SPEECH 
 
 ON THE BILL, 
 
 TO PROVIDE FOR THE APPROACHING EXPIRATION 
 
 BANK CHARTER, 
 
 Delivered in the House of Representatives, Dec. 12,1849, 
 
 Bv JOHN CUNINGHAM. 
 
 ALSO, REPORT 
 
 UPON THE POLICY AND PROPRIETY OP LIMITING THE ISSUE OF BILLS OR 
 PROMISSORY NOTES, PAYABLE TO ORDER OR BEARER, BY ANY 
 BANK OR CORPORATE BODY IN THE STATE, TO THE 
 DENOMINATIONS OR AMOUNTS OF TWENTY, 
 
 FIFTY AND ONE HUNDRED DOLLARS, 
 
 OR UPWARDS. 
 
 CHARLESTON, S. C. 
 
 BY WALKeS^W^JAMES, NO. 101 EAST-BAY. 
 
 PRINTED 
 
*Wv. o',.. 
 
 \ "C) b O r\ 
 
THE SPECIAL JOINT COMMITTEE, 
 
 To whom was referred so much of the Governor’s Message, 
 No. 1, as relates to the Bank of the State, have had the 
 same under consideration, and respectfully Report: 
 
 A BILL 
 
 To provide for the approaching expiration of the Bank Charter. 
 
 Whereas, The General Assembly hath determined that it 
 is inexpedient to renew the Charter of the Bank of the State 
 of South Carolina: And whereas, Such determination renders 
 it wise and prudent that the affairs of the Bank of the State 
 should be placed in a state of preparation for the approach¬ 
 ing end of its existence : 
 
 Sec. I. Be it enacted by the Senate and House of Represen- 
 tives, now met and sitting in General Assembly, That instead 
 of the present number of Presidents and Directors of the said 
 Bank and its Branches, there shall be elected by the General 
 Assembly, as heretofore, one President and four Directors, 
 who shall go into office at the expiration of the present term 
 of the President and Directors of the Bank at Charleston ; 
 and the President shall receive the same salary as heretofore; 
 and each of the Directors shall receive a salary from the 
 Bank of one thousand dollars. 
 
 Sec. II. The new Board of Directors shall order and con¬ 
 duct the business and affairs of the Bank as heretofore, ex¬ 
 cepting that they shall make no new loans of money; they 
 shall reduce accordingly 1 he number of salaried officers at the 
 Bank and its branches; and may substitute an agent, one or 
 more, in place of the Branches, taking care to require ample 
 security wherever funds are entrusted; and giving such no¬ 
 tice as they may think reasonable to such officers as may be 
 dispensed with, to enable them to find other employments. 
 
 Sec. III. The Board of Directors shall collect the business 
 paper, together with all bills of exchange, and they shall ap¬ 
 ply the same, together with the cash assetts, stocks and other 
 convertible property of the Bank, to meet the engagements of 
 the Bank and of the State, as ihey may accrue : and as to all 
 
other debts due to the Bank, the Board are authorized to ex¬ 
 tend the time of payment to any debtor desiring it, to a term 
 of years not exceeding ten; provided ample security be ta¬ 
 ken for the payment of the debt and legal interest, (the inte¬ 
 rest annually,) and the principal by not less than equal in¬ 
 stalments, in each year, of such extended term; and in case 
 such security be not given, the debt shall forthwith be col¬ 
 lected indue course of law. 
 
 Sec. IV. The Board of Directors shall apply any funds 
 which may remain in their hands, to the purchase and extin¬ 
 guishment of the foreign debt of the State, whenever the 
 same may be had at or under par; and if the same cannot 
 be had, then they shall invest the said funds, for the time, 
 upon the security of stocks of this State, and shall apply to 
 the General Assembly for further directions in the premises. 
 
 “ Resolved, That the Governor be requested to employ an 
 Agent to treat with the foreign creditors of the State, and 
 ascertain upon what terms the foreign debt can be transferred 
 home.” 
 
 The above Bill and Resolution were lost in the House of 
 Representaves by G2 to 60, 13th December, 1849. 
 
 The following Resolution passed both Houses of the Le¬ 
 gislature on the last day of the session, 19th December, 1849. 
 
 “ Resolved, That it is the duty of the Bank of the State of 
 South Carolina, in view of the determination of this General 
 Assembly, at its last session, that it was inexpedient to renew 
 the charter of the said Bank, so to shape its policy, as to pre¬ 
 pare for the approaching termination of said charter.” 
 
 Passed House of Representatives by 58 to 51. 
 
SPEECH. 
 
 In the House of Representatives. 
 
 The Bill “ to provide for the approaching expiration of 
 the Bank Charter,” being under consideration, on 12th De¬ 
 cember, 1849, Mr. Cuniugham rose and said: 
 
 It was not my intention, Mr. Speaker, to have participated 
 in this debate; but poised on a just impartiality, to have 
 listened, decided and voted. But so much irrelevant matter 
 has been thrown into it by the discussion ; so many false is¬ 
 sues raised; the true questions so much perverted, in at¬ 
 tempted distractions of the mind of the House, that I feel 
 constrained to recall the attention of members to those ques¬ 
 tions, and to give the reasons for the vote, which my inves¬ 
 tigation and reflection have determined me to render. And 
 here permit me to say, sir, that being disinclined to parti¬ 
 sanship, upon what should only enlist a wise prudence, I can 
 remind the House, that this is a question of State policy and 
 high statesmanship; and to be decided by calm deliberation 
 and on great general principles. It is not one to be tested 
 by party tactics or domination, or to be clouded by party 
 feelings or passions. I rejoice, therefore, sir, that we have 
 disposed of the “ furbelows of fancy,” exhausted the tragic 
 of eloquence, vented the blustering of passion, and com¬ 
 menced to rise above the wiliness of sophistry. 
 
 At the last session of this Legislature, Mr. Speaker, I put 
 upon the record my vote, “ that it was inexpedient to re-charter 
 the Bank of the State" and connected with it a declaration, 
 that this decision was neither calculated nor intended to 
 impair the credit of the State, or violate its pledge of faith 
 to our foreign creditors. I also voted against taking mea¬ 
 sures “ to wind up its concerns during the period of its char¬ 
 ter.” Such were my opinions then; and such honest consis- 
 
tency, and strengthened convictions continue to make them 
 now. And I came here, sir, with the earnest hope and con¬ 
 fiding belief, that this decision of the Legislature of the 
 State, would be a solemn settlement of the question of re- 
 charter ; and I assumed that the factionists of party, and 
 the bank creatures of our will, would have so regarded it, and 
 have conformed to its obligations. I expected therefore, that 
 there would arise only questions as to the time and mode of 
 winding up the affairs of the Bank, of disposing of its funds 
 and discharging our debts. The determination of these 
 alone is contemplated by the measure before us. But to my 
 surprise, sir, this just expectation, sustained and enlarged 
 by the tacit acquiescence of the people, and by general ad¬ 
 missions even by the friends of the Bank, of the soundness 
 of the policy of a “ separation of Bank and State,” has been 
 disappointed and repelled. The arguments of the Bank 
 party in this debate, of the President of the Bank in his Re¬ 
 port, of the foreign creditors, and of the lawyers, whose 
 opinions have been submitted, look to and urge the re-charter. 
 The desperate struggle here exhibited, the nature and extent 
 of the influence here brought to bear, the defying appeal of 
 the Bank from our decision, on the ground of its alleged 
 soundness, its utility, and its connection with the foreign 
 creditors, all, all show that the Bank has determined to con¬ 
 tinue its existence, and maintain its supremacy. The ques¬ 
 tion before us then, is evidently not merely one of inter¬ 
 ference with that institution, before the expiration of the 
 charter. The great question of its re-charter is, therefore, 
 involved in the issue and the measure before us. The great 
 questions of Bank or no Bank, and of a separation op Bank 
 and State, are again to be settled! The battle that decides 
 them, is again to be fought—and to be lost or won, either 
 here or in a new canvass before the people. I have, then, 
 Mr. Speaker, no choice, but to take part against the Bank. 
 Our decision is bearded—we must assert its authority. Our 
 judgment is questioned—we must maintain its truth and 
 value. Our policy is disparaged—we must vindicate its 
 high correctness. 
 
 Entertaining this conception of the issue, I propose, Mr. 
 
7 
 
 Speaker, to discuss, first, the general question of re-charter; 
 and then those questions which arise directly out of the 
 measure before us. And here, sir, I must earnestly recall 
 the attention of the House, to those great principles of 
 finance, currency, and political purity, which enter into the 
 policy of a separation of Bank and Slate, and which consti¬ 
 tute the primary reasons, why we should dispose of and dis¬ 
 continue the Bank. The confused debate on minor or false 
 issues, suggests and renders necessary this recall to the broad 
 and true ones. 
 
 How impressive and forcible is the majesty, how axiomatic 
 is the nature of the proposition, that the simplicity and in¬ 
 tegrity of our republican institutions, preclude the idea, and 
 should the practice, of a State Government engaging in the 
 pursuit of making money by banking; subjecting its funds, 
 which should be devoted to its maintenance or fostering su¬ 
 pervision, to the casualities of Bank speculations; funding 
 a source of political and moneyed vitiation of its rulers, and 
 domination over its people; and entering as a stockjobber 
 into the markets of worldly sordidness. Our noble Consti¬ 
 tution in its silence as to the matter, clearly indicates that it 
 was deemed as unnecessary to prohibit, as it would have 
 been preposterous to authorize the practice. And that of 
 the United States certainly contemplated its prohibition, 
 when it denied to a State the right “ to emit bills of credit 
 and of it, our operating through a Bank, is an unmanly and 
 undutiful evasion! 
 
 Profound principles of political economy, require the State 
 to get rid of this institution, because it is a Bank. Banks in 
 this country are a complication in the worst form, of Banks 
 of deposit, discount and circulation. Having the exclusive 
 creation and control of the currency—of a mere flimsy paper 
 medium, their history has shown them to be capable of in¬ 
 finite mischief and fearful powers. Having an almost illim¬ 
 itable privilege of credit-lending, through their bills—a credit 
 not founded, in fact, directly upon specie, upon property, or 
 upon a practicable reach of their resources by the hand of 
 the legal tribunal, they run in a wild cycle of speculation 
 and indebtedness. The fearful contractions and expansions 
 
of currency and debt, into which their radical deficiencies 
 and sordid tendencies alternately impel them, and which 
 their history in this country, from Maine to Louisiana, has 
 at periods illustrated by their bankruptcies, and by the wide 
 ruin and distress, which they have scattered over our nation, 
 render investments in banking unsafe and uncertain, their 
 establishment dangerous and impolitic, and their practi¬ 
 cal working that of moneyed misrule. Human nature has 
 not yet proven sufficiently honest, nor human sagacity suffi¬ 
 ciently skilful to avert these results. The funds of a State 
 should not therefore be subjected to the casualities of bank¬ 
 ing, nor should they enter into the elements of its its mischiefs, 
 or the sources of its oligarchial corruptions and power. It 
 should at least be left to the watchful enterprise, the neu¬ 
 tralizing competition, and the severest responsibilities of 
 individual pursuit. The high duty of a State was to devel- 
 ope by discriminating Legislation, whatever in it was useful 
 and invigorating, and to prune off, not participate in, its 
 evils, errors and dangers. 
 
