The true Democrat., 1856-11-04

his official transactions. For such information
 as the present Receiver was able to give about
 the condition of the bank, and embracing his own transactions, your attention is invited to
 his report.
 Deeming it essential to the interest of the
 State that the affairs of the bank of the State
 of Arkansas should be thoroughly investigated,
 its true condition ascertained and reported, and
 all the assets that may be discovered applied
 towards the payment of the debt brought up- on the State by the bank: the Executive, ashort time since, caused John H. Crease to com mence the work of examination.
 By a communication from him, dated 21st October 1856, to which your attention is called, it is believed you will be fully impressed with the public necessity of having the true condi- tion of the bank ascertained, and the interest of the State connected with it secured as far as possible. Until recently the Executive had supposed that two good accountants, we'll ex- pierenced in and familiar with such business. could ascertain and report the true condition and the assets of the bank in two or three weeks. So believing the Executive contem- plated being able to lay before you such re- port, at all early period after the commence ment of this session of the General Assembly; for he expected to have had two accountants. instead of one, engaged in the investigation The policy of the Executive is to have the true condition and means of the bank of the State of Arkansas ascertained and reported. and the assets collected, as far as possible, and every dollar faithfully applied towards paying the debt of the bank. To accomplish this the investigation of the bank is absolutely neces- sary; and he has directed that it be prosecuted until completed
 After ascertainng the true condition of the bank, it is recommended that all the assets be placed in charge of the State Treasurer, and that he be vested with proper discretionary powers for collecting the debts, and settling the affairs of the bank, as early as practicable.- This could be so arranged that the Auditor would be check upon the Treasurer, as in other monied transactions, and the Land At torney and State Collector might be required to attend to the collection of the debts, and all legal business necessary to protect the interests and finally settle the affairs of the bank of the State of Arkansas.
 The State never owned any stock in The Real Estate Bank of the State of Arkansas" One hundred and eighty individual stock hold CTS mortgaged to the State Al 96O acres of land valued by commissioners, under oath, at S2,6O3,9 ,932 32; and upon this indemnity l,53O six per cent. bonds of the State were issued to, and sold, by the bank to obtain money to bank upon. The charter provided "That both the capital and interest of the said bonds shall be paid by said bank, as the same shall become lue and payable"
 It Is stated that the bank paid the interest on the ], 530 bonds up to the first day efJuly, 184l, and that DO interest has been paid by the bank 'lnce that time. Under "An act to authorize the stock holders of the Real Estate Bank of the State of Arka kansas, to establish branch in the western part of this State," approved February 24th, 1858, one hundred individuals became ock-holders and mortgaged to the State of Ar Kansas 65,l ,l2l acres of land, valued by commis- 'ioners under oath, at S776,84O O6; and there were 5OO more six per cent. bonds issued to the Real Estate Bank of the State of Arkansas. This bank, in violation of law, hypothecated these 500 bonds to the North American Trust and Banking Company" of New York, on the 7th lay of September, l840, and obtained as a oan S121,336 59 "The North American Trust and Banking Company" afterwards, in bad faith, passed off these 500 hypothecated bonds. amounting to five hundred thousand dollars, to Holforl & Co.,, bankers of London. In this manner these bonds were placed beyond the control of the State
 It Is evident that it was never intended that the people of the State should be ta xcd to pay any liabilities on account of the Real Estate Bank; for the 290 stockholders mortgaged to the State of Arkansas, two hundred and seven thousand, one hundred and one acres of land. valued by commissioners, under oath, at three millions three hundred and eighty thousand, seven hundred and seventy-two dollars and thirty-eight cents, as an indemnity to the State and the holders of the bonds for the payment of the capital and interest of the bonds. In addition, the act of incorporation, which was approved 26th October, 1886, provided, that the capital and profits arising from its use should remain with the bank and branches, "untI the JuH and final payment cf tue bonds of he State, and aH he responsibilities of sad Real Estate
 Bank are fully and .dnoHy pail oG and discharged,
 Uten dtuidenm shall be naole to Hie stockholders cf aH he ren'aining tu'ds to each m proportion 10 hiS share of stock, to be paid in such installments as the tads o, and debts due to the ba,ak, tvW jus tJy being 0aae, from time to hnae qtter the toen- ty-secon3 year 9f Jus charter" The mortgaged lands and the assets of the bank appropriated by law, were doubtless, in good faith, deemed amply sufficient to protect the State from any loss. And it is now believed that, if properly managed, the remaining assets and the mort gagged lands will be more than sufficient to pay every dollar of the debt on account of the Real Estate Bank.
 On the first day of October, 1856, there were 1160 six per cent bonds which had been issued to and sOll by this bank remaining unredeemed. These bonds will not be due until the 26th day of October, 1867. The interest unpaid by the
 Bunk, on the first day of October, 1856. amount ed to S987 ,930 %, but from this should be de- ducted $59, 142 31, funds of the State retained
 and applied at the United States Treasury to.
 wards the payment of interest on the 800 bonds
 of the State, issued to, and sold by the Real
 Estate Bank, and which are held by the Sec
 retary of the Treasury, in trust for the benefit of the Smithsonian Institute. After making
 this deduction, the interest remaining due and
 unpaid, on the lst October, 1856, was S928,.
 787 69; and when added to the amount of the l ,160 bonds which will not be due till the