Pennsylvania, to show the correctness of his comparison and calculations:

The error of this statement, is this, that the deposits are not added as a part of the circulation. Of what did these deposits consist, if not of the notes of these very Banks in their course of circulation? They were put into the Bank one day, and drawn out another; and the Bank was only like the pocket-book of an individual-a temporary stopping place for these notes in their course of circulation. This must have been the view of Mr. Gallatin, when he deduced from the situation of these thirty-one Banks in Pennsylvania, the rule already quoted, "that the debts of a Bank ought not to exceed twice, nor its notes in circulation two-thirds the amount of its capital:" According to the Comptroller's view, the circulation of a Bank ought not to exceed one-third of its capital. Your Committee are not surprised, that with such calculations and views the Comptroller should put forth the following proposition: At the time the Committee recommended the above additional issue, the Bank had in circulation, beyond question, an amount of notes considerably greater than the other four Banks incorporated by this State together, having a combined capital of $3,475,000."

Your Committee have thus noticed the objections and criticisms of the Comptroller General no farther than appeared to be necessary for the elucidation of the principles upon which their report of last year was made, and a clear explanation of the positions and statements it contains. Upon a careful review, admitting their facts to be correct, they have been unable to detect the fallacy of their reasoning or conclusions. It is important that the House should distinctly understand, from what causes the Bank is restricted in its operations. and will be unable to meet the payments of the public debt; for without this knowledge it will be impossible, by wise legislation, to avert or to remove them. It is not then from any peculiar imbecility and inefficieney in the Bank-the Bank is sound, and its capital unimpaired. It is not from the weakness and faithlessness of its offlcers-these are able, and watchful, and honest. The sole causes of embarrassment, and restriction upon its profits, arise from the custom in the Bank, too long indulged, of renewals in full, and from the gigantic powers of the Bank of the United States. The former cause, by a firm yet moderate course of policy, it is believed, the business of a few years will remove.-The latter cause, sooner or later, the State must meet, and either subdue, or submit to be subdued. If this Bank is re-chartered, of which there appears to be little doubt, with the capital it may be authorized to receive on its books, it can sustain an issue to almost the entire demand of the paper circulation of the Union. It will be to its interest to put forth and to sustain this issue; for the profit of every Bank is in proportion to the notes it can keep in circulation. It can only keep out this issue, by destroying the local banking institutions of the States, and thus by extinguishing their paper, make room for the su! stitution of its own. The local Banks and our State institution, thus stand in direct opposition to the interest of this Bank. Arguing from the ordinary principles of human nature, it will not be difficult to divine its course, when its power will be able to create its popularity, and to hold its continuance and existence by the

high tenure of its own free will. To your Committee it appears to be the sound policy of the State, to know and test at once, the true position of her citizens and her own institution, in relation to this Bank. No free State should for a day voluntarily doubt its own independence. If the State possesses the power of checking this Bank throngh her citizens interested in its stock, this power should be demonstrated with promptitude and energy, until at least it is acknowledged, or the exercise of higher and stronger powers shall appear to be necessary for her self-protection. The Bank of the State will be compelled to wind up its affairs, and to close its doors, so soon as it is determined, that any other power than the State Legislature is to control its operations, independent of the salutary check of similar institutions, in a course of fair and honorable competition.

In conclusion, your Committee beg leave to observe, that none of the observations submitted in this report, are intended in the slightest degree, to influence the conduct of the Bank. They coincide entirely, with the opinion expressed by the President, that this Legislature cannot, beneficially interfere in the course and policy of the Board, to whom it has entrusted the management of this institution. Banking is always essentially a practical matter; and the difficulties communicated by the President, under which the State institution now labors, more particularly forbid any interference whatever in its course.

Your Committee also coincide in the opinion, expressed in these reports, that it is inexpedient at this time to raise the taxes upon the people. The means proposed by your Committee, in the bill to raise supplies, they trust will increase the revenue of the State, whilst its expenditures will probably be diminished.

All which is respectfully submitted.

R. BARNWELL SMITH, Chairman.

DECEMBER 10, 1831.