 Sound principles of banking, require us to dispose of this 
 bank. Its chartered banking organization is radically defec¬ 
 tive—is contrary to every established principle and safe 
 practice in banking. There is but one true, or rather tol¬ 
 erable, mode of banking, and that may be styled the com¬ 
 mercial. That mode consists in lending money or credit on 
 short time and on securities immediately realizable in. the 
 currency market. It is as important a principle, that the secu¬ 
 rities on which loans are made, should be as readily con¬ 
 vertible into cash resources by the Bank, as that the bills and 
 liabilities of the Bank should be convertible into specie. 
 One secures the other. This is necessary to protect both the 
 community and the Bank; to secure a sound currency to the 
 one, and a sound condition to the other. It is equally indis¬ 
 pensable, that this convertibility should be constantly recur¬ 
 ring—that at short periods, both the soundness and safety of 
 the Bank, of the currency, and of the mutual indebtedness 
 of the community and Bank should be tested and secured. 
 It protects against, it adapts itself to, those contractions and 
 expansions of business and currency, which have been the 
 curses of banking on the community. Any loans, therefore, 
 
sir, made on bonds and mortgages of real estate ; on personal 
 securities running to maturity at long periods, and even on 
 pledges of stocks, which may be, and usually are, fluctuating 
 in value or unsafe in basis—are dangerous to the Bank, not 
 profitable as transactions, and vitiating to the currency. 
 These assets or resources are not convertible at once into 
 cash at par or certain values; they cannot be relied on in 
 sudden emergencies, and when relief should be given to a 
 nation and its trade. So also, Mr. Speaker, while true 
 credit is founded on property, as well as cash expectancy; 
 while bank bills and liabilities should therefore be based, not 
 only on cash resources, as specie, but on the property of its 
 stockholders; yet it does not follow that banks should invest 
 their means in property and unconvertible assets. The 
 reverse is true practice, because the investment is not imme¬ 
 diately realizable in cash facilities at par, whereby to meet 
 cash liabilities. A Bank should not, therefore, be permitted 
 by its charter to invest in real estate, personal property and 
 insecure stocks. 
 
 Now, Mr. Speaker, I will shew that the Bank of the State 
 is amenable to these objections, both in chartered organiza¬ 
 tion, and business practice. Why, sir, its return of 30th No¬ 
 vember, 1849—a few days ago—show its cash liabilities 
 to be 81,552,000, and its cash resources only $758,000 or 
 one half. 
 
 1. It can lend credit (its bills or other notes) on bonds and 
 mortgages of real estate or personal property at long time. 
 This is authorized and contemplated by a provision of its 
 charter; (see 1 sec. 4 clause, Act 1812.) And what is worse, 
 the present report of the Investigating Committee shows 
 that it has made loans on bonds, &c., running from one to Jive 
 years, many of which are frequently renewed, and have ex¬ 
 isted for years, and in some instances without payment up 
 of interest. Its return shows that its loans on bond, amount 
 to $485,000. And what is stilly worse, that report gives the 
 fact that even in this, it has violated its charter, by the cus¬ 
 tomary practice of lending on bond more than $2000, (the 
 limit fixed by it) to different individuals. 
 
 2. It can and does lend credit on long time. This is autho- 
 
10 
 
 rized by the Act of 1817, and is on notes running for a year, 
 and renewable. These long loans peculiarly also tempt into 
 indebtedness, and which is a leading evil in banking. 
 
 3. It can and does invest in real estate and stocks. This 
 is authorized by its chartar—Act 1812. Its present real 
 estate amounts to 8109,000, and its investment in stocks to 
 8320,000, much of which fluctuates below par. 
 
 A leading object for establishing the Bank was undoubtedly 
 pecuniary speculation. That reason for its continuance has 
 ceased, as it is no longer a profitable concern. 
 
 Its banking means are: 
 
 Capital, (so called) 
 
 - $1,122,000 
 
 Fire Loan Fund - 
 
 - 1,783,000 
 
 Sinking Fund 
 
 616,000 
 
 Deposites, &c. - 
 
 579,000 
 
 
 84,100,000 
 
 The amount of interest on this sum is 8287,000; yet the 
 gross profits of the Bank, just returned, only amount to 
 8240,000, from which 835,000 have to be deducted for losses. 
 The argument can be illustrated in another form. Leave 
 out from the banking means the Fire Loan Fund, and the 
 Deposites ; and take only the funds that belong strictly to the 
 State, to wit: old capital, sinking and current funds, and we 
 have an average amount, at all returns of the Bank, of 
 
 these of -.$1,750,000 
 
 Interest upon this sum is, say, - - - 122,000 
 
 Well, deduct from the Bank profits, all paid as interest on Fire 
 Loan State debts, and all losses, and we have turned over to 
 the State, as profits on its investment in this Bank, only 
 8103,000, or less than 6 per cent. For a number of years 
 its annual profits have not exceeded, on an average, 6 per 
 cent. In truth, there are now too much banking and bank 
 capital, for the business to be profitable. 
 
 A leading and sound objection to the Bank is, that it can 
 involve the State in excessive indebtedness. The faith of 
 the State is pledged and involved for its liabilities. It can 
 create them to the extent of double the amount of its capital, 
 by express authority of its charter. Its present capital (see 
 Comp. Rep. ex. No. 9) which includes Fire Loan, amounts 
 
11 
 
 to $2,900,000. It can therefore contract liabilities to the 
 sum of $5,800,000, and this over and above its present lia¬ 
 bilities for sinking fund, and for deposites, which now are 
 about $1,200,000. That is to say, it can now involve the 
 State for between one and a half and two millions more 
 than its present liabilities, and when from its business and 
 organization, it may be feared that it could not withstand a 
 sudden pressure, and may be even now sustaining great 
 losses. And it can contract this debt too, upon securities 
 that may not be realizable at all, or only after long periods 
 of distress, vexation, and delay to the Bank, the State and 
 people. 
 
 I must confess, Mr. Speaker, to some objection to the ad¬ 
 ministration—the direction of the Bank. It is too numerous 
 —it is open to too many, who only seek the position, for the 
 use of the funds for themselves and friends. It is startling, 
 that thirteen men may and to some extent do, use without 
 limit as to the amount, so much of the public funds. In this 
 view, the benefitted are too few —and many are the instances 
 of these few having been irresponsible men. The direction 
 should be reduced in number, should be salaried, should be 
 more select men, and should not be permitted, except to a 
 very limited extent, if at all, to receive loans from the funds. 
 But I will pass on. 
 
 Sound principles of political ethics, Mr. Speaker, require us 
 to dispose of this Bank as a political Institution. As a State 
 Institution it is literally a political one. It was founded too, 
 as a mere financial and political speculation. The Legisla¬ 
 ture hoped to please the people, by substituting bank profits 
 for taxes, as the revenue of the State. But yet so it is, the 
 expenses of our government are met only from taxation still! 
 And the history of this Bank has been coeval with the ex¬ 
 travagant expenditures, and immense indebtedness of the 
 State. But what I here mean, sir, is, that being a State In¬ 
 stitution, and the selection of its administration a legislative 
 election, it becomes the creature, and then the master of the 
 legislative and political classes of men of the State. The 
 friendships of constant association, the ready facilities of 
 getting loans, the seduction of moneyed influences, and the 
 
12 
 
 terrible and pervading mastery which the force of debt, thus 
 contracted, exerts over the mind and feelings, even to the 
 extent of reducing proud independence to the “ bated breath 
 and whispering humbleness”—all, all, form a mesh of ties 
 and bonds, that fetter and pervert the wise conduct and 
 action of people, bank and legislation. I charge not—I 
 mean not corruption, sir. I mean those subtle influences 
 which insensibly pervade, affect and control men, without 
 either their defined knowledge or consent, as electricity does 
 the material world. I will prove my position by general 
 results and facts. Nine out of ten of informed and sensible 
 men, (and their voice is that of the people,) will admit sol¬ 
 emnly that the State on financial principles should not deal 
 in banking—that republicanism requires there should be a 
 separation of Bank and State, as of purse and sword,; and 
 that paramount principles of truth and policy require a 
 change in this course of our State. Yet, sir, the press of 
 our State, which should be, or is enlightened on these doc¬ 
 trines and facts, presents but one instance in which a voice 
 is raised in defence of truth, and in warning of danger to 
 financial integrity and constitutional purity. Yet, sir, even 
 here in the halls of legislation, where the voice of the people 
 should be spoken in legislative authority and influence, the 
 power of the Bank struggles on equal terms with the power 
 of the State, and arraigns its fiat of last session against its 
 re-charter, with pertinacious pretension. 
 
 In its political influence, this Bank has also swerved the 
 State from its true financial and political course, by seducing 
 or constraining it into debt and extravagance. The state¬ 
 ments and arguments of the distinguished Chairman of the 
 Committee of Ways and Means, (Mr. Memminger,) in his 
 speech of last session, are on this point complete and con¬ 
 clusive. As that speech is on the table of members, I refer 
 them to it—I have not time to give the exposition. 
 
 In conclusion on this head, I insist that this Bank should 
 be disposed of, that its capital and funds may be applied to a 
 complete discharge of the debts of the State. Debts are as 
 dangerous, as vitiating, as crushing, as improper for a State 
 as for individuals. We should also know our resources and 
 
13 
 
 our condition. I will assume that the Bank is in an ordinarily 
 fair condition—I have never questioned it. I seek not to pry 
 into its secrets of debits and credits, or piddle with their de¬ 
 tails ; but the interest alone which we pay on our debts, drawn 
 from us and paid in form of Bank profits , is a canker upon our 
 resources. If, as is said, the Bank funds can nearly or wholly 
 meet the debts, let us gather them together, pay the debts, 
 stop our banking, and resume a high position of independ¬ 
 ence and wisdom. The State debts amount to, say $2,200,000 
 
 The old capital of Bank, - - - - $1,122,000 
 
 The sinking fund,. 010,000 
 
 Fire loan bonds in Charleston, - - 707,000 
 
 If safe, as probable, amount to, - - $2,445,000—2,445,000 
 
 And leave a balance in our favor of - - - - $245,000 
 
 By so discharging the debts, too, the State can leave un¬ 
 touched, well invested and well used, her other resources, 
 now employed in fostering noble enterprises and improve¬ 
 ments, that will elevate and benefit her people. These re¬ 
 sources are invested now, in various rail road enterprises, and 
 amount to ($1,300,000) one million, three hundred thousand 
 dollars. The excess of the whole State resources over all 
 the State debts, may include these investments, and leave an 
 additional balance of over half a million, which may be simi¬ 
 larly and advantageously employed. 
 
