Bank; expressing the belief that the Bank will be able to pay off the public debt as it comes duc. The Report is mainly upon other topics, and is therefore omitted. (1830.) The Committee of Ways and Means, to whom was referred the Report of the President of the Bank, and the Report of the Comptroller General, respectfully Report: That they have considered the financial situation of the State, as exposed by these documents, with all the care and deliberation the importance of the subject demands; and although the conclusions deduced by the Comptroller from the statements made by the Committee. of Ways and Means the last year, are certainly correct, your Committee believe that his report does not entirely disclose the financial resources of the State, or the true capacity of the Bank to meet the calculations upon which the taxes were reduced. All the calculations of the Comptroller appear to rest upon the assumption: 1st. That the Bank, with the Sinking Fund, after paying the interest upon the debt of the State, amounting to $35,500, would leave a surplus of only $25,000 to be carried to the Sinking Fund; and 2d, that all the other resources of the State will be inadequate to meet its expenses. Your Committee will consider these propositions in their order. The first question which will occur, in considering the resources of the Bank, will be, what, in reality, is its banking capital? It has been customary, in the reports submitted to the Legislature, to consider the original capital of the Bank, consisting of $1,196,220, as its only banking capital; and all the calculations of its profits have been based upon this supposition. Hence the common error that the profits of the Bank have been enormous. The truth is, that the Sinking Fund, forming at this time a permanent and increasing deposit of $389,667, has all along been a portion of the capital, upon which the Bank has carried on its operations. In all calculations, therefore, upon the future operations of the Bank, this fund must be taken into consideration as a source of profit, or the purpose for which it is deposited with the Bank, will not be accomplished. Considering, then, the Bank capital and the Sinking Fund as the source of banking profit, the question will occur, what amount of profit, under a prudent and energetic course of administration, may the Bank be expected to realize? Your Committee will not disguise the fact, that their calculations are not based upon the operation of the Bank, as it has been conducted for some years past. Although safely and prudently conducted, its energies have been cramped, and its profits curtailed, by the system of nominal renewals. It would appear to be obvious, that if a Bank throws its paper into circulation, and does not by a vigorous system of discounts, call a sufficient portion of it in, at short and stated periods, to meet the drafts of other Banks, and the demands of individuals, its issues must either be exceedingly limited, or it must exhaust its capital in redeeming its paper. The former effect has actually been produced upon this Bank. For several years past, the amount of its paper in circulation, has been little more than its permanent capital. In order that the views of your Committee may be more clearly seen, they will take the situation of the Bank as it exists at present, by which to test their observations. The Bank capital consists of--. The Sinking Fund of... $1,156,318 389,667 The average amounts of deposits which is usually banked upon, or is equivalent, at least, to so much of the Bank's paper in possession, is. Making in Bank.. 365,000 $1,910,985 The amount of Bank notes issued of and over one dollar, is $1,600,000 ; of which $500,000 are usually in Bank, leaving in circulation, $1,100,000; and if from this balance be taken $345,000 of one and two dollar bills, rarely the subject of exchanges with other Banks, the whole amount in circulation for which the means of exchange must be provided, will be only $755,000. Here then is a capital in Bank to the amount of $1,910,985, and the whole amount of paper for which the means of exchange must be provided, is $755,000. Can it be doubted, if these facts be correct, that the Bank can sustain a much larger issue, or that the limited amount of paper it has in circulation must be occasioned by its tardy and nominal renewals? The effect of a more vigorous system of operation, it appears to your Committee, may be affirmed, from the experience of the last year. Larger reductions upon renewals have been demanded, and the result has been, an increase of specie in the vaults of the Bank, and a balance against the United States Bank of one hundred thousand dollars, at a season of the year when the deposits from the taxes are abstracted; whilst the nett profits of the Bank have exceeded the ordinary income by six thousand dollars. These facts, which your Committee believe to be undoubted, whilst they evince the capacity of the Bank, disclose, also, that its operations have hitherto been too sluggish, and that its issues are too small A continual balance against no Bank is desirable. All that an institution of this kind should seek for or attain, is to keep on an equality with its sister institutions. It cannot be said that there is no