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History of state banking in Maryland

History of state banking in Maryland

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This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1899 edition. Excerpt: ...capital. The Mechanics' Bank of Baltimore allowed discounts on the security of stock up to three-fourths of the stock paid in. As a consequence of their discounting largely to farmers upon real security, the discount term was increased. Only two were limited to sixty-day discounts; for one the limit was four months, for nine it was six months, for two there was no limit. 1 Cf., p. 27. 2 Resolution 18. 1 Cf. ibid., 47, 1819. 4 See p. 28. 1 Cf. Md. Laws, 1813, ch. 33. Directors were forbidden by most all of the charters to receive discounts on different terms from others. The usual limit of discounts to directors was $1000 in one week, or a total of $5000 in all. The president and directors were eligible for reelection without limit in the bank of Somerset and Worcester. In the five charters which were granted in 1817 and 1818 suspension of specie payments rendered the charter void. The insertion of this provision was a result of the continued suspension of Maryland country banks after the general resumption of February, 1816. Six per cent. was fixed as the legal rate of interest and discount, and usury was forbidden; however, interest calculated according to Rowlett's Tables was made valid.1 The issue of small notes was uniformly prohibited by the charters, but this became a matter of special legislation. In 1821 a general law2 was passed on this subject, called forth by the violations of charter provisions and previous legislation, which made it unlawful, under penalty of $20 fine, for any bank to issue or pay out notes or bills of a less denomination than $5, or of a denomination intermediate between $5 and $10. Persons passing such notes of any incorporated or unincorporated company were liable to a fine of $5 for each offence. This law was the...