Page:A History of Banking in the United States.djvu/404

 four shillings and sixpence to the dollar; the contract of sale was fraudulent; the purchase by the Bank of the United States was in violation of its charter; the bonds were sold at less than par. He said that he denounced the sale to the Legislature as illegal, in January, 1839. He declared outright "this State never will pay the $5 millions of State bonds issued in June, 1838, or any portion of the interest due or to become due thereon."

"It was not until July, 1841, that the doctrine of Repudiation was announced to the world—and then by the very last man in the world from whom it should have proceeded, Governor McNutt. We have nowhere seen it advanced that even a minority of the Legislature of 1839 made any movement of repudiation which might at least have served as a notice of intention." On the contrary, that Legislature was angry with McNutt for his animadversions on the negotiation of the bonds, and passed resolutions of approval of that negotiation.

Governor McNutt wrote a letter to the "Richmond Enquirer" saying that a demand would probably be made on the government of the United States for payment. "This will raise an exciting and perplexing question. The State has defined her position and will maintain it, be the consequences what they may. I firmly believe four-fifths of the people of the State prefer going to war in lieu of paying the bonds."

The repudiationists won a great triumph at the November election, 1841. They had two-thirds in each House of the Legislature. The immediate effect was that all State stocks fell. At the opening of the following session of the Legislature, Governor McNutt said that the recent election was a glorious triumph. It had "sustained the sacred truth that the toiling million never should be burdened with taxes to support the idle few." The State had lost $302,988 by the notes of bankrupt banks which it had taken. He wound up his message: "The banks in this State have sunk about $20 millions in relieving the financiers. They will receive their last relief in the bankrupt act."

At the session of 1842, the Legislature was trying to undo the work of 1836-7. February 28, 1842, an act was passed to provide that the State should take over the assets of the Mississippi railroad and sell them at auction. Bonds and coupons of the State were to be receivable for them. The act aimed to stop the sale, by the railroad, of scrip of the Planters' Bank, which had been issued for stock of the State in that bank, and had been transferred to this railroad company in 1839, and also to stop the sale of the same by persons or corporations who held it hypothecated.

February 26th, resolutions were adopted with respect to the Union Bank,