Page:A History of Banking in the United States.djvu/401

 evils due to "unwise and reckless legislation," that metallic currency was the only one known to the Constitution of the United States. They pronounced in favor of the independent treasury with the specie clause. February 15th, all unauthorized banking was forbidden. It appears that there was a great deal of it. Notes issued by unauthorized banks were declared void and such banks were forbidden to do a discount and deposit business. No shin plasters were to be allowed to pass after sixty days from the date of this law.

A relief law was adopted February 21st, with the old device of three valuers and two-thirds of the valuation or no sale.

An act requiring the banks to pay specie was passed February 21st; the limit of note issue was set at three times the specie on hand; semi-annual statements were provided for; post-notes forbidden; also dealing in cotton or other commodities as collateral, or merchandise; $5 notes must be paid in specie from April 1, 1840; tens from July 1st, twenties from October 1st, and a general resumption was ordered January 1, 1841. Any bank officer who refused to endorse on a note his own refusal to redeem it might be fined $1,000 and imprisoned three months; no director was to have a loan in his own bank. Voluntary and involuntary liquidation were provided for. On the next day it was provided, by a supplementary act, that if a bank went into liquidation, any railroad charter connected with it should go on. In a case which arose under this law, it was held that it did not impose any new duty on banks or infringe their charters, and was therefore valid.

In February, the Brandon Bank wanted to close its branch at Paulding. A public meeting was held at that place to remonstrate, at which a committee was appointed, who took possession of the books, papers, and other property belonging to the bank, and held possession of them so as to make removal impossible.

In March, the banking affairs of the State were reported to be all in confusion. The liabilities of the Union Bank in May would be $4 millions, and its rescources were nearly all suspended. Hence the desire to recall the second $5 millions of State bonds which had been issued to this bank. The correspondent of a Mississippi newspaper said: "The credit of the State has been banked to death. Insolvency is now our name. Never was State in such an awful condition. The cry of 'relief' is heard on all sides, but what can a State do that is unable to pay its Legislature and the current expenses of government?" Brandon notes were quoted at nine cents on the dollar; the losses of the Union Bank on cotton were immense. The debt of the State called for a payment of $120,000, for interest, in the year 1840, and an installment on the principal of $125,000 on the 1st of January following. To meet this, the resource was a sinking fund loaned out to one hundred and ninety-five individuals, on which, in the opinion of