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THOMAS LORING, DITOR AND PROPRIETOR THE CONSTITUTION AND THE UNION OP THE STATES THEY "MUST BE PRESERVED. n C VOL. IX. NO. 434. f THREE DOLLARS PER ANNUM.' RALEIGH, r. C. WEDNESDAY, FEBRUARY 221843. THESORTHCAUOLIXASTANDAKD IS PUBLISHED WEEKLY. AT THREE DOLLARS tER ANNUM, IN ADVANCE. Those persons who remit by Mail (postage paid) $5, will be entitled to a receipt for $6, or two years' subscription to the Standard or two co pies for one year, for the same amount. For Jioe copies, : : : : : : S 12 ten "::::: : 22 " twenty" : . : : : : : 40 The same rate for six months. Jlj" Aro order will receive attention unless the money accompanies it. Advertisements, not exceeding fourteen lines, will be inserted one time for one dollar, and twenty-five cents for each subsequent inseition ; those of greater length, in proportion. If the number of insertions be not marked on them, they will be continued until ordered out. Court Advertisements and Sheriff Sales, will be charged 25 per cent, higher than, the usual rates. A deduction of 33 J per cent, will be made to those who advertise by the year. Letters to the Editor must come free oj postage. or they may not be attended to. 53" Office on Hillsborough street, south side, be tween McDowell and Dawson streets. SPEECH OF MR. J. B SHEPARD, In the Senate, Saturday 14th of January, 1843 On the Bill offered by Mr. Edwards as a substitute to that re ported by Mr. Brown, from the Committee on Finance entitled " A Bill to prevent the suspension of specie payments by the Banks of this State" Mr. Shepard of Wake rose and said : Mr. Speaker: The Bill introduced by myself a month since, and on motion of the Senator from Caswell, referred to the Committee on Finance, of which he is Chairman, had the same object in view as the present, while it also proposed some practical reforms of which the present as well as that reported by the Committee is entirely desti tute. During the disegssion I shall point out its manifold advantages over both the latter. The Senator from Guilford expresses some surprise that so much abuse is bestowed on certain institu tions and tells us of the dividends and State tax which the Treasury receives from their coffers. Is he not aware that theses profits whatever they may be, come out of the labor and industry of the people, proceed from their pockets and in no view can be considered a bounty from the Bank to the State? We are further informed by him that the stockholders have never re.eived but G per cent, the legal interest of the country upon their funds thus invested. If the gentleman means by this that the Bank has made but 6 per cL on its specie capital, he is very much mistaken. It is granted that the dividends have not averaged more than 6 per ct. but their own report shows that if now forced into liquidation they have a bonus of 250, 000 more oi less to divide while their specie a mounts to 675.000. Its existence began in 1835 and hence instead of 6 the average dividends have been (if divided) 10 or 1 1 per ct. My friend has also read us the opinion of Chancellor Kent on the great benefit of such corporations, and I could have desired him to extend his selection but a few pages further where that excellent Judge and good man remarks "tie down a charter as you will and it will still play its mischievous tricks." The habit of deceiving is one of their most mischievous tricks and greatest faults. In January 1841 a re port was made to the legislature stating that a com mittee of the other House entertained not a doubt from the strongest assurances that the Banks would resume that month. On the contrary the resump tion vas not until nrar eighteen months thereafter and then upon the eve of a most important election! It is denied that we have thp power to pass this meas ure and the question exultingly asked how can one legislature pass a 1 iv whereby the citizen in vests his property in one channel and the next re peal it when perhaps a large amount may be sac rificed through the recklessness and faithlessness of the State? A case has been supposed of a navi gation Company being incorporated for twenty years and much capital employed by individuals, under the express pledge that the charter should continue for this specified period. In a case of this nature which might be of grievous oppression if the welfare of the country demanded a repeal of the charter, the only mode of relief would be by an appeal to the sense of justice or generosity of the sovereign. The remarks I intend to make now and the objections I may urge must not bnj considered as directed specialty against the Banks of North Carolina but against the system itself. These corporations should beheld to a strict ac countability, because in case of failure the assetts ol the Banks are alone liable for the payment or their debt3 and not the private property of the stockholders who alone are profited. The Sena tor from Richmond and Robeson says that I am the only democrat who has been consistent on this subject, alluding to the fate of the amended resolu tions of the Senator from Halifax. I most sincere ly regret that those whose declamation has been loudest and longest on this subject were afraid to meet the issue presented in those resolutions. If they