The North-Carolina standard., 1843-02-22
JUDGE CAMERON'S LETTER
BANK OF THE STATE OF No. ca. J
Dpce1nbor % 1910 &

AAON' 42EDFOHO DROWN, GnUIfntQH or J01nt
Select Conamnlitte on Banks.
SIR! In reply to the first inquiry contained in
the resolution of the Committee, viz; why lis the
circulation of the Bank so much reduced" the fol-
lowing Statement is submitted :.
1t is a fixed and settled law in regard To the
circulation of money currency, that the currehs
cy 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 products were raised
1 for market The products of the Northern and,
Southern section of this state are carried almost
exclusively TO the markets Of Virginia and South
Carolina. and paid for in the CURRENCY of those
States and being brought by the sellers into this
State, of necessity excludes from circulation like
amount of domestic currency
| The atnount of the products of this State cars
rled to markets, within the State as compared
with the amount carried to those out of the State
is SMALL and after the usual exchanges for the
nfcessaries of life, require but little money to pay
the difference in favor of the producer and as the
prices of produce in foreign and domestic markets
decline, the amount of currency required to paw
for is consequently fessened. In an agricultur-
al community, (such as 0urs,) the products of the
soil, constitute the onl natural legitimate basis
to sustain the circulation flank notes; such ain
amof1nt ofcircuation may be necessary for con-;
vertng the former into monry, can be sustained
and no more, and whenever there is an excess
1t,
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 at the same
time, the prices have Continued to fall; hence
much less amount of motley has been required to-
pay for itthan in times gone by, when there was
much larger amount of produce sold in those
markets and at smuch higher prices
1t does not follow, that the general circulation
Of Rank noteS in fhiS State has II
proportion to the reduction of the circulation of
this Bank, of all the Banks of this State, be-.
cause the vacuum created by such reduction, has
been filled by the notes Of the Banks of those
States in which the productso of this State are sold
SO far as the value Of such products goes TO pros
duce that result
To the influence of the foregoing cause on the
circulation ofths Bank and necessarily compel
ling its contraction may be added the following,
growing out of the great and unexpected revusio1
IN the commercial and monetary affairs of the
country commencing with the suspension of spe-
Gle payment by the Banks of New York, in Nav
1887, and followed by all the Banks in the u
nted States
BY the goth Section of the charter of This Bank,
it is enacted that on failure by the principal Bank
and its branches to redeem the notes respectively
issued by them, in specie on demand, they incur
the penalty of IL per cent interest Although
suspension 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 appli-
cation to the General Assembly of this State, for
the remission or mitigation of the penalty inflicted
for not redeeming its notes in specie on demand
1t determined to abide by the charter and meet the
difficulties by which it was beset as best it cotrh.
bp of
reduction of its circulation, thereby lessening its
liabilities to pay penal interest. 1t was moreover
compelled to this by the long Continued sus-
pension of specie payments by the Banks in Virl
ginia, sanctioned by the Legislature of that State
During that period the notes of the Banks of that
State became greatly deprecated Brokers and
other dealers in money purchased the notes ofthis
Bank in Virginia, at premium, with the notes of
the Banks of Virginia, and then demanded pay
ment in SPECIE or to place them at IL per cent
interest until paid, while the Banks in Virginia,
we're excused by law from redeeming their issues
in specie, and subject 10 no other, or greater
penalty, for filing to redeem, th2n the payment
of per cent. interest -
IQ proof ofthe foregoing, Broker from Rich
mond, demanded the redemption of seventeen thou
sand dollars ofthe notes ofthis Bank and branches
in specie, which he admitted he had purchased
with the notes of the Banks Of Virginia, paving
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 suspension of specie payment by the
Banks in Virginia. Since their resum ption of spe-
Gle payments, on the 18th September last, they
have been rapidly reducing their debt and circula-
tion; which has necessarily pressed on this Bank
and its branches further reduction of their cireu!
Iation.
The contiguity of the States of North Carolr.
ma and Virginia, and the intimate and extensive
Commercial relations between them, necessarily
affect the question of Currency in this State Tho
amortnt Of Banking Capital in Virginia exceeds
Twelve Millions of Dollars, while in this State it
but little exceeds three Millions. 1t follows that
the operation of their Banks must always, to
very great extern, comrolthe action of the Banks
of this State
70 what extert the reduction must be carried
for sefprotection and preservation, experience. to
be derived from future events, can alone deter.
mine.
The Directors of this Bank and its Branches
have endeavored at all times and under all cir
cumstances, to keep their notes at par within this
State In this they have succeeded to the fullest
extent of their wishes and without loss to the hold
ore of thayo T0urpo The ororaroI r