Richmond County GaArchives History .....Banking History of Augusta 1890 ************************************************ Copyright. All rights reserved. http://www.usgwarchives.net/copyright.htm http://www.usgwarchives.net/ga/gafiles.htm ************************************************ File contributed for use in USGenWeb Archives by: Joy Fisher http://www.genrecords.net/emailregistry/vols/00001.html#0000031 October 17, 2004, 4:40 pm CHAPTER XXVIII. BANKS AND BANKING. Two Eras, 1810 to 1865, and 1865 to Date — The Old Bank of Augusta — Its Incorporators— Voting on a Sliding Scale— Old Bank Rules— Death to Counterfeit its Notes — Germs of Bank Examinations — The Old Bank's Good Showings— A Surplus Fund a Novelty — Balance Sheet of 1835— List of Stockholders —Other Old Banks— First Savings Bank in 1827— Its expenses 14.55 per annum— The Old Augusta Savings Institution — Augusta Insurance and Banking Company Almost Ruined by the Fire of 1829 — President Bennoch's Tart Report to the Governor — Report of 1833 — List of Stockholders— Merchants' and Planters' Bank — Its Failure in 1833— Legislative 'Report Thereon —The Mechanics' Bank — Report for 1833— List of Stockholders — The Union Bank —The City Bank — The Georgia Railroad given Banking Franchise — Its Capital Stock and Dividends, from 183610 1847 — Its Banking Business, from 1847 to 1864— Discounts, Deposits, and Circulation for Same Period — Early Banking — Banking at Will — Prohibition of Change Bills — Suppression of Private Banking — Severe Penalties — No Notes Under Five Dollars — Forfeiture of Charter on Suspension of Specie Payments —Free Banking Law of 1838 — Analagous to National Bank Act — Land and Negroes a Basis of Issue — Panic of 1837 — Panic of 1857 — “The War of the Banks" — Banking Capital in 1835, in 1838, in 1860— -Dividends, 182910 1838 — Great Prosperity Just Before the War — Increase of $133,000,000 in Two Years — Wealth of Richmond County in 1860 — Outside of Slaves $20,000,000 — War-Bonds, Specie Suspension — The Banks Exhaust Themselves Helping the Confederacy — Banking During the War— Demise of the Old Banks — Banks Since the War — National Bank — National Exchange Bank — The State Banks — Renewal of Banking Franchise to the Georgia Railroad— Dividends, from 1836 to 1861, Under First Franchise — Dividends, 1861 to 1881 — The Commercial Bank — The Augusta Savings Institution— Planters Loan and Savings Bank — Banks Chartered Since the War, but Not Organized — City Loan Association and Savings Bank— Mechanics' Savings Bank— City Loan and Savings Bank— Manufacturers' Bank— Citizens' Bank— City Bank — Savings Bank of Augusta — Name Changed to Bank of Augusta — Its Failure. The history of banking in Augusta begins in 1810, when the old Bank of Augusta was incorporated, and may be considered in two epochs; namely before, and since 1865. Prior to the war the system of State Banks prevailed since the war the National bank and State systems have both obtained. Up to 1838 there was no uniform banking law in Georgia, but in that year a general act providing for the incorporation of banking institutions was passed. In 1837, and again in 1857, financial panics, prevalent throughout the country, exerted their full influence in Augusta. At the outbreak of the war the banks of Augusta risked their all on the success of the Southern Confederacy, and at the end of the struggle went down in the common ruin. With the rehabilitation of the State, banking revived, and, as has been stated, both National banks and State banks now carry on business in the city. The details of the history thus tersely outlined, let us now proceed to give. In 1810 there was passed "An act to incorporate the Bank of Augusta." From the language of this statute it appears that, for some time prior, there had been a bank in the city, the preamble of the act reading: " Whereas Thomas Gumming, president, and John Howard, Richard Tubman. John McKinne, James Gardner, Hugh Nesbit, David Reid. John Moore, John Campbell, John Willson, Anderson Watkins, John Carmichael, and Ferdinand Phinizy, directors of the said bank, have petitioned the Legislature that they, the said president and directors, and others, the stockholders of the said bank, may be incorporated under the name of the Bank of Augusta." The act then proceeds to incorporate petitioners by the name and style of "The president, directors, and company of the Bank of Augusta," and to declare that, by that name, they " shall be, and are hereby made, able and capable in law to have, purchase, receive, possess, enjoy, and retain to them and their successors lands, rents, tenements, hereditaments, goods, chattels, and effects of what kind, nature, or quality whatsoever, and the same to sell, grant, demise, alien, or dispose of, to sue and be sued, plead and be impleaded, answer and be answered, defend and be defended in courts of record, or any other place whatsoever; and also to make, have, and use a common seal, and the same to break, alter and renew at their pleasure, and also to ordain, establish, and put in execution such by-laws, ordinances, and regulations as shall seem necessary and convenient for the government of the said corporation, not being contrary to the laws, or to the constitution of this State, or of the United States, or repugnant to the fundamental rules of this corporation; and, generally, to do and execute all and singular such acts, matters, and things which to them it shall or may appertain to do; subject, nevertheless, to the rules, regulations, restrictions, limitations, and provisions hereinafter prescribed and declared." The charter was to expire on May 1, 1830, and thirteen directors were to be chosen annually on the first Monday in December. The method of selection was quite curious. The number of votes to which each stockholder was to be entitled in the election of directors was fixed on a sliding scale, as follows: " For one share, and not more than two shares, one vote; for every two shares above two, and not exceeding ten, one vote; for every four shares above ten, and not exceeding thirty, one vote; for every six shares above thirty, and not exceeding sixty, one vote; for every eight shares above sixty, and not exceeding one hundred, one vote; and for every ten shares above one hundred, one vote; but no person, corporation, copartnership, or body politic, shall be entitled to more than thirty votes, and no share or shares shall confer a right of suffrage which shall not have been holden three calendar months previous to the day of election, and unless it be holden by the person in whose name it appears, absolutely and bona fide in his own right, or in that of his wife, and for his or her sole use and benefit, or as executor or administrator, or guardian, or in the right and use of some copartnership, corporation, or society, of which he or she may be a member, and not in trust for, or to the use of, any other person; any stockholder, being absent, may authorize, by power of attorney under seal, any other stockholder to vote fur him, her, or them." Two weeks before the election of directors a full list of stockholders was to be made out and opened to the inspection of any stockholder desiring to see the same, "to the end that public information may be given to the parties concerned of their co-proprietors and stockholders; and to prevent a division of shares, in order to obtain to the person or persons so dividing them an undue influence, the managers of elections for directors shall administer to every stockholder offering to vote the following oath: 'You, A. B., do swear (or affirm) that the stock you now represent, is bona fide your property, and that you are a citizen of the United States, and that no other person or persons is or are concerned therein;' and to any person voting by proxy for a minor, or in right of or in trust for any other person entitled to vote, the following oath: 'You, A. B., do swear (or affirm) that the stock of C. D., whom you now represent, is, to the best of your knowledge and belief, the property of the said C. D, and that he is a citizen of the United States, and that no other person or persons is or are concerned therein;' and any stockholder refusing to take such oath or affirmation shall not be allowed to vote at any such election." At their first meeting the directors were to elect a president out of their number, and any vacancies in the board were to be filled by the other members. The following fundamental rules for the government of the bank were then enacted: 1st. The capital stock was to be $300,000, in $100 shares, $50,000 whereof was to be reserved until January 1, 1812, for the State, should it see fit to subscribe; in which event the governor, treasurer, and comptroller general were to have the right to select two of the directors. 2d. By a majority vote of the stockholders, the stock was increaseable up to $600,000, one-sixth of any increase to be reserved for the State, and, if not taken by the next session of the Legislature after such increase, to be thrown open to the public, the State, if subscribing, to appoint another director. 3d. None but a stockholder, being a citizen of the State of Georgia, shall be eligible as a director, and no director of any other bank shall at the same time be a director of this bank; any director ceasing to be a stockholder to lose his seat at the board. 4th. The board of directors had power to appoint a cashier and other officers, fix their compensation, and make by laws by a majority vote. 5th. The cashier was to give bond in such sum as the directors might require, and he, the president, and all other officers of the board, were to take the following oath: 'I, A. B., do solemnly swear (or affirm) that I will well and faithfully discharge the duties of president or cashier, or other officer (as the case may be), of the board of the Bank of Augusta,' which oath was to be subscribed and entered on the minutes. 6th. Seven directors were to form a quorum, of whom the president was always to be one, except in case of sickness or necessary absence, when the board was to elect one of its members in his place. 7th. The board by a majority vote could call a general meeting of stockholders at any time, giving thirty days' notice in some newspaper in Augusta, Washington, Wilkes county, Milledgeville, and Savannah, and specifying therein the object of the meeting. 8th. In case of death, resignation, or removal of the president, the board was to fill the vacancy. 9th. The directors were to prescribe how transfers of stock should be made. 10th. Bills obligatory and of credit, under the seal of the corporation, were assignable by endorsement; the bank bills or notes were to be signed by the president, countersigned by the principal cashier or treasurer, and negotiable by delivery. 11th. No transfer of stock was to be valid unless entered on the books of the company kept for that purpose. 12th. The bank was only to hold such lands, tenements, and hereditaments as were necessary for its accommodation in the transaction of its business, or had been mortgaged thereto, or conveyed it, or to some other in trust, to secure loans, or bought at judicial sales upon judgments in favor of the bank, or loans, and the directors were empowered to sell all property the bank might thus acquire. 13th. The bank was not directly or indirectly to be concerned in commerce or insurance, or in the importation or exportation of goods, or the purchase or sale thereof, except where pledged to it as security. 14th. All bills, bonds, notes, and contracts of the bank were to be signed by the president, and countersigned by the cashier, or else to be not binding. 15th. The total indebtedness of the bank, by bill, bond, note or otherwise was never to exceed three times the amount of its capital. In case of this limit being exceeded the directors under whose administration the excess had taken place were individually liable; but any director might relieve himself by dissenting from the act or resolution authorizing such over-issue, having said dissent entered on the minutes at the time, and forthwith giving notice of the fact at a general meeting of stockholders, which any dissenting director might call. The bank was also liable for the over issue. 16th. Dividends were to be paid semi-annually, and never to exceed the net profits. 17th. No dividend was to be at the expense of the capital stock; and, if such were declared, the directors present at the declaring thereof were to be individually liable to the bank for the amount of the infringement, but any director might relieve himself by forthwith dissenting in writing on the minutes of the board. 