the State of South Carolina; in other cases the same name was given successively to two or three institutions which succeeded one another in time, and were all called the Bank of the State of ———.
Inasmuch as the term State Banks is used for local banks, it seems desirable to speak always of Banks of the States when that particular group is intended, for they deserve a separate name.
Leaving out of account those Banks of the States in which the participation of the State was limited to the possession of some stock in the bank, and which may be better thrown out of this group altogether, we may distinguish three grades of Banks of the States. 1.—Those which had no capital at all, being "based upon the faith and credit of the State." These were paper money machines. 2.—Those in which funds belonging to the State were deposited as a capital. It was argued that the State might better "bank on" its own funds, for schools, improvements, income from lands, etc., than invest them in loans to private banks or otherwise. 3.—Those which combined with the latter arrangement, capital subscribed by private individuals.
