, by information, to annul the charter. The METROPOLITAN BANK not having been duly appointed a Redeeming Agent for your Bank, you will see the propriety of either filing a regular appointment of said Bank as your Redeeming Agent, or to discontinue Redemptions at said Bank. If this course is not pursued, I shall be obliged to institute legal proceedings to correct the error. Respectfully yours, &c., L. S. CHATFIELD, Att'y General. CATECHISM OF THE BANK LAW OF ILLINOIS. Illinois has adopted a banking system similar in most of its features to the law regulating the Free Banking Associations, &c., of New York State. A cotemporary in Illinois gives the following catechism, which clearly explains the character of the law, in all its important features: QUESTION. How is it proposed to furnish and regulate the bills for banking purposes! ANSWER. The Auditor of the State is required to have them engraved; and to have them countersigned, numbered and registered in a book, by registers which he shall appoint for that purpose. [See sec. 1.] Q. To whom shall the Auditor issue these notes for banking purposes? A. To persons or associations who shall transfer to and deposit with him-1st, any portion of United States stock; 2d, or any State stocks, on which full interest is annually paid; 3d, or the stocks of this State, to be valued at 20 per cent less than the rate at which they have been sold in New York for the six months previous to their being deposited. But the Auditor shall not issue bills on the bonds of any State, if less than six per cent is regularly paid thereon, unless there be deposited two dollars for one, exclusive of interest. No stock to be taken above its par value, or above its market value at the time of deposit. [Sec. 2.] Q. What check is provided on the honesty of the Auditor, in this matter? A. The State Treasurer is required to copy and keep descriptive lists of all notes issued by the Auditor. [Sec. 3.] Q. How are those who thus comply with the law, authorized to get their notes into circulation ? A. They may loan or "circulate the same as money," payable "on demand.” [Sec. 4.] Q. Who keeps the securities deposited by bankers? A. The Auditor of the State transfers them to the Treasurer, who is responsible for their safe keeping. He is authorized-1st, to deliver them back to the Auditor to be sold for the benefit of the bank's creditors; or 2d, to be used or disposed of under a decree of Court for the same purpose; or 3d, to be delivered back to the depositor. [Sec. 5.] Q. What number of persons, and what amount of stock, are necessary to open a bank? A. Any number of persons may do it, but their capital stock must not be less than fifty thousand dollars. [Sec. 6.] Q. What shall constitute such a company a "body politic and corporate?" A. They must make a certificate certifying the name of their bank, its location, its amount of capital stock, and the number of its shares-the names and residences of its stockholders, and the number of shares held by each respectively, and the period at which such association shall commence and terminate. This certificate to be acknowledged and recorded in the county Recorder's office where located; and a copy filed with the Secretary of State. It shall then be a body corporate. [Sec. 7.] What is a chief use of this certificate? A. It may be used in evidence in Court against such associations. [Sec. 8.] A. They have all the powers of ordinary banking institutions. [Sec. 9.] A. Yes. It is declared "personal property, subject to taxation." The amount of taxation is determined by a commissioner provided in the law, and is levied on the company, not the individuals. A transfer of stock to new hands carries with it a transfer of all the "rights and liabilities" of original shareholders. The rights of creditors cannot be prejudiced by any alteration in the articles of association, nor can the association be dissolved by death or insanity, when there is more than one shareholder. [Sec. 10.] Q In what name must the corporations do business? A. In the name of the corporation. [Sec. 11.] Q. Who may maintain actions against such corporations? A. Any person having demands against them; and all judgments against them shall be enforced against their property, except such as may be obtained against shareholders, as provided in section 38. [Sec. 12.] Q. How are bankers to receive the benefit of the security stocks deposited with the Auditor? A. The Auditor may give them power of attorney to receive interest on dividends for their own use; but this power is to be revoked on the bank failing to redeem its notes, or whenever, in the opinion of the Auditor, the bonds become insufficient security. The Auditor may also deliver to bankers an amount of their deposited stocks equal to any notes returned to him for cancelation-notes so returned to be burned. [Sec. 13.] Q. What is to be done when banks refuse to pay their notes on demand? A. The Auditor is to sell the pledged bonds at auction in New York, and shall pay the said notes from the proceeds thereof. [Sec. 14.] Q. Is there any precedence given in the kind of debts to be paid from these stocks by the Auditor? A. Yes. The notes are to be first paid; afterwards "all other liabilities." [Sec. 15.] Q. Who keeps the dies and plates from which