The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1903-06-28
First North Carolina Bank
Began Business in 1904
A History of Banking in North Carolina Up to the
Breaking Out fthe War Between
the States
By P. D. Gold. Jr. of Greensboro

when the first organized bank was es
tablished Prior to this time, however
there had been some legislation which per
tains to the history Of State banks I'm
like many other States, North Carolina
embodied nothing in her constitution con
corning state or private banks, and. 10
fact. early history shows that she was be
hind her neighbors in the question Of
proper banking facilities.
In 1850 the Bank of North America, orr
ginatec in a meeting of the people of
philadelphia through the efforts of Robert
Morris to aid Washington and his army,
1t had no charter Later, in 1871 Alexan-
der Hamilton, then Secretary of the Treas
ury. succeeded in establishing the first
chartered bank in the United States, by an
act of Congress, which was opposed IN that
body by the members from North Caroline
When, in 1911. its charter expired, the
State banks throughout the country OPP
posed its continuance, and by the decision
of one vote in the House (and that of the
Vice President in the Senate), it was dis
continued.
The earliest record of paper currency IN
North Carolina was in 1713, when upon
the outbreak of the Tuscarora Indians,
the State issued money to defray the ex-
penses Of the campaign against this tribe.
AT the same time and for the same pur-
poses South Carolina established a public
bank and issued eight thousand pounds
sterling in bills of credit to be loaned at
interest secured by real and personal prop
erty.
There is little record of banking or cur
rency for many years, until in November
h. ~ r
New Bern. n. c.. enacted the first law re-
garding negotiable instruments in North
Carolina, providing that promissory notes
should be made negotiable as inland bills
OF exchange. In 1882 when the currency
of the Bank of North America began 20
circulate throughout the State. and the
practice of counterfeiting these notes was
prevalent. law was passed making such
counterfeting a felony.
In 1904 was established the first bank in
North Carolina, the Bank of Cape Fear.
and located at Wilmington. Its capital
stock was $3.50, 900; had eleven directors.
seven of whom were residents of Whining
ton. and was empowered to commence
business when SIS 1000 had been paid
Books for subscription for stock were
opened at Wilmington, and Fayetteville,
and subscriptions in gold and silver only
were called for. By It's charter this bank
could not have preference over any other
State bank but was allowed to establish
branches at Raleigh. Washington, Sails
bury, Salem, Fayetteville, Asheville and
Greensboro. Its charter expired in 1920.
but was re-chartered just prior to its ex-
piration.
The same General Assembly, later in its
session in 1904 enacted a law providing
for the establishment of the Bank of
New Bern with capital stock of $780,
900, to begin business when $4,000 had
been paid in gold or silver The general
features of this bank were the same as
that OF the Bank of Cape Fear. as to
number OF directors, the payment of all
stock in gold and silver, and the power to
issue currency. The State could own stock
IN either bank not to exceed $50 shares Of
800 each. and in 1907 the State Treasurer
was authorized to subscribe for this
amount in each bank Payments were
made from any money and currency then
in the Treasury. one-third at the time of
subscribing, the remainder in equal
amounts at the end of one and two years,
respectively, with interest at per cent
The State was represented in the direc-
toratn of each bank by three directors lp-
troller OF the Currency and Secretary of
State. The banks could issue notes in the
ratio of three to one on amount of their
capital stock, which were made legal ten
der for ..e payment of pubic dues
For six years these banks continued az
the only banks in the state While they
did considerable good they experienced
trouble. An immense amount OF notes
were circulated and the banks had consld-
cradle difficulty in keeping sufficient specie
for redemption. The value oil the notes
fuctuated and usually could not be used
in other States except at 4 large discount
In 1870 in order to alleviate this trouble
the General Assembly chartered the State
Bank OF North Carolina. Its authorized
capital was 81 100000, with central office
at Raleigh. with six branches; the prin
cipal office with $500, 900 capital. branch
at Edenton 5000. 900, New Bern $500 600
Wilmington 100000, Fayetteville, $780,,
Co., Tarboro $780, 900 and Salisbury $780,
600. The State subscribed $685. COO which
was to be reserved for its own use, and
was made payable in specie and eertifi-
Gates of the United States and to be
divided between the principal and branch
banks. Three-fourths of the amounts
subscribed by individuals were ordered to
be paid in gold or silver, and the remain
ing fourth in paper currency of the State.
The paper currency was that emitted
under the laws of 1888 and 1885, and was
at that time not legal tender for pay
ment of taxes. Its value was doubtful
and under the charter of the banks,
judgments in favor or against the banks
could not be satisfied with this State
currency. In order to hasten its retire
ment the State ordered that all dividends
OF the bank accruing to the credit of the
State should be applied towards its re
demption. The charter of this the State
Bank OF North Carolina further speci-
fled that this bank could not charge over
per cent interest, could not owe more
than 81. 800 600, could not loan the United
States more than 100000 and individual
State more than $50 000, nor foreign
State any amount whatever except ay
special enactment Although the object
in establishing this bank, was to
strengthen the currency, the effect was
by no means encouraging After several
months only $1,175.60 had been sub
scribed. and With this amount the hank
commenced operations. 0f this oaly about