Extract from the Report of the Committee of Ways and Means: House of Representatives, Dec. 5, 1833. The Committee of Ways and Means, to whom were referred the Reports of the President of the Bank and Comptroller, and a part of the Governor's Message, beg leave to report: They have given the same the most deliberate consideration, and feel authorized to assure the Legislature that the finances of the State are in a prosperous condition. From the appearances of the last session, and the disbursement consequent to the purchase of arms and munitions and other preparations to defend our country from the storm that menaced it, it was but fair to conclude that our treasury would be exhausted, and the Legislature driven to new and increased taxation. The necessity of large disbursements was not the least of the impediments to the action of the State. It was confidently predicted that whatever other results might attend that action, the accumulation of a large public debt and oppressive taxes were unavoidable. It is with great pleasure your Committee are enabled to assure you that so far from realizing those predictions the reports of the financial officers of the State warrant your Committee in recommending a reduction of the taxes. The gross amount of

the profits of the Bank, for the last fiscal year, was one hundred and fifty one thousand three hundred dollars and seventy-two cents, and we are assured by the President of that institution, that with the aid of any surplus revenue of the State, he will be able to meet the yayment of the public debt without affecting the operations of the Bank. From the Comptroller's report at the close of the last fiscal year, there was a balance of one hundred and sixty-two thousand and thirty-seven dollars seventy two cents, which after paying all the appropriations to which it may be subjected, will not be reduced below one hundred thousand. Of the four hundred thousand dollars put at the disposal of the Executive, not more than one hundred and forty thousand have been drawn. Your Committee recommend the repeal of the Acts subjecting to the order of the Executive, the balance of the appropriations of the last year, amounting to two hundred and sixty thousand dollars.

(1835.)

The Committee of Ways and Means, to whom were referred the Reports of the President of the Bank and the Comptroller General, have considered the same, and beg leave to report:

They have examined the Report of the President of the Bank, and the affairs of that institution have been skilfully and profitably managed.

After replacing the losses sustained in its operations last year, and some old debts in the City of Charleston, which have been for a long time unavailable, the Bank has carried to the Sinking Fund the sum of one hundred and twenty thousand dollars. As the Legislature created that fund to meet the instalments of the public debt, at the successive periods of its redemption, it may not be improper to draw the attention of this body to that subject. The whole amount of debt is one million, seven hundred and fifty-three thousand, seven hundred and seventy dollars, and ninety-one cents, ($1,753,770 91): Of this sum eight hundred thousand is due in 1840. To meet this instalment, we have at this time five hundred and forty-five thousand, seven hundred and three dollars, seventy-one cents, ($545,703 71) constituting the Sinking Fund, which, united with the balance in the Treasury, three hundred and forty-two thousand, five hundred and sixtythree dollars, is more than sufficient. Predicating our calculations on the present state of our finances, we are warranted in the conclusion that the State will not be under the necessity to resort to any increase of taxation, or new modes of revenue, to meet the public debt, at the periods at which it is due.

Your Committee recommend that a draft for the amount of thirteen thousand, six hundred and forty-one dollars, and eighty-nine cents, be drawn on the Treasury, in favor of the Bank-being the interest on the debt of the late Gen. Sumter, and debt due by the Female Academy in Columbia, which properly belongs to the Sinking, Fund but was drawn from the Bank by legislative authority.

F. W. DAVIE, Chairman.

In the House of Representatives, Dec. 19, 1838. The Committee of Ways and Means, to which was referred that portion of the Message No. 1, of his Excellency the Governor, relating to the condition of the Banks in this State, have had the same under consideration and respectfully report:

That upon making due examination of the detailed statements, your Committee are satisfied with the condition of the Banks generally, and believe that they are in a sound condition. But there is one state of facts, which these statements exhibit, which should be brought to the view of the Legislature. It appears that two of the Banks of the interior, with an aggregate capital of only $700,000, have out bills to the amount of $1,031,270, and the specie in their valuts amounts only to $238,731. At the same period two other Banks of the interior, with an aggregate capital of $1,098,680, had their combined issues at only $663,340, with $299,636 of specie in their vaults. At the same period, the Banks in Charleston, with an actual banking capital of nearly seven millons, had their combined issues at a fraction less than three millions, with $1,417,160, of specie to meet them. While, therefore, the Banks in Charleston had less than half their capital in notes issued, and two of the country Banks had less than two thirds of theirs, two other country Banks had out their whole capital, and half as much again, with not much more than one-fifth of the issues in specie in their vaults.