 I have now, Mr. Speaker, as succinctly and as clearly as I 
 can, set forth those broad principles of public policy, and those 
 general reasons and facts, which should determine the State 
 not to re-charter the Bank. Permit me to add, they are con¬ 
 clusive, whether the Bank be sound or not, be well managed 
 or not. 
 
 Look a moment to the reverse side. Does any one of those 
 who support this Bank assume to urge that a State should 
 have a Bank ? Do or can they assert that the Constitution 
 authorizes it ? Do or can they assign a reason, founded in 
 sound policy or principles, either financial, political, economi¬ 
 cal or moral, that a State should speculate in banking, or at¬ 
 tempt to furnish a paper currency? Do or can they advo- 
 
14 
 
 cate, that there can be a combination of money power and 
 business, with governmental purity and simplicity 1 No, none. 
 They concede the points, because they can present no main¬ 
 tainable issue, no facts, no principles. Yet they struggle for 
 the continued and permanent existence of this Bank! Their 
 effort means this, or it is the veriest folly. If the creation of 
 a Bank was an original and fundamental error, if this Bank 
 is not founded on just principles, and should not be had by the 
 State, I ask the question, why should it not be terminated ? 
 It is in vain to say that its soundness is a reason against its 
 termination. That condition only removes what might be 
 another and conclusive objection to the Bank. But can you 
 say it is sound, before its assetts are collected ? The sound¬ 
 ness rests only in the probability of those assets being realized 
 in the course of time, and their equalling its liabilities. We 
 may not be able to say that it is unsound, but that inability 
 does not prove that it is sound. Many, very many, on gene¬ 
 ral, as well as specific reasons, believe it to be badly conducted, 
 to be unprofitable, to be unable to meet the emergency of a 
 sudden liquidation, to have many and large bad debts, and to 
 be inevitably destined to subject the State to losses, when its 
 final balance is struck. But if the Bank should be terminated 
 with its present charter, are we not bound now to prepare for 
 that termination ? I call for a satisfactory answer—an an¬ 
 swer worthy of legislators, and the State, to this question. 
 Besides the assertion of its soundness, the only other answer 
 attempted to be made, is, that the faith of the State requires 
 its re-charter, and also its present complete impunity of con¬ 
 duct. I will show the unreasonable pretensions of this pre¬ 
 text. If it also is vain, as it is, then I repeat that no conceiva¬ 
 ble view of State policy or advantage, justifies a refusal to 
 dispose of this Bank. The burden properly rests upon its ad¬ 
 vocates, to present paramount considerations for the existence 
 and continuation of this mammoth institution, which, at least 
 possesses the power and means for infinite mischief to the 
 State and people. 
 
 I come now, sir, to the second general head of my argu¬ 
 ment—the discussion of the nature, the object, and effect of the 
 measure before us. Not informed as to these, I came here 
 
15 
 
 disinclined to it. I came pre-determined against any inter- 
 . ference with the Bank, that would amount to any liquidation, 
 or what is called “ a winding up” of the Bank, before the 
 expiration of its charter. Such liquidation, or termination of 
 the Bank, I deemed would be unjust to the institution, to its 
 debtors and creditors, and particularly a breach of faith with 
 the foreign creditor. But this Bill does not amount to such 
 liquidation, in its prohibition of any “ new loans.” What is 
 liquidation ? It would consist in requiring all the bills in cir¬ 
 culation peremptorily and at once to be called in, paid and 
 cancelled ; in requiring depositers to remove the deposites ; 
 in requiring all either by note, bond or pledge of stock 
 
 to pay up forthwith their dues, and all creditors to render and 
 receive their demands ; and in terminating the Bank as a cor¬ 
 poration, and thus cutting off from against it, the power of 
 suit. The Bill requires none of these. 
 
 On the other hand, the Bill continues, and preserves the 
 institution, both as corporation and as a bank, until 1860—for 
 ten years. 
 
 It thus preserves against it, the power of suit, and the con¬ 
 sequent value and efficiency of the pledge of it, as a security 
 to our creditors, by keeping within the reach of the courts in 
 their favor, its fund and the profits of those funds. It leaves 
 it as a Bank. Banks are of three kinds, of deposite, of dis¬ 
 count, and of issue; of which this one is a combination and 
 complication. 
 
 It leaves it to retain and receive deposites; and to use them 
 by discharging obligations, until called for. 
 
 It does not call in its bills, but leaves them out in circula¬ 
 tion as issues. They are only to be redeemed when brought 
 in, and may be again paid out in discharge of other debts. 
 
 It leaves it to discount renewals of accommodation paper ; 
 that is, taking new notes on short time, in place of the old 
 ones, and receiving a small per cent of the debt. Of course 
 it cannot make advances, or “ new loans on business or ac¬ 
 commodation paper. 
 
 It is evident then to any one understanding the principle 
 of banking, that the institution, retaining, under the bill, this 
 power and business, is still a bank in name and fact. The 
 
16 
 
 argument, therefore, that the Bill destroys it as a Bank, and 
 takes away its liabilities as a corporation, and thus violates 
 the faith of the State, to our creditors, is futile, both in states¬ 
 manship, law and honor. Yes, Mr. Speaker, I will show, 
 before I close my argument, that this pretension of our for¬ 
 eign creditors, that we are bound to re-charter the Bank, as 
 a matter of faith and pledge to them, is utterly without founda¬ 
 tion in the principles of law or justice, and is but a Shylock 
 demand for “ the pound of flesh,” without the excuse of having 
 the “ right in the bond.” 
 
 The Bill also leaves the Bank, in fact, authorizes it, to in¬ 
 vest in (not loan upon) bonds, by changing notes, and other 
 securities of debt, into bonds, if the parties will. This is but 
 in the nature of much of its past business under its charter. 
 These bonds are to be payable in ten annual instalments, but 
 to be well secured. This provision extends the charter of 
 the Bank four years beyond the time of its expiration, as now 
 limited, and two years beyond the time when the greater por¬ 
 tion of our debt has to be paid. It also provides for the pay¬ 
 ment of that portion, and even for the remainder, by the Bank, 
 if the foreign creditor will accept his money at par, or on any 
 reasonable terms. The extension of the payment of all debts, 
 if funded into bonds, over a period of ten years, is, in fact, a 
 generous relief law to all debtors who may need forbearance. 
 Who then has the right to complain of the Bill ? 
 
 The Bill too, continues the Bank, as it is now, as a fiscal 
 agent; not only to receive and disburse the State revenue, 
 but to manage its own resources, make profits upon them, and 
 apply both in proper times and manner to the State debt. 
 
 I have now, Mr. Speaker, in answer to contrary allega¬ 
 tions, pointed out what the measure before us does not do — 
 what it does not work. In illustrating its nature, I shall now 
 proceed to set forth what it does do—what its object. 
 
 The measure only changes the conduct of the Bank, alters 
 its investments, and provides against new and additional lia¬ 
 bilities- on its part, and through it, on the part of the State. 
 These three results are necessary to the termination of the 
 institution at the expiration of the charter at the time fixed. 
 They do not amount to liquidation, but constitute a proper 
 
n 
 
 preparation for it at that period. If the operations of the 
 Bank continue in manner and kind as now, until the charter 
 expires, we will have to re-charter it for a term, if only for 
 the purpose of “ winding it up.” The true object of this Bill 
 is to preclude such, or any re-charter, by commencing the 
 first needful work now; and to secure a sufficient length of 
 time, without however unnecessary postponement, to do that 
 work well and safely. Let gentlemen recur to the history 
 and unhappy management of the termination of the United 
 States Bank. When Mr. Calhoun urged that time and pre¬ 
 paration should be used, whereby to “ unbank the bank,” he 
 gave the true lessons of experience and wisdom. The refu¬ 
 sal to adopt his proposition, and the abrupt termination of its 
 affairs with its charter, resulted in the loss of nearly all its 
 assets and funds. The blaze of popular passion swept as a 
 whirlwind over the fabric, and in a moment it was a mass of 
 consumed and blackened ruins, and thousands became the 
 impoverished victims of the conflagration. It was the case 
 of a debtor suddenly sold out in “hard times ”—his property 
 was sacrificed. I warn gentlemen against giving this history 
 and fate to this Bank, and its beneficiaries. I tell them that 
 the popular mind has fixed its doom—let them not blow this 
 determination into the fierce flame of party excitement and 
 passion. We are bound to protect, as to terminate the Bank ; 
 to preserve its funds, as to pay the debts; and to cherish and 
 soften “ its decline,” as to soothe the weeping of its sor¬ 
 rowing friends. 
 
 The Bill provides for four directors, with a salary of a 
 thousand dollars each, in the place of twelve, with unlimited 
 loans. The reasons for this change in the conduct of the 
 Bank, have been touched upon by me, but more fully set forth 
 by others. It requires, too, a reduction of the number of 
 salaried officers, and the employment of agents instead of the 
 branches. .This is to effect a considerable reduction of ex¬ 
 penses. 
 
 The Bill also alters the investments. It provides that “ the 
 Board of Directors shall collect the business paper, together 
 with all bills of exchange, and they shall apply the same, 
 together with the cash assets, stocks, and other convertible 
 2 
 
18 
 
 property of the Bank, to meet the engagements of the Bank 
 and of the State as they may accrue.” That is, that the Bank 
 shall apply its cash resources to its cash liabilities, inclusive 
 of interest on our debts. It also provides that, “ as to all oth¬ 
 er debts due to the Bank, the Board are authorized to extend 
 the time of payment to any debtor desiring it, to a term of 
 years not exceeding ten ; provided ample security be taken 
 for the payment of the debt and legal interest, (the interest 
 annually,) and the principal by not less than equal instal¬ 
 ments, in each year of such extended term”; and also if there 
 be unapplied funds on hand, that “ they shall invest the said 
 funds, for the time, upon the security of stocks of this State.”* 
 That is, that the main funds of the Bank should continue, 
 over a period of ten years, invested and bearing interest —• 
 making profit. That is, that they shall be applied (both funds 
 and profit) as promised, to the payment of all our debts, as 
 the 4th section afterwards directs. Yet gentlemen tell us, 
 that we are taking away the security of the creditor! 
 
