penses of the State. But the State now has, in the cash capital of the Bank the aggregate amount of all the quarterly payments on the United States stock, from the year 1812, to its final redemption. The balance due from the General Government on this six per cent. deferred stock, was finally redeemed in the last year, although that stock would not have been redeemable by the operation of the above mentioned system, for something more than two years. But as the amount of principal would be at least as productive in Bank capital as in stock, it was thought advisable to permit its redemption. The capital of the Bank has been annually, more or less, increased by unappropriated balances in the Treasury, and particularly by a large balance in the year 1815, occasioned by a repeal of the direct tax by Congress, after the Legislature had made provisions for its payment. From all these sources, the present money capital of the Bank is tenfold what it was during the first year of its operation; and is now greater by more than one half than it was at the same period, even viewing the stock then unsold as capital. In addition to this large accession of capital, the Bank has redeemed stock due by the State, to the amount of two hundred thousand dollars, and has paid into the Treasury of the State, as dividend or profit, something more than half a million of dollars. The notes of the Bank now in circulation, are less than its capital; and if the notes discounted on good securities be added to that capital, the whole amount will be nearly threefold of its notes in circulation. In consequence of the system of policy pursued by the Bank of the United States, towards the local institutions, and of the great demand for specie, for the East India trade, it was found necessary to purchase a considerable quantity of specie for this Bank. The average price paid was something more than the half of one per cent., less than three fourths of one per cent.; which, when the purchases were made, was the lowest market price of that article. To show the necessity of these purchases, it may be proper to state that this Bank has paid to the Branch of the United States Bank in Charleston, within eighteen months, more than seven hundred thousand dollars, besides a considerable quantity to individual applicants. Another consequence of the course of conduct pursued by the United States Bank, has been that the Bank of the State, in common with the other local institutions, found it necessary to call in a part of its debts. Four hundred thousand dollars have been called in, within eighteen months, without creating any considerable pressure or embarrassment among its customers. The whole of the losses sustained by bad debts, since the Bank went into operation, amount to twenty-two thousand dollars; and this loss will, in all probability, be exceeded by the gain arising from the issue of change bills during the war. The losses by bad debts, however, have been deducted from the profits of the Bank in each year, before such profits were passed to the credit of the State. The discounted notes which this Bank has in suit, amount to fifty-five thousand dollars. The whole sum is sufficiently secured by good real and personal security, except about five hundred dollars. Most of these notes have been put in suit in consequence of the death of drawers or endorsers, whose executors or administrators have not been legally authorized to renew or pay them up, at the periods required by banking rules. Since the establishment of this Bank, one debt, contracted by a director, has been lost; another will probably be lost. The loss of the first occurred four years ago; the other more recently. Neither of the persons have been since directors. No debt of magnitude has been contracted by any director in this Bank, for the last eighteen months. Not having access to the books of the Bank, or to its vaults, but relying on the accuracy of the above statements with entire confidence, this Čommittee are fully satisfied that the funds of this Bank have been as wisely and faithfully managed as those of any other banking institution. Indeed, when they take into view the smallness of the losses sustained, the great profits which have accrued, and the present situation of this Bank; and when they consider the great embarrassments through which this, in common with other local institutions, has had to struggle, in consequence of the general and sudden failure of a vast number of persons engaged in agricultural enterprise, or commercial speculation, who were deeply involved in the Banks; and in consequence, moreover, of the policy pursued by the Bank of the United States, this Committee find cause rather for rejoicing than dissatisfaction. And they cannot dismiss the subject without expressing their sense of the gratitude due from the State to the enlightened head of that institution, as well as to the other gentlemen of its direction, for the able, disinterested, and faithful discharge of the important trust committed to them. December 11, 1820. WM. A. BULL, Chairman. (1821.) FROM THE COMMITTEE OF