believed their own charges of corruption to be true I must be permitted to add that they betray ed their constituents. I will now assign the rea sons which induce me to vote for the present bill however imperfect it may be. I am not Mr. Speaker so visionary as to suppose that we can or ought to destroy in a moment a system which has existed for centuries, which has in truth intertwined itself with every interest in the country: on the contrary I propose to give strength and stability, to our present institutions, at least to such as have been wisely and honestly administered, as well by encouraging the sound and legitimate Banker whose course has resulted in benefit to the people, as by condemning the frauds, the villanies and excesses of those which have become gambling shops and whose tendency ha3 been to degrade and debase our population. Most, of them have become irresponsible their frequent suspension of specie payments, often without sufficient excuse, throwing u'jon us all the evils of a depreciated and irredeemable currency of worthless paper, and sometimes threatening that the policy of suspex sion would continue permanent, have all rendered them odious. Many of them increased their aver age paper circulation in proportion to their amount of specie on hand at the very time that th -y were pretending to make every effort to a permanent resumption. Will any support this policy? It was not for a want of specie in the country that all our Banks suspended in '37 but because the a mount of gold and silver was a mere pittance in comparison with the circulating jnedium; and this notable difference will always exist when the law can be evaded because the interest of the cap italist and moneyed man or his proceeds and divi dends will be larger according as the specie is small and the paper abundant. Again, the enor mous frauds of which the banks had been guilty, de pri vedthem of much of theirforraer credit and hence the necessity of hoarding a larger amount of spe cie to meet the payment of their notes which a loss of credit will ever cause people to present It was not then an actual want of specie which ori ginally induced suspension in 1837, but the sus pension itself and the necessary consequence of that act the abandonment of specie as a curren cy forced the latter elsewhere; to wit: to those places where it might supply a currency for the population. This position admits not a question ; suppose the circulation of Raleigh to consist of ir; redeemable bank paper 25 per ct, below par, that is below the market price of gold or silver and then imagine one to possess specie. Will he pay with it? By no means. He will sell his specie for the per ct. and pay and purchase with the irre deemable paper that answers every purpose, and the specie would thus silently work its way to some specie country where it would perform the functions of currency. Thus those States which encourage bank suspensions are continually drain ed of the precious metals which flow where they can act as a currency. Now what are the only ways by "which these institutions can return to the honest payment of their debts? First, I answer, by the purchase of additional specie; secondly, by contracting the amount of their paper circulation. Now have our banks endeavored to do the lat ter ? Bv no means. At any rate if they dimin- j ished their loans, they did not cease them altogeth er when in a state of suspension. I Have they attempted the former? duke the (contrary. Instead of purchasing, our banks have been actually selling specie for notes made by S themselves which by their own suspension had become depreciated in value. And 1 venture to say that from this source much the greatest profits of the banks have lately been derived. It must be admitted on all hands that they have been in the habit of selling checks on New York while in a state of suspension, and these checks being pay able in specie it is the same as if the bank sold the specie itself But perhaps I may be here remind ed that it would be too troublesome and expensive to transport the specie hither for resumption. In answer we should recollect that the note-holder i ! who demands specie here would in nine cases out j of ten, prefer a draft on New i ork. Extortion 'and usury are generally also concomitants of these suspensions, suppose ior illustration tne depreci ation to be 5 per ct. and a man borrow $100 for 6 months. Here the bank obtains for six months legal interest 83 and the borrower loses 5 per ct. by depreciation or pays for 8100 for 6 months 8 per ct. or 16 per ct, per annum. Banks should never loan to a director or to any one in any way connected with them. They should never issue the note of a suspended bank, and on a refusal to pay should be prevented from a further issue even of their own notes in the way of loans or discounts. And this is reasonable because the permission to discount was granted on the express understand ing that it should redeem its paper in coin; be cause also each stockholder and every man inter ested would then find it to his advantage to return to a specie paying state. It is the true and ration al cure and one which would test the solvency of the institution ; and if it be solvent enable it and all in a similar situation to resume forthwith. One of