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to them, to adopt two regulations, one of which required the Banks to inform the public, which gave them credit, as to their condition and solvency; the other required them, upon any future suspension, to pay into the public Treasury an Interest of 5 per cent, upon the portion of their Bills in the hands of the people, which the Banks had refused to redeem.

The provisions thus proposed, have been adopted by the Bank of the State, the South Western Rail Road Bank, the Planter's and Mechanic's Bank, and the Union Bank. These Institutions have faithfully conformed to the public will, and have thereby justly entitled themselves to an increase of public confidence. The other Banks have refused to adopt the Regulations proposed; and under the directions of the law, the Governor has caused suits to be instituted against them, to ascertain whether the abuse of their privileges, involved in their suspension, has not vacated their Charters.

It will be perceived, that great questions of public right are involved in this controversy. The State maintains that all privileges created by any Charter, are exercised upon a public trust that they shall not be abused; that the proper exercise of the privileges and powers granted by a charter, is the consideration of the grant; and that when the Banks abuse this trust, or fail in the due exercise thereof, the consideration fails, the trust is broken, and the privilege is lost by the corporation that enjoyed it; that a suspension of Specie payments virtually destroys all the ends for which Banks were created; confounds the relations of society; unsettles the measures of value; prostrates the commerce and trade of the country; debases the public morals; and spreads far and wide distrust and ruin; that it is therefore to be considered an abuse of such a character as works a forfeiture of the charters under which it has been committed.

Your Committee feel well assured, that in deciding questions so important to the public interests, the Judiciary of South Carolina will adminis ter the law, so as at the same time to protect the public interests, and secure to every class of citizens, whether corporations or individuals, the enjoyment of their just rights. But it must be observed, that the case now pending before the Courts, may turn upon the isolated question whether Suspension of Specie payments is such an abuse as to involve a forfeiture of these particular Charters. The opinion of the Circuit Court, which has been referred to your Committee, is limited by its own express terms to this particular point; and while it sustains by reasoning, several of the most important positions maintained for the State, judgment is given for the Defendant, upon the simple ground that suspension of itself, does not work a forfeiture of the charter. Whatever, then, may be the final result of this case, it is apparent that the decision thus limited, would have no direct bearing upon the constitutional right of the Legislature to regulate and control the Banks; and the question would still remain open, whether the Legislature can or ought to take further measures for controlling the recusant institutions.

In discharging the important duty assigned your Committee, of canvassing these grave subjects, they will endeavor to present, in one view, the various modes of action which are open to consideration. It seems to your Committee that these may be classified under three distinct heads.

1. Legislation to punish the recusant Banks, such, for instance, as some of the measures proposed to prevent the circulation, and affect the credit of the Bills; or to remove from them, some of the protection of the law.

2. General laws of regulation operating upon the Banks at once-such, for instance, as the absolute enforcement of the regulations prescribed by the Act of 1840, without asking any consent from the Banks.

3. Amendments of the Constitution, so as to prevent a recurrence of existing evils, when the present Charters shall have expired.

1. The first mode of Legislation, your Committee would altogether disapprove. In their opinion, it is neither a wise policy, nor is it becoming the dignity of the State. Although the recusant Banks have evinced an utter disregard of the public voice, and have pursued a policy selfish and suicidal, yet it must be observed that they have merely appealed (as they had a right to do) to the constituted authorities of the country. However unwise and unpatriotic their course, in refusing to co-operate for the public good, they have chosen to stand their trial for alleged delinquency, and must abide the judgment which the law awards. Until that judgment be pronounced, it cannot be affirmed that they have violated the law. It is our duty, therefore, at present to regard them as a portion of the commonwealth entitled to its protection; and while we hold over them a firm and steady control, we must not permit impulse to sway over judgment. Your Committee would therefore advise a rejection of all measures bearing a vindictive character.

