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[FONT=Times New Roman]But, by general provisions in some of the states, and as to most of the late charters in all the states, more effectual restrictions have been introduced. By the general bank law of Massachusetts, passed in , every bank established after that time is prohibited from circulating notes to more than per cent, beyond its capital stock ; and the debts of the bank of every kind are not to exceed twice the amount of its [/FONT][FONT=Times New Roman]Tory Burch Flats[/FONT][FONT=Times New Roman] [/FONT][FONT=Times New Roman]paid-up capital, exclusive of what it owes on account of deposits.Mr. Gallatin f thinks that the limit of the loans of a bank to twice the amount of its capital allows a greater latitude than is consistent with safety, and the events of and give confirmation to his opinion. In a season of unwonted prosperity, when every article of exports commanded a high price abroad, and when specie was more disposed to flow into than out of the country, all the banks were tempted to extend their loans to an unprecedented amount, yet, in a majority of the states, they did not reach twice the amount of their capital. In these states, however, as well as the others, the undue extension of their loans, and,[/FONT][FONT=Times New Roman] [/FONT][FONT=Times New Roman]consequently,[/FONT][FONT=Times New Roman] [/FONT][FONT=Times New Roman]Tory Burch Outlet[/FONT][FONT=Times New Roman] of their debts and issues, compelled them to suspend cash payments.With many of the banks, especially when the legislature has taken the requisitive precautions in establishing them, the best security is perhaps to be found in their own prudence, and the lights they have drawn from their late experience ; but with many others, legislative restrictions cannot be safely dispensed with; and, probably, for such, none that have been as yet mentioned are sufficient. Mr. Gallatin further recommends a restriction on the issue of notes to two thirds of the capital. If the capital of the banks was real, and really consisted of coin, this might be restriction enough, and, perhaps, more than is necessary; but, constituted as most of these institutions really are, it would give an unsafe latitude to all that class which require restriction. It appears by Mr. Woodbury's bank report of Jan. , ,f in only eight of the states, (Delaware, Virginia, Illinois, Indiana, Ohio, New Jersey, North Carolina, and Alabama,) the notes in circulation reached half the amount of the capital stock.[/FONT][FONT=Times New Roman][/FONT]
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