Page:A History of Banking in the United States.djvu/453

 the particular branch presenting a claim, so far as the paying bank has them. This law was, however, at once decided unconstitutional so far as it applied to the exchange of notes.

In the following years a number of small banks were chartered, and the old large banks were re-chartered until 1880 or 1885.

February 16, 1885, an act was passed "to more effectually secure a compliance with the terms of their charters by the banks chartered at the present session of the General Assembly." The president and cashier are required to file a certificate before the bank begins that the capital has been paid in in specie, subject to a fine of from $1,000 to $3,000 for neglect; and of from $1,000 to $3,000, with imprisonment for not more than three months, for certifying falsely.

There was strong rivalry between the Bank of the State and the Bank of Cape Fear. At the session of 1856-7, they both obtained new legislation for the extension of their charters, the State subscribing largely to an increase of capital in each. The former was allowed to issue down to $1; the latter down to $3. It appears, however, that the extension of the Bank of the State was not accomplished. At the session of 1858-9, its liquidation was provided for and a new "Bank of North Carolina" was chartered, on the old plan of the banks of the States. The literary and other funds of the State were to be placed in its capital. It contained no novelty except that, in case of suspension, besides twelve per cent. penalty to the note-holder, it was to pay the State a fine of four per cent. on its circulation at the last return, as long as the suspension lasted. By an act of November 20, 1860, all the banks were relieved of the penalties of suspension, but they must not curtail while suspended.

A "Real Estate Bank" was proposed, in 1866; the capital stock to be not less thatthan [sic] $10 millions nor more than $20 millions.

.—In a speech on the bank question by William Gregg, in the Legislature of South Carolina, in December, 1857, we find an interesting description of the methods of banking in the South at that time. If he had a charter in South Carolina for a bank with a capital of half a million, he would first have $2 millions of bank notes printed; a large portion of them fives. "The next move would be to get them in circulation. I would get my neighbors to swap off enough of them for Charleston bills to bring me specie funds.See page 37. My next object would be to appoint agents in Lexington and Louisville, Ky., to supply horse dealers and get drafts on Charleston, then in Nashville, Memphis, and Huntsville, Tenn., New Orleans, Mobile, Montgomery,—in fact, in all the towns where money is paid for cotton. At these points my bills should be freely put out for drafts on New Orleans; when collected, to be invested in Northern exchange. When the Northern funds matured I would purchase through an agent the notes of all the men in South Carolina that I knew to be good, as well as those of