Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1829-01-06

charter only authorised the Bank to operate on
real ana intrinsic capital, and directed that that
csPhai should be paid into the Bank by
the stockholders. In the transaction alluded
, 20, the bank itself, by scribbliny process of
ats own created the capital, and paid OF a portion
OF ITS debt, by the very act by which it also in-
creased ITS capital. circumstance, too, which
greatly adds 10 the enormi,y OF the transaction Is
that before all the instruments became payable
the State Bank, the Bank of Newberi., and Bank
Iof Cape Fear entered into formal resolution,
through their delegates assembled at Fayetteville,
In June. lSlS not TO pay specie; and their notes
Immediately fell to Is per cent below par.-Then
commenced the system of us'iry and extorton,
winch has since been carried on will. such unpa-
Taieied audacity, under the name OF exchange.
Up to this time, viz: 1919 the high tide OF CONNER
ciai prosperity enjoyed by the country enabled the
banks to keep atloat, notwithstanding the artificial
character OF their capital, without resorting 10 this
daring and dishonest expedent They had kept
pace IN their operations with the increasing
sources OF the country SO as to absorb, by way OF
intereston discounts, nearly all the profits OF the
immense business then doing; and having raised,
against The people, debt equal TO the vast re-
sources winch IRON ISIS to that time, they had
derived from their foreign commerce. az soon as
the alteration occurred in cur foreign relations
ana those resources were cut of, the business OF
the country, unable any longer 10 employ the i'm
mense circulating medium which had been Gre
ated by the Banks, and their notes returning upon
them Tor redemption, they determined to extort
IRON the people additional premiums OF loans, in
order TO enable them TO meet the demands of their
ere'uors scene OF extortion and usury ensued,
winch has no parallel in the annals of avarce
tine strange spectacle of inonied institutions
exacnng specie in exchange for their notes which
they themselves refused TO redeem with specie
10 snow the gross character Of the usury thus
rieu on, the undersigned will suppose case: An
individual applies ~ The Bank for loan of $1,000,
and offers his note to be discounted for the amount
He is told by the Bank that hi. note cannot be dis
counted, unless he will exchange with them
nrf l.. r
Taking their notes to be per cent below par,
SI9Oo OF their notes would in fact be no more than
$3.50 So that the substance Of such a proposition
would be, that the borrower should giue the Bank
500 as premium for the loan of S 1000; which,
added to the legal interest received in advance,
would amount TO something more than II per cent,
In some Instances the usury has been still more
rank Quantities Of their notes have been loaned
10 Individuals on the condition that the whole a
mount should be returned in 30 days in specie
iunds. Althe rate OF depreciation before stated.
such transaction would be equivalent TO the ex
ACTON oil 70 per cent. The evidence received by
| ule committee shows that the State Bank & Bank
| o. Newborn have been guilty OF such practices
since 'he Summer Of 1919. There is no evidence
that the Bank OF Cape Fear has. 1t appears, in
aggravation OF the guilt of these practices, that,
IN the case OF the State Bank, the specie notes
thus cxtorted frcm the people in exchange Tor
their deprecated notes, have been employed by
The bank; in purchasing back those notes at dis
count Tha, they have, a, times, employed agents
ana that about IL months since, parcel of their
notes were bought up by their agent at Petersburg
at per cent discount. 1t il stated by the Presi-
Gent Of the Bank Of Cape Fear, for whose testi-
inony too much respect cannot be expressed, that
The notes Of the Bank have, at different times
been bought up az discount by the Bank. That
quantity OF Its notes were purchased in anti
| cipation OF the late call Of the Stockholders and
mat during the panic occasoned by that call
thing like $4,000 Of their notes were bought up
| by The bank at the discount of per cent The
depreciation Of he notes of all the Banks, occa-
stoned by the refusal of the Banks 10 make good
uheir notes with specie has been productive OF in
ch!ciiabie mischief 10 the community; and il is no
Iinconsiderabe ,aggraya,ion OF the mischief 10
know that, in the case Of The State Bank, large
quantities of their notes have occasionally been
thrown into circulation by themselves in the pur-
chase OF cotton II is in evidence TO the under
signed that they laid ont at one time $50 900 of
their notes in the purchase of cotton, on which
they made profit OF more than S. 600. Another
remarkable fact in the history OF the State Bank,
winch the undersigned will notice in passing, is
that 10 protect themselves from demands for spe-
Gle, they determined at time to administer an
oath. and actually did administer oath an in
oiviiua presenting their notes for specie in which
ne was compelled 10 state that he broker
IL further appears TO the undersigned thar all the
Banks have bought UP U S. Bank notes, for which
they exchanged their own notes at a discount; and
that the state Bank. and Bank of, Cape Fear in di-
rect violation of their charters, have purchased
stock to considerable amount in the u s. Bank
The State Bank appears TO have made most con
venient use OF this arrangement il appears from
The evidence of the late President OF that Bank
that they had been in the habit OF rendering false
statements 10 the Legislature; and that in May
last, when thew stated in their exhibit that they
had on hand S2i4,00O in specie, $4,000 of il
consisted of stock in the U. 5. Bank So that in
stead OF keeping the spPcic in their vaults TO take
tt:ir own paper, they had vested in The stock
OF another bank, and deriving interest from
il. II further appears from the evidence of the
same person, that the amount of actual specie now
in the State Bank at Raleigh, is not than 8 or
800, at any rate, not exceeding $1,000.
The undersigned have now gone thro' the de |
tails Of the evidence, and stated all the essen |
fidf facts collected in the OF their examina-
ton. Having thus embodied simple statement |
OF the facts, they would here close their report |
and leave the conclusions and arguments to the |
lie G5I1,uTe; bat they feel themselves impelIed /
by solemn sense of the duty which they owe to
the Legislature and the country, 10 take brief
view of the present relation between the Banks !
and the people, and the consequence which must
ensuc, II the banks permitted to continue their
Operations and in doing TO advert 10 the report
Of the committee of the stockholders Of the State
Bank at their late general meeting II appears that
the people OF n. Carolina, having already paid to
the Banks, since they went into operation, profit |
OF about four millions Of dollars their stock |
stock too S-iihs of which manufactured Ivy !
The Banks themselves in fictitious and fraudu- |
lent manner-that having paid this immense sum,
exceeding four times the amount OF actual capital
stock ever pnid into Bank according 70 law they
still hold the notes Of the people for more than
millions Of dollars, about four times the amount Of
the whole circulating medium of the State. Thus
il is in the power Of the Banks absolutely TO er-
tinguish The currency Of the country, and when
they have taken eycFy dollar out Of circulation,
still TO have debt against the people to the a.