the most usual and at the same time shallow ar tifices urged by the opposition is that if the bank calls in its notes or curtails its circulation its debt-. ors must be pressed and these again will press those who shall owe them and so on until the nronertv of every debtor would be sold for one-half its rea"l j of banks, the effecf of such suspension is an irnme value. This argument is fallacious for the sound jdiate depreciation of its notes, and enables the and solvent debtor would not be pressed by the - - . payment of a dtbt for which he must be prepared, having previously known the precise time it would become due; and hence the insolvent debtor alone would be straightened and probably les3 so now than at a future day when he may and probably will have become more embarrassed and insolved. The qucstiSn is, did our banks have the means and if so, ought they to have continued specie pay ments. I am told that they ought not ; because they would have been drained of all their coin, e ven supposing thpy had dollar for dollar, which would have left neither a paper nor a coin circu lation. But this, Mr Speaker, supposes that all the notes of our banks were held by brokers and northern banks; which is not true, as the amount on the contrary was but small. Besides, if an at tempt had been made by brokers and adjoining States to collect our pap r and demand our specie, we could have prevented them from so doing by rapidly curtailing the debt due to our own banks and demanding specie or their own notes for debt and sueing the foreign banks for 12 per ct. But I am told that such a course would have prevent ed the circulation of their paper in our State be cause dishonored at bank. If a bank in another State dishonor its own paper by a failure to pay, it seems uncommonly strange sympathy in our banks to refuse to dishonor it too: And again, I am told that such a course would have prevented our own bank paper frora circulation out of our own State, because by tho rapid collection of debt it would have been in f;reat demand at home. Now this is entirely inconsistent with the other argument of the bank apologists who support sus pension because, say they, our notes will be col lected by brokers, and broken banks in other States and sent here for redemption to carry off specie. But in the next breath I am informed that our banks can pursue such a course as will pre vent our notes from leaving the State and conse quently brokers and broken banks cannot get them and hence specie will remain with our own citi zens. Another reason assigned by the Senator from Guilford for the long protracted and ofteji de ferred return to specie paymnt by the banks of this State is that "the Batiks north of us would not reiume." The Senator from Caswell in reply to this argument of theSenator from Guilford says that "we ought to have more pride than to be gov erned here by the action of other States." And in deed it is true, Mr. Speaker, to say the least of this apology that it is a clear admission that our cur rency, our legislation and our depreciation must depend upon that of foreign States. However much this is to be regretted I must confess, sir, that I hiv a stronger reason than that of mere pride which induces me to dissent from the ar gument of the Senator from Guilford. His doc trine leads necessarily to the policy of permanent suspension. Now the position is that our notes (if we pay specie) will be purchased by the sus pended banks, in other States and returned upon us for redemption Suppose then that N. York should contract a large debt and were compelled to borrow ten millions of her banks to pay it off; on condition that her banks might suspend for ten years at the expiration of which period the loan should be returned by the State, and in case of fail ure by the State so to return it that then her banks might continue suspended until the State could do so. If then the Dublic debt of New York was so great (like that of Great Britain) that the State could never redeem the principal then her banks may continue non-paying forever. And accord ing to the argument of the Senator from Guilford, we must endure here all the evils of a permanent suspension irredeemable and depreciated because forsooth New York has incurred a heavy debt for Internal Improvement and has to borrow money of her banks to sustain her character. And this alleged by men of discretion in this chamber as a reason why the interests of our people almost an entirely agricultural population should suffer. This sir, is no fancy-picture no speculative dream. At the memorable session of the Penn sylvania legislature, when certain hitherto violent opponents of this system suddenly supported the federal side, what was the law the offspring of such an unhallowed union. Why, the banks a greed to loan the rState 3 millions, provided the State would permit them to suspend for five years longer ; and further, that they should not be com pelled to resume even then unless the State were then able to return the three million loan. Here was a plain bargain between the State of Pennsyl vania and her banks for a permanent suspension of specie payments for a permanent, irredeemable and depreciated paper currency. Here the liber ties of this State were contracted away bargained and sold to