18th. The directors were to keep regular minutes; vote by yeas and nays at the demand of any two directors; and produce the minutes before each general meeting of stockholders 19th. The charter was to endure till May 1, 1830, but two-thirds of the capital stock might surrender the same prior thereto, on giving twelve months' notice in the newspapers of Augusta, Savannah, and Milledgeville. When an increase of stock had been voted, no person could subscribe for more than ten shares, until after the expiration of three months from date of increase. Lastly, the charter contained this terrific denunciation: "That any person or persons who shall print, sign, or pass, or be concerned in the printing, signing, or passing any counterfeit note or notes, bill or bills, of the Bank of Augusta, knowing them to be such, or who shall alter, or be concerned in the altering of any genuine note or notes, bill or bills of the said bank, and shall be convicted thereof, shall suffer death." We have been thus particular in giving the details of the charter of the Bank of Augusta because it is in some sort the model on which subsequent charters were framed, and is in itself, in spite of some archaic features, a work evincing much financial ability. It is said that the curious provision as to the voting power of stock in elections for directors was borrowed from an old Scotch bank; but, however this may be, the cautious restrictions and limitations thrown about the manner of the selection of directors, and the responsibility placed on those officials, evince experience and ability in the framers of the act. It will be seen that the original charter was to expire on May 1, 1830; but, in 1826, it was extended to May 1, 1850; and in 1845 again extended to May 1, 1870. This latter period it never reached, going down in the storms of war, but its long, useful and honorable history we may here trace. In 1820 the presidents of the Bank of the State of Georgia, the Bank of Darien, the Planters' Bank, and the Bank of Augusta were required to annually report to the governor a minute statement of the standing and management of their respective institutions for the twelve months immediately preceding the first Monday in October, "showing particularly the amount of specie in their vaults; the amount of debts due them, the amount of issues, and the amount of bills in circulation; the amount of deposits, and the highest amount due and owing by each of said banks." In 1823 Governor Clark in his annual message recommended that each bank in which the State owned stock be required to make semi-annual statements to the executive; "the whole of their proceedings, giving the names of their debtors and the amount due by each, to be laid before the Legislature at their annual sessions." His excellency seems to have been no friend to banks; farther on in his message informing the Legislature that "the opinion even now almost universally prevails that the pecuniary embarrassment of the citizens is greater in proportion as you approach the vicinity of a bank;" also, that "the time may arrive when those monied 'institutions' will throw the weight of their powerful but subtle influence into the scale of an aspiring faction, hostile to the true interests of the country, thus sapping the foundation of the representative system, by corrupting the purity of the elective franchise." So much of the message as related to the banks was referred to a joint committee on banks, which reported that the reports made were not specific enough, and should exhibit "the amount of specie in their vaults and owned by said banks, the amount of issues in circulation, the amount of discounted paper due and running to maturity, designating the amount in suit, the amount considered bad and the amount considered doubtful (with an exhibit of the names of the parties, makers and endorsers on such bad paper), and at what time such loans were made; a schedule and description of all real and personal property owned by said banks, and from whom purchased, the particular circumstances which induced the purchase of such property, its real value at the time of purchase, and its real value at time of report;" which exhibits were ordered to be made. At this time it is quite clear the Legislature was groping its way toward a system of bank examination. In 1824 a special committee of four, of which Judge William W. Holt, of Augusta, then a member of the house of representatives, was one, was appointed to inquire into the condition of the several banks in which the State was a stockholder, and report to the next session. The text of this report we do not find, but it must have been favorable to the banks as the joint committee on banks says that on inspection of the exhibits made by the Bank of Augusta, and the other banks in which the State had stock, the report of the special committee is fully sustained, that "their condition is sound and all their affairs faithfully and ably conducted." In 1829 the committee on banks report "that they find the affairs of the Bank of Augusta have been managed with great prudence and discretion, and fully merits the continuance of the public confidence." In 1830 the Legislative report gives quite an insight into the banking of that day. The joint committee on banks reporting on the annual statement of the bank of Augusta says: "That on a careful examination of the exhibits, they find such evidence of the ability with which the affairs of this bank have been conducted, and of its sound and stable condition, as fully to retain the high credit of the institution. The committee find on examination of the statement that the issues of the bank have been kept within the bounds of moderation, amounting to a sum less than double the amount of specie actually in the banks of the vault; that out of a sum of $890,575.38 of paper discounted, and due and running to maturity, only $10,000 is considered bad, and $16,000 doubtful. These facts speak highly in favor of the persons exercising the direction of the institution, and entitle them to the approbation of the Legislature and the community. The surplus fund over and above the regular dividend amounts to the sum of $104,948.94, which is held for the purpose of reimbursing the stockholders in the event of loss by bad debts or other accidents. This plan of holding a large surplus fund to meet such exigencies, where the regular dividends, equal to legal interest, are paid, is highly to be commended, and your committee therefore respectfully submit the following resolution: "Resolved, That the abilty and fidelity with which the affairs of the Bank of Augusta have been conducted merit the approbation of the Legislature, and entitle the bank to the fullest confidence of the public": which was adopted. In 1831 the legislative committee reported as to this bank as follows: "That, on a careful and minute examination of the exhibits they find such evidence of the ability with which the affairs of the bank have been conducted, and of its sound and stable condition, that notwithstanding the great depreciation in the real estate belonging to the institution of about $29,000, and in doubtful and bad debts to the amount of $24,000, yet your committee are of opinion that this bank is in a prosperous and flourishing condition, and that the ability and fidelity with which its affairs have been managed, meets the approbation of your committee, and as such is entitled to the entire confidence of the Legislature and of the people of Georgia." In 1832 the legislative report is very complimentary. It says that on consideration of the statement of Thomas Gumming, president of the bank, it finds the institution "in a very sound and flourishing condition; but your committee cannot refrain from giving the directors extra credit for the very able and satisfactory manner in which the affairs of the bank have been conducted and kept for the last twelve months. It seems the directors of the institution require the officers to keep and make to the board a full monthly return of all its operations, which enables a person at a single glance to ascertain the exact condition of the bank at any month during the year, which is much plainer and more satisfactory to your committee than any bank reports which have heretofore been made, which gives evidence of the distinguished ability and prudence with which it is managed, so as to entitle it to the renewed confidence of our fellow-citizens." The report of the condition of the Bank of Augusta in 1835, as shown by its statement of April 8, 1835, is of interest as giving a view of banking in the city at that early day. Mr. John Moore was then president, and A. Picquet, bookkeeper, and the report shows as follows: DR. To capital stock, 6,000 shares $ 600,000.00 To notes in circulation 766,673.63 To amounts due other banks 185,866.72 To unclaimed dividends 2,064.00 To deposits 244.484.05 To amount due treasurer of the United States 8.813.08 To surplus 129.980.78 ________________ $1,937,882.26 CR. By discounts, running $ 900,363.14 By discounts, going over l43,837.51 By amounts clue from other banks 282,264.00 By amounts at Savannah agency 32,687.47 By notes of State banks, good 143,337.00 By notes of United States and foreign banks 10,915.00 By gold at Charleston 43,793.76 By specie of bank in vaults 335,230.33 By real estate, including banking house 39,127.50 By Georgia Railroad and Banking Company stock 600.00 By incidental expenses 5,726.55 ___________ $1,937,882.26 Notes in circulation $766,673,63 Notes on hand 584,367.37 $1,351,041.00 Notes of other banks 153,252 At Savannah agency 32,687.47 Specie 379,024.09 564,963.56 Real estate 39.127.50 Surplus 129,980.78 The cashier, Mr. Robert F. Poe, reports the list of stockholders, which we subjoin: Name. No. of Shares. Amount Paid in. Central Bank of Georgia 1,000 $100,000 Thomas Cumming 290 29,000 Mrs. Ann Cumming 64 6,400 Richard Tubman 358 35,800 John Campbell 266 26,600 Hugh Neshit 205 20,500 John Cumming, Savannah 200 20,000 Jno. P. King. gdn. B. Keating 200 20,000 James Gardner 160 16,000 Wm. H. Turpin 146 14,600 James Fraser 145 14,500 John Fox 120 12,000 Isaac H. Tuttle 115 11,500 John Potter. 100 10,000 John Bones, gcln. A. E. White 100 10,000 Robert Campbell 100 10,000 A. Waterman 100 10,000 James Wardlaw 92 9,200 Wm. S. C. Allen 73 7,300 John Bones, gdn. G. O. K. White 70 7,000 Nicholas Delaigle. 70 7,000 John Carmichael 80 8,000 John Moore 79 7,900 Mrs. Mary Hill 61 6,100 Mary Louisa Hill 61 6,100 Benj. H. Warren 50 5,000 Augusta Free School Society 50 5,000 Ann E. Gumming 50 5,000 Sarah W. Gumming 50 5,000 S. C. Dortic 50 5,000 Chas. A. Harper & O. Waters, tr. A. E. Jackson 50 5,000 George Jones 50 5,000 Anderson Watkins 50 5,000 Robert Walton, tr 50 5,000 Wardens and Vestry of St. Paul's Church 50 5,000 Wm. Whitehead 50 5,000 Jesse Mercer 71 7,100 Fanny Moore 65 6,500 R. A. Reid, gdn., M. A. Reid 40 4,000 Robert F. Poe, tr 20 2,000 Elizabeth Reid 37 3,700 David McKinney 35 3,500 Wm. Bones, Charleston 30 3,000 R. A. Reid, gdn., H. O. Reid 27 2,700 Joseph Rivers 26 2,600 Trustees Meeson Academy 25 2,500 Robert A. Reid 22 2,200 Sarah Adams 20 2,000 Isaac Bryan 48 4,800 Wm. G. Bunce 20 2,000 Wm. Gumming 20 2,000 John Moore, South Carolina 20 2,000 Nancy and Margaret Murray 20 2,000 Thos. N. Hamilton 25 2,500 Alex. Spencer 20 2,000 Jane Telfair 20 2,000 Trustees Burke County Academy 20 2,000 Hozea Webster 20 2,000 Wm. B. M'Law 17 1,700 Ann E. Cumming, tr 25 2,500 S. S. R. R. Jones 15 1,500 Geo. M. Newton 15 1,500 James Shackleford 15 1,500 Samuel Clarke, tr 14 1,400 Robert Clarke 14 1,400 John and Samuel Bones 10 1,000 Sarah H. Haig 10 1,000 Joel Martin 10 1,000 Pleasant Stovall 10 1,000 David Wardlaw 10 1,000 Mrs. Lucy Isaac 9 900 James C. Longstreet. 