This state of facts induced your Committee to examine further into the matter, and ascertain, if possible, the causes of this differance. Your Committee learn that the Banks whose issues are so large, decline keeping their notes at par all over the State, by refusing to make arrangements for their circulation at the commercial metropolis of the State; while the other country Banks have made such arrangements, and kept their notes at par. The natural result is, that those notes which are below par, keep the circulation, while the better currency is remitted to Charleston and elsewhere, in payment of debts. And the consequence is, that the currency which is the weaker remains in the hands of the people, and the Banks which take least pains to keep their notes at par, derive the most benefit.

The Bank of the State, whose issues could, with perfect safety, be extended to two millions of dollars, has its paper returned home upon it, and its issues are contracted as low as $646,000; and of course, its business and profits must experience a corresponding reduction. The State Treasury, too, is used as a source of profit at the expense of the State. For as the notes of all Banks in the State are receivable there, those who have taxes to pay, buy up these notes below par, and pass them off at par to the Treasury; and all the loss is at last borne by the people themselves.

This condition of things your Committee think ought, if possible, to be remedied. Every Bank which obtains a charter from the State, ought to keep its bills at par all over the State. Although, in point of law, the Bank redeems its obligation by paying at its own counter, yet when that counter is in a remote part of the State, it does not fulfil the spirit of the charter, or meet the just expectations of the public. There is no sound reason, why they should not all pursue the plan adopted by the Commercial Bank of Columbia, and the Bank of Camden, and have their bills redeemed in Charleston. The public would be saved the embarrassment of receiving bills which are not current every where, and the Banks themselves would

gain as much by the circulation in Charleston as they would lose elsewhere. At any rate, they would better answer the ends for which the public had chartered them.

Your Committee think that, through the Bank of the State and its Branches, these Banks may be induced, without any infringement of their privileges, to meet the just expectations of the country. By receiving their bills at the mother Bank, that Bank may, through its Branches, take measures for their resumption, in case some more advantageous arrangement be not proposed by the Banks. Your Committee have conferred on this subject, with the President of the Bank, and find him fully sensible of the injustice which the community suffers, and desirous to administer any remedy which may be deemed efficient. Your Committee, therefore, recommend the adoption of the following Resolution:

Resolved, That the President and Directors of the Bank of the State of South Carolina, be authorized and requested to take such measures, as in their judgment may be deemed proper, to preserve at par throughout this State, the bills which may be issued by any Bank within its limits,

In the House of Representatives, Dec. 18, 1840.

The Committee of Ways and Means, to whom was referred a Resolution of Enquiry, as to the expediency of calling in a proportion of the Bonded Debt due the Bank of the State, respectfully Report, that they have duly considered the same, and they recommend the adoption of the following Resolutions, in the stead of that referred to them.

1. Resolved, That in the opinion of this Legislature, it is expedient the President and Directors of the Bank of the State, should call in the Bonds held by the Bank, and which are past due, as speedily as the circumstances of the country, and of the individual debtors, will permit.

2. Resolved, That the President of the Bank make a Report to the Legislature, at the next session, exhibiting, in separate classes, the various amount of Bonded Debt, which have remained unpaid for one, two, three, and more years.

(1841.)

The Committee of Ways and Means, to whom was referred so much of the Message of His Excellency the Governor as relates to the Banks; as also the Report of the Attorney General, in relation to the cases pending between the State and the Banks; as also the Presentment of the Grand Jury of Fairfield; and also sundry bills proposing to amend the Constitution in relation to granting Charters; have duly considered the same, and respectfully report as follows:

At the last Session of the Legislature, a law was enacted, providing against the suspension of Specie payment by the Banks. In view of the disastrous effects upon the public welfare produced by such suspensions, the Legislature proposed to the Banking Institutions within the State, to unite in measures which would tend to prevent future evil, and without recurrence to the past, simply to provide for the future. It was proposed