Page:A History of Banking in the United States.djvu/418

 compound interest on the bonds was affirmed in the Circuit Court of the State, in 1854. Thereupon, while the suits begun by the Governor were pending, others were begun by creditors. It was feared that they would succeed in getting judgments and would sacrifice the assets. The plaintiffs had filed only copies of the bonds on which they sued. In order to defeat them a law was passed, December 7, 1854, that the original bonds must be produced and filed in the office of the clerk, and could not be withdrawn except upon an order of the Court. If the originals were not filed, the suit must be dismissed. This course was taken in five suits, and upon appeal to the Supreme Court of the United States, the law was sustained. The doctrine was affirmed that those who deal with a State must rely on its good faith.

In 1856, Arkansas for the first time had a balance in the treasury in gold and silver. It amounted to nearly $150,000, and all the warrants had been retired. Up to that time 607 State bonds had been retired by the liquidation operations of the Bank of the State.

In 1857 the bonds which had lain in Washington had been recovered and were ordered to be burned. All suits relative to the Real Estate Bank were put under the jurisdiction of the Pulaski County Chancery Court. An act was also passed against trespassers and squatters on the lands of the bank.

W. M. Gouge and A. H. Rutherford were appointed accountants under an act of January 15, 1857, to investigate the Bank of the State of Arkansas. Several previous attempts had been made to investigate its accounts, but the investigators had all given it up on account of the confusion of the books and the magnitude of the labor. These two made a report, October 10, 1858, after having done their best to reconstruct the accounts and discover the facts. The fact which stands out most distinctly in this report is that all parties, at the time the banks were founded, regarded the money which was brought into the State by them as a pure bounty. The people never gave themselves a clear account of what they were doing, or what they expected, but they thought of banks as fountains of wealth, and did not really feel that any one would ever have to fulfill any onerous engagements to one of them.

A Committee of the Legislature of that year refused to give weight to an appeal on behalf of the stockholders of the Real Estate Bank. That bank, they said, "was a speculation from its very beginning. If it had been successful the profits would have been theirs; if it has been unsuccessful, others ought not to bear the loss."

Up to October 1, 1860, there had been paid on the debt of the State, $2,341,996. There was still outstanding a little more than a million for the State Bank and $1.6 millions for the Real Estate Bank. There was also a debt of $267,455 for principal and interest of the negotiation with the North