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eseSe sult upon th, ss clauns acted naaer hlah sense ql unlcial aGlgatlnn am, the admoitnn In lhls shape have donb w,l be c means oi larger collections tl'n otherwise would have been mi1e, and al the sane time will subject pfoelty to sherit sales

 -lt Is due tu the hank dehtas .eiterally, but more especially to the ting porioG that should state, fur my knOwlc ge can bear witness, that an nest desire has been eynced tO liquidaie thelr debts Us rapidiy possibe and II IS believed it- tie longer indulgence Is all that IS requn ed for their total release.

 Recent, the bank has instituted suit upon most of its paper und protest But preparatory tu dong SD, notice was given from time Ia tile, through the pa Fers of tho city, denquents to come iorwatd and submit propositions else tleir paper would be put Tn suit. No propositions being mate, or, at least, such the board coul., consistently with sense Oi duA accept the notes bills &c unarranged for were pla- ced in the hands of bank attorney, 10 be sued up- un returnable to fall courts, These courts com ing on late, sufficient time will be allowed to plan- avail themselves o;a portion o their crops be- fore execution can issue.

 Upon the description of -Aper referred to, suit has been withheld until the latest period Whether the board in nstituting these suits has acted properly is for the general assembly to determine.

 In addition to the above reason, showing one of the causes of so large circulation this iine or two others may be enuue eTaled.

 It became necessary, to prevent the property of many citizens of the State, whose obligations were not so much to the Bank as to individual creditors, and who were alike responsible with bank debtors in

 liability for the payment of the state Gebt, from being struck of from under the slerd's hammer, to grant orig gina discounts, which were however, confined to small suns, and given upon paper known to be un- doubted, and with the expiess understanding that the same 10 be paid in full at maturity ln'many ln- stances too cash advances had to be made to secure the bank in lis liens upon property. feel no hesita- ton in saying these partial advances have saved the bank considerable property that otherwise would have been lost, although they have tended to swell the amount of its circulation, and to represent the bank in light less favorable than could have been desired. Heavier drafts have also been made upon this in- stitution for loans of money, both by the merchant and planter, than woald have been, had the other banks of the city been in condition grant lacill ties. These banks, being specie paying banks, da- red not, while the country general state of sus- pension, any of their bills, for they would be in- stantly returned upon them, with demand for the specie; and the result is, the business confined | 10 and based upon the amount of circulation which this and the other banks of tfe State, might chance | to have on hand, and of course have been quite | limited. Connect with the reason here assigned, the amount of bills returned last protested for non-pay- nent, and you have the main causes that created an

 increase in the circulation ol this branch

 To raise funds adequate 10 the payment of the in- ereSt due on lie bonds ui the Statc, te Dank was el | ther compelled to purchase exchange on New York or Liverpool, or upon both points, to purchase cotton be shipped and sold for thIs purpose; the right dc which Is matter of legal question, waiN l ing all consideration of policy.

 Exchange cotton then, had to he purchased, es' the honor of the State tarnshed and it's character dio graced; and th directory dd not feel at liberty [, enter the cotton market, tn, were forced into the | change. Independent of the high consideration Q maintaining without blot blemish, the credit Q Alabama, d consideration winch should be held abov, all others involving dollars and cents, they were the more disposed to deal lberay in exchanges, at thi, particular uncIure believing such D be the proper ant legitimate operations of banks at all times, but l particularly when it is desirable to create speci, fund.- either to repenish empty yaus or to be check ed against, as policy might dictate Indeed, wliou having bought exchange freely, the price of cottor would have been seriously eecled fir the reaSOl that buyers could not have negotiated their bills witt which the cotton of the State has hitherto been pun chased, and by means of which it has found read, buyers, and ready transportation to domestic and foreign ma kets. This atter perhaps to a se condary consideration, had much influence in con. trolling and irectlng the action of tie board. In supplying the requisite sum for the payment o interest on bonds and III furnishing facilities for the purchase and transportation of the crop, exchange predcated on the same WAS taken,or supposed to bt taken, which, in all human probability, would have been paid al maturity but for the sudden and mos expected decline m tue Waffle or HIS | cotton. The usual circumspecton in taking bills based upon d real transaction, was observed, and had all these bills been met at ths tune, shoulG have had it in my power to report very different re suit from what am compelled to do, of the last win | ter's operations-a resrlt that would have shown a handsome profit to the bank.

 In the last several years, subsequent to the genera suspension of specie payments by our banks, much competition among the banks of this city, as well d: among out door operations, has been witnessed 1T our exchange market, and this particularly the case last season and the result growing out of this competition added stimulating influence to rates | the introduction of many drawers and to the weak ness of many bills With those who had entered the list, this bank, in self-deence, had to become com pettor, and in common with them, it has suffered Its portion of the disasters that uniformly attended change, when the article upon winch it is based ant against which is drawn, tails short m value of the original purchase money, is most forciby illusra ted by the recent calamies which have oyertaken al who dealt in cotton last season, and all who purchas ed their cotton bills.

 Being forced to have exchange at all hazards there was no alternative left but to make the best selections from the bills offered, and to abide the risk of pay ment Incident to this, many which were considered good, have been protested for non-payment. The money employed in the purchase of these bills, mol having been returned into bank, makes large acces | sion to the amount of it's circulation.

 In the face of all this however, it is gratifying to me be able to communicate, that since the state the bank has been made up to 16th October, 1S4l bills protested have been reduced some hundred thou sand dollars, and that negotiations are now in pro gress for the settlement of much more, which vii probably soon be consummated; and if reliance car be placed upon assurances, the belief may be wei founded, that in the Of this business season most, if not all, of these bills will be settled.

 I do not know of any thing further, coupled with the subject upon which am required to report, that | claims your particular attention

 The commissioners are now actively engaged ir the prosecution of their duties and their invest eation will be thorough, from them full report may be expected Referring to the same,

 | 1 have the honor to be,

 Very respectfully, your ob't serv't l pnXKIN