Page:A History of Banking in the United States.djvu/461

 redistributed between the branches in order to be more profitably employed. The Planters' Bank and Union Bank resumed July 1, 1858, but the Bank of the State would not, which exposed it to abuse, and the other banks refused to receive its notes; so that it was compelled to follow suit. Nevertheless rumors were afloat injurious to its credit and the other two banks made very heavy demands on it for redemption. The president and directors also complain that the bank and its branches can only pay out at their counters their own notes, but are compelled to receive in payment of debts the notes of each other. The mother bank receives the notes of its branches, but cannot pay them out and cannot recover its own. Its business has therefore been almost suspended for one month. The great trouble is that the mother bank has by law no control over its branches as respects their business. Notes under five dollars are being withdrawn as fast as they come in. After the 1st of January, 1860, no bank is to issue anything under ten, but it is believed that the small notes of the neighboring States will come in. The capital of the Bank of Tennessee, after twenty years' existence, has yielded to the State a net profit of $4.7 millions. The bank had ten branches.

A general law regulating banks was passed February 6, 1860. No notes were to be issued which were not redeemable where they were issued or paid out, and none under five dollars. All the capital was to be paid in in coin and a coin reserve of one-fourth of the circulation was to be maintained. No charter was to last for more than fifteen years. This law was said to dismember the Bank of the State, on account of the provision that no notes might be issued which were not redeemable where issued. The Planters' Bank and the Union Bank refused to obey the law and it proved ineffective.

The Bank of the State removed all its assets to the South early in the civil war. They never could be recovered. It was wound up by order of the Legislature in 1866. The notes were redeemed but no other debts were paid.

In, at the session of 1860-1, a plan was proposed for a "Sinking Fund Bank," very nearly on the plan of the old Bank of the Commonwealth. Among other peculiar provisions was one that it should keep an amount of specie equal to one third of its circulation; but that, if it failed to do so, it might suspend.

.—A bank of the State of Ohio was founded on a new plan, February 24, 1845. Any number of persons, not less than five, might engage in banking. A number of companies are mentioned as already existing, with an aggregate capital of $6,150,000, which are to be combined in it. The State is divided into twelve districts, with a specified number of banks and amount of capital in each. Five Bank Commissioners are named for one year, after which the Auditor, Treasurer and Secretary of State are