pay her enormous public debt And is this a good reason why we who have no public debt should equally suffer for the extravagance and prodigality of a sister State? Here Mr. Moye the Senator from Pitt rose and : asked. Mr. Shepard "if the legislature of Pennsylva ! nia was not then democratic." Mr. Shenard re plied that "if we were to judge simply and without reference to this particular case, it is generally and almost universally true that wherever the liberties of the people arebartered away for gold, the act is perpetrated by the federal or whig party." Mr. Mr. Moye insisted on a direct answer to his qnes tion. Mr. Shepard said that he would candidly state the facts. Thedemocrats be said had a majori ty of one or two but still the measure he had allu ded to was a whig measure, as every whig voted for it and all the democrats against it, except one or two, just sufficient to change the result. The Senator from Guilford says that "the banks north of vs suspended!" Is this, I would again inquire, a good Teason for Bank suspensions in North Carolina ? Certainly not, unless the banks north had all their means and refused to pay it to them. It is no more, Mr. Speaker, a good reason than it would be for me to -say that I would not pay my debts, because you cannot or do not pay yours, when you do not owe me a dollar and my means are neither diminished or increased by your PJ'-o nr not Pay ,nff ylir debts. The suspension of the banks any where causes coin to be sought after to pay foreign debts or debts that are contrac ted in our commerce with the world where our bank notes will not answer as money. Throwing impediments in the way of getting the coin by one set of banks would cause it to be sought elsewhere, where it is paid more readily, and as most of our foreign commercial transactions require prompt ness and people generally cannot suffer the delay of enforcing payment from a delinquent cr refusing bank, and many of those that are able to do so, re frain from it, either from policy because they are interested in the Banking- Institutions or from the fear of offending a large and wealthy class of citi- zens, such as Generally compose the stockholders t 1 1 1 1 . banks in suspending to realize larger profits They have no check or limit to their business then except the refraining of the community to ask loans, for if they can exchange their notes not bearing Interest, and which they have proclaimed they will not pay, for your's bearing interest.lhev are doing a very profitable business and it can be extended (as fir as the bank is concerned) infinite ly; for they only have to be at the expense of pa per and engraving to circulate theirs bearing no interest to exchange for the note of the community bearing interest. The profits indeed are so great that no bank has yet ever been found wanting in i plentiful supply of cngraved notes. By suspend ing the banks make large profits also by what is called exchanges. The proper exchange between any two places is the cost of carrying and the in surance of sofe carriage e.g. take $100,000 at Tarboro', Elizabeth City, Wilmington or New bern for 1-4 perct. freight $250 and 3-8 to 12 in sumnce $375 to $500, viz. from $675 or $750 at most, you can send the $100,000 to New York and insure it to get there safe. Now in the late suspensions North Carolina bank notes were at a depreciation of from 3 to 6 per ct. discount, so that the bank at any one of those places by refu sing to pay their notes at the counter, as promised and as bound to by every principle of justice and good morals, can make and does make very large profits. Thus the cost of getting $100,000 to New York, and insurance, is, at tne nignest, . i t say t After getting it thcro, by drawing on it and 750 selling exchange at 3 per cent premium, they would get Thus realizing a profit, by that operation, of And if the premium for which they sold was G per cent., it would give And yield a profit of 3.000 2,250 6,000 5.250 more than they could make if they paid their debts honestly and as required and expected to do by the Legislature when the charter was granted. And this is a gain to the Bank and a loss to the people among whom the Bank is situated and cir culates its notes. And again, unless the Banks north of us held the notes of our Batiks or haddc posites withthem and call on them for payment, the suspension of the northern Banks can be no more a justification of the southern Banks suspending than it would be a justification for a mart in Ra leigh to swindle his creditors because several men had swindled their creditors in New York or any other northern city; for if one Bank or. set of Banks suspend to deteriorate the value of their notes in order that they, may buy them in at a large discount, either by the intervention of bro kers to take their specie and buy their notes up for them, or by the Banks themselves in the way of exchanges, it is no excuse for another set. By selling exchange on a point where their notes will not be received at some 3 or 4 ;er 5 or greater per cent, premium more than they are worth in good money, and sending their specie off to meet their drafts, or by procuring funds on specie paying points and pressing them there' so as to buy up their notes at a large discount, instead of bringing the coin' home