counts farther than they could otherwise do, and will secure dividends even when considerable losses occur.

It cannot reasonably be expected that the profits of the Bank for some years to come, will equal those that have hitherto been realized. The circulation and discounts must be less in proportion to the capital than heretofore, seasons of depression will not fail to come, for banks can no more expect perfect uniformity and regularity in their business, than farmers can hope never to suffer from drought or dearth, frost or inundation. But no state of things is likely to occur, in which a clear profit of five per cent. a year, after paying the interest of the loan in New York, may not be made to the state on its stock in the Bank. At this rate the profit in future will be $44,000 a year, which if loaned out at eight per cent. clear of expenses, will, in less than thirteen years, with proper management, pay back the loan by which the stock was purchased.

The third instalment in the Fort Wayne Branch has been charged to the Sinking Fund, no loan having yet been made by the state to meet the payment. An increase of Individual stock has been made at the Lafayette Branch of $20,000. Several other Branches had also contemplated the increase of their capital, but finding that their stock was not in demand they have postponed it for the present.

The charter now authorizes the capital of the Bank to be enlarged as occasion shall require, to $3,000,000, and it will, no doubt, be raised to this amount within a short time after the present difficulties are removed.

The success of the Bank hitherto, arising from the prosperous state of affairs generally, and not always requiring effort on the part of its officers, may have had a tendency to permit its loans to be used too of ten as permanent capital, and not in doing the business of the country. This application of bank means is highly objectionable on many accounts. Loans will be made, not as independent transactions, but as matters of favor. Banks will be created, not to lend but to borrow money, and not in reference to the amount of business, but the number and clamor of borrowers. The stockholders will be more interested in the loans than the dividends, in distributing the capital than in securing the profits.

Money loaned for business, will find limits in the extent of that business. Employers, manufacturers, and exporters, who borrow and expect to pay, when the transaction for which the loan was made is completed, will seldom ask for more than they can use with advantage to themselves and community. If the country be prosperous, and public credit and confidence be general, the business of the bank and country will expand to suit each other, while under circumstances like the present, the sphere of action for both will be kept within narrow bounds.

But there are no other limits, besides those of avarice and ambition, to the desires of borrowers of capital for permanent use. When times are good they will not pay, and they cannot when they are oth erwise. As directors and stockholders there can be little security for

their safe management, or that they will obtain public favor by effecting public good.

Such is not the condition of a large majority of the Branches. Those who choose, can at any time buy stock in the most of them. In general the stockholders and directors are not improperly favored. The loans made for business transactions are felt as a benefit to the whole community, and the institution is considered an honor and credit to the character of the State.

To insure a uniform and correct course, by the branches, of applying the loans to the business of the country, the State Board is taking decisive steps, and discounts will be limited in proportion where suitable payments upon them do not provide funds to keep up an active and healthy circulation of the paper.

Much of the business of banks is necessarily of a character, which the Directors will neither have leisure nor disposition to explain to every curious inquirer. It is not in their power to accommodate, many, who come with fair claims and good security; and they are often beset by others who are clamorous just in proportion to their want of merit. That many should be dissatisfied with their decisions, and having only partial views of their motives should mistake them, is, perhaps, unavoidable. For the allowances usually made to the imperfections of their nature, those who manage banks may lay claim. But they neither ask nor expect any thing further. They constitute a portion of a community that is regulated by public opinion, and to that they will submit without a murmur.

The semi-annual examinations of the branches required by the charter have been regularly made. Wherever improper proceedings have occurred, they have been disapproved by the parent Board. But in general, much has been found to approve and little to condemn.

The Bank, as yet, has commenced but few suits, and it is understood that no sales on executions have ever been made on its account. For months past, there have been loud complaints of pressure, scarcity of money, and the difficulties of the times. Many of the products of the country have fallen considerably in value, while the prices of some articles are still high in proportion to others. But these matters soon regulate themselves, though when a change is unavoidable, if it be made early and amicably there need be no interruption in the progress of business, especially in a country like this. Those who accommodate themselves to the times will not find them so bad but they can make good out of them. The labor and rents of a country should be paid according to the prices of its produce. If the former be too high, employment cannot be furnished, if too low, labor will not be supplied. When these bear a due proportion to each other, the farmer is encouraged to enterprize, and the laborer stimulated to exer

tion.

There would then appear to be no cause of serious alarm, in the present state of things. Every prudent man has foreseen its approach, and while the future was uncertain, his fears may have predominated. But now the worst is known, and there is no cause for despair, unless rashness and folly create new and unnecessary difficulties.

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The progress of the State in wealth and improvement need not be long retarded. Those now in the lead may falter, but others will soon take their place. No failures of consequence have occurred among the business men. The suits for debt in the courts are not more numerous than usual. Sheriff's sales seldom occur. All the produce of the country is demanded for consumption. Visionary schemes are understood and duly appreciated. Emigration to the State is increasing. Canals and rail roads will soon be completed. Confidence will be restored, and exchanges be again at fair rates, and if produce do not command high prices, its cost of transportation will be less, and the wants of the citizens will be supplied from abroad at reduced rates.

Accompanying are tables showing the condition of the State Bank and Branches, and the names and compensation of the officers.

Respectfully submitted on behalf of the Board.

S. MERRILL, Pres't.