Page:A History of Banking in the United States.djvu/434

 one share to have one vote; not more than half the capital to be employed in dealings in bills of exchange; no loans on its own stock; twenty per cent. penalty for suspension; some notes to be made payable at New Orleans and Baltimore, Philadelphia or New York, and they may be made payable at any respectable bank in the United States. The bank may borrow not more than $5 millions, payable in five years, to lend on mortgages in Missouri; this last fund and its accounts to be kept separately; to pay the State annually one-quarter of one per cent. on the private part of its capital in lieu of bonus and taxes; lowest note, $10; to be the fiscal agent of the State; the note issue not to exceed double the capital for the first five years; if it suspends, to forfeit its charter. February 15, 1841, an amendment was proposed to the stockholders to repeal the provision for branches and for the loan to be lent on mortgage.

Governor Boggs, in his message, November 17, 1840, boasted that the Bank of Missouri had resisted the second suspension in 1839, "and in so doing has not only gained honorable distinction, but has shown how easy it is for the banks of any State to resist these suspensions." He complained, however, of chartered insurance companies in St. Louis, which, although not allowed to issue notes, circulated the notes of foreign banks. He also complained that, although there were heavy penalties for the circulation of notes under $5, "notes of lower denominations have been circulated freely ever since its passage, and has any one been prosecuted under that law? Not in a single instance that I have heard. The law is a dead letter on your statute book, and your courts either cannot or do not enforce it."

In 1842, the Governor complained earnestly of the issue of small notes by cities, towns, and county courts; also of the issues made by unauthorized companies or companies chartered for other purposes; also of the great amount of depreciated paper from other States, especially from Illinois. After having, in 1839, with the approval of the Legislature, resolved not to do business with the paper of any suspended bank, the Bank of the State changed its policy, in the spring of 1841, and began to use such paper in its transactions.

Resolutions were adopted by the Legislature in February, 1843, that the Bank of the State ought not to receive the notes of any suspended bank, and also ought so to manage its business as never to suspend.

An issue of State bonds to the amount of $175,000 was ordered, in 1842, in order to pay the debt of the State to the bank, and a committee was raised to investigate the bank. The circulation of notes under $5 was also prohibited after July 1, 1843, and after January 1, 1844, the circulation of those under $10; after July 1, 1843, no note of a suspended bank was to pass or be dealt in. Contracts in such notes were declared void. All banking privileges, except those of the bank of Missouri, were declared unconstitutional and void. All charters of companies which should violate this law were to