8 800 Mrs. Isabella Bones 7 700 James Harrison 6 600 Francis Hamil 6 600 M. Kinchley 10 1,000 James and William Harper 5 500 Thomas M'Graw, gdn 5 S. M'Graw 2 500 Alexander Martin 5 500 W. W Montgomery, tr. J. S. Blair 5 500 H. Fosbrook 4 400 Joseph Henry Lumpkin 3 300 William McCaw 67 6,700 Robert McDonald 5 500 President, directors and etc. of Augusta stock as pledged on loans 234 23,400 _____ _______ 6,000 $600,000 By the original act of incorporation the capital stock was fixed, as has been stated, at $300,000; but in 1826 the Legislature in extending the charter to 1850 authorized an increase of capital to $600,000, which will account for above total. In 1842 the Bank of Augusta was authorized on the sale of any real or personal property held by it, to take payment in cash or in its own stock as it might prefer; also to take in payment its shares hypothecated for loans; also to reduce the number of its directors to twelve, five to be a quorum, the State to have two and the1 stockholders ten directors. In 1845, the charter was extended to May 1, 1870, and the total amount of its indebtedness was required never to exceed double the amount of its capital, the original charter allowing three times. It was further provided that the individual property of stockholders should be bound for the ultimate redemption of the bank bills in proportion to the number of shares held, and that all transfers of stock six months prior to a failure of the bank should be void, and the private property of the transferring stockholder be liable as if no such transfer had been made. In 1847 this personal liability clause was repealed, and the old rule 15 of the charter restored, making the directors individually liable for over-issues, unless dissenting, as therein stated. The further history of this venerable bank we will consider in the general history of banking in Augusta. The other ante bellum banks of Augusta were the Augusta Savings Bank incorporated in 1827; the Augusta Insurance and Banking Company, also incorporated in 1827; the Merchants and Planters Bank also in 1827; the Mechanics' Bank, in 1830; the Union Bank, originally incorporated in 1836 as the Bank of Brunswick; the Peoples Savings Bank of Augusta, in 1851; the City Bank, in 1854; and the Augusta Savings Bank, in 1855. At the outbreak of the war there were in operation, the Bank of Augusta; the Augusta Insurance and Banking Company; the Mechanics' Bank; the Union Bank; and the City Bank of Augusta. The Georgia Railroad and Banking Company, incorporated in 1833 and a railroad company with bank adjunct, was also in operation at this time. "The Augusta Savings Bank was incorporated in 1827. The incorporators were John Campbell, Thomas Cumming, Samuel Hale, Isaac Henry, Timothy Edwards, Edward F. Campbell, James Fraser, William W. Montgomery, Joseph Wheeler, Anderson Watkins, Asaph Waterman, Augustus Moore, Henry Cumming, John Howard, William H. Turpin, John Course, Richard Tubman, John Phinizy, George Twiggs, John Moore, and James Harper; and were to constitute "the Board of Appointment," which board was annually to choose a president and other officers of the board and seven managers, which managers, were to elect from its own membership, a president of the bank, and were to appoint a secretary, treasurer, and other officers for the institution. No president or manager was to receive any compensation for his services. Deposits of not less than two dollars were to be received, and two weeks' notice required before withdrawal. Dividends were to be paid in June and December, "to be calculated only from the first day of January, April, July and October in each year, and not having relation to the time of deposits provided deposits shall be made at any intermediate period between those dates, nor shall interest be allowed for fractional parts of a month." No manager or officer was to be allowed to borrow from the bank, nor was it to accept their endorsement or any security by them. In reporting on this institution, in 1832, the Legislative committee say: "This differs from ordinary banks; its object is essentially charitable and, with its benevolence it affords to the improvident practical lessons on economy; it holds out no invitation to the capitalist or office hunter. The management of this institution reflects honor on its philanthropic directors; and, in confirmation of the disinterestedness with which it has been managed, it is shown that its expenses, from the commencement of its operations to the present time, nearly three years, amount to only $22.74." The charter of this bank was perpetual, but it does not appear to have done business for any considerable length of time, as we find that, in 1852, Henry H. Cumming, Robert H. Gardner, jr., George Crump, Gary F. Parish, George M. Norton, J. H. Mann, Christopher C. Taliaferro, Robert F. Poe, Henry Moore, James Harper, John Foster, George Jackson, James Miller, Artemas Gould, and John M. Adams were incorporated as " The People's Savings Bank, in the city of Augusta," with all the powers and privileges of the original bank, the charter whereof was granted them. In 1856, the Legislature, after a preamble which states that "there exists a class of persons who, from their position and want of experience, are incapable of investing and accumulating their small incomes and earnings, and it is desirable to encourage economical and provident habits in all classes, and more especially in the young, the laboring, and the dependent," incorporates Charles J. Jenkins, James Gardner, jr., A. A. Beall, J. B. Walker, W. A. Walton, Benjamin Conley, I. P. Garvin, T. W. Chichester, M. P. Stovall, D. H. Wilcox, E. B. Ward, W. W. Alexander, H. H. Hickman, and James Miller as "The Augusta Savings Institution." The capital stock was $30,000, increasable to $100,000, which stock was to be "a fund pledged for the security of deposits." "There shall be not less than twelve or more than fifteen stockholders, each stockholder shall have absolutely and invariably an equal interest in the institution." The institution could issue certificates of deposit, but not notes or bills as a circulating medium. " The Augusta Insurance and Banking Company" was incorporated in 1827, the incorporators being Peter Bennoch. James Harper, John Bones, Charles Labuzan, Anderson Watkins, Edward J. Harden, W. W. Montgomery, Samuel Hale, and Abraham M. Woolsey. The capital stock was not to exceed $500,000, in shares of $100 each. For the first twenty days after the opening of the books of subscription none but citizens of Georgia could subscribe, and no citizen for more than one hundred shares; after the expiration of that time, any citizen, or body corporate, of the State could subscribe, without limit. The company was authorized "to insure property and effects of every nature and description, against losses by fire and water, and all other accidents, dangers, and casualties for which insurance companies are usually established, or to buy or sell life annuities." Losses were made payable in six months after the happening thereof. If the claimant was compelled to institute suit, the trial was to be at the first term, and if the company failed to satisfy the judgment in ten days after rendition thereof, the charter was forfeitable. The company was authorized to issue bills to the amount of its capital stock, when such issue was authorized by a vote of three-fifths of the stock. By amendatory act of 1831, the issue of bills might be double the amount of the capital stock. The charter was granted for thirty years, or up to December 26, 1857. The Augusta Insurance and Banking Company had scarcely gotten under way when it was almost blotted out of existence by the great fire which desolated Augusta in April, 1829, This conflagration reduced the greater part of the city lying south of Monument street to ashes, and the losses inflicted a staggering blow on the new company. In 1830 the bank committee reported " that notwithstanding the institution has experienced immense losses, at various times, by that destructive element, fire, in that city, yet its exhibit shows us an improved condition compared with the same period of last year, and we think it has the ability from its present condition to redeem the amount it has in circulation, and will be able, in time, to fulfill its obligations to the citizens generally." In 1831 the committee reports "that the promptitude with which it has settled its late uncommon losses entitles it to the highest praise." In 1832 it is reported "in a sound and flourishing condition." In 1833 the president of this company, Mr. Peter Bennoch, made a report to the governor which is a curious and interesting document in more than one respect. The year before the Legislature had passed an act requiring the various banks of the State to make certain detailed reports to the executive office annually, under penalty of*not having their bills received at the State treasury. Like much of the legislation then, and we might as well add, since, this statute was rather cloudy in expression, and Mr. Bennoch in his report very freely airs the ill opinion he entertained of it. He says "the unintelligible ambiguities of the law in question have put at defiance a common sense construction of its provisions;" and again, "the presumption seems natural that, during the conception and maturity of the law, the respective departments of the government must have been under the influence of some extraordinary impressions in regard to banking operations." He adds: "Your Excellency will perceive in submitting the return now made, on the part of the directors and officers of this institution, an earnest desire to comply with the letter and spirit of the law; should they have failed, you will please to impute it, not to intention, but to that dimness of legal vision which would enable the judge, only, to reconcile and harmonize what, to ordinary minds, must be hid in impenetrable obscurity." Having thus relieved his mind, Mr. Bennock submits his report, saying: "it will doubtless afford to the stockholders a gratification almost unexpected to contrast the present with the condition of the office three years since. Then its stock, from extraordinary losses, sold at half the amount paid in; now it would command thirty per cent, premium." The statement shows as follows: DR. To capital stock $125,000.00 To surplus 16,338.31 To bills in circulation 206,399 00 To deposits 28,186.52 To dividends unpaid. 981.00 ___________ $376,904.83 CR. By discounts $170,502.57 By amounts due from other banks 130,256.14 By specie 44,419.21 By bills of other banks 29,407.00 By amounts due for premiums 2,319.97 ___________ $376,904.83 The president was Peter Bennoch; the cashier, Robert Walton; the list of stockholders was as follows: Name. No. Shares. Amount Paid On. A.L.Alexander 100 $ 2,500 W. J. Bunce 50 1,250 Peter Bennoch 15 375 J. D. Beers, I. R. St. John & Co 404 10,100 John Bones 25 625 Estate of William Bones 25 625 William Bryson 10 250 Hays Bowdre 65 1,625 Samuel Clarke 200 5,000 Estate of John Campbell 545 13,625 Phillip Crump 10 250 Thomas Gumming 200 5,000 Charles A. Crawford 45 1,125 Thomas G. Casey 50 1,250 John C. Cannichael 30 750 Robert Campbell 50 1,250 Edward Coxe 75 1,875 Nicholas Delaigle 50 1,250 William Bearing 50 1,250 John Fox 100 2,500 James Fraser 210 5,250 Alexander Graham 91 2,275 William Glendenning 25 625 Samuel Hale 50 1,250 J. and W. Harper 77 2,955 Estate of Arthur Harper 100 2,500 Estate of J. Herbert 10 250 Andrew Kerr 100 2,500 Estate of E. Knight 50 1,250 J. L. Kilburn 155 3,875 Garret Laurens 38 950 G. M. Lavender 10 1,250 William Harris 75 3,875 Juriah Harris 15 375 Thomas N. Hamilton 50 1,250 John Moore 100 2,500 Andrew J. Miller 755 18,125 W. W. Montgomery 50 1,250 Henry Mealing. 25 625 Alexander McKenzie 30 750 Estate of H. Nesbitt 100 2,500 Thomas J. Parmelee 80 2,000 Samuel H. Peck 50 1,250 Thomas J. Parmelee 80 2,000 Samuel H Peck 50 1,250 Edward Quinn 50 1,250 James Shannon 100 2,500 Estate of Alexander Spencer 50 1,200 St Andrew Society 10 250 William H. Turpin. 