Page:A History of Banking in the United States.djvu/457

. The Court said that the State had "squandered" this sum "in riotous living." The expenses of the liquidation had been enormous. The salaries and fees, from June, 1876, to January, 1882, amounted to $58,630. The legislation about this bank was said to cover 65 pages of the statute book.

Early in the fifties there began to be complaint at New Orleans that there was a deficiency of banking facilities, which was crippling the business of the place. This deficiency was attributed to the undue stringency of the existing Constitution and the banking law. Apparently in response to this complaint, the Citizens' Bank was revived, by law, in 1852, as a bank of discount and deposit. The Governor vetoed the bill on the ground that it was unconstitutional, but it was passed over the veto. Although the existing Constitution was only seven years old a new one was made in this year, as it appears, in a great measure, in order to relax the barriers against the banks. The provision in the new Constitution, however, was by no means lax. "The State shall not subscribe for the stock of, nor make a loan to, nor pledge its faith for, the benefit of any corporation or joint-stock company created or established for banking purposes." It might aid companies for carrying out public works under certain conditions, but "no corporation or individual association, receiving the aid of the State, as herein provided, shall possess banking or discounting privileges." "Corporations with banking or discounting privileges may be either created by special acts, or formed under general law; but the Legislature shall, in both cases, provide for the registry of all bills or notes issued or put in circulation as money; and shall require ample security for the redemption of the same in specie. The Legislature shall have no power to pass any law sanctioning in any manner, directly or indirectly, the suspension of specie payment by any person, association, or corporation issuing bank notes of any description." In case of the insolvency of any bank, the note-holders were to have preference over all other creditors. By a special section, laws to revive the Citizens' Bank were authorized and such acts already passed were validated.

The scheme of 1852, however, to resuscitate that bank proved impracticable. By another law, April 8, 1853, the holders of the mortgage shares were given a preference in subscribing a new cash capital of $1 million for a bank of discount and deposit. The amount of State bonds issued for this bank and outstanding, January 1, 1874, was $4,018,626. October 8, 1880, the assets were $1.5 millions, consisting of $1 million in the banking department and $500,000 mortgage stock assets, the latter worth not over $300,000. In 1883 the cash stockholders paid in $350,000 more. The value of the banking department assets, in 1889, was $300,000. In 1874 the charter was extended for twenty-seven years. In 1880 the Legislature authorized the bank to compromise and settle the liability of its stockholders on their mortgages. This act was construed by the courts as in the interest