 The Bill also provides against further liabilities by the 
 Bank, and consequently the State. This is the grand merit, 
 with me. It secures against further or any unsoundness, if 
 any exist; it secures against further indebtedness, which is 
 already sufficient and exhausting; it stops the particular 
 banking operation, that has in it most of danger and falsity. 
 It works the State and people no mischiefs, but cuts oft’ all 
 those of either a financial or political nature. It is the grand 
 remedy for the disease or evils of the Bank, its operations and 
 its influence. It deprives us of no necessary accommodations 
 or facilities; for these of equal goodness arc hawked in su¬ 
 perabundance among us, by other banks and capitalists. 
 
 I have now shown, Mr. Speaker, the nature, objects and 
 some results of the Bill. Before proceeding to consider its 
 effects on the business of the State and the Bank, I will dis¬ 
 cuss the matter of its alleged breach of the faith of the State 
 to our foreign creditors. It is urged by the Bank and its 
 friends, that the faith of the State precludes any liquidation 
 
 •Mr. Richardson, in his speech next day, assumed the palpable error, that the 
 investments were to be also in stocks of other {States'; argued that they should 
 not be stocks of free-soil States, because they are opposed to slavery, nor in stocks 
 of slave Stales, because their stocks were not valuable or reliable. 
 
19 
 
 or destruction of the Bank, before the expiration of its char¬ 
 ter in May, 1856 ; and that it binds our sovereign justice and 
 honor, to re-charter it until 1870, the period of the last in¬ 
 stalment of a State debt. I have pre-shewn that the mea¬ 
 sure before us, being neither a liquidation nor destruction of 
 the Bank in its corporate capacity, nor a change of the con¬ 
 tract by a withdrawal or misapplication of its funds and 
 profits, is not amenable to the first allegation. 
 
 Does the faith of the State require the Legislature to re- 
 charter the Bank ? This seems to. be the hinge of the bank 
 argument—this the citadel of the last of its strongholds. 
 The solution of this grand question will depend simply upon, 
 what was the contract with our creditors, both in its letter 
 and its spirit ? I will shew, Sir, that this argument is unsus¬ 
 tained by either—that it is the veriest specimen of a foisted 
 illusion and an attempted humbug. It does not even amount 
 to a technicality—but is “ the baseless fabric of a vision” of 
 technicality. But we can oppose to it technicality too—we 
 have demonstrated, that the institution remains a Bank, not 
 only substantially, but technically; that this Bill retains it so, 
 not only until 1856, but by extension, until 1860; that its 
 funds continue to make, at least, the usual profits; and that 
 the security of these funds and profits (which are pledged) 
 is still enforceable in the Courts, as long as it exists by con¬ 
 tract—that is, till the expiration of the charter in 1856.*' 
 
 * Some speakers (as Mr. Black, of the Senate.) insisted upon the difference be¬ 
 tween Think profits on its funds, and the interest merely that would accrue from 
 these funds, if simply loaned out; and upon the importance of this difference to 
 file creditors, who had the pledge of those profits, co nomine. It has been shewn, 
 as a matter of fad, that the profits of the Bank have not equalled interest, by one per 
 cent., and that therefore the creditors would be benefitted by the proposed clranges. 
 
 This answer being conclusive, any further reply is unnecessary. But those gentle¬ 
 
 men speculated on the theory of banking profits, and urged, that as a bank might 
 lend to the extent of two or three times its capital, it might make far more than 
 mere interest If there was but one Bank, and that not too large for the business 
 required to be done, tins might be true. But there being an excessive abundance 
 of bank capital and business, other than the Bank of the State, and there being of 
 course a limit to operations, in the extent of trade and currency themselves, this 
 presumed result does not and cannot accrue to that Bank. Beside this fact, those 
 gentlemen also forget, that the great expenses of a banking concern, must be de¬ 
 ducted from profits; that losses, which bear a proportion to the loans, must be de- 
 
20 
 
 This renders the application to this period, of the argu¬ 
 ment of my friend from Charleston, who has just taken his 
 seat, as baseless as his “ vision” of the technicality. 
 
 But what was the contract 1 It has exclusive reference to 
 the Fire Loan Debt;—to the bonds held for that loan. These 
 are payable (interest annually): 
 
 In 1858, in London, .... $486,606 67 
 
 In 1868, in do.. 488,888 88 
 
 In 1860, in Charleston, - 482,922 20 
 
 In 1870, in do. ... - 325,808 90 
 
 $1,785,286 65 
 
 The two first constitute our foreign debt. All other debts, 
 which are small, will be discharged in fifteen months, except 
 it may be two (Rail Road Capital Debt and Revolutionary 
 Debt,) amounting to only $120,000. 
 
 1. By the 1st Section of the Act authorizing the issue of 
 the State Bonds for the Fire Loan, “ the faith and funds of 
 the State arc pledged to secure the punctual payment of the 
 said bonds or contracts, with the interest thereon.” 
 
 This evidently does not involve the Bank—but only what 
 is left of it—only its surplus funds after liquidation.' 
 
 2. The 10th Section makes it “ the duty of the President 
 and Directors of the Bank, to make proper provision for the 
 punctual payment of the interest, and for the ultimate pay¬ 
 ment of the principal.” 
 
 Now be it specially remarked, that these officers and their 
 Bank had in law no contemplated actual existence after 1856. 
 The Fire loan creditors knew it—the charter was laid before 
 them. They did not even offer 1o stipulate for a re-charter. 
 They then, as it were by indirect expression, took the secu¬ 
 rity of the agency of the Bank, and of its medium to reach 
 
21 
 
 its funds (the pledge of which is otherwise another matter, 
 and extrinsic to any bank existence) only for the term of its 
 limited existence—until 1856. Be it also remarked that this 
 section requires only provision for payment, and not the exist¬ 
 ence of the payer, or the act of payment by him. A debtor 
 can make provision for payment after his death. 
 
 3. By the 11th Section, “ the President and Directors are 
 required to keep an account of the profits to arise from this 
 loan ; and these profits are pledged for the payment of the 
 interest and principal of the loan.” 
 
 The agency of these officers in keeping an account of the 
 profits could of course not extend beyond the term of their 
 office—1856. But is it not perceived, and it will appear by 
 an examination of the section, that the pledge of the profits 
 is not connected with, and is extrinsic to, any agency or exist¬ 
 ence of the Bank and its officers. 
 
 4. By the 12th Section, “it is provided, that when the 
 profits of the bank shall have paid the public debt, both prin¬ 
 cipal and interest, for which they are already pledged, the said 
 profits shall also be considered pledged for payment of the 
 interest and principal of said loan.” 
 
 That is to say, that if the other public debt be paid off be¬ 
 fore the expiration of the charter, the other profits of the bank 
 shall, during its term, be applied to the interest and principal 
 of the Fire Loan debt. 
 
 The negotiator of the loan, (Gen. McDuffie,) “ put forward 
 the liability, the responsibility and agency of the bank,” in 
 making the contract. I use the very language of Baring, 
 Brothers & Co. This was all—he said, and urged nothing as 
 to a re-charter, or its just expectancy. Then his representa¬ 
 tion applied only to its chartered term. 
 
 This is the contract—this the pledge—these the terms of 
 faith. It is evident that their letter does not require the State 
 to re-charter the bank. Now does their spirit require it. 
 
 I will discuss this question under two heads ; first, the legal 
 substance —the true intent and result of the contract; second, 
 “ the point of honor,” which has so subserved gentlemen in 
 sublimation of argument and tinsel of eloquence. 
 
 On the first head, the arguments of members and the dis- 
 
tinguished counsel, whose opinions have been laid before us, 
 are two-fold. They are based on an implication of law that 
 we are bound to recharter, and with great deference, I confi¬ 
 dently say, that they are “ without shadow of foundation.” 
 And I will here state the clear and admitted proposition that 
 the Legislature of 1838 (which directed the Fire Loan) had 
 no power or right to bind a succeeding Legislature to re¬ 
 charter the bank. Any express or implied attempt to do so, 
 was, or would have been a fraud upon the State. 
 
 1. It is urged that by the Act of 1838, “the duty of pay- 
 ing the interest anil principal of a loan to be effected by the 
 State, was devolved on the bank; that it may be considered 
 that the Legislature authorized the Bank to contract a loan, 
 payable by their successors in 1858 and 1868; and that by 
 granting this authority, the Legislature virtually extended 
 the charter to the year 1868.” 
 
 My dissection of the contract has already shewn, that 
 neither the premise nor the conclusions have any truth. 
 The payment of the debt was not devolved upon the Bank. 
 The Bank was not a contractor of the loan, but only the 
 agent for effecting it. Nor did the Bank, by authority 
 make any contract with the creditors. This first point 
 palpably failing, all fails. The case of the Bank of 
 Charleston does not apply. That was upon a point between 
 the Bank and the State, and not as to any obligation to, or 
 right of a third party. The point there was, whether the 
 Charter would be held to be forfeited by a previous act, when 
 the Legislature had recognized its existence, and continua¬ 
 tion, after that act. In that case, the Legislature had sur¬ 
 rendered its claim ; in this case, there are no rights as to the 
 Bank, to be forfeited, and no claim to be surrendered, and on 
 neither side, of course, any resulting obligation to the State 
 on the one hand, or to the Bank, or to a third party on the 
 other. 
 
 2. It is urged “ that the creation of the corporate body, 
 may arise by implication from powers granted, and of course, 
 an extension of charter; and that if this were a private 
 bank, scarcely a doubt could be entertained of the effect of 
 the Act of 1838, in extending the duration of the charter.” 
 
Here again the premise is false. No powers that involved, 
 or depended upon an extension of the charter have been 
 granted. And, even if this were a private Bank, could not 
 its Stockholders refuse an extension of the charter, refuse to 
 carry on banking operations, refuse the exercise of all cor¬ 
 porate functions; and could it be coerced into making profits, 
 using funds, or playing agent 1 Why cannot the State, then, 
 standing in its banking character, also refuse these fictitious 
 liabilities and existence ? The argument has nothing in it; 
 no application. 
 
 Yet, on these grounds, it is contended, that as an obliga¬ 
 tion could be enforced by the Courts against, or in favor of 
 a private Bank, that State faith is bound by it, although the 
 State cannot be sued. The first part is untenable, and even 
 if true, the second not a truthful consequence. But, in truth, 
 this is a question above legal subtleties. It is to be settled 
 by the great principles that enter into matters between nation 
 and nation, and man and man, and which are determinable 
 by substance more than form. It is a question between a 
 sovereign State, bound to look to the correctness of its internal 
 policy and integrity, and a creditor, whom it is able and 
 willing to pay. Suppose, sir, that the report of the Investi¬ 
 gating Committee made it appear that this Bank was utterly 
 unsound, and running to ruin, would not necessity and policy 
 justify our interference, both on our and our creditor’s ac¬ 
 count ? Would not faith be the other way than the one 
 alleged ? If justifiable in one instance, why not interference 
 in the Bank affairs, or a refusal to re-charter, where high 
 State reasons of finance and policy require them; and that, 
 too, where there are on our part, as the creditors expressly 
 admit, an ability and readiness to pay them ? 
 