2. The second class of laws which suggests itself, embraces those regulations which might be deemed salutary in restraining mischiefs or promoting the public welfare, during the term of the existing Charters. The rule laid down by the Supreme Court of the United States in the case of the Providence Bank against Billings, in 4 Peters, 514, sanctions an extensive range of legislation of this character. It has been held, even by this Federal tribunal, that the sovereign power of the State to exercise legislation over all persons or corporations within its territory, can only be restrained by force of some express grant or exemption contained in the Charter. If the State, therefore, should enforce upon the Banks the regulations contained in the Act of 1840, these institutions could only maintain their ground before the Supreme Court, by showing an express grant in their Charters, resulting in exemption from this action of the Legislature. The salutary influence of the Act of 1840, upon the institutions which have conformed to it, has removed all pretence of injury which might have been set up; and in the absence of any such grant of exemption as is required by the decision of the Supreme Court, the Banks would be reduced to the necessity of contending that they are a body in the State, above and beyond the law-that they have purchased with money, an existence and privileges upon which the law-making power of the State cannot act, but with their own consent; or in other words, that there exists within our Republic, a moneyed Aristocracy, with extensive and dangerous privileges, entirely beyound the reach of the legislative authority.

But your Committee are of opinion, that it would be premature, at pres ent, to resort to legislation of this character. The cases now before the Court of Appeals involve.the existence of all the recusant Banks, and your Committee are content to await the judgment of that tribunal. Should the final result be in favor of the State, the charters will then be at the disposal of the Legislature, and can be vacated or restored, upon such terms as that body may deem expedient. If, on the other hand, the judgment be in favor of the Banks, or if delays should be interposed, it will be for the wis dom of the Legislature, at any future period, to decide upon such measures as may then seem proper.

In the meantime, your Committee would congratulate the country, that one of the main objects of the policy pursued by the Legislature has been already accomplished. The currency of the State has been preserved sound during the past year-while every other State South of New York has been subjected to the evils of a disordered and inconvertible currency. The simple fact, that the name of South Carolina upon a Bank Note, has been found to give it currency through distant sections of the Union, proves the estimation in which she is held; and the citizens of the State may be justly proud of her untarnished honor and integrity.

3. We now come to the third mode of legislation submitted for consideration, viz-by amendments of the Constitution, providing against a recurrence of evils after the expiration of existing charters. Your committee, in a former report, enforced the expediency of directing the sound public opinion which now exists on this subject, to the construction of a wise policy for the future. With this view, the Act of 1840 made such provisions as to future charters, as were deemed wise and prudent. These provisions are merely legislative enactments, and arc, consequeutly, open to the action of any future Legislature. It is now proposed to advance a step further, and embody some provisions in the Constitution of the State. Two propositions have been submitted for consideration. The first proposes to limit the power of the Legislature, by annexing to all charters to be granted, a consideration of special responsibility in the stockholders. The second, provides that all charters to be granted, shall at all times be subject to amendment, or repeal, by the Legislature. The first proposition binds down the Legislature to a special form, which experience may prove to be an inadequate remedy. The second, removes all trammels, and would leave the Legislature at all times free to adopt the first proposition, or any other regulation which experience may suggest. The last amendment, in fact, includes the first, and stands free from all those objections which may justly be brought against the special provisions in the Constitution. It offers, moreover, the decided advantage of preserving unfettered for the people, in all times to come, that great principle of civil liberty, the power of self-government, and of enacting such laws as may, at any period, be deemed essential to the public welfare.

Your committee do not perceive that such an amendment of the Constitution has any connection with the cases now pending in court. A judgment on either side would not affect the considerations which must determine this question, and they would, therefore, respectfully recommend that the Bill to amend the Constitution in relation to granting Charters of Incorporation, be passed, merely changing the phraseology, so as to read as follows:

Every Charter of Incorporation hereafter granted in this State, shall at all times remain subject to alteration, amendment, or repeal, by the Legislative authority.

Your committee further recommend, that the Bill to alter and amend the 8th Section of the 9th Article of the Constitution, do not pass.

They further recommend the adoption of the following Resolutions: 1. Resolved, That a suspension of specie payments by the Banks, is to be deprecated as an evil destructive of the best interests of the State, and that it is the duty of the Legislature to try to prevent, if possible, its recurrence, by the exercise of all lawful and constitutional means.

2. Resolved, That a duc subordination to the laws, by every class of citi

T

zens, is an essential feature of Republican Government; that a claim to exemption from Legislative authority, is a denial to the people of the power of self-government, and if admitted, would, in fact, change the nature of the Government, and establish within the State, a moneyed aristocracy, irresponsible to the law.

3. Resolved, That the Bank of the State, the South Western Rail Road Bank, the Planters' and Mechanics' Bank, and the Union Bank, deserve the confidence and support of the people, for their co-operation with the State in promoting those measures which have been deemed essential to the public welfare.