demand for an additional issue throughout the State. The commercial interests of the interior, cannot now be accommodated, from the want of a sufficient circulating currency; and the petitions made to the Legislature for the incorporation of Banks, do not proceed from the mere spirit of speculation. A depreciated currency from the Banks of Georgia, is used from necessity as a circulating medium; whilst merchants of the first respectability and credit, are often shackled in their operations, from the incapacity of the Bank to accommodate them. Your Committee, therefore, beg leave to submit the calculation marked A, annexed to this report, based upon the supposition that the Bank issues $300,000 more paper than it now has in circulation, and that it makes six per cent. profit upon this issue; from which it will appear, that it is by no means extravagant to suppose, that nearly the whole public debt will be provided for, as it becomes due. The other proposition of the Comptroller, is, that the ordinary income of the State under our reduced taxation, will be inadequate to her expendi tures. It is true that our excess of expenditures, over our income from the Treasury, the last fiscal year, has been seventeen thousand dollars; but your Committee believe that there were demands upon the Treasury, during this period, which will not be included in our ordinary expenditure.— Upon the following items alone, it is believed that the following amounts will be saved from the appropriations of the last year. Internal Iprovement....... Public Buildings.. -$16,000 15,000 8,000 Census, Lunatic Asylum, and Fire in Camden--- Making an aggregate of... -$39,000 This amount will probably supply the deficiency of the last year. Your Committee will also beg leave to express their opinion, that the amount of money expended by the system of free schools, is in no proportion to the benefit dispensed. The system ought either to be revised, so that a more efficient and responsible application of the large amount of $40,000 annually, shall be secured, or it ought to be entirely abolished.As now administered, although not without some benefit, it is a system of irresponsibility, extravagance, and waste, and the money had better either be left with the people, or applied to the payment of our debts. In taking a view of the financial resources of the State it may not be improper to bring to the attention of the House, those debts of a large amount due the State, which will probably be recovered, and in a few will form a part of our financial resources. Debt due by the United States. -$200,000 30,000 Bonus of the Union and Planters' & Mechanics' Bank. 50,000 years, Making the aggregate of---- $280,000 Your Committee have thus been elaborate in their report, to justify their opinion, that it would be inexpedient to raise the taxes upon the people, or to provide other means than those we now possess, until a few years shall disclose more clearly what are the resources of the State, to meet her debt. Under the present aspect of affairs, they appear to your Committee to be adequate to her wants. Time will prove whether your Committee are erroneous in their calculations: and time will bring also the capacity to rectify them, and to sustain the credit and honor of the State. All of which is respectfully submitted. R. B. SMITH, Chairman. TABLE A.. Amount of profits for the year 1830-- -$131,000 Amount of income from additional issue of $300,000 18,000 Profit and loss on this amount, discount on Sinking Fund, 14,060 $594,864 Sinking Fund now created.__. 304,167 $899,031 To pay off 6 per cents. due in 1840.. 800,000 Deficit to be advanced by the Bank, and repaid from the $101,965 (1831.) Report of the Committee of Ways and Means. The Committee of Ways and Means, to whom was referred the Report of the President of the Bank, and the Report of the Comptroller General, and also so much of the Governor's Message as relates to the Finances, respectfully report, That in submitting their report the last year, upon the financial resources of the State, they could neither have intended useless reflections upon the Comptroller General, or to extend instructions or directions to those who govern the Bank. Neither self-respect, nor a sense of duty, would have justified such a course. The Comptroller had recommended that the taxes should be raised upon the people; and the report of your committee was made for the purpose of showing, that with the resources possessed by the State, it was inexpedient at that time to adopt this remedy, which nothing but the clearest and most absolute necessity can ever justify. The object of the report is disclosed in its concluding words, "Your committee have thus been elaborate in their report, to justify their opinion, that it would be inexpedient to raise the taxes upon the people, or to provide other means than those we now possess, until a few years shall disclose more clearly what are the resources of the State to meet her debts. Under the present aspect of affairs, they appear to your committee to be adequate to her wants. Time will prove whether your committee are erroneous in their calculations, and time will bring also the capacity to rectify them, and to sustain the credit and honor of the State." |