 But as to the substance of the contract' in another view. 
 What has South Carolina undertaken to do ? Why simply 
 to pay a debt which she has contracted. The only true point 
 of faith or honor involved, is that which is involved in a 
 mere money obligation. She is bound to provide the means, 
 and apply them at the promised times. Is she not able, and 
 does she not propose to do so! Her resources far exceed her 
 liabilities. See Comptroller’s Report— 
 
State debt is.$2,210,000 
 
 Balance against Bank in cash liabilities, - - 794,OOo 
 
 Whole debt to be met, .... $3,004,000 
 
 State resources,. 4,904,000 
 
 Balance of resources in favor of State, - $1,900,000 
 
 And this is the balance in our favor, even after discharging 
 the very fire loan debts, as to which this ephemeral and ideal 
 argument is urged! The bill too expressly provides for the 
 payment. “ The Board of Directors shall apply any funds 
 which may remain in their hands, to the purchase and ex¬ 
 tinguishment of the foreign debt of the State, whenever the 
 same may be had at or under par.” The resolution connected 
 with it, provides also to send an agent abroad to negotiate 
 the terms of this application. The bill so arranges the 
 affairs of the Bank, that all its funds and profits, (which are 
 pledged) shall as they come in, be applied strictly, and at 
 once, to our foreign debt. This secures the punctual pay¬ 
 ment of both principal and interest, either at or before the 
 time they fall due. Does not all this keep our faith and 
 maintain our honor ? It is urged, and we will admit that 
 the Bank will have remaining over and above its own debts 
 
 and losses, the following assets: 
 
 Capital, (so called).$1,122,000 
 
 Sinking Fund,.616,000 
 
 Fire Loan Bonds in Charleston, - - - 707,000 
 
 $2,445,000 
 
 $486,000 
 
 488,000-974,000 
 
 $1,471,000 
 
 This balance to be applied to remaining portion of Fire 
 Loan Debt, which is $810,000, due here at home, and then 
 also to any other debt. Be it here observed, too, that the 
 Bill continues the Bank until but one instalment of the for- 
 
 Foreign Debt, payable in Lon¬ 
 don, 1858, 
 
 Foreign debt, payable in Lon¬ 
 don, 1868 - 
 
25 
 
 eign, and one of the home debt, remains unpaid; and for 
 the payment of these we arrange to tender the money. The 
 foreign debt will then be but an insignificant sum of £100,000, 
 with an annual interest of £5000. This we can readily, as 
 shewn, pay when it falls due, and we offer and are able to 
 pay it before it falls due. Yet the Barings and Bates, and it 
 seems to be at the instance of the Bank, (see letters to them 
 of President,) put up a claim that our faith requires us to 
 re-charter the Bank for this, as between them and the State 
 of South Carolina, pitiful matter! They certainly do not un¬ 
 derstand the position of things. They are, and certainly would 
 be above, such contemptible specialities. But if not, then it is, 
 as I have shewn it to be, but a Shylock-demand for “ the pound 
 of flesh,” a demand in the face of offered payment, and that 
 without its being “ in the bond”—in either the letter or the 
 spirit of the contract. 
 
 Gentlemen deal in extravagant and phrensied strains about 
 our honor! Why, what is honor, a thing, or name! If this 
 were a matter of feeling, or an evoivement of sentiment, it 
 might be admirable for gentlemen to soar into the regions of 
 transcendentalism. But this is the honor of dollars and 
 cents, of business, of State policy, of strict, stern, substantial 
 justice to both parties. And their honor of this matter, is all 
 of one side. It is a poor compliment to the Barings, to make 
 their’s, that of the relentless creditor. In truth, Mr. Speaker, 
 there may be garishness in honor, as bombast in chivalry. 
 Let not South-Carolina have the reputation of both ! 
 
 In conclusion, I will briefly discuss the immediate effects of 
 the measure before us. The Bank is required to gather 
 together and apply forthwith its cash resources. With the 
 exception of this, the effects are problematical, and what they 
 will be, are now mere matters of opinion. The cash liabili¬ 
 ties, which include deposites, bills in circulation not lost, 
 debts to other banks, and so forth, 
 
 Amount to about - - - $1,552,000 
 
 Cash resources, .... 758,000 
 
 Balance against Bank, 
 
 794,000 
 
This balance can be met from other readily available re¬ 
 sources, which amount to §1,908,000. These are, 
 
 Notes discounted, ..... $1,261,000 
 
 Loans on pledge of Stocks, .... 110,000 
 
 Investments in Stocks,. 320,000 
 
 Suspended Debt, &c., ..... 217,000 
 
 $1,908,000 
 
 Much of these resources, or debts to her, will not be funded 
 in bonds under this bill, because many debtors (good business 
 men) rather than consent to pay interest at 7 per cent, for so 
 long a period as indicated by it, will pay up in whole or part. 
 
 Dcposites may be the first to be paid. They amount to 
 $579,000. These the cash resources can at once meet, and 
 leave a considerable balance. But as they will be as safe 
 under the measure as now, and no more wanted than now, 
 there is no practical reason for their being demanded to be 
 paid, except slowly, as they may be required by the commu¬ 
 nity. The reduction or discharge of them, will then probably 
 extend over a period of a few years. 
 
 The unlost hills in circulation, it is urged, will be at once 
 returned upon the Bank. They amount by computation to 
 over $700,000. But they are scattered over the whole South, 
 and if they return, they will probably do so, at the earliest, 
 only in the due course of trade. This will take a year. But 
 why should they return ? Is not the bank good ? Are they 
 not entitled to priority of payment ? Is not the State an¬ 
 swerable for them ? Is not all this known ? ' Are they not 
 valuable, and required for use, in circulation '! The argu¬ 
 ment is a fictitious apprehension. It is met too by the fact, 
 that the bills of the United States Bank did not return in 
 years, and at last had to be peremptorily called in. But it is 
 urged, that the bills will in the course of trade, concentrate 
 at the points of trade (the towns,) get into the hands of other 
 banks, and by them be returned against our bank for specie. 
 But is it not more probable, that where, as at these points, 
 specie demands are made, that banks will pay out these bills 
 on discounts instead of their own, and send off their own to 
 a distance X This will be the same as drawing specie, and 
 
they make in addition thereby two discounts, instead of one ; 
 that is, at home with these bills, and for distant points with 
 their own. The constantly increasing means of the bank 
 will enable it, even if they be presented for specie, to meet 
 the demands with the bills of other banks or with specie. 
 But I have also shewn that there is no probability of any 
 thing more than a slow and distant concentration of them 
 at the counters of any bank. But what at last is this argu¬ 
 ment, that is urged for the bank. It will be equally good 
 against any termination of the bank, as now against this 
 bill. Does it amount to a sufficient reason for re-charter of 
 this improper Institution ? Is 'it not a trifle to our trade, al¬ 
 ready over-supplied with bank capital and paper money? 
 Is it not a trifle to the State, having abundant resources to 
 meet the contingency, however urgent ? Is it not a trifle in 
 comparison with those great reasons of Stale policy, which 
 require a disposal of this Institution ? Is the meeting, or the 
 passing through, a slight momentary difficulty to be made a 
 reason to deter us from our high duty ? Away with the 
 bugbear. 
 
 Mr. Speaker, I have done. I close, with a vista of the 
 scene in my mind’s eye, when South Carolina will stand 
 neither as a suppliant debtor nor frowning creditor : when she 
 is no longer a speculator and stockjobber, with skirts pol¬ 
 luted in the shambles of the market, and when, in accordance 
 with her high mission and duty, she, in unsullied robes of 
 sovereignty, simply receives and disburses her revenue, in 
 administering, in republican dignity and simplicity, her Gov¬ 
 ernment for the happiness, protection and prosperity of her 
 
IN THE LEGISLATURE OF SOUTH CAROLINA. 
 
 House of Representatives,) 
 November, 1846. \ 
 
 At the last annual Session of this Legislature, the follow¬ 
 ing Resolutions were passed by the House of Representa¬ 
 tives : 
 
 “Resolved, That Messrs. Cuningham, Memminger and 
 Boykin, be appointed a Committee to inquire and report upon 
 the policy and propriety of limiting the issue of bills or promis¬ 
 sory notes, payable to order or bearer, by any Bank or Cor¬ 
 porate Body in the State, to the denominations or amounts of 
 twenty, fifty and one hundred dollars or upwards.” 
 
 “ Resolved further. That such Committee report to the next 
 annual Session of this Legislature, and by bill or otherwise.” 
 
 In conformity with the instructions of these Resolutions, 
 your Committee respectfully submit the following 
 REPORT: 
 
 They have considered with a due solicitude and effort, to 
 arrive at intelligent and practical conclusions, the subject- 
 matter referred to them, and which involves a profound and 
 complicated inquiry. It is one that is co-extensive with the 
 whole range of banking, currency and commerce, and from 
 its importance, should command the earnest attention, as well 
 as needs the varied and general inquiry of the State and Na¬ 
 tion. It concerns every individual and class; and every com¬ 
 munity desirous of the progress of truth, civilization and its 
 rightful interests, should bring to its investigation and settle¬ 
 ment, all its experience, information and reflection. The light 
 from the past, and their own view, have clearly shown to 
 your Committee the policy and propriety of some such change 
 or reform, as is suggested by the resolutions. The banking 
 system of this country needs being simplified and restricted, 
 trade greater steadiness and security, and the currency a 
 radical change, a purer nature and higher standard. The 
 great discussion that ensued from opposition to the United 
 
States Bank, as a source of vast commercial and political evils: 
 from an investigation of the proposed substitute (a number 
 of private or State Banks,) a still more dangerous organiza¬ 
 tion ; and from the well considered scheme (called the Sub- 
 Treasury) of freeing the Government from banks and banking, 
 and obtaining a truer medium for its fiscal operations, pro¬ 
 duced a general inquiry, and diffused considerable information 
 as to banking and currency, and which the statesman and 
 economist might well have hoped and expected to have re¬ 
 sulted in a thorough and much needed reformation of both. 
 The advancing experience of commerce and legislation has 
 tended in the same direction, and has demonstrated that there 
 lay at the basis of both in the United States, and other por¬ 
 tions of the civilized world, radical and inherent errors and 
 evils, which produce injurious and deranging results in the 
 social and trading, as well as fiscal and political relations. 
 But ignorance and custom, which in all times have bent even 
 the most high-spirited and truth-loving natures to a submis¬ 
 sion to “ the existing order” and “ the powers that be,” soon 
 relapsed from the keen inquiry of party excitement into their 
 own indifference, and left honest intelligence no stimulant to 
 investigation and progress ; the intelligent sharper to the wide 
 field of fraudulent profit and debasing principles under legal 
 guises, and all classes to corporate thraldom, fluctuating, trade, 
 unsound currency and fiscal corruption. The discussion should 
 be revived, the errors and evils removed, and a great reform 
 consummated. 
 
