Daily Richmond Whig. [volume] (Richmond, Va.) 1828-1831, 1829-01-01

Expose of Fraud and Us,rv.

to the people Of the II. States The excitement
against the Banks Of that State which gathered head
during the last and fall has led to an nves-
tisation and expose Of the condition of the State
Bank of North Carolina, the Bank of Newborn and
Cape Fear and of their fraudulent and usurious
tees, by Committee of the House of Commons,
absolutely startling. 1t will be seen by the perusal
OF the annexed Report, that these Banks have been
literally, nests of usurers and swindlers-that they
went into operation with little no capital in vio-
iatnn OF their charterthat they have issued paper
and had interest paid them it, an amount nearly
twelve times exceeding their captal-that they have
speculated in cotton, u States bank stock and other
artcles-and that to cap the climax of their offend.
ing, they have gone into the market and purchased
up their own paper ut discount. The scene of mi
quity revealed by Mr.. Potters report is terrific In
me course of their operation, the people of North
Caroirl have paid them more than four millions of
dollars, and remain indebted to them in the enormous
sum OF five millions Of dollars more! Blessed effects
OF Banking! The free people of a large State,
mortgaged to monied Corporations! The influence
oil these Corporations great, that they have it in
their power to eXtngush the whole circulating ,ned
urn of the country! These Corporations refusing TO
ledeem their own paper, but exactng for its use the
most enormous usury!
Let all men read the following Report, and learn
to execrate with us, all banking institutions.
The undersigned, members Joint Select Committee 70
whom was referred so much of the Governors message
iaes TO the Banks having had the subject under con-
sderau2n and examined such testimony in relation it,
they could conveniently procure, respectfully submit, as the
resuit OF thelr Investigations, the following
REPORT.
The Legislature having laid down, in the charters
or the several Banks. certain fundamental articles for
the government thereof the committee assumed these
tlt1Ir
ceeded accordingly to inquire in the first place whr-
Their the stock the several Banks had been raised in
the manner required by their chartcrs' The evidence
received by the committee on this point shows that
the charters ofthe Banks were disregarded and VIC
lated IN the very creation their capital.
The Charter OF the Bank of Cape Fear, enacted III
'3o4, authorised that corporation to raise capital
stock OF two hundred and fifty thousand dollars; and
the chatter of the Newbern Bank, enacted in the
same year, authorised that Bank to raise stock of
two hundred thousand dollars both charters directing
Tue capital to be paid by the Stockholders in gold or
silver. Tie undersigned have received no evidence
rs TO the mode in which these banks rot into opera
ton. Iwoud seem however, that they contemplated
c the outset an evasion the provisions of their char
tiers. 1t Is in evidence TO the undersigned that soon
after they went into operation, they contrivod to get
possession OF nearly all the paper money which Ind
been issued the faith of the state which, beinr m
the time legal tender, enabled them to evade de-
mands Tor specie, which they did by tlrustinr this
ragged paper at those who presented their notes for
specie. In 1907, twenty-five thousand dollars WINS ad
ded to the capital stock of each ohcse banks; in 1914
their charters extended and they were atbori-
sod to increase their respective capitals to eight hun
dred Thousand dollars each, viz: the Newborn Bank
was authorised to addition to its stock of five
hundred and seventy-hvo thousand dollars, and the
tank OF Cape Fear addition of five hundred and
twenty-five thousand dollars. 1t is in evidence To tho
undersigned, that the whole Of this additional stock
was manufactured by the banks themselves and that
III many instances favored individuals were permitted
10 acquire stock by subscribing their names and put
ting their notes into Bank, without adyancinr snVl.
dollar of actual capital 1t follows that the whole a.
mount OF the interest drawn from the people, on the
loans made on this fictitious capital, was foul and
Illegal eXtortion. The effect of the transaction was
The same as ifthe pretended stockholders had ndivi-
dualy executed their notes Of hand, without interest
10 the amount OF the notes which they issued from the
bank and exchanged them with the people for their
notes, bearing interest and renewable every ninety
days. Taking the issues made on this fabricated ca
pital to be in proportion with those made on their for
mer capital they must have put into circulation OH
the tnlth ot this assumed Stock between three and
tonr millions OF notes and thus parcel Of individuals
under the name of Stockholders, but who, i'm fact
held no socb contrlved 10 exchange their notes. with
Out interest to the amount OF three four millions
for the notes the people bearing interest fmorc
than per cent; and while the property of the peo-
PIE was pledged for the payment of The notes thew had
given to the stockholders, there WIS not oar or an
atom OF property pledged 70 them for the pavrcpt f
~ nc'' thoy had received from the stockholders so
That iOr the use Of their notes, which intrinsicav
were OF no value at ell the stockholders Of these two
binks nave drawn from the people, by way of interest
something like two hundred thousand dollars annually
Inc charter Of the State Bank, enacted in ~ TO- aiI-
tncrlsed that corporation 10 raise captal stock Of
ono million SIX hundred Thousand dollars and directed
hooksto be opened to receive subgcriptions for that
sim, requiring at the time that individuals sub
scTDmg TOR STOCK should pay three l0urths Of the H.
mount subscribed in gold or silver and the other
fourth IN the paper currency, issued on tho faith Of
the Stato' books were accordingly opened and tho
sum subscribed including the subscription of tyobup
urea a1d MY thousand dollars for the State amount
Cd 10 one million hundred and scventv-fyc tb,u-
SAND SIX hundred dollars. OF this SUM- only 100000
doiiar8' or Whereabouts, was paid into Bank as
requires by the charter, in god or silver Tho ba
lance was Pld IN Bank notes. Upon the capital thus
constituted the Bank went ON to o,nrote Nh N,y,
Dor 1873; at which tine the proportion between the
notes in circulation and the specie on hand was near
~ l[to J. La other words, the Bank had LARGELY nm
wards OF ~ aud nearly 10 dollars Of their notes in
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