accruing to the State were to be appropriated to pay the notes of the State held by the bank. In the loose and inconsistent wording of the clauses about this State paper money, we can see the play of opposing factions in the Legislature, which interjected amendments to preserve the State paper currency, or guard it against what was considered invidious action. This bank was not to be liable to taxation.
The attempt to retire the State paper proved vain, and similar stipulations were repeated three years later.[1]
South Carolina.—By a law of December 21, 1799, it was peremptorily forbidden, under a fine of $10,000, to issue and re-issue bank notes founded on the paper currency of the State.
The Bank of South Carolina and the State Bank were chartered December 19, 1801, both being already in existence as partnership associations. They were chartered until 1823, the capital being undefined, the former being charged to pay, as a preliminary, into the State Treasury $15,000. The State might subscribe $300,000 to the State Bank in six per cent. bonds, which were not to be sold by the bank unless in the last necessity, upon the consent of the Comptroller; and the bank was not to have the interest on these bonds. Three directors were to be appointed by the Legislature. The State Bank refused to accept this charter, and a new one was enacted December 18, 1802, the capital to be $800,000, of which the State might subscribe $300,000 in certificates of indebtedness, at six per cent., saleable, and the interest paid quarterly; the bank to be free of taxes; to have the public deposits; to issue no note under $5 (which is enacted as to all banks), and to discount the Comptroller's warrants at seven per cent. for not more than $140,000, in order to retire the State paper money.
The State Bank at Charleston and the Manhattan at New York wanted to make an arrangement to redeem each other's post notes, but the Legislature of South Carolina forbade the former bank to give credit to any bank outside of the State. The terms were so wide that the prohibition prevented the State Bank from becoming a federal deposit bank.[2]
The Union Bank of South Carolina was chartered December 20, 1810, but seems to have been previously in existence. Langdon Cheves was an incorporator. The capital is not fixed. Limit of property, $3 millions; duration, twenty-one years; bonus, $20,000; notes receivable by the State. On the same day the Planters' and Mechanics' Bank was chartered, with branches, until 1832; capital $1 million; limit of property, $3 millions; not to be taxed; to give the State 800 shares, at $25 each, which was the par amount. By an amendment, the following year, this bank and the Union Bank were allowed to deal in exchange. E.S. Thomas tells us in his "Reminiscences," that he was piqued because the State Bank threw out his notes, in 1810, and so he got up the Planters' and Mechanics' Bank. He subscribed as attorney for a great number of shares and sold them for double; that is, no doubt, on the first installment paid.