the bank notes are to be printed; and who pays for the printing? A. The Auditor keeps the dies and plates, and pays for the printing, charging the same again to the bank. [Sec. 16.] Q. Is the Auditor prohibited from issuing notes to a greater amount than there are securities deposited? A. Yes. He is for this to be judged "guilty of a misdemeanor; and shall be punished by a fine of not less than five thousand dollars, and imprisoned not less than five years in the penitentiary." [Sec. 17.] Q. Are the banks to be bound for damages, for refusing to pay a note on demand? A. Yes. Twelve per cent. [Sec. 18.] Q. How may it be known who are shareholders in any bank? A. The bank is bound to file lists with the county Clerk, for inspection. [Sec. 18.] Q Where are bank notes to be made payable? A. At the bank, and no place else. [Sec. 19.] a suffi Q. When are bank notes payable; and what is to be the banking capital? A. They are to be payable on demand, and the capital is to be specie, cient amount" of which is "to be kept always on hand" to redeem all notes which may be presented. The bonds deposited with the Auditor are not the bank's capital -they are only pledges of security. [Sec. 20.] Q. What is to become of torn and mutilated notes ? A. The Auditor is to give new ones in exchange for them-descriptions of the torn ones are to be put on file, and they are then to be burned. [Sec. 21.] Q. Can the bank prefer any of its creditors to others, by conveying its property to them? A. No. Such conveyances are expressly declared void. [Sec. 20.] Q. Can the banks hold real estate A. Yes. Such as is necessary, as banking houses, &c.; such as is mortgaged to them by debtors in good faith; such as shall be conveyed in satisfaction of debts previously contracted in the course of its dealings; and such as they shall purchase at sales under judgments in their behalf, or in behalf of others, for the purpose of saving a debt due them. [Sec. 23.] They cannot purchase, hold or convey real estate for any other purpose whatever, VOL. XXVI.—NO. I. 7 and conveyances shall be to the corporation, free from any claim for or against shareholders, or others claiming under them. [Sec. 24.] Q. How is the condition of a bank to be investigated? A. The Judge of the Circuit Court where the bank is located, may appoint competent persons to investigate it, on the application of one or more shareholders whose shares amount to three thousand dollars; said investigation to be published by the Judge's orders. [Sec. 25.] Q. What is to be done when a bank refuses to pay its notes on demand? A. The holder of the notes may have them protested before any Notary Public; and the Auditor, on receiving such protest, shall forthwith give notice in writing to the bank to pay the same; and if the bank shall omit to do so, the Auditor shall immediately, (unless the bank shall by affidavit convince him that it has a good defense against the person presenting the same,) give notice in a newspaper at the place where the bank is kept, (if there be a paper there,) and in a paper at the seat of government, that the notes of that bank will be redeemed out of the trust funds belonging to the bank, by the payment pro rata of all such circulating notes, whether protested or not; and to adopt such other measures as in his opinion will secure the note-holders from loss. The obtaining of such a protest, and the filing a copy thereof with the bank, shall put all end to its banking powers, and they shall be prohibited from exercising further banking privileges. The legal existence of the bank will only be continued for the necessary purpose of settling its accounts. [Sec. 26.] Q. What is to be done with the property of such banks! A. It is the duty of the Auditor to apply to any Judge of the Circuit Court, who will appoint Receivers to take the assets or property of every such bank. They are to apply the property: 1st. To the redemption or payment of circulating notes: 2d. To the payment of all other indebtedness; and 3d. To the payment of stockholders on account of stock invested. [Sec. 27.] Q. What then becomes of the stock in the hands of the Auditor? A. He is also bound to devote it, first, to the payment of the circulating notes. [Sec. 28.] Q. Cannot stockholders avoid personal liability by pretended assignment or transfer of stock? A. No; "the said liability is to continue six months after the assignment by him of any such stock;" and any stockholder who is the party in interest, shall be liable, although such stock may be held and recovered in the name of some other party. [Sec. 29.] Q. How is it to be known who are stockholders ? A. The bank is bound to keep a list of its stockholders posted up for inspection; and also a list of all transfers of stock, as they occur. [Sec. 29.] Q. To whom does this law apply? A. To all who shall conduct business under the provisions of this law. [Sec. 30.] Q. How are the bank Commissioners to be appointed, and what are their duties? A. At the first meeting of the Legislature after the law takes effect, and every fourth year thereafter, the Governor is to nominate to the Senate three persons as Commissioners, and by the advice and consent of the same they are appointed. It is made their duty to make annual examinations of the condition of all banks