to pay their debts with, dollar for dollar, they make large profits. It was also urged as a further excuse for the suspension of our Banks "that if they had continued paying specie, they would have been drained of all of it by brokers and suspended northern Banks." In reply to this I may say, that they would have been so drained is a matter of mere conjecture, and whether they would have been so drained or not would have depended very much on their ability to meet tkeir liabilities without exhaustion. But if they would have been so drained it is no justification for sus pension unless they are always to refuse to pay when called on. For as soon as they get fairly under way in business, they have more notes due than they have coin to meet, and if it be a reason to Tefuse because they cannot pay all and if they attempt to do so will be drained of their specie, then indeed would all bank in ff be fraudulent If a man from the very nature of his business were to create more and greater moneyed demands than he knew he could pay, and by so doing get pos session of other people's property in exchange for his notes, and when called on for payment by any holder of his notes were to refuse because not having enough to pa' all, and as he might by possibility be called on to pay all then "if, in con sequence of refusal, his notes depreciate in value and the holder has not the ability to wait tore cover his just dues bylawor is rather fearful to un dertake it, and this man were then to take advan tage of the depreciation which his Tefusal had caused, and buy in his notes with what money he had on hand, either by an agent or by way of ex change, would not, I ask, such a man be justly condemned and treated as a swindler? And does a company doing the same alter the principle? But, Mr. Speaker, it has been said that this bill is unconstitutional because it violates a contract. Considered as a mere party question, we have high authority on the federal side for the repeal of charters, as Gen. Harrison, their late chief, intro duced in 1819 into Congress a proposition to re peal the late U. States Bank charter. Other emi-1 nent federalists have held the doctrine that no State could pass a law impairing contracts between in dividual and individual, but had the undoubted right to annul a contract where the State itself was one of the contracting parties. The case of Brown rs. the Penobscot Bank, decided in the Massachusetts Supreme Court, at March term, 1812. also decides the same; but candor compels me to acknowledge that this is the only case either in the U. States Supreme Court or any of the Su preme Courts of the several States whjch counte nances so odious a doctrine. I believe the follow ing, however, to be the settled doctrine of ihe country, and I think the uniform decisions of the Supreme Court of the U. States will bear me out in the assertion, that the laws of the different States may be in their nature and character retrospect ive, and may even divest or determine vested rights; and this, unless the obligation of a cont tract is at the same time impaired, does not amoun- to a violation ol the t ederal Constitution. 1 re peat then that the decision in the Penobscot Bank case is. in my opinion, not regarded as good Uw. and that the course of Gen. Harrison as alluded to above, was very agrarian. The law is settled, however, that you may determine vested rights, provided you do not at the same time impair the obligation of a contract. Let us now apply the principle to the case before us. Every thing is implied in favor of the sovereign according to the good old rule that no laches can be imputed to the king. When the sovereign parts with any por tion of its sovereignty it must be done in express terms and not implied from the words of the grant. If then North Carolina has made a contract with her banks that she will not force them into liqui dation or make them forfeit their charters for a suspension of specie payments, I for one will ad mit that she is bound by it, and this Legislature cannot alter the terms. But I insist that gentle men shall show the paper, convince me that such a bargain was made. It must, however, be in ex press terms, for I repeat that neither the previous nor the present Legislature can.dispose of any por tion of its sovereignty by implication. I have read the charters of the several Brinks in this State and find no such bargain. It is true that they pay 12 per cent to the note-holder in the shape ol dama ges to the individual sufferer, but I find no pro mise on the part of the State that she will not en force the prerogative of sovereignty by altering, increasing or enlarging the penalty or by chang ing entirely its nature where the republic no less than individuals may suffer. On this point I am atisfied. I regret that this bill does hot contain" a' provi- sion preventing tne iresident ana otner omcers of these corporations from holding the proxies of stockholders; for it was this which placed the late U. States Bank under the sole control cf one man. This bill is very defective, as it docs not prohibit the circulation of cut notes and post notes or sell ing exchange when suspended, or prohibit our Baiiks from receiving or paying out the notes of Banks of other States issued and payable put of the