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On the very same day, December 11, 1839, I find the following:
INTERESTING COMMENT BY THE SUPREME COURT OF LOUISIANĄ.
(Volume 3, Louisiana Reports, folio 585.) “Directors of a bank have important duties to perform towards creditors and customers, the public and stockholders.
“Creditors and customers have a claim to the preservation of the capital in its original integrity, for it is the pledge on the faith of which they accept the notes of the institution, deposit their money and lodge paper for collection. * *
* “Banks are not incorporated for the sole purpose of enabling capitalists to employ their money advantageously. * * * Most bank charters contain a stipulation that certain capital shall be employed in some manner advantageously to the public * * * in the extension of commerce and the encouragement of agriculture, etc.
“As the claim of the public for these advantages is subordinate to that of the creditors and customers of the bank, so is that of the stockholder for profits subordinate to that of the public.”
The following comparative statement of deposits to credit of the Treasurer of the United States shows the heavy withdrawal of funds by the government:
Statement of the Commercial Bank (before) 1st October, 1836: Deposit credit of Treasurer of the United States...$1,861,689.13
(After) 3rd December, 1837: *Deposit credit Treasurer of United States........ 90,374.75
*Shows the heavy withdrawal which helped the local nonin.
We have before us a statement of the situation of the banks in New Orleans on the 23rd of December, 1837, as submitted by the joint committee by both houses of the Legislature, showing the resources of sixteen banks, with total assets of $72,712,463, and a liability of $27,864,742; however, the total movement of the banks is confined to the deposits, $7,096,465, and a circulation, $7,558,465. Deducting from the total the notes of the banks held by local banks, $3,160,505, we have the actual cash liabilities, $11,824,428, with a specie reserve of $2,729,983, equal to 23 per cent. of the cash liabilities.
• Attention would naturally be directed to the loans on real estate and loans on bank stock as provided under the charter, which makes a very heavy dead weight, amounting to $43,341,904. Of the sixteen banks of 1837, we have with us to-day only two banks—the Canal and Banking Company, now the Canal Bank and Trust Company, and the Citizens' Bank of Louisiana, now operating as the Citizens' Bank and Trust Company. Neither of these banks availed themselves of the national banking act but the Union Bank of Louisiana after the Civil War became the Union National Bank, and the Louisiana State Bank became the State National Bank in 1870. The Union Bank of Louisiana went into Liquidation about 1896 and the State National Bank was liquidated in 1908, following the panic of 1907.
We have been unable to locate any data which would give us the more intimate history of these banking interests, but have noted on the bottom of the statement the different public improvements for which the City of New Orleans is indebted to the improvement banks of those days, and I submit the statement for your further information:
Following is a synopsis of the general principles contained in the bills reported to the Senate and House of Representatives relative to currency:
First-It creates a Board of Currency to be composed of competent persons appointed by the executive of the Senate, whose special duty it shall be to cause the provisions of the bill to be carried into execution.
Second—A condensed statement of the circulation and liabilities of the banks is to be published monthly by the Board of Currency.
Third-It is made the duty of the said board to transmit to the General Assembly, on the first Monday of January in each year, a statetment of the situation of the banks.
Fourth—All issues of banks are limited until the resumption of specie payment to one-fifth of their capital paid in, such issues to include notes of whatever kind emitted by the banks.
Fifth—The banks are authorized to increase the rate of discount to 8 per cent. on all loans over four months, to 9 per cent. on all loans over nine months.
Sixth-The banks are permitted to issue post notes payable on the first of March, or sooner, if in the opinion of the majority of the presidents of the banks, specie payments can be resumed before that time; said notes to be stamped by the Board of Currency.
Seventh-The Board of Currency to ascertain the circulation of each bank.
Eighth—All banks having a larger circulation than that required, are compelled to curtail the same gradually, so that they may be within the amount by the first of March, 1839, unless the resumption of specie payment take place sooner, the banks having a less circulation to issue post notes as above.
Ninth—All post notes received at par by every bank in payment of debts.
Tenth—All banks are compelled, so far as practicable, to use their own notes for their daily payments.