100 2,500 Richard Tubman 150 3,750 George 0. White 25 625 Anna E. White 75 1,875 James Wardlaw 25 625 James McDowell 10 250 _____ _______ Total shares $5,000 $125,000 In 1852 the charter of the Augusta Insurance and Banking Company was extended to January 1, 1878; and for a number of years after this extension the company as we will see further on, continued to flourish. In 1827, the Merchants and Planters Bank was incorporated, Edward Thomas, Joseph Wheeler, and William Bostwick being appointed commissioners to secure subscriptions at Augusta for 1,150 shares; other commissioners being appointed for like purpose at other points throughout the State, viz.: At Savannah, for 600 shares; Washington, Wilkes county, for 150 shares; Athens, 50 shares; Lexington, 100 shares; Petersburg, 100 shares; Greensborough, 150 shares; Milledgeville, 150 shares; Macon, 100 shares; Waynesboro, 50 shares; Louisville, 50 shares; and St. Mary's, 50 shares. The capital stock was to be $300,000, in shares of $200 each, and the charter was to expire January 1, 1858. It expired long before that. The bank began business in May, 1828; and, for some years,-received the commendation of the Legislative examining committee. In 1830, it was reported "sound, and its credit unimpaired;" in 1831 as "entirely sound;" in 1832 " in a sound and thriving condition." April 10, 1833, it suspended; m December of that year the Legislature appointed Nathaniel W. C. Cocke, Henry Cook, and Robert Campbell, of Augusta, to co-operate with a joint committee of two from the Senate and three from the House, to examine into the circumstances of the failure. The report of this committee is curious reading. It first dilates on the obstructions placed in the way of a discharge of their duty: "The first obstacle presented to the efficient discharge of those duties was the unqualified refusal of the president and directors of said bank to submit their books and papers to the inspection of your committee. A formal protest under their order was presented, in which the investigation directed by the supreme legislative authority of the State was denounced as 'a proceeding illegal, utterly subsersive of private right, and assumption of power which under the Constitution, the Legislature cannot exercise.' Tin's lofty tone of presumptuous defiance against the authority of the highest tribunal recognized by the Constitution and the people of the State, adopted by this banking interest, a mere creature of the Legislature, and owing every moment of its existence to the forbearance of that body, seemed well to become the arrogance of an inflated aristocracy, more gratified at the possession of power to abuse, than respect to those whose interests are affected by its exercise for the virtuous use of it, and placed in bold relief the shameless desperation which violated confidence, fraught with its excesses, was capable of assuming." The committee then proceeds to say that it overruled the protest, and ordered the president and directors to appear before them and to produce the books of the bank. In answer to this those officials replied that the books had been deposited in the bank, not to be removed except on an order of the board of directors; and as there was now no such board they could not be produced by them, they being now mere private individuals. This showing also was overruled, and the books ordered to be produced; and, further, the recalcitiant officials were ordered to show cause why they should not be attached for refusing to attend and testify in person, as ordered. On this, the recusants protested the whole investigation was illegal and unconstitutional, as before, and prayed the benefit of counsel to make their defense. At the prospect of a dozen lawyers being let loose upon them, the committee somewhat receded from their high ground, saying," to have done this would necessarily have consumed much time which was not to spare, as ths committee was to report to the Legislature then in session." Accordingly the committee confined itself to an examination of a large number of other witnesses, and reported their concisions as follows: In the first place they say "the Merchants and Planters Bank never did have any legal existence whatever." By the charter, directors were not to be elected until gold and silver coin to the amount of twenty per cent, of the subscription had been received. No such payment had been made. Bank notes had been deposited in the State Bank, and certificates of deposit, as of specie, had been requested and received, these certificates being used in order to show the same to the governor as evidence that the bank had the amount of specie required for it to begin operations. In the next place the committee found that, whereas the charter required all discounts to be passed on by at least five, directors, it was a common practice for the president, or the president and cashier, or a less number of directors than five, to make discounts. Another violation of the charter was that non-stockholders were made directors. The causes of the bank's failure are then considered. It had no capital; the stock was largely represented by the notes of stockholders; the bulk of discounts were made to the president and three directors. This quartette had half a million of their paper in the bank; all other debts due it were but $80,000. The committee say they cannot see how, with such a state of things existing, the credit of the bank stood so high. Its stock was 130, and its regular dividend eight per cent. In 1829 it reported a reserved fund and undivided profits of $14,944; in 1830, of $27,668; in 1831, of $44,418; in 1832, of $23,-060; and within a few days of its failure, $418,803 debit and $659,981 credit, and yet its stock was then 66 per cent, below par. The committee finds that in April, 1833, the bank had $393,000 of its bills in circulation, in December of that year but $98,000. The difference, $205,000, had been passed out to the president and directors on their own notes; they had gotten what they could for them; and when the bills, came back the bank failed. Down went the bills, and the evidence was that those who had thus set them afloat at par, brought them in at 66 per cent, discount. The committee further report that a loan of $100,000 was offered this bank by the State Bank, if it would allow two disinterested and skillful persons to examine its affairs, and they should report it solvent, which was declined. The committee recommended that the bills of the Merchants'and Planters' Bank, should never be thereafter received at the State Treasury, and that the attorney-general be directed to proceed to forfeit the charter thereof, which was so ordered. The Mechanics' Bank was incorporated in 1830, the incorporators being John Phinizy, Amory Sibley, John H. Mann, Moses Roff, jr., William W. Montgomery, Alfred Gumming, Jesse Kent, George R. Rountrte, and George L. Griggs. The capital stock was $200,000, increasable to $400.000, in shares of $100 each. Subscriptions were to be paid as follows: Two per cent, cash at time of subscribing, eight percent, at the expiration of sixty days, ten percent, at the expiration of sixty days more, and the balance at such times thereafter as the directors may require. For non-payment, the shares, and all amounts paid thereon, were forfeitable to the bank. There were to be nine directors, and the instiution was to go into operation when twenty-one per cent, of subscriptions should have been paid in, in specie. Stockholders were to have one vote for each share, but no share was to be voted unless held bonafide for three months prior to the election by the person voting the same. Five directors were to be a quorum and every twenty stockholders owning two hundred shares could call a stockholders' meeting on sixty days' notice in the city papers of Augusta specifying the objects of the meeting in the call. The bank was not to contract debts by bill or otherwise beyond three times the amount of its capital, and the stockholders were personally liable for such debts. The charter was to expire January 1, 1860, and "the said bank shall be established at such place as may be determined on by the directors below Washington street in the said city of Augusta." The granite building erected by this bank still stands on the north side of Broad street a few doors east of Washington street. At the close of the war it was used as headquarters for the Federal post-commandant of Augusta, and after many mutations, is now a hospital for the renovation of disabled cooking stoves—sic transit. In 1832 this bank was reported as manifesting "a prudent and cautious management." In 1833 it was reported "in a solvent condition and deserving confidence of the people." Its statement of April 1, 1833, makes the following: DR. To capital stock paid in $200,000.00 To bills in circulation 194,439.00 To reserve fund 8,601.32 To deposits 18,429.31 ___________ $421,469.63 CR. By specie in vaults $ 76,403.21 By United States Bank notes 10,295.00 By notes of other banks 20,977.00 By amounts due from other banks 47,073.99 By exchange 119,700.84 By discounts 122,003.96 By discounts, protested and in suit 3,528.69 By discounts, protested and not in suit 11,333.47 By protest account 13.00 By current expenses 2,277.08 By banking house and lot 7,863.36 ___________ $421,469.63 By the next semi-annual report the debits and credits were $448,880.70. The specie was $42,172.54; issue, $206,363. The bank had been robbed of $5,428. Fielding Bradford was president, and George W. Lamar, cashier. The list of stockholders of the Mechanics' Bank in 1833 was as follows: Name. No. Shares. Amount Paid In. Richard Allen, Augusta 12 $ 1,200 John M. Adams, Augusta 10 100 Fielding Bradford, Augusta 160 16,000 Edward Bustin, Augusta 10 1,000 J. D. Beers, I. R. St John & Co., Augusta 35 3,500 A. Cumming, Augusta 10 1,000 R. Campbell. James Fraser and James Harper tr., estate Jno. Campbell, Augusta 390 39,000 Thomas G. Casey, Augusta 36 3,600 Samuel Clarke, Augusta 35 3,500 Jacob Dill, Augusta 5 500 John W. Downing, Philadelphia 40 4,000 Major A. C. W. Fanning, New York 15 1,500 John B. Guieu, Augusta 25 2,500 James Hubbard, Augusta 10 1,000 Samuel Hale, Augusta 20 2,000 Juriah Harris, Columbia county, Ga 30 3,000 Isaac Henry, cashier, Augusta 120 12,000 Marshall Keith, Columbia county, Ga 135 13,500 G. B. Lamar, Savannah 32 3,200 James Lampkin, Columbia county, Ga 10 1,000 G. B. Marshall, Augusta 10 1,000 William A. Mitchell, Augusta 55 5,500 Elisha Martin 15 1,500 Musgrove & Bustin, Augusta 150 15,000 William H. Morgan & Co., Augusta 110 11,000 Robert McDonald, Augusta 10 1,000 George M. Newton, Augusta 50 5,000 M. E. Phinizy, Augusta 5 500 A. P. Pillot, Augusta 50 5,000 R. F. Poe, tr.,. M. O. Longstreet, Augusta 25 2,500 George H Paddock, Augusta 10 1,000 Moses Ruff, jr., Augusta 20 2,000 Lucy Smith, Abbeville, S. C 100 10,000 Joel Smith, Abbeville, S. C 75 7,500 John Smith, Laurens, S. C 60 6,000 I. S. Tuttle, Augusta 60 6,000 E. B. Webster, Augusta 50 5,000 _____ ________ 2,000 $200,000 In 1836 the Mechanics' Bank was authorized to increase its capital stock to $1,000,000, but in 1841 was empowered to reduce same to $500,000. In 1854 the charter of the bank was extended to January 1, 1880, and the capital stock was authorized to be increased to $1,000,000. The bank was given a lien on the stock of any stockholder for debts due by him to the bank as principal, security, guarantee, drawer, acceptor, or endorser. The personal liability clause was re-enacted, and no transfer of stock within six months of failure of the bank should relieve a stockholder. The Union Bank was originally incorporated in 1836 as the Bank of Brunswick. The capital stock was $200,000, increaseable on the completion of the Brunswick and Altamaha Canal, to $1,000,000, and on the completion of the Brunswick and Florida Railroad from Brunswick to the Apalachicola River, to $3,000,000. The voting power of stock was regulated something after the fashion of the Bank of Augusta, viz.: For one share, one vote; for two shares, and not exceeding five, two votes; and for every five shares above five, one vote; but no person, or body corporate, was to have more than thirty votes, and no stock could be voted which had been transferred three months prior to the election. The subscriptions were to be in specie, and the bills of the bank, the issue of which was not to exceed three times the amount of the paid in capital, were to be paid on demand in specie under penalty of forfeiture of charter. The personal liability clause was inserted, and it was provided "that the United States Bank, now located in Pennsylvania, shall hold no stock in said company." In 1842 the Bank of Brunswick was authorized to remove to Augusta and there exercise all the privileges of its charter, save that the capital was not to be increased beyond its then present amount, $200,000. In 1850 this restriction was removed, and it was provided that the stock might be increased to $500,000, and that each stockholder should have one vote for each share by him held. In 1854 the name was authorized to be changed from the Bank of Brunswick to the Union Bank, the charter otherwise to remain the same, save that the personal liability clause was amended so as to continue such liability on holders of the stock transferred within six months of a failure of the bank. The Peoples' Saving Bank, incorporated in 1852, has already been mentioned. The next bank incorporated in Augusta was the City Bank, chartered in 1854. The incorporators were Ignatius P. Garvin, Henry C. Seymour, Benjamin Conley, William H. Stark, and Charles S. Baker. The capital stock was $200,000, increaseable to $500,000. The charter was to expire January I, 1880; there were to be five directors; each share of stock