State of North Carolina, and many other salu tary provisions which we should engraft tipotl these institutions. The truth is, that neither this bill nor that reported by the committee propose any judicious, practical and wholesome restraints on the system. The acts of incorporation of the several Banks in this State prohibit the emission of any notes of a less denomination than three dol lars, but a practice prevails in many parts of the State of cutting the notes into two parts and circu lating each half for half the amount of the whole bill. The Banks, sir, have given countenance to such mutilation of. their notis and evasion of the laws prohibiting the circulation or emission of notes under three dollars, against both the letter and spirit of the art. The object of such a provi sion was designed to infuse into the common cir culation of the country a larger portion of specie, and the reason for encouraging this violation of the law is very apparent as thereby the notes are gradually destroyed, to the great profit and ad vantage of such institutions. v It is highly important, too, in my opinion, to prevent the Bmk from selling exchange when suspended. They should not, when suspended, pay their debts by selling exchange at exorbitant premiums. . They would, under the restrictions I proposed, find it their interest to keep their coin at home to pay with instead of sending it off, as it will cost something to send it off, and then not be msr able to charge a premium for it they cannot make a profit by it, and would therefore keep it Otnerwise a price or reward is new om tovthem to keep suspended, as when so suspendcaaeated an utter disregard, to character, holding their notes must and will depreciate. By sending out to individuals impunity from reproach on a their money off instPad of paying their notes with it at their cetmters, they can get a larger or smaller premium for redeeming them as they are more or less persevering in refusing all payment, and thereby causing them to depreciate. Experience has also taught me Jiow necessary it is to prohibit our Banks from doing business on other than their own or some notes of Banks pay able in this State, so that the community when they want specie may have notes on which it can be made in the State, and not be sent to Virginia or South Carolina, or Georgia, or elsewhere, to get it wherever the notes that are given them may be payable. It is, it seems to me. a necessary check that all Banks ouffht to have on them. For otherwise when they .suspend and wish to play off such a game on the community they might send off and get some of the most worthless Bank notes they could procure and palm them off in loans to the people and then refuse to take them back, as it was said some of the North Carolina Banks did in regard to the Virginia Bank notes the preceding year. . It seems to rne, further, nothing more nor less; than justice that they should pay into the Public x iuu&ury mree per cent on meir circuiarion ana depositees when in a state of uspension, because they the stockholders alone profit by such a state, and the noteholder alone suffers. I do not believe that the penalties proposed in the bill submitted by myselt were severe; they are, it is true, exempla ry but in my view moderate and proper. I think, Mr. Speaker, that I have reviewed the different provisions of my own bill, with the exception, perhaps, of the second section : the. obvious pro priety of which in regard to post notes seems to me not to require an argument. If the views I have suggested on this absorbing question be in any degree correct, the provisions of the tenth section will follow as a matter of course J to wit: that a suspension for the time therein specified hall work a forfeiture of their charters and sub ject them to an Information in the nature of a bill in Equity, and as a necessary consequence their effects be divided. In such a division the note holder and depositor should first be satisfied be cause they derive no profit, and the stockholder should only take the balance as he alone is profit ed by large discounts, a bloated circukdidn, sus pension and bankruptcy. In order to know the true state of the Bank each Cashier should be compelled to declare on affidavit as to its actual condition. For these and similar reasons I much prefer the first bill to that of the Senator from Caswell or the substitute offered by the gentleman from Warren. The Banks of this State, Mr. Speaker, have fre quently suspended specie payments. anc( have re mained so suspended for the greater part of the last five yeaTS past to the great loss and injury of the community in which they are situate; against good faith and good morals; in open violation of the requirements of justice; and solely, as it ap pears to me, for their own profit and advantage. They have also pretended to qualify and alter their terms of doing business from the require ments and privileges of their charters, by giving notice that for all deposites made and for.alldis counts tthey will only pay out current notes; which tin their practice they make to men notes payable ai ine most aistant points irom tne place wnere they are paid out; to the deterioration of the cur rency, without authority of law, against the prin ciples of good morals and honest