Page:A History of Banking in the United States.djvu/398

 of the State it should discount no note except for renewal, nor deal in bills of exchange except to pay interest on the State debt. Thirty per cent. damages were laid upon any bill bought by the bank, which should be protested. The number of officers was reduced and the bank was ordered not to pay out any more notes. Small notes might be issued in exchange for notes of $100 or more. All the specie of the branches was to be controlled by the Bank of the State at Tuscaloosa, and the president and directors of that bank were to provide for the interest on the State bonds issued for the branches. The Commissioners under the act of 1833 were directed to examine the bank and branches, especially the expense account from January 1, 1835, with reference to certain illegal expenditures. The Governor was to institute suit, such as the facts might call for, to recover the illegal expenditure. On the same day with these enactments, joint resolutions were adopted against assumption and repudiation.

The Legislature renounced the function of electing the directors of the Bank of the State, December 15, 1843, assigning it to the Governor. A measure was also adopted to extend until 1850 the bonds which would fall due in 1844.

The debt of Alabama, in 1844, was $14.1 millions, of which $9.2 millions was for bonds outstanding, "issued by the State in aid of her late banking operations." The total included $3 millions bank notes and also the university and school fund, $1.2 millions, which had been used up. The Committee on Ways and Means had come to the conclusion "however reluctantly, that not more than $7 millions of the debts due from individuals, including real estate and all available assets, can ever be realized" from what is due to the banks.

The Commissioners to examine the Mobile Branch in 1844, found errors and discrepancies in the accounts, in regard to which they said: "The general source of the error is the want of system and carelessness of the officers in former years by which confusion and discrepancies were introduced, which no possible amount of labor can now trace and correct." Having examined the debts due to the bank amounting to $5.7 millions, they valued them at $2.3 millions, fearing that they had put them too high. They valued the real estate owned by the bank at $250,000. It stood on the books at $1.3 millions. Recapitulating all the assets, they found that they were worth $2.6 millions, although standing on the books at $7.4 millions. The total liabililities were $6.1 millions, so that they found a deficiency in this one Branch of $3.4 millions. The clue to the accounts of the bank must have been entirely lost. "In the year 1840, after much trouble and the application of the labor of two clerks to the investigation of these books, the further prosecution of the task was abandoned as hopeless."

The Governor, in his message of 1845, referring to the losses which the various investigations had discovered, said: "The causes which have brought about these continuous and heavy losses are readily discovered by a recurrence to the history of their management, the whole tenor of which