was to have one vote; the debts were never to exceed three times the amount of the capital paid in, and no bills were to be issued until $50,000 had been bonafide paid in specie. The directors were personally liable for the whole of any over issue, and the stockholders liable in proportion to their shares. The Georgia Railroad and Banking Company was originally incorporated in 1833 as the Georgia Railroad Company for the purpose of a railroad communication between the city of Augusta and some point in the interior of the State to be agreed upon by the stockholders, with branch roads to Athens, Eatonton, and Madison. In this charter it was provided that "it shall be lawful for the company from time to time to invest so much, or such parts of their capital, or of their profits as may not be required for immediate use, and until it may be so required, in public stock of the United States, or of this State, or any incorporated bank, or lend the same out at interest on good security, and draw and apply the dividends, and when, and as they shall see fit, sell and transfer any parts or portion thereof, provided that nothing herein contained shall be so construed as to authorize said company to issue bills of credit or to loan out any moneys at a greater rate of interest than eight per cent." The capital was fixed at $1,500,000, but it was provided that "the said company shall be at liberty to enlarge their capital as in the progress of their undertaking they may find necessary, and that either by additional assessments on the original shares, not to exceed in the whole the sum of twenty dollars in addition to each original share, or by opening books for enlarging their capital by new subscriptions in shares of not more than one hundred dollars, so as to make their capital adequate to the works they undertake." In 1835 the corporate name was changed to that now borne, the Georgia Railroad and Banking Company; the capital stock was fixed at $2,000,000, " one-fourth of which, applied to banking purposes, shall be gold or silver coin, in shares of one hundred dollars each, of which capital one-half may be used for banking purposes, and not more until the completion of the road to Athens and one of the southern branches through Greensborough, to be designated by the stockholders, at which time any capital stock unemployed may be used for banking purposes." The railroad was directed to be completed by December 18, 1840, and the banking privileges were to expire on December 18, 1865, or twenty-five years thereafter. The company was empowered to issue bills, not to exceed three times the amount of the banking capital allowed. By the last section of this amendatory act it was provided "that no foreigner either directly, or indirectly, shall own stock in the said railroad or bank; and if any foreigner shall own stock in anywise, the same shall be forfeited to the State." In 1840 this was modified so as to allow foreigners to own stock, provided it did not amount in the aggregate to one-third of the entire stock. In 1849 the stock was increased to $5,000,000, but it was provided that the banking capital should not be increased beyond the amount then authorized by the charter, namely $1,000,000. In 1865 the Georgia Railroad and Banking Company was authorized to close up its banking business, the term of that privilege expiring, as has been stated, in 1865. In 1870 the banking privileges under the act of 1835, and acts amendatory thereof, were renewed and extended to October 19, 1900. We here present a statement of amount of capital stock of this company, and dividends paid thereon from 1836 to 1847; from which, by bearing in mind the ratio of banking to entire capital as prescribed by the charter, can be seen how the banking department prospered during that period. From 1847 to the lapse of the banking privilege in 1865, a fuller account can be given: Date of Dividend. Capital Stock. Dividend November, 1836 $ 858,615.00 $ 26,018.00 February, 1837 1,170,715.00 41,452.80 October, 1837 1,434,405.00 53,962.54 April, 1838 1,910,215.00 70,492.90 October, 1838 2,011,895.00 80,300.96 April, 1839 2,116,810.00 84,178.00 January, 1840 2,143,317.00 86,234.68 April, 1840 2,193,952.00 86,513.48 April, 1842 2,201,612.00 230,161.20 January, 1846 2,288,449.92 45,768.88 October, 1846 2,289,199.92 45,783.99 April, 1847 2,289,199.92 45,783.99 From this period can be given the total amount of capital of the company, and amount of gross receipts of banking department: Year. Total Capital. Bank Receipts. '847 $2,289,199 $54,761 1849 2,262,497 26,115 1850 4,000,000 50,159 1851 4,000,000 55,485 1852 4,000,000 63,661 1853 4,000,000 95,887 1856 4,156,000 108,441 1857 4,156,000 204.881 1859 4,156,000 134,324 1860 4,156,000 104,124 1861 4,156,000 185,209 1862 4,156,000 150,686 1863 4,156,000 435,191 1864 4,156,000 601,592 The deposits, discounts, and circulation for the same period are as follows: Year. Deposits. Discounts. Circulation. 1847 $112,004 $297,447 $ 376,446 1849 62,762 279,844 388,330 1850 122,666 500,663 566,318 1851 163,022 365,832 657,227 1852 214,552 412,183 921,654 1853 72,276 578,159 1,145,130 1856 53,209 308,778 1,233,115 1857 214,101 902,206 1,115,596 1859 252,939 654,799 1,293,618 1860 289,114 549,295 1,069,579 1861 290,018 685,349 1,651,455 1862 804,667 593,375 1,065,225 1863 626,849 559,066 1,054,861 1864 99,844 181,319 1,005,668 Having thus given some account of the particular banks existing in Augusta in ante helium times, we now proceed to a statement of the banking system as regulated by law. In the early part of the nineteenth century banking in Augusta, as elsewhere throughout the State, was conducted in a very loose and irregular way. It was then supposed one of the inalienable rights of the citizen to set up a bank at pleasure, issue such bills as he saw fit, and financier generally at his own good will.' The consequence was that the country was overrun with mushroom banks and irresponsible paper currency. The need of a better plan was sorely felt in Savannah and Augusta, and accordingly the Planters' Bank was incorporated in the former city in 1807, and the bank of Augusta in the latter in 1810. The good effect of these regular organizations was soon manifest, and in 1815 the Legislature began to take steps toward the suppression of the guerrilla style of banking above mentioned. It was enacted that it should not be lawful for any association or company of persons not having a charter authorizing them so to do, to issue "any engraved note or bill, intended to represent a bank note, for the sum of two dollars, or for any greater sum." The act also stated that "a practice pernicious to the community has prevailed with corporate bodies, companies, and individuals in this State, of putting in circulation small notes, or due bills, to supply a deficiency of change; which pernicious practice is calculated to defeat the object it proposes to remedy by expelling from circulation the small coins, and is productive of other serious evils," wherefore it was provided that any person, body politic or corporate, other than the incorporated banks of the State issuing "any engraved or printed note, due bill, ticket, or change bill evidencing or intending to evidence that any sum less than two dollars is due," should forfeit three times the amount thereof, "such recovery to be had by warrant or summons before a justice of the peace, and on the trial of every such warrant or summons, if the note, due bill, ticket, or change bill be in part or whole engraved or printed, it shall be conclusive evidence of an intention to violate this act." The emitters of all such bills then out were to pay a tax of twenty per cent, thereon, or in default, be subject to a penalty of treble the amount of the bill. It is sad to relate that Augusta felt the weight of this statute with special force. The city council and the Change Company of Augusta were found to have been issuing shin plasters at a terrific rate, and a special act was passed for their pardon on condition of paying the tax on their issues in ten days. In 1818 the Legislature essayed to lay the ax to the root of the old voluntary system. It was enacted that, from and after January 1, 1820, no person, association of persons, or body corporate should keep any place of business for carrying on any kind of banking operation which incorporated banks were allowed by their charter to conduct, or issue, emit, circulate, lend, pass, pay, or tender in payment, as private bankers, any bills or promissory notes of private bankers, incorporated or unincorporated banks or banking companies, copartnership, or association, by whatsoever name called, unless thereunto specially authorized by law. If any person or persons, co-partnership, association or corporation should contravene these provisions, such person and every individual member of such copartnership, association, or body corporate should forfeit the sum of $1,000 for each infraction, each day such unauthorized bank was kept open, and each note issued, etc., to be a distinct offense. The act also required that by the time named, all private bank notes then out should be redeemed, on demand, in specie, or notes of incorporated banks of the State, or bear interest at the rate of two and a half per cent, per month until paid, and that, for any note under one dollar issued without authority of law a penalty of $100 should be incurred. This act dealt a severe blow to private banking, but the issuing of change bills was kept up, and by acts passed in 1829 and 1830 it was declared that on all change bills put in circulation without a charter a tax of fifty per cent, should be collected, and that for each issual a fine of not less than fifty nor more than five hundred dollars should be imposed. To stimulate prosecutions it was provided in these acts, as in that of 1818, that half the amount of the penalty should go to the informer. In 1832 the Legislature, reciting that " the circulation of bank bills of a small denomination has been productive of fraud and loss to the public, and has a tendency to prevent or retard the general and speedy restoration of a specie currency,"enacted that the chartered banks should not issue any notes of a less denomination of five dollars. The penalty was $100, and each bill a separate offense. In 1835 the Legislature, reciting that the act of 1832 "has manifestly benefited the circulating medium," enacted that the banks should not issue any notes "other than of the denomination of five dollars, ten dollars, twenty dollars, fifty dollars, hundreds of dollars or thousands of dollars,"under a penalty of $500. In 1842 they were allowed to issue small bills of the denomination of one, two, three, and four dollars, to an amount not exceeding five per cent, of their capital stock. In 1832 failure to redeem a bank note in specie on demand was visited with a penalty of ten per cent. In 1840 it was enacted that such failure should render the charter forfeitable. In 1832 it was also enacted that the banks should make semi-annual reports to the governor. On failure, their notes were to be refused at the State treasury, and the governor was to publish their names in the papers of Milledgeville, then the State capital. The report was required to state " the amount of bills on other banks of this State; the amount of gold, silver, and bullion in their vaults; the amount of debts due them at the North, or elsewhere, which may be denominated specie funds; the amount of active or running paper, the amount in suit, the amount under protest, and not in suit, and clearly stating what amount of all the debts due the bank is considered good, what amount doubtful, and what amount is considered bad and lost to the bank, the amount of issues; the amount of bills in circulation; and the amount of bills of said bank in circulation under the name of deposits; and the highest amount due and owing by the bank." By act of 1837 no bank was to issue any paper for circulation made payable at a longer lime than three days from date, or redeemable otherwise than in specie, under a penalty of $1,000 for each offense. In 1838 the Legislature passed " an act to authorize the business of banking, and to regulate the same," commonly known as the free banking law. The system established by this statute is in some particulars much like the national bank act. It provided for a commission consisting of the comptroller-general and two commissioners chosen by the Legislature to operate the act. The commission was to prepare a quantity of engraved bank notes in blank, of the