 The Resolutions evidently suggest two leading questions: 
 
 1st. The policy and propriety of a decisive change in the 
 nature ()'. e. the quantity and quality) of our currency. 
 
 2d. In the nature, extent and influence of the banking sys¬ 
 tem and business. 
 
 It is well known that our currency is composed, exclusive¬ 
 ly, it may be said, of paper money; that this paper money is 
 but the promissory note, as low as one dollar, of Banks and 
 Corporations; that these, with their peculiar powers and 
 privileges are put on foot for limited, but successive periods, 
 by legislative authority, and are, or should be, its creatures ; 
 and that they create and control the money of the country, 
 
and have, in these respects, monopolized the greatest and 
 most varied business and power. Although the coins consti¬ 
 tute capital and wealth, it is well established, and should be 
 well understood, that paper money does not. It consists merely 
 of promises to pay that which is capital— is merely the evidence 
 of debt. Nor does paper money create capital or wealth. 
 The note of a Bank is like that of an individual, and cannot 
 make land, gold or silver, breadstuffs or materials of clothing, 
 which substantial things, or the like, are alone capital and 
 wealth, and administer to the real wants and comfort of 
 mankind. On the other hand gold and silver constitute capi¬ 
 tal and wealth, not only because they are useful in the arts 
 and sciences, but because they alone, possess all those varied 
 and peculiar qualities, which lit them to he, and which, in all 
 ages and countries, have made them the circulating medium— 
 the money—the currency of the world. They therefore of 
 themselves possess value, and throughout the trading world, 
 are the measure, (the only one,) or standard of value; and, 
 as a sequence, the only true and reliable medium of exchange. 
 It is also to he understood that by exchange or trade is here 
 meant that transfer or sale of what one nation or individual 
 makes for what others make, according to their wants and 
 facilities, and money is the medium through which it is most 
 easily effected. Coin has intrinsic value, but paper money is 
 at the utmost but the representative of value, and bank notes 
 circulate as money, when notes of individuals do not, simply 
 because their source is more generally known, and that cus¬ 
 tom has given them facility and credit. 
 
 If the whole field of discussion was familiar to all, and 
 somewhat exhausted, and the service of your Committee but 
 the vehicle to present and sufficient action, your Committee 
 would not have entered into this particular enumeration of 
 almost axiomatic propositions, or into the extended argument 
 and illustrations, deemed necessary. But they feel that the)' 
 are but opening the way to a wide arena of future investiga¬ 
 tion, and they would therefore make it as broad and solid as 
 the great issues demand. 
 
 They would but passingly, however, allude to the manifold 
 evils and dangers thought to result from Corporations, the 
 
power and influence of which over the religious, pecuniary 
 and political relations of society, have frequently alarmed 
 prudence, bearded power, and defied opinion. While it is 
 admitted that they have done some good, and aided progress, 
 yet it is felt that they should be limited in their capacities 
 and governed in their tendencies. Combining the great pow¬ 
 ers of money and association, their capacity is sufficient, if not 
 curbed, to dominate over and live upon mankind ; and their 
 tendency, as history has shewn, is to consummate this fearful 
 rule and advantage. 
 
 For what use have wo money ? It may be said, for the 
 purpose of this discussion, to be threefold : first, to effect the 
 purchase and sale of the produce and supplies of the country 
 within its limits ; second, to effect an interchange of the pro¬ 
 ducts of our nation for those of other nations, and pay the 
 balances ; and third, to be lent to those who want it for ope¬ 
 rations that require time to return their proceeds for re-pay- 
 ment. At present, the first end is effected mainly by 
 paper money—bank bills; the second by bills of exchange, 
 and imports and exports of coin; and the third by simply 
 transferring whatever is used as money to the party who 
 wants it; and this upon credit, the nature and influence of 
 which should be well understood. 
 
 These three objects legitimately conducted within proper 
 limits and time, require comparatively little money. Its 
 prompt and right transfer from hand to hand consummates all 
 real business, however large, in a short and easy manner, and 
 readily discharges those varied but small balances, between 
 either nations or individuals, which natural trade and healthy 
 credit, leave, as general results, only to be settled. Trade be¬ 
 tween nations amounts to hundreds of millions, while the 
 money that effects it does not even to tens. The same thing 
 and proportion hold among individuals. The supply of gold 
 and silver is amply sufficient to serve as money for the world. 
 The vast quantity of them used, not only for other purposes, 
 as in the arts, but to such extent in articles of mere luxury 
 and display, as watches, spoons, plate, and so forth, as that 
 almost any one can buy them, abundantly proves the propo¬ 
 sition. The coinage of Europe alone is estimated to amount 
 
to two thousand millions of dollars (2,000,000,000.) The 
 present stock of coin of the world is estimated at ($12,000,- 
 000,000,) twelve thousand millions, or twelve dollars per head 
 to every inhabitant of the earth; and the annual average 
 coinage of late at one hundred millions of dollars. As coins 
 are sometimes re-coined, these estimates must be over the act¬ 
 ual amount of bullion used now for money. Paper money 
 is comparatively but little used, except in the United 
 States and Great Britain; and even in England the smallest 
 current bill permitted is the £5 note,—which is a little less 
 than $25. Coins then, even now, almost wholly serve the 
 world for money, and their supply is rapidly increasing. It 
 has been estimated by both European and American States¬ 
 men, that for an agricultural nation like Russia, a circula¬ 
 tion amounting to about $5 per head for every inhabitant, 
 was sufficient; for a commercial one, like England, about 
 $16 per head, and for one partaking of both pursuits, a sum 
 intermediate. The United States is of the latter character, 
 but mostly agricultural, and it may be assumed that $10 per 
 capita would be sufficient for her, or about two hundred 
 millions of dollars. But her entire circulation last year 
 (which was rather contracted) did not exceed (both paper 
 and coin) a hundred and fifty millions, ($150,000,000,) or 
 •$7 1-2 per head. Her mints have already coined more than 
 this sum of gold and silver, much of which now lies in Bank 
 vaults, some is in circulation, and much shipped abroad, and 
 her coinage now varies from twenty to one dollar gold pieces, 
 and from one dollar to five cents silver pieces. If necessary, 
 millions more, brought into the nation by demand, would be 
 coined in a very short time. Considering the comparatively 
 immense productions and trade of the United States, she 
 could readily command of the coinage of the world three or 
 four times the amount necessary for currency, and so of any 
 of the States. It should also be here considered, that a 
 greater or smaller amount would be necessary, as the nomi¬ 
 nal prices were greater or less. Under an entire paper cur¬ 
 rency, prices usually are either artificially high, when more 
 money is required than would be under a sound and steady 
 currency, or low, when all the effects of a scarcity of money 
 
are felt. This fluctuating condition is of great injury to the 
 United States, inasmuch as their people eithey buy at home 
 under a paper medium at high prices, and sell abroad at a 
 specie standard, or lower prices, or they are prostrated by 
 the undue reduction of the value or price of their property 
 and of the products of their industry, produced by a con¬ 
 traction of the currency. But it is immaterial whether 
 prices are high or low, so that what we. buy and sell is by 
 the same standard, which would conform to the laws and 
 amount of specie. Your committee have been thus par¬ 
 ticular in urging the ample sufficiency of gold and silver for 
 the currency of the world, and that we at least can command 
 them to any desired extent, in order to remove a common and 
 fatal error of the unthinking and uninformed in this country. 
 
 It may now be inquired, how gold and silver, which must 
 take the place of the excluded Bank bills, are to be obtained, 
 and by what laws they are governed. It is not to be ques¬ 
 tioned, that they obtain their value and circulation by the 
 same laws of supply and demand, which regulate the value 
 and distribution of all other commodities; that commerce 
 effects their dissemination, and applies those laws: and 
 that specie tends to a general level of currencies throughout 
 the trading world. The lowest denomination of bank bills 
 is fixed by the resolutions at twenty dollars, that the coins 
 of the world, being in less sums, may flow in and serve as 
 currency, where money in quantities under that denomina¬ 
 tion is wanted. The moment small bank notes are with¬ 
 drawn from circulation as money, there springs up an urgent 
 demand for money of their denominations, and gold and 
 silver of corresponding amounts flow in from all quarters of 
 the earth where we have commerce and sell the productions 
 of our industry, and become diffused throughout every quar¬ 
 ter of the State, in purchase of cotton, rice and other pro¬ 
 duce. That their nominal values may be more familiar, our 
 mints forthwith convert them into American coin. The 
 supply thus obtained furnishes a currency abundant, steady 
 and reliable. Has not experience taught the most ignorant 
 and unobserving, that an entire paper currency, created and 
 governed by banks, as may suit their interests or be required 
 
by their necessities, is either in too great or scarce quanti¬ 
 ties, lor a healthy and natural trade, and thus controls inju¬ 
 riously the value of the property and profits of the country ? 
 Has it not taught the necessity of another source and supply 
 of money in times of scarcity, which source is trade, and 
 which supply is coin : and that in times of undue abundance 
 of bank paper, there must he a check to its depreciation and 
 a means of its redemption, such as coin alone can or does 
 afford ? Currency is properly one of the elements of trade 
 only, and its great end is to effect or facilitate it. It is the 
 oil to the machinery. Coin, the creature of trade, is regu¬ 
 lated by it to the exactest quantities and value needed, as 
 gravitation regulates the flow and level of water, and there¬ 
 fore its fluctuations as currency are easy, not unexpected, 
 and of course seldom injurious or oppressive to a whole 
 people, or an extended commerce. 
 
 It will now be perceived that the effect upon our currency 
 of the policy suggested by the Resolutions, will be to purify 
 our present circulation by a large infusion of gold and silver, 
 in substitution of a spurious and dangerous portion of paper 
 money; to render it in the whole ever steady and healthy 
 by those qualities and laws that belong to coin, and to there¬ 
 by enable trade to conduct itself in an easy and regular man¬ 
 ner, and commerce, not corporations, to regulate the currency. 
 
