receiving and paying deposits; removes the only barrier against abuses of currency; imposes upon the community an unsound, depreciated, and inconvertible paper medium, and re-acts upon the discounts of the bank by compelling them to be made in the same depreciated medium.

4. That the primary objects or ends for which banks were chartered being thus defeated, and the franchises and powers granted being thus misused or abused, the condition implied for the protection of the public is broken, and the charter becomes forfeited.

1. But for the strenuous effort made on the other side to establish that a bank charter is no franchise, I should have deemed it unnecessary to do more than state the proposition from which our argument starts, that corporate existence is itself a franchise, and that every charter of incorporation, whether of a banking company or any other association, is the grant of a franchise, and subject to the condition implied in all such grants. We do not mean by a franchise, neither does the law intend by the term, merely that class of franchises which are placed in the text-books in the same category with waifs, wrecks, or even escheats; but we include every grant from the government, through any of its branches, of a privilege which gives to one citizen, or one set of citizens, rights or immunities which vary their position from that of the general mass. Our position is, that government is instituted for the good of the public, and is, therefore, a public trust; that a distinction created between the citizens can only be legitimately made when its object is the public benefit; and that a grant, therefore, which creates such distinction must assume that the grantee is to furnish to the public the consideration in some form. The grant of a charter of incorporation to certain individuals has, usually, the effect of exempting them personally from those actions to which, without such charter, they would have been liable. They cannot be held to bail; their bodies cannot be arrested; nor can their estates be charged in execution. They have a perpetual existence, under their newly created form, and may sue and be sued, without any of the embarrassments to which their unchartered neighbors are exposed. They thus have certain privileges and exemptions which are derived from their charter; and this is precisely what, according to our view of the matter, the law means by a franchise or privilege.

This view of the subject is not only sustained by elementary writers, 2 Bl. Com. 37, 3 Kent's Com. 459, but it has the support of the Supreme Court of the United States in the celebrated case of Dartmouth College v. Woodward, 4 Wheat. 657. In that case a charter of incorporation is expressly declared to be a franchise, and is put upon the footing of a contract executed between the public and the corporators, and protected as a contract by the Constitution of the United States. In this contract the public are one of the parties; and the consideration to be furnished

by the corporation is, therefore, to the public. It is generally some great public advantage which it is proposed to afford; such as the advantages to traveling and intercommunication offered by a railroad or bridge; or to education by a college; or to commerce and currency by a bank. The corporation undertakes to afford to the public these advantages as the consideration for the privilege of being made a corporation, and consequently becomes, as it were, a trustee of this consideration for the use of the public. Hence, in Comyn's Digest, Franchises, G. 3, it is distinctly called a trust; and Lord Holt and Mr. Justice Buller placed corporations upon the same footing in the cases hereafter to be cited.

It follows, from the law in relation to all franchises, that if the corporation abuse this trust, or fail to perform the objects for which it was created, its franchise of being a corporation may be forfeited. The consideration has failed, or the trustee has abused his trust, and so the contract may be rescinded, and the privilege which the public had granted may be resumed.

This proposition has been asserted, in terms, by every elementary writer who treats of the subject; and it has the sanction of every court before which it has been brought in judgment. Com. Dig. Franchises, G. 3. Bac. Abr. Corporations, G. 1 Bl. Com. 485. 2 Kyd on Corp. 474,

512.

In the courts it was established by the great case of the city of London, which, although open to condemnation on other accounts, is good authority on this-the more especially as it was confirmed after the Revolution by the case of Sir James Smith, 8 Cobbett's State Trials, 1343, in note-and in Rex v. Amery, 2 T. R. 515; in Rex v. Pasmore, 3 T. R. 199; and in Colchester v. Seaber, 3 Burr. 1866.

So, too, the authorities in the United States are equally conclusive. In the Supreme Court of the United States, in the case of Terrett v. Taylor, 9 Cranch, 43, it is distinctly laid down that a private corporation created by the Legislature may lose its franchises by a misuser or nonuser of them; and that they may be resumed by the government under a judicial judgment to enforce the forfeiture. This, says Mr. Justice Story, is the common law of the land, and is a tacit condition annexed to the creation of every such corporation. This doctrine is repeated in the same court in the case of Mumma v. The Potomac Company, 8 Peters, 281.

In our own State the same doctrine is announced in White v. City Council, 2 Hill, 576. In New York it has been repeatedly asserted: Slee v. Bloom, 5 Johns. Ch. R 380, 19 Johns. 456; The People v. Bank of Niagara, 6 Cowen, 209; and in two other cases in the same book, pp. 216, 219. In Massachusetts it is affirmed in two cases in 5 Mass. Rep. 230 and 420. In Vermont, in The People v. The Society for Propagating

the Gospel, 1 Paine C. C. Rep. 656. In Maryland in the Canal Company v. Railroad Company, 4 Gill. & Johns: 122. And in Indiana, in the case of the State v. The State Bank, 1 Blackford's Rep. 267.

It is then clear that a charter of incorporation may be forfeited whenever the corporation abuses the trust upon which it was created, or the powers and privileges with which it is invested, or fails to accomplish the ends and purposes for which the public granted the franchise of being a corporation.

The question then which we are discussing becomes changed in form and resolves itself into an inquiry, whether the Bank of South Carolina has thus abused its powers, or failed to fulfil the ends or purposes for which it was created.

2. And this inquiry leads us directly to ascertain in the next place what are the ends or purposes contemplated and intended by the grant of a bank charter.

These may be ascertained in this case with sufficient distinctness from the various clauses of the charter. But it is not at all necessary that the charter should say a word on the subject. Usage and common understanding ascertain these points with a reasonable certainty. Thus in the grant of the charter of a ferry, or bridge, or church, no one would be at a loss to declare what public objects were contemplated; and, with equal certainty, a mere charter for a bank would imply the objects intended by the grant.