dealing, to the loss of the dealers, in derogation of the implied confidence reposed when the charter was granted and only to the benefit and advantage of them selves; as thereby they were enabled to sell ex change for nearly-double what they would other wise get for it. I certainly, think that a company should not cease to pay while it has a dollar to pay with, and when it has exhausted its money it should give any means it has in exchange for its notes. If this principle were fully acteel on, I believe ninety nine times out of every hundred there would be no necessity for suspension by any bank. The late suspensions I believe to have been unjustifia ble, wholly inexcusable, and ought not to have been tolerated by any community as long as the Bank hid a dollar of means to-pay with; for it is a borrowing or tne money ot tne people (by cir culating their notes among them as money) to ustain them in their broken fortunes and throw ng the burthen of their bad management on the people who suffer all the inconvenienceand loss oc casioned by the depreciation of their notes and have none of the benefits of their profits. They have made loans when in a state of suspension and from this and other sources, as exchange, they have made larger profits than if they had net sus pended. Ihe man who perils life in a cause dear to h;s i affections is suppose! rcrtbj cf the crown of mar tyrdom; and if 2, how much more deserving is he who perils what is much dearer than life his reputation, his feelings and who passively be comes the object of hatred, calumny and malice in defending the sacred cause of truth against the at tacks of error error held sacred on account of the length of time it has prostrated reason and blunted every moral perception ? Before enga ging in such a cause one should reflect upon the activity, endurance aud fortitude it requires. He should remember that Sans culottes leveller in fidel Jansefiist are epithets which enemies will spare not: while every even the most infa- moils suspicions with regard to his obrects, his views and opinions will be harbored and circula ted in order to lessen the effect which calm and dignified argument of pure and spotless devotion to the true interests of his country may have upon those who honestly differ in opinion.- But con scious of his owti innocence, and willing to believs others as honest (though mistaken) as himself it is no less his duty than his privilege to enforce them on all proper occasions, in expressing my views fully and freely on. this vital subject I bate then been discharging but a duty I owe my constituents and a privilege to which I am entitled. " I have thus, Mr. Speaker, discharged my duty whatever may be the consequence. It becomes us to enact some law whereby in future these in stitutions cannot evade the payment of their liabil ities, and the penalties of their so doing ought in my opinion to be exemplary. Several years, near ly six, have no w passed since the people of North Carolina have been enduring,' with a fortitude worthy of a better cause, the most intense suffer ing have been laboring under a currency of pa per money, and that currency, too, not only below par but irredeemable. Such a currency experi ence has proved to be productive of enormous bur dens and to have injured not only tne pecuniary interest, but the moral and social circle it has failure to pay their debts, because the same has been excused in corporations of larger capital it has sown distrust, and apprehension, trhfre the producing classes, ..(he laborers and "mechanics of the land, hate suffered more than those privi- feged few' iv'hb enjoy the unholy pints' of trjrer system. JUDGE CAMERON'S LETTER. Bank 61 th State of No. Ca. ) .-. December 28, 1842. tic ON; JiEDFttftD BROWN. Chairman -nf Jnlnl Select Commmilte. on Banks. Sirs In rerilv td the first. innuirv contained in the resolution of the Comitiittee, viz "why . is, the. circulation of the Batik so much reduced!" the fol- 1 ; a. . ... ' 'owing piaiement is submitted. ; v .,, , . . It is a fixed and settled law. in regard id iiid circulation of money or currency, that Xhe. ctf rrcrr cy of the market in which the products of the soil are sold, becomes to the amount of the. value of! the products so sold, the currency of that portion ot the country, in which the products were raised for market: The products of the Northern and: Southern section of this state, afe carried atmosf exclusively to the markets of Virginia and South f 1:. J 1r t.,..i .. . ... arunna. nnn are paia ior mtne currency ot thosu States, and being brought by the sellers into, this State, of necessity excludes from circulation a like amount of domestic currency. The amount of the products of this State, car' ried to markets, within the State, as compared with the amount carried to those out of tfris State,, is small, arVd aflrr the usual exchanges for ihe w cessaries" of life, require but little money to pay the difference in favor of the producer, and as the, prices of produce in foreign and domestic. markets, decline, the" amount of currency required to pay, for it is consequently lessened.