Page:A History of Banking in the United States.djvu/394

 until the expiration of the time specified in the mortgages (most of which have yet upwards of twenty years to run), without the payment of any portion of their annual interest, and continue, at the same time, to enjoy the possession and use of the property mortgaged to the bank. This opinion appears to me as absurd in its conception as it is demoralizing in its tendency."

The Secretary of State of Florida replied to the inquiries of the Secretary of the Treasury, 1847: "The General Assembly of this State, doubting the right of institutions of this character chartered by the Territorial Legislature to exercise corporate privileges in this State, has not acted on their report or legislated concerning them." The same officer replied, in 1848, that the authorities of the State had avoided any communication with the banks, lest they should appear to recognize their pretended charters and legal existence. The banks were always referred to in public acts as "alleged" or "pretended." The notes of the Union Bank were worth 20 cents on $1 and those of the Life and Trust Company less.

.—An act was passed, February 3, 1840, which was another link in the extension system begun by the act of June 30, 1837, whose consequences we shall soon see. It was made lawful for the Bank of the State and branches to collect twenty per cent., and interest, on all debts to the bank, including the extended debt, until the Legislature otherwise orders, in such a way "as to conform to the safety of the said several banks and to the ability of the debtors to discharge the same;" the debtors giving security. It will be observed that the three years' extension from 1837 would expire in the following June, when, if the debtors had fulfilled the terms of the extension, all the old accounts should be cleared off. Resumption was postponed until July 1, 1841. The Bank of the State at Tuscaloosa and the branches at Montgomery and Huntsville were "authorized" to issue each $500,000 in twelve months' post-notes; the Mobile and Decatur branches were "required" to issue the same. The Board of Control was abolished. The Planters and Merchants' Bank of Mobile and the Bank of Mobile were authorized to issue post-notes, lowest denomination $10, at twelve months, to any amount they think best, not exceeding $500,000 each; but the Legislature reserved the right to change this permission.

The Governor, in his message of 1840, stated that two sets of directors elected by the Legislature, and the members of the Legislature of two successive years, obtained accommodations to a larger amount, and will probably be the cause of greater loss to the banks, than the whole community besides.

The report of the president of the Bank of the State at Tuscaloosa, October 4, 1840, stated that the amount of debts due to that bank and made extendable by the act of February 3, 1840, amounted to $3.9 millions. The amount actually extended up to the time of this report, was $1 million. The bank construed the section of the same act which authorized each of the specie-paying banks to issue $500,000 in post-notes, and each of the