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were only $99,609.
In 1833 in order that other institutions should take the place of those banks, the charters of which were to expire in 1835 and 1838, the General Assembly re-chartered the Bank of Cape Fear, but replaced the other two banks with new institutions. The new charter of the Bank of Cape Fear extended to 1859, with capital stock of $800,000 and with few changes in the general arrangement. In place of the State Bank of North Carolina, there was chartered in 1833 the Bank of the State of North Carolina with capital stock of $1,500,000, $600,000 to be subscribed by the State and $900,000 by individuals. Its headquarters were at Raleigh, and branches could be established at points designated by the directors. Besides several agencies, branches were established at Fayetteville, Elizabeth City, Wilmington, New Bern and Tarboro, and later at Charlotte and Milton. The agencies only made discounts, and purchased bills of exchange with money furnished from the principal bank. The branches, however, could issue paper currency payable at their respective offices. The general features of this bank were the same as those of the old State bank, though there were some important differences. The new bank could not issue notes for smaller denominations than three dollars, nor could its circulation exceed twice its capital stock, and the refusal to redeem made the paper interest-bearing at the rate of 12 per cent. per annum from time of refusal.
To take the place of the Bank of New Bern, there was chartered in 1833 the Merchants' Bank of the Town of New Bern, to continue until January 1, 1859. Its capital stock was $250,000 payable one-half in gold or silver, and one-half in bank notes or State paper or other kinds of money, the bank to commence business when $25,000 had been paid in. No notes under $3 could be issued, the circulation could not exceed twice its capital stock, and the refusal to redeem made the note bear interest at the rate of 6 per cent. per annum from date of refusal. The same Legislature granted a charter to the Albemarle Bank, and with practically the same arrangement as the Merchants' Bank of New Bern. No further mention is made in the legislative documents concerning it, and not complying with the terms of its charter, did not continue as a separate institution.
The period of 1833 to 1836 was favorable to the bankers, and the general condition of the State was good. There were three State banks in operation besides the United States depositary at Fayetteville. At this time the Bank of State commenced its memorable career - perhaps, the most interesting and important of all the State institutions. For twenty-five years it was the head of the financial system, and was probably the most potent factor in advancing the resources of North Carolina during that period. Yet, it was to encounter several panics, crises, and inflations, from which many older and larger banks throughout the country did not recover Where the books were opened for subscriptions, the individual stock answered promptly but with the States the bank was not so fortunate. By 1835 the State which had subscribed $600,000 stock had only paid in $196,000, of which $166,600 belonged to the literary fund. The State Treasurer had only taken $30,000, leaving $403,400 yet unpaid which it seemed the State Treasurer was unable to meet. The banking facilities were curtailed, and several branches were seriously affected. To overcome this trouble, the Legislature of 1835 created a debt of $400,000 by issuing 400 $1,000 5 per cent. bonds maturing in 1860, and secured by all the State's stock in the bank. In this way their full stock of $1,500,000 was paid in by the end of the year 1836, by which time all the banks were in successful operation and the stock of the Bank of the State sold at a premium. The combined capital of all the banks, however, was only $2,425,000, or less than in 1815. The combined capital of the Virginia banks at this time was about $12,000,000. Of the capital in North Carolina $750,000 was in the principal bank of the Bank of the State at Raleigh, and the remainder divided among the branches of this and the Bank of Cape Fear and Merchants' Bank.
Such was the condition of affairs just prior to the panic of 1837. In 1835 the United States branch at Fayetteville was discontinued. President Jackson had just previous to this time ordered the government deposits to be placed in the different State bank instead of the Bank of the United States. North Carolina received her share of the revenue. The banks throughout the country seized the opportunity to issue a large amount of paper currency on these funds. The country was flooded with new paper, values fluctuated and reaction followed. The banks in North Carolina joined the general movement and suffered likewise. The influx of paper currency from the "wild cat" banks of the South and West added to the trouble. Paper was thrown back on the banks for redemption, credit suffered and fell, prices rose, and a large number of the banks throughout the country were forced to suspend. In May, 1837, the Bank of the State of North Carolina suspended specie payment, and the others followed the example. It can be said to the credit of the State, that more prudence was shown, coolness and good sense displayed and less speculation indulged in t'an any State in the Union. These years were marked by the absence of extravagance among its citizens, prudence in trading, and while they suffered at the hands of the banks of other States the action of the people aided in restoring confidence to a great degree.
In August, 1837, the Bank of the State of North Carolina, resumed payment, and continued redeeming its paper until Oc-