 But let us turn to the probable effects upon the business 
 and issues of banks. Banks are of three distinct kinds, to 
 wit: of deposite, of discount, and of circulation. A bank of 
 dejmitc. is an institution established solely for the safe keeping 
 of the coin and bullion of individuals, which are transferable on 
 its books, or drawn out by drafts or checks. A bank of dis¬ 
 count, is an institution that lends moneyed capital to individ¬ 
 uals by discounting acceptances and promissory notes. It 
 also receives on deposit. A hank of Circulation, is an in¬ 
 stitution that lends credit, by exchanging its promissory notes 
 for those of individuals. The banks in this State and the 
 United States, are a combination and complication of all 
 these. Their history is, that their every obligation is dis¬ 
 chargeable at any moment in coin. Their effect has been 
 to banish coin from circulation, and almost from payments. 
 
Their system, as existing among us, is the vastest and most 
 effective scheme ever devised by the ingenuity or selfishness 
 of man, whereby the few can govern and batten upon the 
 many. Commerce, currency, the means and customs of 
 people and government, have all become subject to its con¬ 
 trol and liable to its disasters. Truly, a fearful and irrespon¬ 
 sible power and privilege ! The system runs in a cycle of 
 alternate delusive prosperity and wide-spread desolation ; 
 and nothing but the wondrous resources and elastic vigor o f 
 our country in its youth, could have withstood such, its sap¬ 
 ping of its strength and binding of its sinews. What is that 
 cycle 1 Confidence, so necessary to banks and paper money, 
 has its excess and its panics. In its excess, banks expand 
 their issues, and discount to any and all comers, whether good 
 or bad, or on either business or accommodation paper. 
 Money becomes superabundant, and prices rise artificially 
 high. All, more or less deluded by the apparent prosperity, 
 buy largely and speculate wildly. Immense debts are freely 
 contracted. Foreign goods, attracted by the prices, flow in 
 to an extent greater than the produce of the country usually 
 exported can pay for. There is a glut—a superfluity over 
 the ordinary wants of the' country. Prices fall. A balance 
 must be met in coin to the foreign creditor. The banks, 
 through their bills are called upon for it—those bills cannot 
 serve abroad. They have comparatively, for the emergency, 
 little specie—it has been shipped abroad as capital in specu¬ 
 lation. That little is being sent away; but the demand 
 comes. The frail fabric of paper totters for want of a base. 
 Panic ensues, Banks press their debtors, and (heir bills are 
 called in. Money becomes scarce, paper is withdrawn, and 
 there is no specie currency or capital at hand. Debts must 
 be paid, debtors press debtors, prices fall more, property is 
 everywhere sacrificed, panic increases the evils, and wide 
 ruin is over the land. Industry and economy, the sweat of 
 the brow of the working producer, after a time remedy the 
 injuries—raise from the prostration. The lowered price of 
 exportable produce at home, causes their shipment instead of 
 specie, and the inability (o buy, and fall of prices, check im¬ 
 portation. Trade then grows more healthy, confidence be- 
 
comes restored and again infatuated, and the same circle is 
 run anew. Such is the history of Banks and paper money- 
 These evils result from the/acts, that banks can not only loan 
 capital, but credit on interest; that these loans, in the shape 
 of Bank notes, circulate as money, when they have none of 
 the true qualities of money, and are issued to any amount; 
 and that these bill drive from circulation and from the coun¬ 
 try, gold and silver. The bills readily circulated here, but 
 not abroad, arc easily substituted for gold and silver as cur¬ 
 rency, and the latter are therefore sent abroad to be used 
 there as capital. Credit, founded upon honesty, property and 
 industry, and that commands capital on their faith, is an in¬ 
 dispensable and useful element in trade. But credit founded 
 on credit, has mostly but the shifting sands of confidence to 
 rest upon. 
 
 The leading effects or results of this latter credit arc, first, 
 that speculation', which, sanguine, bold and thoughtless, de- 
 velopes to a fatal extent the types of the disease—inflated 
 prices, extravagant issues, undue imports, recklessness of 
 indebtedness, false principles, and an improper disposition of 
 coin and disregard of a specie standard. Second, that gen¬ 
 eral indebtedness, which, while an outward show of pros¬ 
 perity and strength is preserved, is sapping the vigor, the 
 morals and the productiveness of the country and individ¬ 
 uals. Great Britain, next to the United States, is of all 
 nations, most under the influence of, and dependent upon 
 banking, paper money and fictitious credit. The London 
 Times, its leading and most discriminating press, said in 
 July last, “that one of the crying sins of the people of Great 
 Britain is the national habit of indebtedness. Every one is 
 in debt, and half the people, if their affairs were inquired 
 into, would be found insolvent. The State sets the example. 
 It owes nearly £800,000,000, and because the debt is of such 
 fabulous proportions, it gives up all effort to repay.” Is not 
 this statement emphatically true, in a greater or less degree 
 at different stages in the cycle of our affairs, of our people 
 and States ? The next effect is, that we are the last in a, 
 chain of dependents upon this artificial credit. It is a chain 
 because we can get no other as a general element, and that 
 
only through its connections. Our people and trade buy it, 
 for currency and commercial purposes, of our banks ; they 
 buy it of banks at the North in the importing cities; they 
 obtain it of capitalists and banks in Great Britain; and they, 
 from the bank of England, the sway of which is as abso¬ 
 lute over our interests and moneyed system, as that a de¬ 
 rangement in that nation to a certainty produces an instan¬ 
 taneous, and therefore unnatural shock throughout our entire 
 limits and trade. This effect upon us, is then oppressive and 
 cramping. Exports enrich a country, imports build up cities, 
 and one should pay for the other. But this vast artificial 
 system of credit has so diverted this interchange from its 
 healthy and simple tendency, and so established a custom of 
 long credits and uncertain payments, that until we again 
 establish a credit founded merely upon produce and specie, 
 we cannot have a direct and untaxed trade, nor that trade 
 be conducted in an independent, prompt and safe manner. 
 This dependency too, is peculiarly felt by the planter or agri¬ 
 culturist. If space permitted, it could be easily shown that 
 our present system has induced him, his revenue coming in 
 at an annual period, to anticipate that revenue by yearly 
 credits. The result is common, therefore, that lie is seduced 
 into an indebtedness over his income—a terrible evil to a 
 planting country ! But there is another result. Banks are 
 the only regular lenders, and paper the only money. He 
 wishes to borrow, but his payments being annual, his paper 
 is seldom bankable, and there is no other regular or conve¬ 
 nient source of moneyed capital, from which he can draw, in 
 independence of banks, or the casualities of its bills and 
 business. But payments must be made, and his property be 
 frequently—yea, is generally sacrificed. In truth, credit of 
 any kind, from its very nature, is a dangerous clement— dan¬ 
 gerous to both property and trade, and should only be per¬ 
 mitted when based on the soundest constituents, and required 
 by the most clear exigencies: as for example, buying bills of 
 exchange drawn upon the shipments of produce, or loaning 
 money upon paper given on the sale of property, where the 
 parties are good. And in truth, it is an element most de¬ 
 manded and most advocated, by those who, have “ little to 
 
lose and everything to gain,” and generally what the specu¬ 
 lator gains, the producer or consumer loses. 
 
 But it may be inquired, what distinguishes this artificial 
 or fictitious credit from that natural kind, which directly rests 
 upon a combination of property, industry and honesty. The 
 answer is, its almost illimitable expansibility, and its 
 difference of basis. Banks generally lend credit — iheirprom¬ 
 ises to puij, and not actual capital. This lending of credit, 
 instead of being limited by, and to the amount of capital, 
 moneyed or otherwise, which they possess, and which bounds 
 substantial loans, may expand as far as men will take their 
 bills. The notoriety of the bank, and the fact that men freely 
 borrow from it without knowing its liabilities, and upon a 
 presumption of its goodness, and therefore do not hesitate to 
 take its bills, enable it to contract an indebtedness far beyond 
 its actual capital. Regarding its specie and real estate as 
 alone constituting this actual capital of banks, the liabilities 
 of all, even the soundest banks of the State and Union, are 
 usually from five to ten times that capital. Every thing, 
 then, depends upon the borrower, and all know that his ca¬ 
 pacity to pay is of mere guess work and speculation, and is 
 still more uncertain under an entire paper currency, where 
 the value of his property is affected by its contractions and" 
 expansions, and often unexpectedly dissipated by them. 
 
 But its basis is different. We have defined that of one to 
 be property, honesty and industry. That of the other is 
 mainly confidence. From the disproportion of bank liability to 
 bank actual capital, it is evident that its chief resource is the 
 realizable value in a short time of the credit of its borrowers. 
 A general panic, a general recall of paper money, and the 
 consequent absence of money of any kind—a general glut 
 in the sale of property, and its consequent general sacrifice— 
 all of which frequently occur in different degrees, may and 
 will, render this realization of the value of such credit either 
 ruinous to the banks or the country. A terrible alternative, 
 indeed! 
 
 Your Committee are not disposed to deny or overlook the 
 advantages supposed to result from banks. They greatly 
 protect the gold and silver of a community from loss by 
 
abrasion, or by robbery and fire. By the creation of paper 
 money only to the extent of a part of the currency, they 
 enable the country to export a part of the metallic money, 
 which was previously required to circulate its commodities, 
 and thereby convert it into actual capital, yielding an annual 
 income. This paper money, too, is of convenient form to be 
 transmitted, kept, or carried safe. But these advantages are 
 the merest trifles in comparison with the great evils they in¬ 
 flict in a thousand forms on a country, where they are the ex¬ 
 clusive arbiters of credit and furnishers of currency. 
 