formed under this law; to inspect the securities filed with the Auditor to see if they are still sufficient security for the notes; and to report them to the Auditor and to the banks. They have all powers necessary to those duties. [Sec. 31.] Q. What are the Commissioners to do if they find the securities from any cause insufficient? A. They are to notify the bank concerned, and require additional securities, or the surrender of such quantity of their notes to be burned as will make the securities. sufficient for the remaining notes. If the bank fails to comply, it is to be put into liquidation by the Auditor. [Sec. 32.] Q. Are the banks bound to report their condition? A. Yes; quarterly under oath-to be published by the Auditor in a newspaper. These reports must contain the amount of stock "paid in and invested according to law;" the value of real estate held; the debts due the bank, and a list of bills discounted; giving amounts and times payable; the amount of debts owing by the bank, and the notes in circulation; of loans and discounts, and specie on hand; and amount held of the notes of other banks. Also, the amount of suspended debt held by the bank. [Sec. 33.] Banks which refuse to do this "shall forthwith go into liquidation." [Sec. 35.] Q. How and when may banks wind up voluntarily? A. When they have redeemed 90 per cent of their notes, and deposited means to redeem the remainder in such bank as the Auditor shall direct, to his credit for that purpose. The Auditor may then give up the securities before deposited with him. [Sec. 36.] The bank may then give three years' notice in a paper published at the seat of government, and in a paper in the county where the bank is located, that all notes of said bank must be presented at the Auditor's office within three years, for redemption; after which the Auditor will give up to the bank any securities which may have been held for the redemption of any unredeemed notes. [Sec. 37.] Q. What rate of interest may the banks charge? A. "Not exceeding seven per cent on any real or personal security." This may be received in advance; thirty days to make a month, and twelve months a year. [Sec. 38.] Q. Are stockholders to be individually responsible? A. They are, "to the full intent provided for in the Constitution of this State, and to the amounts of their respective shares of stock." And when the property of the corporation is exhausted, creditors may have recourse against stockholders. [Sec. 38.] When does the bank law take effect? Q. A. When a majority of the people, on the first Tuesday in November, shall vote in favor of its adoption. [Sec. 39.] Q. How are the people to vote? A. By ballot; with the tickets having the words, "For the general banking law;" or," Against the general banking law.” [Sec. 40.] Q A. How long may a bank exist under the law? Not longer than twenty-five years. [Sec. 41.] COMMERCIAL REGULATIONS. THE HALF PILOTAGE LAW IN PENNSYLVANIA. We publish below the law and supplement passed at the last session of the Legislature of Pennsylvania, as applied for by the Wardens of the Port of Philadelphia and Board of Trade of that city. It will be seen that all vessels engaged in the Pennsylvania Coal trade are exempt from the charge of half pilotage, whether inward or outward bound, and also ALL coastwise vessels outward bound and all steamships arriving at or departing from Philadelphia. The following is a correct copy of the laws in relation to Half Pilotage, passed March 24th, and April 8th, 1851 :— ACT OF 24TH MARCH, 1851.* SEC. 4. That no duly licensed coasting steamboat, or propeller steamboat, sailing to or from any port within this State-and no duly licensed coasting vessel, bound from any port within this State-and no duly licensed coasting vessel, of the burden of one hundred tons, or under, and bound to any port within this State, shall be obliged to take a pilot, or to pay any pilotage therefor-and all vessels taking steam down as far as Reedy Island between the twentieth day of November and the tenth day of March, inclusive, in any year, there shall be a deduction of five dollars, or to the Buoy of the Brown, there shall be abated the whole charge of winter pilotage, of ten dollars. SEC. 5. That every vessel arriving from, or bound to any foreign port or place-and every other vessel of the burden of one hundred tons or upwards, sailing from, or bound to any port not within the river Delaware (excepted licensed coasting vessels sailing from this port,) shall be obliged to take a pilot-and it shall be the duty of the master of every such vessel, within thirty-six hours next after his arrival at said ports of Philadelphia, to make a report to the master warden of the name of such vessel, her draught of water, and the name of the pilot who shall have conducted her to this port, and when any such vessel shall be outward bound, and not duly licensed to coast, the master of such vessel, and the pilot who is to conduct her to the Capes, and her draught In accordance with a system of legislation that prevails in Pennsylvania, which we have alluded to in former numbers of this Magazine, the other Sections of the Act relate to matters entirely disconnected with the objects of the Half Pilotage law, included in the 4th, 5th, 6th and 7th Sections s above. |