THE SENATE, APPOINTED IN 1820. On the 15th day of December, 1820, a Resolution was passed by both Branches of the Legislature of South Carolina, in the words following: "Resolved, That a Joint Committee of three persons from each house, be appointed to obtain, during the recess of the Legislature, a general statement of the transactions of the Bank of South Carolina, signed by the President and countersigned by the Cashier; the duty of which Committee it shall further be, to inspect the general accounts in the books of the Bank, and report whether there has been any, and what, violation of the fundamental articles of the said Bank, its condition, the goodness of its debts, and their opinion of the mode of its administration, whether beneficial or otherwise." The Committee on the part of the Senate beg leave now to report: That in obedience to the will of the Legislature, expressed in the above Resolution, they met at the banking house of the mother Bank, in the city of Charleston, on the 14th day of February last, and commenced and continued their investigations, which they closed on the 23d day of the same month, and adjourned to meet at Georgetown on the 25th day of April. following, which they did accordingly, and closed their examination of the books and accounts of that Branch, on the 27th of that month. The Committee were not able to meet at Columbia until the 26th day of November last, and have performed the duty assigned to them, by a careful examination of the management of that Branch of the Bank of the State of South Carolina; the result of which scrutinies, your Committee beg leave herewith to submit, in documents and statements, marked with the letters from A to H. The paper marked A, contains a compendious history of the operations of the Bank, since its establishment, and its influence on the fiscal concerns of the State. B contains a statement of the Bank of the State of South Carolina, for February 1821. C covers the contingent accounts, and an account of the profits passed to the credit of the Treasury. D is an exhibit of the amount of specie purchased, and the premium paid for the same. E is the profit and loss account, and shows what debts are considered as loss to the Bank. F contains a monthly statement of the amount of discounts and loans of the Bank and its Branches, from 1813, to February, 1821. G exhibits the specie on hand, from September 1813, to February, 1821, inclusive. H. exhibits the issues of the Bank, in its own notes. Together with the papers above enumerated, the Committee beg leave to submit general statements of the accounts of the Branches of Georgetown and Columbia, marked I and K. These statements, it is hoped, accomplish the hopes which the Legislature had in raising the Committee, and it is presumed will give entire satisfaction. In comparing the returns made by the Branches of Georgetown and Columbia, to the mother Bank, and entered in its books, with the accounts kept at the Branches, they were found to correspond. Your Committee have been minute in pursuing their investigations, and have traced the transactions of each branch of business through all its ramifications, and have invariably found them correspondent. In examining the individual accounts in the books, they resorted to the best information which they could obtain from consulting persons of credit and integrity, and the exercise of their own judgments, where the parties were known to them, and they confidently believe, that in Charleston the debts due to the Bank are well sccured; and from an examination of persons most likely to give correct information on the subject, there is not a bad debt due to the Bank of Georgetown, and but one of a small amount at Columbia. On consulting with the officers of the institution, and well informed citizens, it was thought that a considerable increase of capital could be profitably and safely employed. The withdrawing of the surplus of the treasury from the funds of the Bank, by an Act passed in 1818, accounts for the capital of the Bank being stationary from that period. The profits of the Bank have been considerably reduced in the last two years, in consequence of the pressure of the United States Bank and the local Banks, which rendered it prudent and necessary for the Directors to curtail their business, withdraw much of their paper from circulation, and to purchase specie. For the last year the dividend is 7 22 per cent.; much less than it has hitherto been, and is to be ascribed to the causes above mentioned and to additional expenses incurred by engraving and striking change bills, by order of the Legislature at its last session, and advances made to the State, which were not refunded till the most active season of business had passed. The Bank has occasionally made large advances for the State, on which no interest is charged, and it was through it the State was enabled to pay the general government its quota of direct taxes, during the late war, on which, in consequence of payment in advance, a discount of 15 per cent. was allowed, amounting, on the different assessments, to $91,143 28 cents, and which was so much saved to the State by this institution. In pursuing their investigations the Committee met with every facility from the attention of the officers and directors of the institution, both in exhibiting the books and accounts of the Bank, and personally answering all interrogatories. The Committee cannot dismiss this subject without expressing their entire approbation of the manner in which the business of the Bank has been conducted. From a minute and strict examination, they are enabled confidently to state, that there has been no violation of the charter-that its condition is highly prosperous and its administration has been able, faithful and judicious-highly creditable to the President, Directors and Officers, and perfectly satisfactory to your Committee-and it is well calculated to excite in our citizens a lively interest in the welfare of the institution. The advantages derived from it, in the opinion of your Committee, are numerous, unequivocal and important, sufficiently so to induce the Legislature to extend to it, from time to time, all the aid it may need, as well to preserve its credit, as to extend its usefulness. JACOB BOND I'ON, Chairman of the Committee on the Bank. EXHIBITS. A. The Committee of the Legislature having required "a detailed statement of the progressive increase of the capital of the Bank of the State of South Carolina since its establishment, stating the sources from which this increase has arisen, with the actual annual receipts of interest, and the annual expenditures specifically designated," the following view of the annual transactions of this institution is respectfully submitted: It will be sufficient briefly to premise that the first section of the Act incorporating this Bank, vested in it certain funds belonging to the State, which, consisting of specialities of various descriptions, were to form its capi tal, whenever, either by sale or by payments, those funds should be converted into money. And as, for many years, large sums of money had remained unemployed in the Treasury of the State, it was also ordered by another provision of the charter, that all sums which should be found in the Treasury on the 1st day of April in each year, the day on which the payment of the taxes of the current year usually commences, should be transferred to the Bank, and become a part of its capital. The charter of the Bank was ratified in December, 1812, and in the ensuing August, the Bank commenced its operations. Some time was necessarily consumed in procuring a house for the institution, and preparing books, bills, &c. and this delay was unavoidably increased by the war which existed at that time, and which obliged us to transport by land everything which we were compelled to procure from the Northern States. By the 1st October, 1813, when the Bank may be considered as fairly in operation, we had realized of the capital vested in the Bank, the sum of.... This amount was derived from the following sources: The sale of 800 shares of Planters' and Me chanics' Bank stock.... $19,341 77 The sale of 498 sharse of State Bank stock. 53,004 99 $102,546 76 A sum drawn from the Treasury at the first 30,000 00 200 00 By the 1st October, 1814, the following additions had been made to our capital: By the sale of 873 shares of State Bank stock. 90,556 58 102,546 76 $56,893 95 In the thirteen and a half months, during which the Bank was doing business previous to the 1st October, 1814, the gross amount of the profits of this institution was $44,753 01. The expenses during that period, including all of the outfits, not only of the parent Bank, but of the Branch at Columbia, comprising stationery, bank furniture, (as desks, counters, scales and weights, iron chests, &c.,) and the plates and paper for bills, which are generally in use to the present time, and the salaries of officers, amounted to $41,427 80-leaving a nett profit of $3,325 21. If, as is fair, we take a medium or average between the amount of capital with which we began and concluded the business of each year, the average amount of capital for this year will have been $179,223 46, and the gross amount of profit equal to 24 97-100 per cent. The nett profits, however, only to 1 85-100 per cent. It is customary in private Banks that the extraordinary expenses of their out-fit should be divided and deducted from the profit of several successive years. But as it was really of no importance to this institution or to the State, as no stock was in the market, whether a great dividend was made the first year, it was deemed advisable by the directors to pay off all of those contingent expenses at once, and leave no charge from this source, on the proceeds of the succeeding years, and in the same spirit they have continued ever since to defray the expenses and losses of each year out of its actual profit, Amount of capital, 1st October, 1814. By the 1st October, 1815, the following additions had been made to our capital: By cash received as part of the principal of $255,900 14 .872,835 07 6,034 08 4,037 85 82,907 00 $338,807 14 |