The Camden journal. [volume] (Camden, S.C.) 1836-1851, 1849-12-19
REPORT
Ofthc Joint Speci;t. Committee of Inspec-
tion for the bank 'r,he State Of South
Carolina in Charleston.
CONCLUDED.


Carolina in Charleston.
CONCLUDED.
Independently of the objec:ops above
stated, II appears to the Comm'ltee.hat ma
nv of the loans on bonds and mortgages are
too large in amount, and for two long perr.ts
nf time. Besides which, some long since
pavab!e have not been collected, large ar
rcars of interest have accumulated upon
them and no efficient measures have been
taken to collect them. The annexed schcc-
uIe, F. exhibits the amounts, dates. anc tine
OF payment, of all the bonds he'A ~ 'h'
Bank, with the interest upon the'H.
The practice of allowing d!sc"uo."0 ""'@F
10 be renewed in full, has prevail - ~"
great an extent, inasmuch that mary r"'"2
have been continued for years without "nr
considerable reduction of their an,"unt.-
This practice, if general, would be utterly
inconsistent with the ready command and
control of its funds, which are essential TO
to The proper management of a Bank, sn
ifparial and confined to few, IS open To
the i,npu,a,ion Of parliality and iavorltls'n.
Among the discounted notes, the Commit
tee observed some notes of persons residing
in the ncighboring States Of Georgia, Ala.
bamc d North Carolina endorsed by and
d .nled for commercial houses in Char.
Il These were generally for small
sL.. seldom If ever as much as five hundred
and frequently less than one hundred dol
lars; and their aggregate amount was not
very large, but the practice appears TO have
been onIy recently introduced, and If not ar
rested in time, may grow from small be-
ginnings to a much greater extent. The
Committee believe that the notes OF this de-
scrption now held bv The Bank will be paid
at maturity. Such of them as became pay
able during the progress of the examination
were paid. Indeed, if they were not paid
bv The makers, the endorscrs would no doubt
take them up. rather than allow them 10 De
protested, while they themselves were IN
good credit and business. But the objec-
ton to discou Ting this sort of paper is, that
the security of the Bank rests almost exclu-
sivcIv upon The endorsers As long as they
are prosperous, it ls not on ly more probable
that the makers will redeem it for the pur-
pose of keeping mp their credit with the en-
dorscrs, but IN default of payment by them,
it will be paid by the endorsers. But in
case oflhe bankrup uplcy the endorsers. the
strongest motive on the part of the makers
would be taken away, and if The Bank were
obliged to resort the compulsory process a.
gains, the makers for enforcing payment,
the expense Of collecting small dcbIs in 9TH
cr States would absorb considerable part
of the amounts collected, besides the noto-
rious risk of loss by agents employed Tor
that purpose. 1t is. perhaps, proper TO add,
that no notes of tins description appear to
have been discounted for any other persons
than Directors of tho Bank; and that they
were all what they call business notes-tlat
is to say. notes taken for merchandise sn|l
in the regular course Of business. The
Committee have already advcr,cd to The
large amount Of some of the loans on bond
and mortgage, and the length Of time tor
which they are extended. The same re-
mark applies with nearly equal force to the
loans on discounted bills and notes. The
extent 10 winch this abuse has been carried
NAV be estimated from the fact. that near
" S7OO, 900 Of The funds Of the Bank are in
the hands of about thirty individuals borrow
ed from the Bank in Charleston alone; and
some Of the same persons are also large
debtors TO the branches.
In its purchases of fnre 90 exchange the
Bank, in the opinion of the Committee h'HS
not always observe precautions necessary
and proper to secure 1t against i"s$. ''"'
bills of exchange sold in Charleston ~" :.":.-
orally founded upon shpmcnis "' i.'.''G"..
They are drawn upon the c"","t".,''. 7"@
sold bv the drawers to raise the ''.i:" ''
paying tor the produce purchased i"' 'h;'-
ment 1t is well known that many "' lis
purchasers of produce arc persons ol II" cai-
ltaI or substance, and whose mere personal
obligation furnishes no security whatever.
beyond the assurance, suppos'ng them I" bc
men of integrity, that the bills will hc accep-
ted bv the persons on whom they are drawn,
and to whom produce has been consigned,
and who arc themselves to be relied on. 1t
rs, therefore, the usual and prudent course
in purchasing such bills to require them to
be fortified by letters Of credit, equivalent
to previous acceptance from houses Of
known credit and responsibility. or to be
accompanied with the bills OF la'l'ng OF the
produce, on the shipment o: which they are
founded, and to send the bills OF exchange.
to be retained by the agents Of the Bank un-
ii, the latter are accepted. Bills OF the char
ac,cr above mentioned, are purchased by
The Bank without either requiring letters OF
credit or bills of ladIng
The charter cxprcssl Y requires the d..
reclors to keep minutes Of their proceedings
and the very nature Of a corporation COM
posed of many individuals necessarily de-
mauds that their determinations and pro-
cccdngs should be recorded, AS il would he
l. n a o.