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


winch they themselves created by the act of
subscription. This the undersigned conceive to have
been most flagrant and fraudulent violation of their
charter The charter only authorised the bank 10
operate on real aud intrinsic capital, and directed
that that capital should be paid into the bank BY the
stockholders. In the transaction alluded to, the
bank itselS by scrbblug process of its own created
the capital and paid off portion of its debt bv h,
very act by which it also increased lis capital
circumstance, too, which greatly adds to the cnormy
OF the transaction Isl that before all the instruments
became payable, the State Bank, the Bank of New
bern and Bank Of Cape Fear entered into formal re-.
solution through their delegates assembled ut Fav-
eteville, in juno 1919, not pay specie; and their
notes immediately fell to ID per cent. below par
Then commenced the system OF usury and extortion
which has since been carried with such unparacl-
cd audaclty, under the of exchange. IJp TO
this time, viz: 1919, the high tide of commercial
prosperity enjoyed by the country enabled the banks
TO Keep aiioat notwithstanding the artificial cha
racer OF their capita without resorng TO this dar-
ing and dishonest expcdicnt. They had kept pace in
their operations with tine increasing resources OF the
country, So as TO absorb, by way of interest on dis
counts nearly all the profits of the immense business
then doing; and having raised, against the people,
debt equal To the vast resources which from 1915 T.
that tune, they had derived from their foreign COM
&C, as soon as the alteration occurred in our for
elgn relations and those resources were cut Off the
business of the country unable any longer TO employ
tho iinmcnce circulating medium winch lad been
created oy the Banks ind their notes RETURNING upon
them Tor redemption, they determined TO cXtort from
enable thcmto meet the demands Of theiz creditors
A scene of eXtozton and usury ensucd, which has
no parallel III the annals OF uvaricc-thc STRANGE
spectacle OF moned institutions eXacting specie
IN exchange for their notes, which they them
selves refused 20 redeem with specie. TO show,
tie gross character of the usury thus carried on the
undersigned Will suppose case: An individual ap-
pies to the Bank for loan Of 1000 dollars and offers
ms note to be discounted fpr the amount. He is told
ny the Bank that his note cannot be discounted mn
less he will exchange with them 1000 dollars of spe-
Gle funds for 1000 dollars OF their notes. Takinr
their notes 10 be per cent. below par 1000 dollars
OF their notes would fact be 40 more than $50 dol
lars. 80 that the substance of such proposition
would be, thar the borrower should aive the Bank
MY dollars as premium TOR the loan OF one thousand
dollars; which, added to the legal interest received in
advance, would amount to something more than ela-
ven per cent in some Instances tho usury has been
still more rank Quantities OF their notes have been
loaned TO lldgltuas OH the condition that the whole
amount should be returned III ninety DAYS in specie
funds At the rate OF depreciation before stated
such transaction would be equivalent to the exac-
ton o. 20 per cent. Tie evidence received by the
coumittet, shows that thH State Bank and Bank of
Newbcrn have bcCn cu..Lv OF such practices since the
summer OF 1919 IHelc IS no evidence that the Rank
OF Cape Fear has. j; APPEARS i'll aggravation Of the
gtlllt OF these Practices that in the case of the State
BANK the specie funds thus extortcd from the people
IN exchange Tor their deprecated notes have, been
employ ed Dy the Bank purchasing back those notes
aL discount. That they have, at times, employed
agents IL New York ard Petersburg to buy I'D their
a
cl tclr notes were bought up by their agent at Pc
tersDurs AT per cent DISCOUNT Il is ST atcd by the
President OF the Bank Of Cape Fear, for whose tcs-
tiony too much respect cHnno be expressed that the
notes OF that Bank have, at different times been
bought up ~ discount by the Bank. That Il GUAM
ty OF notes were purchased in anticipation of
the late call OF the Stockholders and that d,riny the
panic occasoed by that call something like five thou
sand dollars of their notes were bought I'D by the
Bank at discount OF per cent. The den-ocio,ior
vi the notes OF all the Banks, accustomed b. the rcll
sal OF the B-n%s TO good their notes with sperie
mas Dcen productive of lncalculabe mischief TO the
community; nd II is inconsiderablc arrravatiou Of
the mischief to know tEnt m tn, case of tho State
BANK large Quantities Of their have occasionally
Oech tiro"n INTO circulation by themselves in the
purchase OF cotton Il IS III evidence to the Under
sgcn, JhaJ they lad ont at time thirty thousand
dollars Of their III the purchase of cotton n,
Wnich tey made profit OF more than eight thousand
do!arS' Another remarkable fact III the history of
Inc STATE Ba'.:, which the undersigned will notice in
passing IL, that To protect themselves from demands
Tor specie they determined at nc time TO administer
an OATH and actually did administer an oath to an IN,
oIVlil presenting their notes for specie in which Ic
was compelled TO state that nc was not a. broker 7,
further appcars to tine undersigned that oil the Banks
nave bought up u. >. Bank notes for which thev ov
changed their own notes at discount; and that the
StIte Bank, aud Bank Of Cape Fear in direct viola
tlon oil Their charters, have purchased stock 10 con
Siderable amount the United States Bank 'l'i,a
state Bank appears TO uIldc most conveni.,,
use OF thIs arrangement appears from he evidence
OF uie iatc frCsidcnt OF that Bank that they have
occn III the habit of RENDERING alse stntctnou,s tho
LcgslAur, and that IN May last when thcy stated in
their exhibit that trey had hand two hundred and
fourteen thousand dollars specie ono hundred and
iGry thousand dollars Of 1t consisted Of stock in tic
United States Bank. so that lustead of knonin,- ,
specie in their vaults to take up their p,per tr 5aJ
vested 1t IN the stock Of another bank and were drri
wing interest from It. 1t further appears from tho
evidence OF the same person, that the amount Of ac
tuaI specie no" IN The state Bank at Raleigh is not
+ Il
not exceeding one thousand dollars
ne undersigned have gone through the do.
talS OF Inc cviheicc, and stated a the cseni1L lcs
'oi'cteu III INC course % their examination. HAVING
thus embodlDd simple statement of tbe facts tb5
would mere Close clr report ard caye the conclusion,
ana arguments 10 tho Legislature; brt they feel ,licr
selves u1pcied, by solemn sense Of the duty which
.nIy owe 70 tlr i'c5y!aturc and tho country to take
bret WOW ofthe present relation between liz PAM
ana ne people, aIi the consequence which must en-
sue u the banks arc permitted t. continue their opor-