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Joint Comm. on the Banking System. Report and bill, 1827
Senate No. 14 From the House on January 13, 1827 notice of a Committee to study the Massachusetts banking system. The Senate concurred on January
17, 1827. The report: There were 62 banks in Massachusetts with a value of almost $18,000,000. The banks added about $105,000 to the State's revenue
per year. There was some uneasiness about the management of the banks and two had failed. Each bank could issue bills [paper money] and the state
had no control over that. All bank charters were set to expire in 1831, so it was important to decide how to manage the system now so people would know
what to expect. Coinage was the purview of the federal government, but bills and letters of credit were more useful in real life, so the State should
provide a secure medium of exchange. Another Committee studied the entire system. Should charters be renewed without question? Should there be one
bank in Boston with many branches? How should the State prevent fraud and over-issue of bills? On p. 6, the second report began. The Committee did
not recommend a big overhaul of the system. On February 8, 1827, An Act to regulate banks and banking. Any bank receiving a charter had to operate by
the new rules. A chartered bank was a corporation for 20 years, organized and operated as any other corporation. A bank had to have gold and silver
in its vaults to the amount of 25% of its capital stock. The State Bank Commissioners had to physically see and count the specie. No bank could loan
more than double the value of its capital stock. If a bank overstepped, its directors were personally liable. The directors had to be state citizens
and a majority of the directors had to live in the area where the bank was incorporated. Dividends were to be paid every six months. The cashier had
to give a substantial bond for his performance. If a bank refused to redeem one of its bills in specie, it would be fined. Bank stockholders would be
personally liable if the directors mis-managed the bank. The State could borrow up to 10% of the value of a bank's capital stock and repay it in
five years. The Legislature had access to any bank's books and records. The State could buy stock in banks and put directors on the board. No bank could
issue bills for less than $1. All bills had to be printed from a stereotype plate invented by Jacob Perkins. Printing plates had to always be in the
bank's vault under stringent security rules with fines and jail time for failure to take care. Every May and December, each bank had to send the
State Treasurer a statement of the condition of the bank. The form for that was included and would be supplied by the State. If any new privilege was
granted to one bank, the privilege was granted to all. (Digitized from a microfilm copy of title originally held by the Massachusetts State Library).
Title:   Commonwealth of Massachusetts, House of Representatives, Jan. 13, 1827 : Ordered, that Messrs. Phillips of Salem, Simpson of Boston, Thayer of Uxbridge, Dwight of Springfield, Lovering of Medway, Sprague of Duxbury, Norton of Tisbury, Taft of Sunderland, Wade of Woburn, Paige of Ware, Hull of Sandisfield, Lothrop of Easton, Sears of Chatham, Barnard of Nantucket, and Dana of Groton, with such as the Senate may join be a committee to inquire whether any disadvantages have resulted from the present banking system of this commonwealth, and whether it is expedient for the legislature to adopt any measures in relation to this subject, previously to the year 1831. Sent up for concurrence, William C. Jarvis, speaker ...
OCLC Number:   1382343017
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