Page:A History of Banking in the United States.djvu/458

 of the State, because it would have been ruinous to have enforced the legal obligation against property devastated by the civil war. This bank has recently undergone a revival and is reported prosperous.

A free banking law was enacted in 1853, a distinguishing feature of which was that each bank must hold, in specie, one-third of its cash liabilities exclusive of the circulation secured by the bonds.

The charter of the Union Bank expired in 1857. It then became a free bank, and is now a national bank. The statement occurs in a memorial of Hope & Co. to the Legislature of Louisiana that the Union Bank paid all the bonds issued to it, and paid to the State besides $1.3 millions from its earnings.

In 1857, the banks of New Orleans were required by law to record daily statements of the "movement" and to return to the Board of Currency weekly averages ot the same. Each of the banks revived in 1842 was already required to keep constantly on hand one-third of its cash liabilities in specie. It was now enacted that each president and director should be liable to a fine of $100 for every day that this requirement was not complied with.

The banks which suspended in that year were the New Orleans, Union, Citizens', and Mechanics and Traders'. "The banks at New Orleans that successfully maintained specie payments are the Bank of Louisiana, the State Bank of Louisiana, the Canal Bank, and the Southern Bank; the latter the only one of the free banks which stood the storm, except the private bank of James Robb. Of the suspended banks the Citizens' Bank, aided by the chartered banks, was first enabled to resume."

The Louisianians exulted in the results of their banking system as shown in the panic of 1857. There was a great flood of currency pamphlets, etc., after that panic, in which all conceivable views of the ills and remedies were put forward. In most of them it appeared that the course of events at New Orleans had powerfully influenced the opinions of the disputants.

In 1860 the Bank of the State of Louisiana had the largest specie reserve held by any bank in the United States, $4,133,000. The Citizens' came next with $3,232,000.

The banks of New Orleans, with one exception, the Southern Bank, suspended, at the request of the Governor, September 16, 1861, one year later than the other banks in the seceding States. The purpose of the suspension was to sustain the credit of the confederate notes. Those banks were the financial mainstay of the Confederacy. As such they fell under the blows of both sides and were reduced to ruin. Their rights and wrongs in that period and the vicissitudes through which they passed are too intricate to be unraveled here. They belong to political, not to financial, history.

The current cash or money of account at New Orleans, in 1863 and 1864,