4. Resolved, That this Legislature approves the course adopted by his Excellency, the Governor, in relation to the Pianters' and Mechanics' Bank, and the Union Bank, as in accordance with the spirit of the Act of 1840. That for the reasons assigned by the Attorney General, the Bank of Georgetown be discharged from any further proceedings, and that the Governor be requested to carry out such measures as he may deem expedient for the final disposition of the cases against the other Banks, All which is respectfully submitted,,

C. G. MEMMINGER, Chairman.

In the House of Representatives, December 15, 1843.

The Committee of Ways and Means, to whom was submitted so much of the Governor's Message, No. 1, as relates to the Public Debt and the Bank of the State, and also sundry other papers in relation to the same subject, have duly considered the same, and respectfully report: That the Capital of the Bank of the State consists of two distinct portions, one arising from actual cash capital, which the State owned, amounting to $1,156,318 48; and the other portion consisting of the two millions of dollars borrowed by the State, under the Act for Re-building Charleston, of which, about one million is loaned to the sufferers by the great Fire in Charleston. A Bank based upon two such distinct funds, is operating upon two distinct principles.

In the one case, where the Bank is based upon actual capital, if a loss ensues it is not by the capital, and there is simply a loss of that amount.But in the other case, where money is borrowed on the faith of the State, and loaned out or used in banking, if a loss occurs, the debt which has been incurred by the public, remains to be paid, while the means of paying have been abstracted, and the people must be taxed to meet it. The finances of the State are thus involved in all the casualties of banking, and the public are made to guaranty debts incurred by individuals. Such a system of finance is unsound in principle and proves dangerous in practice.It places a large amount of funds at the control of the persons who direct the Bank, and while it exposes the action of the Legislature to an undue influence, if desired to be exercised, it stimulates in a wrong direction the currency and credit of the country.

Your Committee are of opinion that the State fell into an error, when she consented to contract a public debt by borrowing money to loan out again to individuals, or to be used in banking. The sooner she retraces

her steps and reverses that policy, the better for her welfare and prosperity will it ultimately prove. It is unwise to persevere in such a policy, but it would be still more unwise so reverse it, by a sudden change, to the opposite extreme. So many important interests are affected by action on these subjects, that measures of change should be gradual in their operation, em. bracing such a range of time as neither to give a shock to public credit, or to inflict unnecessary suffering upon our people. It is this very necessity for gradual measures that renders it proper that the State should now definitively declare its determination on this subject, and take the first step at once. The Direction of the Bank will then be enabled to shape their course to carry out this policy.

Convinced, as your Committee are, of the necessity of a change of measures, they are happy to perceive that the President and Directors of the Bank have proposed in their annual Report, that which is properly the first step in this reverse direction. They ask authority to cancel such evidences of public debt as may now be in their possession in Charleston, and such as may hereafter be purchased up by them. Your Committee are informed that they have made arrangements for bringing within their power, such of the public debts as fall due within the longest periods. If this course of policy be pursued with proper care and energy, it will result in extinguishing those obligations which lie in the way of the Legislature, in adopting a policy of separating the State from banking operations, (if it shall be deemed advisable) at a much earlier day than would now seem compatible with the public faith.

There are now in possession of the Bank, at Charleston, Fire Loan Bonds and other evidences of Public Debt, amounting, as per

their last statement, to- -

But standing against the State at.

Besides these, the Bank has under its control, in the hands of its Agent in England, a portion of the Rail Road and Fire Loan Sterling Bonds of the State, purchased up, amounting to..

$394,568 11

415,270 00

64,740 96

$3,495,164

Such of these last Bonds as are due by the State are under some arrangements which induce the Bank to prefer not cancelling them at present. Your Committee will only advise, then, as a present measure, the cancelling of the former, and would authorize the Bank to cancel, from time to time, such other public debt as they may procure. The Public Debt of the State, at present, amounts to. -Of this, about one million is to be paid by the buildings in Charleston mortgaged for the Fire Loan, and which, with the personal liability of the borrowers, together with the guarantee of the City, may be considered as secure, without recourse upon the State. The other million constitutes so much of the capital of the Bank of the State, and of course must be secured by notes or otherwise, so as to relieve the liability of the State. So that, for all practical purposes, this sum of two millions may be deducted from the liabilities:.

And it will leave. . .

-2,000,000

-$1,495,164

of Debt for which the State must provide.

Of this amount, $250,000 will become payable on the 1st January, 1845,

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