denominations then allowed by law which were to be countersigned by Pages 352-353 missing he would receive for them twenty-one cents. These three paper dollars are based upon the one dollar in gold or silver, and the bank in fact receives the twenty-one cents interest upon his one dollar in specie, while the person without banking privileges receives only seven cents interest upon his dollar. But the banker is not content with twenty-one per cent, a year, or three times the amount received by his neighbor who is without banking privileges. He will not, therefore, lend his three paper dollars (his own notes) a year at seven per cent, but he will loan them at thirty days, first deducting interest out of the sum loaned, if the borrower will also pay one half, one, two or three per cent. a month usury under the name of exchange. . . . This increases the interest received on the banker's three paper dollars, or one silver dollar, to twenty-five, thirty, or thirty-five per cent, dependent on the amount of exchange or usury added each time the note or bill is renewed." He then proceeds to say that this is not all. The banker has still left the one silver dollar on which the three paper dollars were issued, and while the charter says the one silver dollar must be paid in before the three paper dollars issue, it does not say it must stay in, after they are issued. He can, therefore, lend that out too, and thereby make on the use of his one dollar from thirty to fifty per cent, while the non-banker can only make seven. The consideration of the privileges accorded banks is, he says, that they should furnish a paper currency at all times convertible into specie on demand. Out of their profits they should buy specie and resume. He affirms that by suspending they are guilty of a high commercial, moral, and legal crime; a commercial crime because by suspending, they have brought on a commercial crisis, causing cotton to fall from seventeen to ten or eleven cents a pound and other property in proportion; a moral crime by refusing to keep faith with the people by the redemption of their promises; a legal crime by violating a positive statute of the State. Since the establishment of the banking system in Georgia he notes that the country has passed through two or three periods of like distress. In 1840 the people determined to apply a remedy to suspensions at such epochs, and passed the act which makes a forfeiture of charter the penalty of suspension. If that law be violated the penalty should follow. None should be above the law. He could not admit that the suspension of the Northern banks compelled those of Georgia to do so also. If so, why was it that nine of the South Carolina banks, most of those in Alabama, all of the Kentucky banks, and four or five in Georgia had not suspended ? The constitution of Louisiana forbade the Legislature of that State to legalize a bank suspension. Referring to the statement that large public meetings in Augusta and Savannah had asked the banks to suspend, he queries how many bank directors, stockholders, or otherwise interested had managed these meetings, and asks why none were held elsewhere in the State. He then discusses some of the details of the bill and takes up the argument that it would react injuriously on the people to wind up the banks as the banks only owe the people $5,000,000 and the people owe the banks $22,000,000. This being so, would alarmingly evidence how the banks are concentrating the wealth of the country in their own hands, but it is not true according to the sworn statements of the presidents and cashiers whose reports as made to the executive office " balance to a quarter of a cent." This expression was long memorable in Georgia. Lastly argues it was part of the contract whereby the bill-holder took the bill, that of the bank did riot redeem it on demand, in specie, its charter should be forfeited, and argues that the act to legalize the suspension impaired the obligation of this contract afld thereby violated constitution of the United States. Great was the excitement in the Legislature when this veto came in. Long and fiery were the speeches, but the bill was repassed by 61 to 22 in the Senate, and 68 to 33 in the House, a small gain for the bill in either body. As will be remembered, the suspension was legalized to November 15, 1858. but on May I, 1858, the banks resumed specie payment. A golden era ensued and lasted till the outbreak of the war, but before entering on this period we may give some further idea of banking in Augusta up to the time of the panic of 1857. In 1835 there were eleven banks in operation in Georgia with an aggregate capital of $4,571,000, a total circulation of $3,942,000, and the sum of $2,111,000 in specie in their vaults. Three of the banks were in Augusta with capital, circulation, and specie as follows: Capital. Circulation. Specie in Vault. Bank of Augusta $ 600,000 $ 607,545 $ 381,181 Augusta Insurance and Banking Co. 175,000 160,146 78,404 Mechanics' Bank 400,000 457,244 207,598 _________ __________ ________ $1,175,000 $1,224,935 $667,183 __________ __________ ________ Total in State $4,571,000 $3,942,000 $2,111,000 In 1838 there were nineteen banks, the railroad banks being excluded, with a total capital of $8,648,562. The three Augusta banks above mentioned had an aggregate capitalization of 2,700,000, namely, Bank of Augusta, $1,200,000; Augusta Insurance and Banking Company, $500,000; Mechanics' Bank, $1,000,000. The early policy of the State was to subsidize banks as it were by liberal subscriptions to stock, and from a report made in 1839 we have a very fair idea of the dividend paying power of the old Bank of Augusta. We give the names of the banks in which the State had stock, number of shades, amount paid therefor, and dividends and bonus received thereon from 18^9 to 1838, both inclusive; Bank. No. Shares Amt. Paid Dividends Bonus Total Per.Ct State Bank 5,000 $500,000 $380,000 $30,000 $410,000 .82 Bank of Darien ....5,000 325,000 178,750 178,750 .55 Bank of Augusta 1,000 100,000 80,000 20,310 100,310 1.03 Planters' Bank 1,000 80,000 56,800 56,800 .71 Showing that during this period the Bank of Augusta paid a regular eight per cent, dividend, and a bonus equal to two per cent more. In process of time the State's bank stock became reduced from one cause or another, and in 1859 there remained of the above but 1,833 shares in the State Bank and 890 shares in the Bank of Augusta. To this had been added 186 shares of stock in the Georgia Railroad and Banking Company, and the comptroller-general in 1859 states that these stocks paid an annual average dividend often per cent. As the Georgia Railroad Bank paid but eight per cent, in 1859 the other two must have averaged an eleven per cent, dividend. In 1860 there were twenty-five banks in Georgia, including the Georgia and Central Railroad Banks, with an aggregate capital of $9,028,078, Augusta having six, with a capital of $2,675,000, as follows: Bank of Augusta, $600,000; Mechanics' Bank, $500,000; Georgia Railroad Bank, $500,000; City Bank, $400,000; Augusta Insurance and Banking Company, $375,000; Union Bank, $300,000 The prosperity of the State at this time was marvellous. The depression of 1857 passed away by the spring of 1858, and from that time to the outbreak of the war the taxable property of Georgia increased at a rate never known before. We have said that a golden era preceded the war, and the tax books sustain the assertion. The total valuation of the State and of Richmond county for the years 1858,1859 and 1860, distinguishing slave property from other property, we here give: 1858. Slaves. Other Property. Total Valuation. The State $227,468,927 $311,586,187 $539,055,114 Richmond county 3,693,300 14,390,781 18,084,081 1859. The State $271,620,405 $337,989,471 $609,589,876 Richmond county 4,302,075 15,575,845 19,987,920 1860. The State $302,694,855 $369,627,922 $672,322,777 Richmond county 4,407,870 17,166,487 21,574,357 The total valuation for the years named showed the following astounding increase: State. Increase. Richmond Co. Increase. 1858 $539,055,114 $18,084,081 1859 609,589,876 $70,534,762 19,987,920 $1,903,839 1860 672,322,777 62,732,901 21,574,357 1,586,437 ___________ __________ $133,267,663 $3,490,276 Slave increase ‘58-'59 75,225,928 714,570 Other property 58,042,635 2,775,706 Showing that, in the two years immediately preceding the war, the wealth of the State in property other than in slaves, had increased about eleven per cent, and the like wealth of Richmond county had increased fifteen per cent. The wealth of Richmond county in 1860 was made up of the following items: Money and solvent debts $7,118,247 City or town property 4,964,450 Land 1,941,448 Merchandise 1,736,850 Other property 1,405,492 ____________ 117,166,487 Slaves 4,407,870 ____________ 21,574,357 But even this does not fully represent the taxable property of the county in 1860. It only represents the property returned to the county receiver of tax returns. There was, as we have seen, an aggregate bank capital in Au -gusta in 1860 of $2,675,000, which made return direct to the controller-general, and, accordingly, does not appear on the books of the local officials. In addition to this there were exempt from taxation all annual crops and provisions, all libraries, all fire-arms, all poultry, all plantation and mechanical tools, and all household and kitchen furniture not above three hundred dollars in value, all lands and stocks of literary associations, and two hundred dollars worth of all other property to each taxpayer. It is probably within bounds to say that, exclusive of slaves, Richmond county had, at least, $20,000,000 of property in 1860. The State tax was six and one-half cents on the $100; the State debt was $2,670,750; its assets were the State or Western and Atlantic Railroad, which cost $4,441,532, and paid $450,000 yearly into the treasury, and $807,025 in good, dividend paying stocks and bonds; there were 400 lunatics, 247 felons, and no paupers in a population of 1,057,248. It was truly a golden era, but this prosperity was laid a sacrifice on the altar of war. In 1860 the Legislature authorized an issue of $1,000,000 in six per cent, twenty-year bonds, of which amount the banks of Augusta at once took $267,000, thus: Bank of Augusta, $60,000; Mechanics' Bank, $50,000; Georgia Railroad and Banking Company, $50,000; City Bank, $40,000; Augusta Insurance and Banking Company, $37,500, and the Union Bank, $30,000. In the same year an act was passed relieving the banks from liability to forfeiture of their charters, up to December, 1861, in event they should be compelled to suspend specie payments, a privilege subsequently extended. In 1861 the banks lent the State $2,000,000 of their notes to bridge over an emergency. In 1862, in order to enable the State to assume her quota, $2,441,000, of the direct tax levied by the Confederate Congress, the banks took $1,920,000 of the bonds issued to meet that tax. From this time on there was financial chaos. At the close of the war the State's indebtedness in bonds and notes was $20,811,525. The war bonds amounted to $3,308,500, in two issues, one of $2,441,000 Confederate direct tax bonds, and one of $867,500 of State defense bonds, the residue of the issue of $1,000,000 not being placed. There were out $3,758,000 of non-interest bearing treasury notes and treasury certificates of deposit, "payable in eight per cent, bonds or specie, six months after a treaty of peace, or when the banks of Savannah and Augusta resume specie payment, if before that time." There were also out non-interest bearing treasury notes and treasury certificates of deposit "payable in specie or six per cent, bonds of the State, six months after a treaty of peace shall have been ratified between the United States and the Confederate States," to the amount of $4,800,000. There were also in circulation Georgia treasury notes, payable in Confederate treasury notes " if presented within three months after maturity, otherwise not redeemable except in payment of public dues," to the amount of $5,171,500; and, lastly, there were change bills outstanding, payable only in Confederate treasury notes, to the amount of $977,775- The change bills were in the following denominations, five, ten, fifteen, twenty, twenty-five, fifty, and seventy-five cents, and one, two, three, and four dollars. Some $3,000.000 of these bills were issued. How the banks fared during this period of inflation and distress may be surmised from the following statistics: 1862. 1863. 