In the work of Angel & Ames on Corporations, this principle is confirmed at page 59, 145. And in the same work at page 132, the ends or purposes implied in a bank charter are stated. But in the case of the New York Firemen Insurance Company v. Ely, 2 Cowen, 711, these ends are more authoritatively declared. In that case it is expressly declared that a grant of banking powers implies that the bank is to exercise three functions or powers: 1, to discount notes and bills; 2, to receive deposits; and 3, to issue bank notes in the nature of currency.

Upon examining the charter of this bank it will be found in the various clauses that all three of these powers were distinctly expected by both parties to be exercised by the bank.

They are all of great importance to society, and are absolutely necessary to a commercial community; and the fact that no bank has ever existed in this country without exercising them all, would seem to be conclusive in establishing the intention of the parties, and the usual meaning of a bank. No institution in this country which should merely discount paper should ever be called a bank; neither would such a term be applied to a mere place of deposit. In fact, a deposit bank merely would be an anomalous institution, in which expense must be voluntarily incurred for the benefit of the public without any compensation; a thing unknown in the present circumstances of man

kind. It is in connection with the power to issue notes in the nature of currency, that the other functions become valuable; and it is this last power which offers the chief inducement to every bank, and without which their charters as banks would never have been asked or accepted. 3. We will be enabled then to advance our argument by considering thirdly, the effect of a suspension of specie payments upon each of these great functions which the bank has undertaken to perform, and by ascertaining whether the trust confided to the bank has been abused or fulfilled in each or any of them.

And first, as to making discounts. A suspension of specie payment is a confession by the bank that specie is more valuable than its notes. Before a suspension specie is exchanged on demand for these notes. After the suspension they refuse to pay specie in exchange for their notes. An individual then who receives a discount from a bank in a state of suspension delivers to the bank his own note, which, by law, is payable in coin, and receives from the bank its notes in exchange, without any diminution for their depreciated state. Throughout the whole course of the suspension the banks paid out their notes upon discounts at precisely the same rates as though they were exchangeable for coin; and the individual who received them had at once to submit to a loss of from three to ten per cent. to convert them into a legal currency. This, according to the decision of the Supreme Court of the United States, was a usurious transaction, and a plain violation of their charters. See Gaither v. Farmers' Bank, 1 Peters, 41. Bank of the United States v. Owens, 2 Peters, 527.

The only measure of value which can be applied to money transactions is coin; and a party making a loan, and paying in depreciated paper, as though it were at par, actually receives, in addition to the legal interest, the difference between coin and the depreciated paper. Discounting in this manner by a suspended bank, therefore, not only violates its charter, but holds out the strongest inducement to the bank to continue such violation of the trust confided to them. If the bank be solvent, and capable of acting otherwise, it is a wilful perversion of the power entrusted to it, to make discounts for the accommodation of the public; and if the bank be insolvent, then it is a fraud upon the public to make discounts, or to continue to do any business, which increases its liabilities, and more especially where dividends are paid to the stockholders. In either case it comes clearly within_the rule of forfeiture.

But, further, so completely is this public trust perverted by a suspension of specie payments, that what, under other circumstances, would be a public benefit, is converted into a nuisance. The admitted proximate cause of all suspensions is a redundant paper currency; and the obvious remedy is, to prune this redundancy; to reduce the over issues

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to the legitimate standard; to stop new business; and diminish the old. In this state of things, if the bank make a discount, an addition is necessarily made to the already redundant issues; and new poison is thus sent forth into the body politic, through the very organ which was created to give life and health to its action.

Secondly, let us next proceed to consider the effect of a suspension of specie payments upon the objects contemplated in the function of receiving deposits.

By the law of the land, as established in The Bank of Kentucky v. Wister, 2 Peters, 318, every deposit is payable in gold and silver. But the first effect of a suspension, it is plain, must be the depreciation of bank notes below the standard of coin; and the individual, therefore, who is paid by the bank with depreciated notes, for a deposit, which he is entitled to receive in coin, is actually subjected to a loss of the difference in value between the notes and the coin; whilst the bank makes a profit of that difference at his expense.

It is said, that the individual is not bound to submit to the loss, but may, by an appeal to the laws, receive his payment in legal coin. This answer is mere mockery of a most disastrous condition, and, when examined, evinces still more strongly the necessity of public interference. By force of the charters of the banks themselves, and of the privileges which they enjoy, the business of the country becomes concentrated in them. All other currency disappears; and while these institutions exist, all the specie in the country becomes absorbed in their vaults. No one finds it an object to undertake discounts, or receive deposits; and the accumulation of capital, caused by the`grant of the bank charters, in the banks themselves, drives every other competitor from the market. They thus become the sole channels, through which the circulation is carried on, and, in virtue of the public confidence, become possessed of all the circulating medium, either as depositaries, or as issuers. In this state of things, to propose to the individual, to leave with the bank his deposit, or to hold their notes until they are sued, is virtually to bid all business cease, and to paralyze every limb in the body politic. The bank has got the advantage, and the individual is compelled to submit to its terms. And this is the very case which calls most loudly for the intervention of public justice. For the State itself has been the innocent cause of the mischief, by creating such institutions, and giving them power to produce such a condition of things; and the State alone is able to cope with them. The individual, for the time, particularly amidst the confused and disastrous trials which accompany a suspension, is bound hand and foot, and must yield to the necessity of the case. Under these circumstances, it is a moral necessity which controls the depositor. The law is too slow to help him, and he is in fact so hemmed in by circumstances, as to be glad to get his deposit upon any terms.