Page:A History of Banking in the United States.djvu/388

 From 1814 to 1841 the Bank of the State of South Carolina earned on an average more than seven per cent on the capital placed by the State in it. In the latter year the president, in his report to the Legislature, said: "The collection of the debts due to the bank and its branches is becoming every day a more important subject of consideration. The present system is one of great inconvenience and risk. The debtors are scattered over all parts of the State, and when a note or other cause of action is sent to suit, it, in a great measure, is lost sight of, especially if the party defendant lives in a remote district." In 1843 the same officer declared that the bank and all its branches had not "exhibited for many years a more healthful, vigorous, or sound state of its affairs." He renewed, however, his expressions of anxiety about the debt to the bank, and desired that a power of attorney to confess judgment might be inserted in the bonds given to it for loans. A proposition was made in the Legislature in the last mentioned year to wind up the bank, or to separate it from the State, or to compel it to call in its notes under $5; but it failed. The president took up the question whether a bank which was a loan office could maintain a circulation. If it was nothing else but a loan office, he doubted if it could; but an institution which was a loan office and a bank of commercial discount and deposit at the same time could do so. The difficulty is to adjust the proportion between the two. He felt warranted in his opinion by the facts of the suspension of 1839. Six of the seven banks in Charleston were purely commercial; five suspended specie payments, while the Bank of the State paid in specie all its notes which were presented, and at the same time paid off more than $1 million of other liabilities.

The voluntary attempt of the leading banks of Charleston to enforce redemption of the country notes did not succeed. The Bank of Charleston, in 1842, received the notes of all the banks in the interior of the State at par. They had previously been subject to a discount of one-half of one per cent. In six months it sent home nearly $1 million for redemption.

As soon as the United States Bank and other banks ceased their management of the foreign exchanges, no further difficulty was experienced with them. They regulated themselves, the business became normal, and we hear no more discussion about it than about the supply of groceries. The Bank of Charleston reported, in 1841, that it had not had a foreign exchange bill returned for a year, and that the interior exchanges with South Carolina, Georgia, and North Carolina had produced no loss and no addition to the suspended debt. In 1843, the Bank of the State of South Carolina and its branches engaged in legitimate exchange dealing on cotton, the result of which was to bring the trade to steadiness and regularity.

In 1843, the State sued out a scire facias against the Bank of Charleston for suspending in 1837, although it did not suspend in 1839. The act of 1839 about this bank, recognizing its present and future, was held to be a waiver of forfeiture which had been really incurred. The Court also