1864. Capital $17,262,072 $17,335,832 $17,131,382 Circulation 15,339,241 15,572,542 15,135,680 Confederate bonds 2,367,029 3,528,616 6,207,227 Confederate notes 3,032,832 21,928,371 7,613,305 State bonds 1,332,205 1,359,950 1,287,500 State notes 527,700 1,260,747 1,524,042 Specie 1,643,463 1,498,118 1,294,527 Deposits 11,588,378 25,101,848 2,833,928 During the war one of the banks now in operation in Augusta was chartered, to wit: The Commercial Bank, though, as originally incorporated in 1863, it was called the Commercial Insurance Company of Augusta. At a subsequent date it was changed into a bank, and will be more fully mentioned hereafter. When the war closed, the ante bellum banks of Augusta were practically wiped out of existence. Most of them had erected handsome buildings in the day of their prosperity, and some of these landmarks remain. The Mechanics' Bank building has already been mentioned as the granite structure on the north side of Broad street, a few doors east of Washington street. The Bank of Augusta had erected in 1856 a handsome brownstone front banking building on the north side of Broad street, between McIntosh and Jackson streets. The City Bank was on the same square where the Southern Express Company office is now located. The Augusta Insurance and Banking Company had its quarters in the bank building on the same side of Broad street, between Jackson and Campbell, afterwards occupied by the Bank of Augusta, a corporation created since the war with the same name as the old bank, and now by Fleming, Thomas & Co., bankers. The Union Bank was located on same side of Broad street, between Campbell and Cumming streets, where the shoe house of Mulherin, Rice & Co., is now. The Georgia Railroad Bank occupied its present location, but from 1865 to 1870 did no banking business, its franchise having expired in the former and not being renewed till the latter year. In December, 1865, the National Bank of Augusta was organized under the national bank act, with a capital of $500,000. The main spirit in its organization was that wealthy and powerful capitalist who has been connected with the starting of so many great and substantial enterprises, Mr. H. B. Plant. The first president of the bank was William B. Dinsmore, of New York. The administration of the bank, however, was carried on by the vice-president Judge B. H. Warren, until his death. At his demise the position of president was given to that capable financier, Mr. William E. Jackson, long president of the Augusta factory, who remained at the head of the institution until his death. Upon the decease of Mr. Jackson Mr Z. McCord was chosen. Mr. McCord was succeeded in the presidency by Mr. Charles Estes, for many years mayor of Augusta, and now president of the King Mills. Mr. Estes was succeeded by Mr. James Tobin, a most capable financier. From the organization of the bank up to 1884, Mr. George M. Thew was cashier, and was then succeeded by Mr. A. C. Beane. This bank has had the good fortune to have had excellent management during the whole period of its existence, and passed with flying colors through the crisis of 1873. The capital stock of the bank is $500,000, and the surplus $100,000. It carries an average deposit of from $325,000 to $350,000. The National Exchange Bank of Augusta was organized under the national bank act in August, 1871, with a capital of $250,000. Mr. Alfred Baker, a veteran financier, whose biography appears elsewhere in this work, is the president of this institution, and has been from the time of its organization. For a number of years Mr. Joseph S. Beane, sr., a brother of the cashier of the National Bank of Augusta, was cashier, and since his death the position has been very ably filled by Captain Charles E. Coffin, a gentleman whose high character and great financial skill have made him treasurer of many of the associations of the city. The State banks of Augusta are four in number, namely: The Georgia Railroad and Banking Company Bank, commonly called the Georgia Railroad Bank, The Commercial Bank, The Augusta Savings Bank, and The Planters' Loan and Savings Bank. The history of the Georgia Railroad Bank up to 1864 has heretofore been given. In December of that year the banking franchise of the company expired, and no effort was then made to obtain an extension or renewal thereof. In his annual report in 1864, Hon. John P. King, president of this company, said: "The banking charter expires in December next, and the Legislature has refused to renew it except upon terms deemed inadmissable. Banking charters are now of no value, and are in fact a heavy burden upon stockholders. From a very general misunderstanding of the resources of banks, and the extent of their profits, they seem to be considered by government, both State and Confederate, a never ending resource of taxation. If they can so use their assets as to liquidate their liabilities, it is probable that most of them will deem it good policy to surrender their charters and wind up their institutions." These views met the approval of stockholders, and no effort was made to obtain an extension of the banking franchise of the company. By act of 1865 the Legislature empowered it in order the better to close up its banking business to use the corporate name in all suits, legal proceedings, acts, and contracts where necessary to this end, and further empowered it to loan at seven per cent, for not exceeding six months any surplus money then on hand, provided, however, no notes were issued or other banking business done. A statement of the dividends paid by this company from the time it first got fairly in operation up to April, 1861, will be of interest, and is here subjoined. STATEMENT OF DIVIDENDS DECLARED ON THE STOCK OF THE GEORGIA RAILROAD AND BANKING COMPANY. Date of Dividend. No. Div. Capital Stock Dividend November, 1836 1 $ 858,615.00 26,018.00 February, 1837 2 1,170,715.00 41,452.80 October, 1837 3 1,434,405.00 53,962.54 April, 1838 4 1,910,215.00 70,492.90 October, 1838 5 2,011,895.00 80,300.96 April, 1839 6 2,116,810.00 84,178.00 January, 1840 7 2,143,317.00 86,233.58 April, 1840 8 2,193,952.00 86,513.48 April, 1842 9 2,201,612.00 220,161.20 January, 1846 10 2,288,449.92 45,768.88 October, 1846 11 2,289,199.92 55,783.99 April, 1847 12 2,289,199.92 45,783.99 October, 1847 13 2,289,199.92 68,675.99 April, 1848 14 2,293,118.36 68,807.01 October, 1848 15 2,262,497.16 67,874.91 April, 1849 16 2,262,497.16 79,187.31 October, 1849 17 4,000,000.00 140,000.00 April, 1850 18 4,000,000.00 140,000.00 October, 1850 19 4,000,000.00 140,000.00 April, 1851 20 4,000,000.00 140,000.00 October, 1851 21 4,000,000.00 140,000.00 April, 1852 22 4,000,000.00 140,000.00 October, 1852 23 4,000,000.00 140,000.00 April, 1853 24 4,000,000.00 160,000.00 October, 1853 25 4,000,000.00 160,000.00 April, 1854 26 4,156,000.00 166,240.00 April, 1855 27 4,156,000.00 145,460.00 October, 1855 28 4,156,000.00 145,460.00 April, 1856 29 4,156,000.00 166,240.00 October, 1856 30 4,156,000.00 166,240.00 April, 1857 31 4,156,000.00 166,240.00 November, 1857 32 4,156,000.00 124,680.00 April, 1858 33 4,156,000.00 124,680.00 October, 1858 34 4,156,000.00 145,460.00 April, 1859 35 4,156,000.00 166,240.00 October, 1859 36 4,156,000.00 166,240.00 April, 1860 37 4,156,000.00 166,240.00 October, 1860 38 4,156,000.00 166,240.00 April, 1861 39 4,156,000.00 166,240.00 It will be perceived that even during the panics of 1837 and 1857 this company regularly paid its dividend; and it may be here added that alter payment of the last dividend, in April, 1861, there was then to the credit of the reserve fund the sum of $1,065,642. In a quarter of a century of operation, and that when railroading was in its infancy, some $4,700,000 was paid out in dividends. By act of October 19, 1870, the banking powers and privileges conferred on the company by the act of 1835, heretofore mentioned, were continued to it for the term of thirty years, or up to October 19, 1900. From 1861 to 1881 it paid out in dividends the sum of $4,154,576, or $99 50 per share. The capital of this company is $4,200,000, and the business done by this bank is the heaviest in the State, reaching $75,000,000 in a single year. It has has had but two presidents in its long career, Hon. John P. King, who presided over its affairs from 1833 to 1881, and Mr. Charles H. Phinizy since that date. More of this wonderfully successful corporation will be found in the chapter on railroads. The Commercial Bank was originally chartered in 1863, for a term of thirty years, under the name of "The Commercial Insurance Company of Augusta." The incorporators were Henry F. Russell, Barney S. Dunbar, Jacob Danforth, William Battersby, Henry E. Clark, James T. Gardiner, Daniel B. Plumb, and George T. Barnes. The capital stock was fixed at $250,000 increasable to $1,000,000, but operations could be begun when $100,000 was subscribed, and five per cent thereof paid in. The company was authorized to insure against losses by fire in all kinds of property; also against the hazards of ocean or inland navigation and transportation of every kind; also, to make insurance on lives and every insurance appertaining to the duration of life. It was further empowered to receive money on deposit and make loans and discounts. The stockholders were made individually liable for the debts of the company to double the amount of their respective shares. In 1872 the corporate name was amended so that the same should be the Commercial Insurance and Banking Company of Augusta; and in 1875 was again changed to its present style the Commercial Bank of Augusta. In 1876 the bank was authorized to reduce its capital stock from $300,000 to $200,000, without prejudice to a right to a future increase under its charter, the reduction to be made by a purchase and retirement of its stock. The personal liability clause of the charter was reaffirmed, and as to the retired stock was to continue for twelve months after such retirement. In 1887 the charter was extended for thirty years, and many valuable franchises were conferred upon it, by which it received the most enlarged banking powers, was authorized to create a savings department, to receive realty as collateral, or to deal in such property, to act as fiscal agent for the negotiation of bonds or to act as executor, trustee, agent, assignee, or receiver. The capital of this bank is $300,000. Mr. John A. North, an experienced financier, is president. The Augusta Savings Institution of Augusta, Ga., was incorporated in 1875, and has been in successful operation since May of that year. The corporators were Alfred Baker, John B. King, William B. Young, George T. Barnes, William H. Howard, sr., E. R. Schneider, Charles Spaeth, C. Hunneken, Patrick Walsh, William Mulherin, and Edward O'Donnell. The bank was authorized to make loans and discounts, to receive deposits on interest; act as trustee; invest in stocks, bonds, or mortgages on real estate. Deposits as small as one dollar were made receivable; no manager, officer, or agent of the corporation was to be allowed to borrow therefrom; the management was to be in the hands of a board of managers; and the private property of the managers for the time being is made liable for all deposits and for all debts incurred by the institution while under their management in the same manner as in ordinary commercial cases or cases of debt. Semi-annual returns are to be made to the governor setting out in detail the condition of the institution. In 1881 the charter was so amended as to make the board of managers consist of four members, and it was declared that the private property of all incorporators for the time being should be liable for deposits or debts as in the act of 1875. Mr. Alfred Baker, president of the National Exchange Bank, is also president of this institution, and Mr. William B. Young, cashier. The Planters' Loan and Savings Bank was incorporated in 1870, Charles J. Jenkins. John P. King, George M. Thew, Benjamin Conley, Thomas P. Branch, Joseph S. Bean, William H. Goodrich, William H. Scott, and M. I. Branch being the incorporators. The capital stock was $1,000,000, and when $100,000 was subscribed, and $50,000 paid in, the corporation was authorized to organize and proceed to business. The ordinary banking powers were granted, and, in addition, authority to purchase, hold, and sell real estate in the course of its business; act as trustee; guarantee securities, and loan on mortgages on real and personal property, or on crop liens, receiving interest in money or products, or both. Stockholders were individually liable for