Page:A History of Banking in the United States.djvu/460

 to charter it after the State had taken stock in the Union Bank and the Planters' Bank. The Legislature, however, Ireferred the contrary course and transferred the State stock in the two latter banks to the Bank of the State, with authority to sell, and after the payment of the five per cent. bonds of the State, falling due in 1858, to apply the proceeds to the increase of its capital. The president and directors adhered, in 1857, to their former opinion that the State might better dissolve all connections with banks or internal improvement companies as soon as possible, although at present the aid of some banking institution seemed indispensable to sustain the credit of the State. They think that the Bank of the State is best adapted to this function if put on an equality with the stock banks of the State. They complain that the authority of the mother bank over the branches consists mainly in the annual election of their directors and in the preparation of currency for circulation. The officers have been frequently changed on account of political changes in the State. The suspended debt in was $700,000. It was then placed under the control of the principal bank.

"The examination since made into the condition of the branches shows that the principal losses arose from that feature of the charter requiring loans to be made to the different counties in proportion to their voters." If the proposed changes could be made in the charter, the bank might do all the banking business of the State and win all the profits of it for the State. It now has the exclusive right to issue notes under $5, but they think this might better be abrogated.

The tables which are added show that the annual profits of this bank in the early fifties averaged nearly a quarter of a million. The annual requirements addressed to it by the State amounted, by 1855, to $275,000, which was 8.6 per cent. on the capital it then had.

There was great jealousy and hostility at this time between the stock banks and the Bank of the State.

Governor Harris, in 1858, stated in his message that he had made a computation of simple interest on each of the items of the cash capital of the Bank of the State since it was paid in, and had compared this with the profits of the bank; the result being that it does not pay to borrow at six per cent., payable semi-annually at New York, with exchange at one per cent., in order to go into the business of banking.

In the preamble of certain resolutions adopted November 21, 1859, it is stated that "the question of what shall be done in relation to the banks is one of vital importance to all the great interests of the State; is the great question of the present Legislature," etc.

The Bank of the State seems to have been reconstructed at this time. Its annual report for 1859 speaks of it as having gone into operation July 1, 1859. The old suspended debt is still nearly $100,000. The capital consists of $1 million in State bonds, $850,000 in school fund, $932,000 of surplus revenue, $664,000 of Union Bank stock, $232,000 of Planters' Bank stock. The stock of the two banks has been sold for cash and the capital has been