Piney Woods planter and Amite union literary reflector. [volume] (Liberty, Miss.) 1838-1838, 1838-02-10
GOVERNORS MESSAGE
ACCOMPANYING THE
BANK COMMISSIONERS REPORT

ITO hchSenate and House Of Representatives
of the State of Mississippi;
Herewith transmit the Report of the
Bank Commissioners of the State of Mis-
sissippi, showing the situation of that por-
ton of the Banks examined by them. The
facts therein disclosed, and the magnitude
of the abuses proven to exist, cannot fail
to arrest the serious attention of the Legi-
stature, and demand speedy and efficient
correction.
1t appears from the report that few
persons have ATTAINED the control of the
various banks, and made most of the loans
to commission merchants, spectators and
officers of the banks, and we are left to
infer that the large borrowers are totally
unable, at present, to pay any part of their
loans. The banks, therefore, are now
looking to the planters-the drawers and
endorsers ofsthe bills--for their security,
and depend entirely on them for ultimate
payment. This deplorable result has been
mainly effected by the course which the
banks have pursued in applying most of
their funds to the purchase Of bills of ex-
change drawn on cotton monopolists, and
not predicated on funds in hand, or even
expected at the time and place of maturi-
ty. Two causes have led to this policy.
In the first place, the commission merch-
ants contrived, either directly or Indirect
ly, to obtain the control of the banks-se-
condly, the unjust practice of the banks in
taking usurious interest, in the shape of
exchange, induced them to discount all
the bills they could obtain, and invest but
asmall portion of their capital in the dis
count ofnotes. By so doing, they were
enabled to make large profits for the stock
holders, but deprived that portion of the
people who were unable to obtain New
Orleans acceptances, of all participation
in the benefits of their loans. The banks
seem not to have considered that the abil-
ity of the commission merchant to pay his
acceptances was dependant, almost entire
ly, on the shipments of produce by the
drawers of bills, and that whenever they
discounted paper not predicated on remit
tances of cotton, but on credit alone, they
thereby hazarded the safety of their seve-
raj institutions and jeopardzed the inte-
rest of the whole community.
examined by the commissioners, had
$303, 304 95 of specie in their vaults,
and have made advances on cotton to the
amount of S3l4,307 IL, while their cir
culation amounts to S3,S4O, 32l--their
deposites to $l,40l,24S C6; and the
amount due, them from other banks ex-
ceeds their liabilities to the same. The
report does not show what amount Of their
notes and bills discounted are available
now or will be in any given period. The
ability efthe banks to resume specie pay
ments, and at the same time to keep in
circulation currency sufficient to meet
the demands of the country, depends on
the availability of their discounts. Judg-
ing from the vast amount Of loans made to
a few individuals, combined with know
ledge ef the fact, that the means Of the
borrow RS consist mostly of unproductive
proper9, | conclude that the banks will
not realize much from those who are hea-
Willy indebted, for several years to come.
'Fhe abundant resources of the State,
however. together with the fixed determi-
nation manifested by the people to incur
no new debts which they can possibly a.
void. will have favorable influence in re-
storing confidence, and soon enable the
banks to resume specie payments. Har-
monious action, is nevertheless indispen-
sable, and the banks should be prohibited
from extending their issues until the re-
sumption is effected. The present circu-
lation of our banks amounts to mere than
six millions Of dollars portioIf of i'll