The Charlotte journal. [volume] (Charlotte, N.C.) 1835-1851, 1843-02-02
NUMBER 10.
LETTER FROM JUDGE MERON, PRE-
SILENT OF TIE BANK UF THE STATE.
BANK or The STATE or n. CAROLINA, I
December &c, 1912.

@~S-''DS4 ,
HoS. BEDFoRD BRowS,
Chairman Of JOINT Select Committee on Banks.
SIR: In reply TO the first enquiry con-
tanned in the resolutions Of the Committee,
viz: q why is the circulation of tho Bank
so much reduced" the following State
ment is submitted.
1t is Il fixed and settled law, in regard
to the circulation Of money or currency,
that the currency of the market in which
the products of the soil are sold, becomes
to the amount of the value Of the products
so sold, the currency Of that portion Of the
country, in which the prour.ts were raised
for market: The products Of the North
ern and Southern sections of this State,
are carried almost exclusively 10 the mar
iets Of Virginia and South Carolina, and
are paid for in the currency Of those
States, and being brought by the sellers
into this State, of necessity excludes from
circulation a like amount of domestic cur
rency.
The amount Of the products Of this State,
carried to markets within the State, as
compared with the amount carried to those
out of the State, is small and alter the usu-
al exchanges for the necessaries of life,
require but little money to pay the differ
cnce in favor Of the producer, and as the
prices of produce in foreign and domestic
markets decline, the amount of currency
required to pay for it is consequently les
sened. In an agricultural community,
(such as ours,) the products Of the soil,
constitute the only natural or legitimate
basis TO sustain the circulation of Bank
notes; such an amount of circulation az
may be necessary for converting the for
mer into money, can be sustained and no
more, and whenever there is All excess of
circulation, it is thrown back on the Bank
issuing it, for redemption.
For several years past, the amount OF
produce raised in this State, and sold in
our own markets, has been progressively
reduced while al the same time, the prl-
ces have continued to fall ; hence, much
less amount of money has been required to
pay for it than i'll times gone by, when
there was a much larger amount OF pro-
/ duce sold in those markets at much high
er prices.
1t does not follow, that the general cir
culaton of Bank notes in this State, has
been reduced in proportion to the reduction
of the circulation of this Bank, or Of all
the Banks of this State, because the Vacu.
UNI created by such reduction, has been
filled BY the notes of the Banks of those
States in which the products of this State
are Sold SO far as the value of such pro-
ducts goes to produce that result.
To the influence of the foregoing cause,
on the circulation of this Bank and neces.
sary compelling its contraction, may be ad
ded the following, growing out OF the great
and unexpected reyulson in the CONNER
cial and monetary affairs Of the country,
commencing with the suspension Of specie
payment by the Banks of New York, in
May 1887, and followed BY all the Banks
10 the United States.
F.. BY the both Section Of the charter Of
this Bank, il is enacted that on failure by
the principal Bank aud lis branches, 10 re-
deem the notes pectiyely issued by them,
in specie on demand, they incur the penal
ty Of y per cent. interest. Although sus-
pension Of specie payments was forced on
this Bank, by the general suspension of all
other Banks, and more especially by those
in Virginia, and although in most, if not
all other States, the Legislatures released
their respective Banks from the penalties
prescribed for the failure TO redeem their
notes with specie, this Bank made no APP
pIication TO the General Assembly Of this
State, for the remission or mitigation OF
the penalty inflicted for not redeemins its
notes in specie on demand. II determined
to abide by the charter and meet the diff
cuties by which it was beset as best 1t
could. The most efficient means al It's
command, was the reduction of It's circu-
larion. thereby lessening its liabilities to
paw penal interest. 1t was moreover COM
PEELED to this course by the long continued
suspension Of specie payments, by the
Banks in Virginia, sanctioned by the Le-
gislature of that State. During that perl
cd the notes Of the Banks of that State be-
came greatly deprecated; brokers and
other dealers in money purchased the notes
of this Bank in Virginia, at a premium,
with the notes of the Banks of Virginia,
and then demanded payment in specie, or
/ to place them at - per cent. interest, until
paid, while the Banks in Virginia, were
excused by law from redeeming their is
sues in specie, and were subject TO no 9TH
err or greater penalty, fol failing to re-
deem, than the payment of 6 per cent IN
terest.
! Inproof of the foregoing a Broker from
Richmond, demanded the redemption OF
seventeen thousand dollars of the notes of
this Bank and branches in specie, which
he admitted he had purchased with the
notes of the Banks of Virginia, paying a
premium of from three to FIVE per cent.
for our notes. Many other demands OF
like kind, and on our notes Obtained IN
like manner, were made during the sus-
pension of specie payment by the Banks IN
al. NH Dt