the debts of the bank in proportion to their stock. In 1873 the charter was amended so as to make the shares ten dollars each instead of one hundred dollars. In 1887 the bank was authorized to change its name to the People's Insurance and Banking Company; and to do a fire and marine insurance by participating policies if deemed advisable; it being provided that no stockholder should be individually liable on insurance policies. The president of this bank is Mr. William E. Benson, and its capital stock $100,000. The aggregate banking operations of the city will run to $200,000,000. The foreign exchange is $17,000,000. For cotton alone $280,000 have been used in one day. As much as $800,000 has been sent to Augusta to purchase cotton. The direction of exchanges has largely changed to the West from the North. Quite a number of other banks have been incorporated for Augusta since the war, but never went into operation, or have ceased to exist. Some sketch of them may be of interest. In 1865 the City Loan Association and Savings Bank of Augusta was incorporated, the incorporators being Henry Myers, W. H. Howard, F. C. Barber, Joseph P. Carr, John E. Marley, W. A. Ramsey, William C. Barber, and John Kenny. The capital stock was $100,000, increasable to $400,000 in $50 shares, said stock being pledged for the security of deposits, and stockholders being liable to depositors to the extent of their unpaid stock. The corporation was vested with the ordinary banking powers, but forbidden to issue notes or bills as a circulating medium. In the same year the Mechanics' Savings Bank of Augusta was incorporated with a capital of $200,000, increasable to $400,000 in $50 shares, the corporators being Henry Moore, Porter Fleming, John H. Baker, John D. Butt, George McCord, C. A. Rowland, John Butt, Charles Estes, W. E. Jackson, and George T. Jackson. In 1865 a third bank, the Savings Bank of Augusta, was incorporated with a capital of $30,000, increasable to $100,000 in $100 shares, H. H. Hickman, E. P. Clayton, J. B. Walker, T. W. Chichester, Benjamin Conley, and C. F. McCay being the incorporators. The capital was made a fund pledged for the security of depositors. In 1866 the charter was so amended as to allow the capital to be increased to $500,000. In 1872 the name was amended by striking the word "savings" therefrom so that it then read, the Bank of Augusta, being identical in name with the venerable bank of 1810. In 1879 the capital, then $350,000, was authorized to be reduced to any sum not below $200,000 by purchase and retirement of stock, and the bank was made one of deposit, discount, and loan. In 1882 the stock was authorized to be further reduced from its then figure, $350,009, to $125,000 in same manner. In 1886 this bank failed. In 1872 the City Loan and Savings Bank of Augusta was incorporated with a capital not to exceed $500,000 in $100 shares, organization to be had when $100,000 was subscribed and $50,000 paid in; John P. King, Thomas G. Barrett, Charles H. Phinizy, George T. Jackson, W. M. Read, W. H. Barrett, William C. Sibley, and P. H. Woodward being the incorporators. This bank was authorized to receive deposits, make or negotiate loans, guarantee securities, act as trustee, and exercise the powers generally of the Planter's Loan and Savings Bank. In 1873 the Manufacturers' Bank of Augusta was chartered with a capital of $100,000, increasable to $500,000 in $100 shares. Each stockholder was liable in proportion to the amount of his stock. The incorporators were William S. Roberts, Henry F. Russell, Charles H. Phinizy, William T. Wheless, and William F. Herring. In 1879 Joseph S. Bean, jr., D. B. Hack, M. A. Stovall, John D. Hahn, and Ernest R. Schneider were incorporated as the Augusta Savings Bank. In 1880 the Citizens' Bank of Augusta was incorporated with a capital of $200,000, increasable to $500,000 in $100 shares, business to begin when $20,000 was paid in. This bank was authorized to issue bills not to exceed three times the amount of the capital paid in, and stockholders were individually liable in proportion to their stock. The incorporators were William H. Howard, Vernon Richards, William A. Latimer, John Doscher, John W. Wallace, Andrew J. Smith, Bernard Franklin, John A. Bell, Zachariah McCord, and Patrick Armstrong. In 1881 the charter was amended so as to allow business to begin when $10,000 was paid in. In 1881 William J. Wheless, Edgar R. Derry, J. V. H. Allen, P. E. Pearce, and H. Clay Foster were incorporated as the City Bank of Augusta, with a capital stock of $200,000, increasable to $1,000,000 in $100 shares, business to begin when $50,000 was paid in. The stockholders were liable to contribute to the payment of the debts, of the corporation an amount equal to the par value of the stock held by them at the time of the bank failure. During the existence of the State banking system divers highly penal laws were passed for the purpose of preventing violations of the trust and confidence necessarily reposed in such institutions. These statutes were codified into the penal code adopted in 1833, and at various times since have been amplified or amended. To a certain extent they are still applicable to banks operating under the State system, and some synopsis of this legislation will be here given. Any president, director, or stockholder of an incorporated bank of this State who shall embezzle, steal, secrete, or fraudulently take and carry away any bullion, notes, bill, bills of exchange, warrants, deeds, bonds, drafts, checks, or other things of value, the property thereof, or any of the books thereof, is punishable by imprisonment in the penitentiary for not less than two nor longer seven years. Any president, director, or other officer of any such bank violating, or being concerned in the violation, of any provision of the bank charter, is punishable by like imprisonment for not less than one year or more than ten. Every such officer is presumed to have a sufficient knowledge of the affairs of his institution to determine whether any act or omission is a violation of the charter, and if present at a meeting where such violation occurs is deemed to have concurred therein unless he cause his dissent to be entered at the time on the minutes of the board; and if not present, but remaining an officer for three months thereafter without entering his dissent, is also deemed to have concurred therein. Every insolvency of a chartered bank or failure to redeem its bills on demand, in specie or current bank bills, is deemed fraudulent, but the officials may repel this presumption by showing that the affairs of the bank have been fairly and legally administered, and that the officers thereof have used the same care and diligence as all other agents receiving a compensation for their services are required by law to exercise. Where deposits are made in a bank at the time insolvent, and so known by the officials having charge thereof, and the deposit is not paid to the depositor within three days after demand, such officers are punishable by imprisonment in the penitentiary for not less than one year, nor more than ten. All conveyances, assignments, or transfers of stock or effects made by a bank in contemplation of insolvency, or after insolvency, except for the benefit of all the stockholders and creditors, unless made for value to an innocent purchaser are void; and the officers making or consenting to such assignment, etc., even if to an innocent purchaser, are punishable by like imprisonment for not less than four nor more than ten years. Purchase by bank officers of its paper at a discount either for themselves or the bank is punishable by a like term as that first mentioned. Declaring fraudulent dividends, or other than out of net proceeds, is similiarly punishable. Purchase of shares with the capital stock is punishable by from one to ten years imprisonment. On the organization of the royal, or king's, government in Georgia in 1755, one of the first statutes was one regulating the rate of interest which was allowed to be ten per cent. In 1759, this was reduced to eight per cent, the preamble to the act reciting that " the high rate of interest in this province of Georgia is a great discouragement to planters and others from improving their landed estates, by reason that the profits arising from such improvements do not equal the sum paid for money so laid out and employed." It was therefore provided that all agreements wherein it was stipulated that a greater interest than eight per cent, per annum should be paid, should be utterly void, and that any one taking a greater rate should forfeit three times the sum loaned. In 1814 the same rate was re-affirmed and the penalty left as it stood. In 1822 the act of 1759 was so amended as to forfeit only the entire interest, but to leave the principal recoverable. In 1845 the rate was reduced to seven per cent, any excess to forfeit the whole interest but impose no other penalty. In 1857 it was provided that the rate of bank discount should not exceed seven per cent, per annum, under penalty of avoiding and annulling the entire debt. By the code of 1863 the rate was to be seven per cent.; all over was usury; but the effect of the usury was only to void the contract so far as the usury was concerned, leaving the principal and legal interest thereon recoverable. In 1871 it was enacted that if the contract were silent as to the rate of interest, seven per cent, was collectible; but by contract in writing any rate not to exceed ten per cent, should be legal; if more was stipulated, only the excess was non-collectible. In 1872, it was provided that no bank should charge over seven per cent, on loan or discount, and any excess paid should be recoverable if sued for within sixty days after payment thereof. In 1873 banks were placed on the same footing as individuals as regards interest, usury, and penalties, the effect of which was to restore the act of 1871, but five days after this first act, a second was passed which abolished the usury laws in toto, and established a conventional rate of interest, that is, made it lawful to contract in writing for any rate agreed upon by the parties, whether more or less than seven per cent. If no rate was stated, seven per cent was to be understood. In 1875 the rate was restricted to not exceeding twelve per cent, provided it were specified in writing. For an excess both excess and interest were forfeited. If no rate was expressed, seven per cent, was to be understood. In 1879 it was made unlawful to charge more than eight per cent.; and any excess, forfeited both interest and excess. Seven per cent, still remained the rate where none was expressed. This act made it obligatory on any party suing on a contract which expressed a higher rate than seven per cent, to allege and prove that no greater rate than eight per cent, had been, or was to be, taken. In 1881 this act was amended so as to make the penalty for a greater rate than eight per cent, a forfeiture of excess only; and to do away with the requirement of proving no excess had been, or was to be taken; so that as the law now stands, the legal rate of interest is seven per cent, where nothing is said upon the subject in the contract, but by specifying the same, the rate may be not exceeding eight per cent, the penalty for excess being forfeiture of excess. With this we may end a somewhat extended sketch of banks and banking in Augusta. It will be seen that in the long course of some eighty years since the old Bank of Augusta the second bank chartered in Georgia, was incorporated, the record of banking in the city has been highly creditable. One failure before, and one since, the war, the instances occurring about a half a century apart, form the exceptions which demonstrate an excellent general rule. The downfall of the old regime of banks in 1865 can hardly be deemed a banking failure proper. The banks had simply gone out of their line into the business of government and on the downfall of the government of which they had become mere adjuncts fell like the governing authority itself. Even in this fall some passed away honorably, redeeming in whole or part their bills. Additional Comments: Extracted from Chapter XXVIII Memorial history of Augusta, Georgia : from its settlement in 1735 to the close of the eighteenth century by Charles Colcock Jones D. Mason & Co. Publishers, Syracuse, N.Y. File at: http://files.usgwarchives.net/ga/richmond/history/other/gms390bankingh.txt This file has been created by a form at http://www.genrecords.org/gafiles/ File size: 113.0 Kb