FARMERS' BANK OF SHARON.

The officers of this institution appear to have conducted its affairs with an anxious endeavor to comply with the provisions of the statute, and to sustain the credit of the bank. The constant presentation of its hills for redemption, had, however, on the 8th instant, nearly exhausted its specie and other immediate means of discharging its debts. Suits had been commenced against the bank on its bills, and such, under the difficulties of present embarrassment, was the condition of their affairs, that it was deemed both politic and necessary to wind up its concerns. Of this the directors were themselves fully aware. The circulation is $17,158.

The securities are not in accordance with the requisitions of law, yet an amount more than equal to all liabilities, has been executed and recorded, and no loss can be sustained by the creditors.

The above statements exhibit some of the facts which induced proceedings by injunctions against the banks above named. The undersigned has been fully aware of the difficulties with which our institutions have had to contend, and it has been his endeavor not only to avoid throwing unnecessary embarrassments in the way, but by every means in his power to assist and induce them to arrange their affairs in such a manner as to deserve and secure the confidence of community.

At the same time, in accordance with his duty to the public, he has not hesitated to proceed against such institutions, as from improper or fraudulent conduct in the officers, or from insolvency or other cause, were undeserving of credit. The public must have the means of discriminating, and the line must be distinctly drawn between the good and the bad, the solvent and the insolvent, before the currency of Michigan, furnished by her. own institutions, can afford a safe circulating medium.

The banks now in operation, within the limits aforesaid, the undersigned is happy to state, have generally exhibited much. anxiety in endeavoring to comply with the provisions of law, to reduce their liabilities to the smallest possible amount, and by every means in their power to preserve, unimpaired, their credit. It affords pleasure to believe that these institutions are not only in a solvent condition, but that they will soon be able to extend business facilities to community, and to give a currency of undoubted character.

All which is respectfully submitted.

ALPHEUS FELCH,

Bank Commissioner.

Monroe, Sept. 19, 1838.

(C.)

Report of the affairs and condition of the several banks within the limits of the third judicial circuit of Michigan, September, 1838.

To his Excellency, STEVENS T. MASON,

Governor of Michigan.

The undersigned, immediately after being notified of his appointment as bank commissioner, in the place of Thomas Fitzgerald, Esq, resigned, took the oath of office, and entered on the discharge of his duties.

Believing the public mind to be exceedingly anxious for correct information of the standing and condition of the banks generally, the undersigned has completed his tour of examination, with all possible expedition, consistent with a due regard to the proper and efficient discharge of his duties, the consequent labor attendant thereon, and the time naturally required in travelling over an extensive and inconveniently situated district.

The undersigned has now the honor herewith to transmit to your excellency, a statement showing the present condition of the several banks under the supervision of the Bank Commissioners, within the third judicial district.

Upon officially visiting the Berrien County bank, the undersigned found its operations suspended by his predecessor, Col. Fitzgerald.

On investigation of its affairs, with that gentleman, much was exhibited betraying either culpable mismanagement, or gross ignorance of banking.

Col. Fitzgerald, however, with the usual vigilance and promptitude characteristic of all his official acts, had, previous to my arrival, caused the arrest of some of the officers of the institution, under the provisions of the act of December 30th, 1837; and required of the proprietors to furnish real estate securities to a considerable amount, conditioned to be released on the entire re-organization of the bank, and its being placed on a sound and permanent basis, or suffer a forfeiture of the lands pledged, which, together with their assets in bank, individual responsibility and the real estate security, given in conformity to law, must in the worst event, be more than sufficient to satisfy and pay all their liabilities.

In this condition, after confirming a requisition made upon the directors, to place their money and effects beyond their control, and in the hands of persous in whom both Col. Fitzgerald and myself had unlimited confidence, I left them, and within the last few days have been informed by letter, from Col. Fitzgerald, that efforts are being made by them to comply fully with the require

ment aforesaid, and that they had since withdrawn several thousand dollars of their own bills from circulation.

The result of mature deliberations of both the undersigned and his predecessor, and of legal advice obtained, induced them to adopt and confirm the course taken with this bank, as the one most advisable under all circumstances connected, to protect and secure the public against loss.

The bank will either soon comply with the requisitions made, or an injuction will be applied for against them.

In the course of his investigations, the Commissioner, after reviewing the affairs of the St. Joseph County Bank, deemed it proper to apply for an injunction against them, which has been granted. Although the business operations of this institution appear to have been conducted from the commencement, with propriety and fairness, they have decreased the amount of their circulation since their last report, and have made zealous and laudable but ineffectual efforts to sustain themselves, yet the impoverished condition of the bank, demanded such a determination and result; both of which were not only anticipated but desired by the directors of it, and had the law enabled them, would have voluntarily surrendered their effects and wound up.

As it is,the commissioner considers the amount of their discounted paper alone, which is generally, if not entirely good, sufficient, with proper management in its collection, to pay all its liabilities. to the public, and without recourse to its landed securities.