Eleventh—The banks to have by the first of March, 1839, onetenth of their capital in specie.
Twelfth—The banks to have in their vaults by the first of March, 1840, and at all times thereafter, one-third of their liabilities in specie.
Thirteenth-Each bank, from and after the first of March, 1840, to settle all its balances weekly, and to pay or require the payment, as the case may be, in specie, said balances, and to reject the paper of any bank neglecting or refusing to effect such a settlement.
Fourteenth-The protest of a notary public from and after the first of March, 1840, of any bank or post note, to constitute a forfeiture of the charter of said bank.
Fifteenth-Any bank forfeiting its charter to be compelled under certain conditions to grant one, two and three years to its debtors.
Sixteenth—The limits to issues to be considered as repealed the moment the banks resume specie payments, and the penal clauses to become binding and in full force at the same time. Penal clauses are also contained in the bill to enforce a strict compliance with the provisions of the act. It is besides made the duty of the Attorney General to prosecute for forfeiture of their charters, such of the banks of this State as shall not have accepted, after a stated time, the above rules and regulations as part of said charters.
RESULTS, EFFECT AND WORKING OF THE À 1. The Board of Currency afforded a complete issues and restored public confidence.
2. Monthly statements published of circulat ties enabled close scrutiny of bank movement.
3. Authorization to issue post notes payable' 1840, which notes were receivable at par by all b' them, insured circulation within the State an two crop years to realize upon before they we sume specie payment after the 1st of March, 1€
* Banks settle weekly balances in specie. Each bank maintained specie reserve equal to one-third circulation.
MEETING OF MAY 1917. The regular monthly meeting of the Historical Society was held in the Cabildo, Tuesday evening, May 15th. The attendance was good; all of the officers were present.
After the reading of the minutes the following members were elected :
Mr. William A. Briant, 2406 Bienville Street.
Mr. T. P: Thompson called up the question of the selection of the day upon which the two hundredth anniversary of the founding of New Orleans should be celebrated. He gave a résumé of the investigations he had made, which had determined his conclusions that the date was the 9th of February, 1718; giving a succinct account of the first selections of the site and the
the 1st of March, anks for debt due d gave the banks re required toute. 140.
various settlements made upon it, from the first Indian huts found by Bienville when he landed there in 1718; showing the first structure recorded was a chapel by a Jesuit priest; while there is historic evidence of squatters on the site as early as 1702.
Mr. Thompson's conclusions finding favor with the members present, Mr. Thompson moved that the Society by a vote formally adopt the date, February 9, 1918, as the date upon which the two hundredth anniversary of the founding of the city should be celebrated, and this motion was unanimously adopted.
The President then introduced Mrs. Harriet F. Magruder, the essayist of the evening, who apologized for not having written a paper. In a colloquial address on Baton Rouge, “old times and its people,” she presented many personal reminiscences. .
At the end of it, Mr. Hart read an interesting extract giving : an incident in the life of Zachary Taylor, who was residing in Baton Rouge when he was notified of his election as President of the United States.
General Booth questioned Mrs. Magruder's statement that Baton Rouge was the oldest settlement in the State, with the exception of Fort Natchitoches. He had always understood that there was a tradition that Baton Rouge was founded by settlers from the little town of Galvez, but he could not verify the statement. This was not taken up or answered.
Mrs. Magruder was thanked by a vote of the Society, whose attention was then asked by Mr. Thompson, for the consideration of an original proposal in regard to the United States flag. This was, in brief, after an eloquent and patriotic peroration by Mr. Thompson, to designate the regimental flags of the different States by enlarging the star representing that State in the blue union. He had prepared to illustrate his proposition, a diagram of the flag, with the stars numbered according to the dates upon which the States were admitted to the Union. Louisiana's star being the second in the third row, which, if it were enlarged, would at once upon sight fix the flag as belonging to a regiment from Louisiana.
The Society listened with great interest to Mr. Thompson, assenting with approbation to his suggestion, when an unexpected discussion arose as to the exact date upon which a State may be said to have entered the Union. In the liveliness of the debate that followed, between Mr. Thompson, Mr. Hart, General Booth