Bank of the State of South Carolina
The main branch of the BSSC was located in Charleston (the financial center of the state), and the new bank catered to both commercial and agricultural interests, offering planters relatively easy terms of repayment and low rates of interest. The bank was run by a president and twelve directors elected annually by the General Assembly.
The General Assembly chartered the Bank of the State of South Carolina (BSSC) in December 1812. Easily passing both houses of the legislature, the charter gave the new bank the power to circulate currency and act as the financial agent of the state. The main branch of the BSSC was located in Charleston (the financial center of the state), and the new bank catered to both commercial and agricultural interests, offering planters relatively easy terms of repayment and low rates of interest. The bank was run by a president and twelve directors elected annually by the General Assembly. Stephen Elliott served as the first president.
Elliott expanded the operations of the bank during his tenure, establishing branches in Columbia (1814), Georgetown (1817), and Camden (1822). A fourth branch would be established in the upstate at Abbeville in 1861. The bank proved to be an effective financial arm of the state, absorbing excess tax revenue that significantly expanded its operating capital. The BSSC grew into a powerful, well-funded institution that promoted currency stability. It posted more than $1.4 million in net profits for the state during Elliott’s tenure.
Charles Jones Colcock was elected president of the BSSC in 1830, serving until his death in 1839. Colcock further expanded the BSSC’s influence by establishing agencies in important market towns such as Hamburg and in the global financial centers of New York City and Liverpool, England. Rechartered in 1833, the bank briefly suspended specie payments during the Panic of 1837, but the institution weathered the financial crisis relatively well. Following a fire that decimated Charleston in 1838, the legislature authorized the sale of $2 million in bonds to aid Charleston. Proceeds were then deposited with the BSSC, which provided victims of the fire with low interest loans. The plan helped rebuild Charleston and expanded the operating capital of the bank.
Franklin H. Elmore succeeded Colcock as president in 1839. A controversial figure deeply involved in state politics, Elmore would have the most contentious tenure in the history of the bank. Throughout the 1840s opponents of the BSSC, led by Christopher G. Memminger and James H. Hammond, agitated for liquidation of the bank, arguing that the state should not be in the banking business and accusing Elmore and BSSC directors of cronyism and corruption. In particular, Elmore’s involvement with the Nesbitt Manufacturing Company caused a stir, with critics charging that Elmore used his influence to provide the Nesbitt Company with loan extensions and readjustments of its debt. The BSSC remained a volatile political topic in the state until Elmore was appointed to the U.S. Senate following the death of Calhoun in 1850.
Elmore’s successor, Charles M. Furman, was decidedly less political than his predecessor, and attacks on the bank subsided. Indeed, the bank would enjoy its greatest prosperity during the 1850s. It also helped to underwrite the modernization and expansion of the state’s transportation network by serving as the state’s agent in the purchase of hundreds of thousands of dollars in railroad stock. By 1860 the bank had working capital of almost $4 million.
During the Civil War, the BSSC wholeheartedly supported the state’s war effort and the Confederate government. By 1863, due to staggering inflation, the resources of the bank were valued at $15 million, but more than half of this total was in Confederate securities or currency that became worthless at the end of the war. An attempt to recharter the bank was defeated in 1866. In 1868 the General Assembly ordered that the remaining assets of the bank be turned over to the state. Lawsuits over the proper distribution of assets to the bank’s creditors clogged the courts until the 1880s.
Elmore, Franklin Harper. Defence of the Bank of the State of South Carolina, in a Series of Letters Addressed to the People of South Carolina. Columbia, S.C.: Palmetto-State Banner Office, [1850?].
Ford, Lacy K., Jr. Origins of Southern Radicalism: The South Carolina Upcountry, 1800–1860. New York: Oxford University Press, 1988.
Lesesne, J. Mauldin. The Bank of the State of South Carolina: A General and Political History. Columbia: University of South Carolina Press, 1970.