Against the Bank of Allegan, an application had been made for an injunction, by Col. Fitzgerald, while in office, which the undersigned supposed had been granted and served, but on visiting that place, on his way to Singapore, found that no service of a writ had been made. The Attorney General, as the Commissioner is informed, from assurances having been given him that the bank would, in a short time, be restored to a sound and legal condition, in his discretion withheld the application.

This action on the part of his predecessor, the Commissioner deemed a supersedeas to any agency of his in the matter, and consequently made only sufficient examination into the affairs of the institution, to satisfy himself that in case of failure, its resources would probably pay all its liabilities.

The undersigned was officially called to visit and examine a new bank styled the "People's Bank of Grand River," which he did on the 7th of August last, and finding the institution in operation, without having complied with the important requirements of the law, but in direct violation of its provisions, immediately sus pended its operations, by requiring to be put in possession of its moneys and effects, until the whole law should be complied with, or in default thereof, legal proceedings should be had against it.

'The directors of the institution are said to be men of unblem

ished reputation, and it is probable that no fraud was intended, but that their course of operation was induced by an honest misconstruction of some of the important provisions of law.

The Coldwater Bank, it will be observed, exhibits a very limited amount of cash resources wherewith to redeem and pay a large amount of circulation and deposites made with them; and the Commissioner would have felt it incumbent on him, in the ordinary discharge of his duties to have applied for an injunction against them; but from statements of the officers of the bank, made under oath, and a thorough examination into all its affairs, he was induced to delay, at least for the present, such action, believing that under any contingency, the public interest would not suffer, but would, in all probability, be much better served by such determination than by any summary foreclosure. In explanation, it will be stated, that to meet their present exigencies, they are negotiating a loan with one of the New York state banks, on individual responsibility, which, if obtained, is designed and will be employed in the redemption of their circulation, and payment of their deposites. A more permanent source of relief, though somewhat more remote, will be afforded them, as they expect by making collections from the merchants and farmers, their debtors, in grain and flour, which the past abundant harvest will readily enable them to do, and at such prices as will afford a profitable competition in an eastern market, and thus enable them to collect their debts, and by the sale of these pledges, establish a credit at the east, subject to their drafts for such funds as are most valuable and needful to them. About a week since, the undersigned was advised by letter, dated August 24th, from the cashier of that bank, that the negotiation above referred to, had been made, and "would be carried into effect in about two weeks." The bank is virtually inoperative at this time, excepting so far as their present means will enable them to redeem their circulation, pay depositors, or make collections; the Commissioner having requir ed of them to subscribe an affidavit, in which they promised a suspension of all operations whereby their liabilities might be in any manner increased, until upon further investigation, he was satisfied of their ability to resume fully.

The undersigned takes this opportunity to say that he has great confidence in the integrity and honor of the president and other officers of the bank; that their assets are substantial, the united responsibilities of the directors very great, and their real estate securities ample and perfect; and from this combination of facts, constituting a guaranty to public security, he was induced to afford them an opportunity to sustain themselves, and thereby readily pay their debts, rather than close their operations by injunction and wind them up, under a process, though sure in its determination, yet naturally productive of delays and embarrassments

to the public, and frequently of much loss in consequence thereof, to the billholder and depositors.

Into the affairs of the Branch Bank of Michigan, at Kalamazoo, the Commissioner was unable to make an examination, in consequence of the absence of the cashier at Detroit, and the indisposition of the person left in charge.

An examination into the condition of this institution, will be made as soon as practicable, and the result reported to your excellency immediately thereafter.

The payment of their tribute to the "safety fund," has been by many of the banks neglected; but the importance of the requirement has been impressed, and its compliance insisted on, and assurances are given that all arrearages shall be paid, and the law strictly conformed to hereafter.

Most of the banks under the general banking law, have furnished the full amount of real estate securities required by it; some have even exceeded their quota, while others have not fully complied with the law. The banks in default have invariably been required by the undersigned, to perfect their securities, as soon as the actual amount of deficiency can be ascertained from the Auditor General; and to this end as well as to have correct and authentic information of the amounts and condition of the securities pledged by all the banks within the district, a letter has been addressed to that office, requesting to be furnished with a statement of that description.

A full and immediate compliance with the law, in this respect, has been promised by the banks, whose securities are now imperfect; and although in the present state, no injurious result to the public, is apprehended, still it is important that the law should be fully observed, and the commissioner is determined to enforce it, to its extent.

All the banks within this district, except those in suspense, and under injunction, were at the time of their examination by the Commissioner, redeeming their bills in circulation, in specie or other funds satisfactory to the bill holder, as he is informed and believes; and it may here be noticed that since their resumption of specie payments, an average of one third the aggregate amount of their whole circulation, has been redeemed and withdrawn.

In conclusion, the undersigned begs leave to state, that he considers the present responsibilities and resources of the several banking institutions, now in operation, within this district, an abundant and ample guaranty for the payment of all their present liabilities to the public; and although the cash resources of some of them are much diminished, owing to the constant draft upon them produced by a combination of embarrassments, they have, notwithstanding, hitherto sustained themselves; and it remains to be ascertained how long they may continue erect, and how far their