Page:A History of Banking in the United States.djvu/387

 amount of six per cent. of their capital, until October 1st, by a law of January 26, 1843. March 4, 1846, an act was passed reciting that the Bank of Virginia had lost thirty per cent. of its capital, and wanted the par of its shares reduced to $70, which was allowed.

At the session of Congress, 1839-40, strenuous efforts were made to obtain the passage of a law to revive the District of Columbia banks, but they failed.

.—The waves of financial elevation and depression in this State do not seem to have coincided with those in the other States. It had a great inflation in 1829-30 when the others were at their best. The revulsion of 1837 to 1843 seems to have passed over it with little effect.

The Governor stated, in his message of 1840, that within four years the banks had paid to the State, in dividends and taxes, $253,201; "the most conclusive proof of their value to the State." This was nearly half its total revenue.

.—After the suspension of 1839, the Bank of the State of South Carolina and the Bank of Charleston alone sustained specie payments. The former was called on to redeem $288,000 of its circulation within a year, even the ones and twos being returned. The Governor, in his message of 1840, said: "The recent suspension of specie payments by most of the banks of our State calls for some decisive action. The legal remedy which the bill-holder has amounts to nothing. In modern times the refusal to redeem a note is a common bank operation, and he must be endowed with more than ordinary firmness who will make the demand, as he is sure to encounter the insulting, contumacious spirit of a chartered gentleman."

The Legislature passed a resolution, December 19, 1838, that the Bank of the State should take the best measures it could devise to preserve all the bank notes in the State at par. In 1840, the banks of the State were divided into those which were paying specie and those which were not. The Southwestern Railroad Bank, the Bank of Charleston, the Planters and Mechanics' Bank, and the Bank of the State entered into a voluntary agreement to try to keep the country notes at par of specie.

The banks of this State resumed in June or July, 1840.

It was enacted, December 18, 1840, that if any bank should suspend the payment of its notes in specie, it should pay to the State every month five per cent. of its circulation outstanding at the beginning of that month, until it should resume. Reports and examinations were also provided for, and every bank which had suspended was required to give notice that it accepted these obligations within three months, or legal proceedings were to be instituted to vacate its charter.

The income obtained from the fire loans, in 1840, was not equal to the interest on the fire bonds by more than $50,000, which the Bank of the State was obliged to advance.