The Progress of N. C. Banking
The first bank in I hr state wasn't estab¬
lished until 1801, anil for many years
thereafter the growth in the number of
hauking institutions was extremely slow.
North Carolinians from
Mantco lo Murphy may well
be proud of their splendid
system of over 300 strong banking
institutions which serve business
well in every city, town and
country village from the moun¬
tains to the sea, yet it's a fact that
the banking business is relatively
new in the Old North State. The
first North Carolina bank didn’t
open its doors for business until
1804 although paper money first
came into use as early as 1713
when the State government issued
crude currency to pay soldiers for
waging war on the ferocious Tus-
earora Indians.
The first bunk established in
North Carolina was the Bank of
Cape Fear, at Wilmington, which
opened for business in April, 1804,
with a capital stock of §250,000 di¬
vided into 2,500 shares with a par
value of SI 00 each. It had a board
of directors made up of eleven
members, seven of whom lived in
Wilmington, and a committee com¬
posed of George Hooper. John
London. John Hill, Richard Brad¬
ley, William Giles, John Hogg and
Henry Watters who traveled
through eastern North Carolina
soliciting subscriptions to its stock
and deposits in gold and silver
coins.
So impressed were the citizens
of New Bern with the successful
start of the Bank of Cape Fear that
they too made plans to open a
bank. Three years later North
Carolina’s State Treasurer decided
that both banks were such sound
and business-like institutions that
he invested State funds in 250
shares of stock in each bank, and
the banking business as we know
it today really got under way.
Enjoyed a Flourishing Business
For six years these two banks
were the only ones in North Caro¬
lina and needless to say both of
them did a flourishing business but
had a difficult time keeping up
with the fluctuating value of bank
notes from other states as well as
keeping enough hard cash on hand
to redeem them on demand.
In 1810 the General Assembly
By EARL WEA\
chartered the Bank of North Caro¬
lina with an authorized capital
stock of $1,600,000; astronomical
banking figures in those days. Its
central office was in the State Capi¬
tol at Raleigh and branches were
established at Edcnton, New Bern,
Wilmington, Fayetteville and Salis¬
bury. The State subscribed lo
$250,000 in stock in this early bank
and disbursed most of its funds
through it.
Those were days when ledgers
were kept in fine Spencerian hand¬
writing, bunkers wore tall silk
hats and also velvet lapels on their
coats. The huge brass key to the
bank’s strong box usually hung
over the president’s desk on a nail
From 1810 to 1835 there were
only three banks in the whole
state — the two banks at Wilming¬
ton and New Bern and the Stale
bank at Raleigh with its six branch
offices.
During President Andrew Jack¬
son’s war on the Bank of the
United States, banking in Nortli
Carolina was marked by an influx
of spurious paper money from
"wildcat” banks in other states,
but historians say more prudence,
good sense and less speculation
was indulged in by North Carolina
banks than in any other state in
the Union. This was particularly
true with the Bank of Cape Fear
whose extreme conservatism soon
made it a byword for sound busi¬
ness practices both in this country
and abroad. At that time Wilming¬
ton was an important seaport with
an extensive overseas trade in
cotton.
Some Unusual Financing
On May 19. 1826, a statement is¬
sued by the State Bank of North
Carolina revealed the amazing fact
that with a capital stock of $1,600,-
000 it had deposits of only $289,-
515.55 and cash in its vault
amounting to only §40.702.64
while the main office and its six
branches had notes in circulation
totalling §910,554.25! In order to
remedy this situation the Legisla¬
ture decided to re-charter that
financial Rock of Gibraltar, The
Bank of Cape Fear, but to consoli¬
date the New Bern bank with the
State bank which was made sound¬
er by an additional §600,000 sub¬
scribed by individuals. Branches of
the newer State bank were opened
at Fayetteville, New Bern, Eliza¬
beth City. Tarboro. Charlotte and
Milton. These branch banks, how¬
ever. could only make discounts
and purchase bills of exchange
with money furnished by the par¬
ent bank located at Raleigh. The
branch banks could issue paper
money payable at their respective
offices and the few local bank
notes that have survived the wear
and tear of the years are collector’s
items today.
For the next 25 years the State
Bank of North Carolina was the
head of the state’s financial system
which was growing more intricate
every year and was a most potent
factor in developing the rich re¬
sources of North Carolina. But it
too had its periods of panic, crisis
and inflation. Yet the years be¬
tween 1844 and 1847 were bright
and prosperous ones for North
Carolina's infant banking system
and the State bank declared semi¬
annual dividends of 3' j per cent
during this period and its stock
was selling at $110 a share
Some Other Banks
From 1850 to I860 numerous
banks were opened throughout
North Carolina. A few of them
with the date they were organized
and their capital stock, are given
here:
The Farmers' Bank of North
Carolina. Charlotte. 1853. $500.-
000.
The Bank of Yancevville. 1853,
S200.000.
The Bank of Clarendon. 1854.
Fayetteville. §400.000.
The Wilmington Savings Bank.
1854. $800,000
The Bank of North Carolina. Ra¬
leigh. 1859. $7,500,000.
(Continued on page 20)
THE STATE. August 12. 1950
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