 The great truths are, that banks should not furnish and gov¬ 
 ern the currency of a country, and that such currency, so fur¬ 
 nished and governed, is a false one. Their so doing is not 
 within the design and legitimate business of banking—which 
 are the lending of capital, and, to a certain extent, of credit, 
 on business paper —that is, paper given upon the actual sale 
 or transfer of property and goods. This legitimate business 
 we would leave them. We would not even wholly interdict 
 their dealing in foreign or domestic exchange, which, from 
 their exclusive control over the quantity and quality of the 
 currency, they have turned to their interest and to the injury 
 of the country. We would also leave them all the advan¬ 
 tages and profits of deposits. But wc would and must eradi¬ 
 cate their evils, lop off their dangerous capacities, and curb 
 their injurious tendencies. To this end, their pov.v.- U, d;v. c 
 from circulation and the country the coins, by a substitution 
 of small bills, must be taken away by prohibiting those bills. 
 Their power to exclusively create and control the currency, 
 and thus to expand and contract it ad libitum, must be abated 
 and removed, by enabling trade, with its great corrective ten¬ 
 dencies, to bring into and keep in circulation and reach, suffi¬ 
 cient amounts of the only true mediums and standards, gold 
 and silver, to check and keep sound, credit-lending and bank 
 bills, by the ceaseless action and competition of specie; and 
 thus to enforce a sound currency, and the practice and ability 
 of constant convertibility, so invaluable to the country as an 
 accurate test and remedial agent. Their vast system of arti¬ 
 ficial credit, that deranges the legitimate channels and cus¬ 
 toms of trade, as well as the soundness and just quantity of 
 
the currency, must be narrowed to the limits of safety and 
 purity, by enabling rivals, whether called bankers, brokers, or 
 lenders, to arise, who will, as a business, lend actual moneyed 
 capital, and afford sound commercial facilities, and by ena¬ 
 bling every man thereby to borrow as lend such capital, ac¬ 
 cording to his means, and to obtain it without either the 
 exclusion or assistance of favoritism, or partial rules. Prop¬ 
 erty must also be enabled always to command its value in 
 the market, and to resist subjection to ruinous fluctuations. 
 The country, too, must be enabled to buy as well as sell by 
 a specie standard, and to go, on equal and independent terms, 
 into the market of the world. All these objects must be ef¬ 
 fected, for us to be substantially and permanently prosperous. 
 
 But let us descend to some important details. A large 
 portion of bank bills is of denominations under twenty dol¬ 
 lars, and if not allowed to be issued, paper money would not 
 only to a great extent be removed, but beyond a certain 
 point, could not be forced into or kept in circulation. In the 
 ordinary inland trade—in the transitions between the pro¬ 
 ducing classes, and from them to the commercial, money of 
 denominations under twenty dollars constitutes necessarily, 
 the active part of the currency, and theretore must be had in 
 proportion to its use, in exclusion of the higher. This sphere 
 could not be entered by large bills, although they would enter 
 largely into circulation, and be used when large amounts 
 were to be transmitted or kept. Bank issues, then, that are 
 not wanted, and of course continually rejected by the circu¬ 
 lation and action of a specie medium and standard, would 
 be returned upon the banks. Paper money would thus be 
 limited to a portion of the whole currency, and banks could 
 not issue their bills, as might suit their purposes or factitious 
 necessities. As silver and gold coins vary, say from five cents 
 to twenty dollars, there must be an entire exclusion of paper 
 bills of corresponding amounts, in order to insure a free 
 flowing in of specie from all countries, and through every 
 commercial channel, and to effect a full restriction of our 
 banking system. 
 
 It will be perceived that while your Committee would make 
 the currency natural and sound, it would not altogether ex- 
 
41 
 
 elude paper money; and while it would reform and limit 
 our banking system, it would yet retain its advantages. We 
 seek a just and salutary mean between the extremes. That 
 the effects would result, as we have urged, to our currency, 
 commerce, and banking system, from the policy and measure 
 proposed, and as authority and example for our suggestions 
 and views, we refer to the whole trading and enlightened 
 world. The United States is the only country where coins 
 are excluded from circulation, where the money is almost en¬ 
 tirely paper, and where commerce and currency are com¬ 
 pletely under the control of irresponsible Corporations. In 
 England, the lowest paper money is of the denomination of 
 about twenty-five dollars, in France of about ninety-five 
 dollars, and in other European countries of similar sums. 
 In Great Britain the circulation comprises about a hundred 
 and fifty millions of dollars in coin, and the same sum in 
 paper, or half and half. In Cuba, remarkable for its steadi¬ 
 ness of currency and trade, and which are large, the currency 
 is almost entirely gold. So also specie in France, Holland 
 and Russia. In Missouri there is no bank bill under ten dol¬ 
 lars, and in various sections of the Union, as Mississippi, the 
 currency is almost wholly specie. The United States Gov¬ 
 ernment has set a wise example in breaking all connection 
 with and dependence upon, banks and paper money, and in 
 using specie in its fiscal operations. Let the bon st of South 
 Carolina now be, that she secs the policy and propriety of 
 the proposed reforms, and proceeds to secure them. 
 
 The denominations of bills over twenty, are fixed at fifty 
 and one hundred dollars, because inlet-mediate amounts might 
 be made greatly to interfere with tens, fives, and other smaller 
 or larger denominations of specie. 
 
 Let us, in conclusion, advert to such objections as suggest 
 themselves to the proposed measure. It is not at variance 
 with the meaning and spirit of Bank Charters, as they were 
 never designed to give banks the entire creation and control 
 of currency; or to enable bank evidences of debt—mere 
 Notes, to circulate as money. These were unpremeditated 
 consequences. And the policy would be in accordance with 
 that control which the Legislature should at all times have 
 
over banks and their charters, when their operations are in¬ 
 jurious to the community. The charters of all our Banks, 
 (except that of the Bank of the State,) already prohibit their 
 issuing bills under the denomination of five dollars. It may 
 be said that the legal presumption from this is, that the con¬ 
 tract with them authorizes their issuing bills of and over that 
 amount, and that any further prohibition cannot affect those 
 whose charters are not alterable, until those charters expire. 
 Let the courts decide this question. We have in this State 
 twelve Banks, and the law provides that all charters hereaf¬ 
 ter granted, shall be subject to repeal, alteration or amend¬ 
 ment by the Legislature. Six of these Banks, by acceptance 
 of the provisions of the Act of 1840, are already subject to 
 this Legislative direction. The charters of the other six, ex¬ 
 pire at periods commencing in January, 1853, and ending in 
 January, 1857; and if the prohibitions cannot take effect 
 until such expirations, they are yet close at hand, and the 
 time is upon us for a decision. The very next Legislature 
 will have to consider and decide upon the work and terms of 
 re-charter. 
 
 But it is said, that if the small bills of our Banks were 
 prohibited, those of other and adjoining States would flood 
 our circulation. This apprehension should not deter us from 
 doing what is right, and from an effort to induce others to 
 join in the reform. But it is groundless to any important ex¬ 
 tent. The absolute prohibition of their circulation, where¬ 
 soever or by whomsoever issued, would preclude their being 
 bankable or receivable for taxes, or in payment of debts in 
 this State, and these results would effectually exclude, them. 
 This was shown in Pennsylvania, in 1828, when she led the 
 way in getting rid of small bills under five dollars. But 
 again: the general operations of trade in the State would 
 exclude them. That which circulates as money in a commu¬ 
 nity is obtained in its markets of sale and export, and nothing 
 will serve long in circulation, which is not at par with specie, 
 and legally transferable in those markets. Under the pro¬ 
 posed measure, too, those markets would become specie 
 points —places where the demand for, and supply of coins 
 would concentrate, and form a stringent specie standard, 
 
where the bills of few could stand the test. A planter sends 
 his cotton or rice to Charleston, the final market before ex¬ 
 portation for nine-tenths of the State, and he is paid for it in 
 specie and in Charleston or other State Banks’ bills, which 
 will there fill all the arteries and veins of circulation, and 
 when carried home with him, will constitute the currency of 
 his section. In this way every section would become supplied 
 with the desired currency. The. Banks of the State also, 
 would use every effort and means to exclude from circula¬ 
 tion the bills from other States, because it is their interest to 
 have every possible room for the circulation of their own. 
 Thus the force of law, the course of trade, and the manage¬ 
 ment of Banks, would effectually prevent the objection. 
 
 To cc 1 a the views and purposes presented by your 
 Committee, they herewith submit a Bill. 
 
 They would also respectfully advise, that the Governor be 
 directed to bring this subject to the attention of all the States, 
 and especially of those surrounding us, through their Execu¬ 
 tives ; and to invite their immediate co-operation and assist¬ 
 ance in carrying out the great and important measures pro¬ 
 posed. They therefore recommend the adoption of the annexed 
 Resolution. 
 
 All of which is respectfully submitted. 
 
 JOHN CUNINGHAM, 
 Chairman Special Committee. 
 
 Resolved, That the Governor of this State, at the earliest 
 moment, do invite, through the Governors of all the States of 
 the Union, the attention of those States to the policy of pro¬ 
 hibiting all paper money under the denomination of twenty 
 dollars, and their co-operation in securing throughout the na¬ 
 tion the free circulation of specie alone as currency, under 
 such denomination. 
 
 A BILL 
 
 To limit the issue by Banks, or other corporations, of any 
 bills or notes to denominations of twenty, fifty and one 
 hundred dollars or upwards, and for other purposes. 
 
 Sec. 1 . Be it enacted by the Senate and House of Represen¬ 
 tatives, now met and sitting in General Assembly, and by the 
 
44 
 
 authority of the same, That no Bank, or other body, politic 
 or corporate, within this State, shall hereafter be allowed to 
 issue or pay out any promissory notes, payable to order or 
 bearer, or any bills of credit, or any scrip, either of their own 
 or wheresoever or by whomsoever issued, in the nature of a 
 circulating medium, or other than such as answer the pur¬ 
 pose of contracts, except those of the denominations or 
 amounts of twenty, fifty, and one hundred dollars or upwards, 
 under a penalty of ten dollars for each and every dollar so 
 issued or paid out, and all or any such notes or bills, so issued, 
 or paid out, contrary to this act, are hereby made and declared 
 to he utterly void. 
 
 Sec. 2. Be it further enacted, That every Bank, or body 
 corporate, now existing in this State, shall, on or before the 
 first day of October, in the year eighteen hundred and fifty- 
 one, withdraw from circulation, and cancel all such, their 
 notes, hills, or scrip, as hereinbefore described, under the 
 denominations or amounts of ten dollars ; and on or before 
 the first day of September, in the year eighteen hundred and 
 fifty-three, all under the denomination or amount of twenty 
 dollars ; and all such notes, bills, or scrip as may not be so 
 withdrawn or cancelled, at the times respectively specified, 
 shall be so as soon as possible ; and shall not be payable for 
 taxes, or in discharge of debts, (except to the issuer,) or re¬ 
 ceivable by any Bank or body corporate, except the one that 
 has issued them, under a penalty of ten dollars, for each and 
 every dollar of such notes, bills, or scrip, so paid or received. 
 
 Sec. 3. Be it enacted, That no notes, bills or scrip, is¬ 
 sued now or hereafter, in the nature of a circulating me¬ 
 dium, by any Bank, or body politic or corporate, of any other 
 State or nation, other than those of the denominations or 
 amounts of twenty, fifty and one hundred dollars or upwards, 
 shall hereafter be receivable or payable in this State in any 
 manner whatsoever, under a penalty of ten dollars on such 
 receiver or payer, for each and every dollar so received or 
 paid. 
 
 Sec. 4. Be it further enacted. That half of the penalties 
 imposed by this Act, shall be payable to the informer. 
 
 /