J. Tony Scammon to Richard Yates

Marine Bank of Chicago. Chicago, Dec 27, 1860

Hon. Richard Yates, Jacksonville, Ill

My dear sir: I am in receipt of yours of the 23rd. My opinion is that there is not so much fault in our present law as in its misconstruction, perversion, and nonenforcement. Yet there are amendments which are indispensable for the protection of the public.

1st we need to have a requirement that all bonds shall have such an endorsement upon them when [deposited?] as to destroy their negotiability, as long as they shall remain on deposit, with a provision that they cannot be taken out of the Treasurer's hands without an order of Court, which may be made at any time by the Judge in [vacation?] as well as as [illegible] [illegible] but to be entered arrears. We need this in order to prevent the bonds being stolen or abstracted. We have thus far been fortunate in having honest officers and clerks in the Treasurer's Office, but there is no security that this will continue so.

2nd.. We want to amend the law so as to require a redemption in Springfield or Chicago, at a fair rate, say from 1/2 to 1 percent discount.

3d. We want the law amended so that the formal liability clause may be made

available and in order to do this, we want the law so amended that no new bank can be established without the actual cash capital of at least $50,000 as required by the law. My opinion is that we should tax the bank for their actual capital, or presumed capital of $50,000 each and for any surplus of capital they may actually have, if any and for the circulation, if any, above actual capital, require them to pay into the State Treasury 1/2 of one percent. I think too, that the bond deposited for circulation should be confined to Illinois & U.S. Stock or nearly so, and the coupon upon the bonds of banks which have not a ten percent margin should be retained by the Auditor, or exchanged only for returned circulation until they have the same margin as the new banks. But after all, the main difficulty is that the banking law has been so construed as to encourage banking without capital and what we want is to frame the law as to encourage banking upon capital and discourage it where there is no capital. If the law was enforced requiring actual capital, and actual banks instead of more circulation machines, we should have less difficulty; but the provision of the 34th Section requiring the bank to report the debts owing to the association, and the date and amount of each bill or note discounted, and that the same should be published in a newspaper, without precluding any bank doing a discount

business. No bank would thus expose its own and customers affairs. This provision should be repealed.

The Auditor and Treasurer should be made Bank Commissioners with a Superintendent to be the Chairman of the Board, and if you could appoint some man of as much decision of character as William [Thomas?], as Chairman of the Bank Commissioners who could see the law enforced, we could soon have our currency in right shape.

It may be objected to this legislation that the banks have vested rights. This is not so, except in a few instances, as their [pretended?] capital, is all sham and their affidavits perjured, and they cannot resist liquidation in the enforcement of amendments. I am for making such amendments to the law as will secure the bill [illegible], and the public, and at the same time encourage banking. I think this can be done.

I note what you say about the present national crisis. I hope you will recommend a revision of our militia laws and the maintenance in each county, and especially in our cities of sufficient military organizations to secure the enforcement of the laws and the suppression of mobs and illegal violence.

I do not despair of so much of the Union

as can be of any use to us. If the Cotton States could get out of the Union peaceably and honorably, I am not sure that it would not be a great deal better for us. But the laws must be enforced, and it will not do for the Republican party to show any fear or weakness in the knees, or to back down at all. It is right, and upon its platform it can maintain itself. Any concessions or [illegible] will only destroy it, without doing any good to the country. If the South are not willing to abide by the Constitution as our fathers formed and administered it, let them quit, if they can; but let us do all we can to maintain and preserve our inheritance and escape the hole in which Tyler & Fillmore fell.

Truly yours J Tony Scammon

J.T. Scammon Bank