Page:A History of Banking in the United States.djvu/115

 than $5,000 at one time, or have endorsements in the bank for more than $10,000. December 31st, the State renounced its right to subscribe 2,500 shares in the Farmers' and Mechanics' Bank.

Before the war of 1812 money was scarcely ever seen in, the skins of animals supplying its place. The money which was brought in after the war turned the heads of the people so that by the whole country was in a rage for speculation. At that period "the country was flooded with bank notes, good, bad, and indifferent. Many counterfeit notes were in circulation.

The custom was to make contracts in "trade at trade rates," which was a system of barter, and displaced money just as it had done in the colonies. Factory goods from New England and Kentucky reached that region about 1818, and the domestic textile industry ceased. Until 1833 there was no legal limit to the rate of interest. The common rate by contract was about 50 per cent. A law of the Territory, January 11, 1816, imposed very heavy penalties on counterfeiting, a peculiar feature being that the law applied whether the bank whose notes were counterfeited was in existence or not. December 28, 1816, the Bank of Illinois at Shawneetown was incorporated, with a capital of $300,000, of which the State might take one-third; to last until 1837. It was never to suspend under a penalty of 12 per cent. It is said of it in its earlier period that it was "so well managed that neither the government nor any one else lost by it. The Bank of Kaskaskia was incorporated by the Legislative Council of the Territory January 9, 1818. Its capital was $300,000. It was to begin when $50,000 were subscribed and $10,000 paid in, and to last until 1838. On the same day the Bank of Edwardsville was incorporated with a capital of $300,000, of which one-third might be taken by the State. It was to begin when $10,000 were paid in. Upon subscription, $5 were to be paid in in specie or "bank bills which will command the same." It was to last until 1838. In the charters which were framed on the model of that of the Bank of the United States, the provision that the debts, exclusive of deposits, should never exceed a certain amount, presents a great number of variations. Apparently it was often not understood. In this charter the clause reads that the debts "shall not exceed twice the amount of their capital stock actually paid over, and above the moneys then actually deposited in the bank for safe keeping." It was never to suspend under a 12 per cent. penalty.

On the same day the city and Bank of Cairo were also incorporated. The owners of the point of land at the junction of the rivers are named, and their opinion is recorded that "no position in the whole extent of these western States is better calculated as respects commercial advantages, and local supplies, for a great and important city;" but the inundations are a drawback and dykes are needed. The proprietors desire to devote one-third of the proceeds of land sales to dykes, etc., and two-thirds to banking. They