- In an agricultur al community, fsuch as 6'ursJ the" products of the soil, constitute the.onlynatural or legitimate basis, to sustain the circulation of Bank notes; suehan amotfnt of circulation as maybe necessary for con-: verting the former into mon y, can be sustained, and no more, and whenever there is an excess, of circulation', it, is thrown back on tho Banks issuing it, for redemption. For Several years pqst, the amount of produce raised in this State, and sold in our own markets,, has been progressively reduced ; while at the same time, the prices have comirrued to fall ; hence, a' much less amount bf money has" been required to pay for it than in limes gone by, when there wasf a much larger amount of produce sold in those markets and at much higher prices. It dors not foflow, that the general circulation of Bank notrs in this State, has bee ft reduced in( proportion to the reduction of the circulation of this Bank, or of all the Banks of this State, be-' cause the vacuum created by such reduction? haaf been filled by the notes of the Banks of thbsef, States in which the productsof this State are sold, ' so far as the value of such products goes to'prdi du'ce that result. To the influence of the foregoing cause, on the circulation of this Bank and necessarily compel ling its contraction, may be added the following, growing out of the great and unexpected revulsion1 in the commercial and monetary affairs of tho country, ccmrr.er.cing with the Suspension of spc cie payment by the Banks of New "Vork, in May 1837, and followed by all the Banks in the U nited States. By the 29th Section of the charter of tlife&anS it is enacted that on failure by the principal Bank, and its branches, to redeem the notes respectively, issued by them, in specie on demand, they incur the penalty of 12 per cent interest. Although suspension of specie payments was forced on this"! Bank, by the gefieraf suspefTsioW of all other Rnnks. nnd mnrft psnerinllv hv thnst In V!rrrin. , - - - - - J ." ... . . . i . t . and although in most, if not all other States, .the Legislatures released their respective Banks' from? the penalties prescribed for the failure to redeem their notes with specie, this Bank made no appli cation to the General Assembly of this State, for the remission or mitigation of the penalty inflicted for not redeeming its notes in specie on demdnd. It determined to abide by the charter and meet the difficulties by which it was beset as best it cotrid" The most efficient means at its command, was the' reduction of its circulation, thereby lessening its liabilities to pay penal interest, t It was moreover compelled to this course by the long Continued sus pension ol specie payments by the Banks in Vir ginia, sanctioned by the Legislature of that State. During that period the notes of the Banks of that State became greatly depreciated ; Brokers ancf other dealers in money purchased the nots ofthis Bank in Virginia, at premium, with the notes of the Banks of Virginia, and then demanded pay ment in specie, or to place them at 12 percent, interest, until paid, while the Banks in Virginia; ve.re excused by law Irom redeeming their issues in specie, and were subject to no other, or greater penalty, for filling to redeem, thn. the payment of 6 percent, interest. r - In proof of the foregoing, a Broker from Rich mond, demanded the redemption of seventeen thou- - sand dollars of the notes ofthis Bank and branches in specie, which he admitted he had purchased with the notes of the Banks of Virginia, paying a premium of from three to five per cent, for our notes. Many other demands of a like kind, and oi our notes obtained in like manner, were made during the suspension of specie payment by the Banks in Virginia. Since their resumption of spc-. cie payments, on the I5th September last, tbey have been rapidly reducing their debt and circula tion; which has necessarily pressed on this Bank and its branches a further reduction of their circuV lation. The contiguity of the States of North Carolr pa and Virginia, and the intimate and extensive Commercial relations between them, necessarily affect the question of Currency in this State. Tho amoifnf of Banking Capital in Virgima etieeds Twelve Millions of Dollars, while in this State it but little exceeds three Million? It follows that the operation1 of their Banks must always, to' a very great extent, control the action of the Banks of this State. Trf w'frat ex-fert the reduction must be carried. for self-protection and! preservation, experience, to be derived from future events, can alone deter mine. . - . . The Directors of this Bank and t its Branches -have endeavoreel at all times, and under all cir cum'siarrces, tcf keep their notes ai par within this State : In this they have succeeded to the fullest extent of their wishes and without toss to the hold ers of them. During the general ' suspension of specie payments, instead ofuxteTirJrrrg''TheTr debts' and circulation, to Khance the profit of the stock--holders, they steadily and gradually curtailed both, thereby reducing the profits of the Bank. They preferred! safely, the enjoyment of public' confidence, and small profits, to hazardous loans, distrust, and large profits: They could not disro V ""J .4 -v
The Weekly Standard (Raleigh, N.C.)
Standardized title groups preceding, succeeding, and alternate titles together.
Feb. 22, 1843, edition 1
1
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