New Orleans daily crescent. [volume] ([New Orleans, La.]) 1851-1866, 1856-04-28


.rTtE CITIZENS, BANK OF LOUISIANA.
ba xsaorlinary success following the reorganiza
ton Of the Citizens Bank the unparalleled pinnacle
of fame the which its operations
have reached the great advance in the value Of its
stock the steady increase of its already vast business
nave attracted large share Of the attention of the
irnoneyed men Of the country. To explain the
true position of the Bank the time and the causes
its being recognized, which appear, from enqui-
ries frequently made Of us, not to be fully under
Stood and how has attained its great and prepon
derating influence in the financial history of our city,
are the reasons for the following remarks.
1t must he promised that the inception Of the bank
dates as far hack as twentythree years that the
original charerWas granted in April, 1888, underline
state administration Of Gov. A. B. Roman with
capital of twelve millions of dollars, which caplta
was to be raised by the novel process OF loans y
bonds to be issued by the bank that tlie ~
be subscribed BY stockholders to raise tne VIZ
900 on LA 900 shares OF stocks 70 seeo pi
capital of $l2,000,000 that the ee "
be guaranteed secured and pledged lof oy
on real estate. On the faith OF these supscr
nle1eess and mortgages the bank was authorized to
;ssne II bons PAYABLE in fourteen, twenty three,
tI;rtv.two torty.one and fifty years. A tolerably
LAM time to- trust an incorporated association Of
;5;yiduals though some Of the best and most pro-
ductiye property in the State as well of the
most gyalneless and unproductive, was secured to
cover the capital.
The citizens Of New Orleans were entitled to sub
viii be remembered with what avidity the stock was
taken. Every owner and proprietor of a vacant lot
whether dry or under water proprietors of old and
tenantess buildings, with some good proprietors,
ina gned that the millennium was really approach
ing. The bank was also authorized to advance money
to build houses, and particularly to prescribe the
materials of which the roofs should be composed 1t
was authorized to take stock the Lake Borgne Navi
| cation and Canal Company build railroad from
the Mississippi river to the GENTLY road land other
privileges, enough to bankrupta bankin the world,
were granted It was intended to be real Credit de
| Mobiiier.
The bonds Of the bank on which the capital was to
| be raised were duly engraved, and were about as
beautiful an specimens Of artistic skill as were ever
| issued from an engraver's hand To look at them
was considered equivalent to having the cash for
them and it was surmised that all the bank had to
j. do was to ask and receive Agents were dispatched
to the chief financial markets Of Europe to sell these
bonds !: but on the first tender they rejected
from the fact that the faith of the State not
Il pledged Or identified with Sthem as was the case
with tie bonds Of the Union Bank and Consolidated
Il Association. Here was dilemma for which the stock
i holders were not prepared, rendering imperative
Il all movements towards organization. After several
attemps to obtain the faith of the State or the States
endorsement on the bonds, the Legislature in 1856,
three wears afterwards granted the security of the
State and finally, in the summer and fall OF 1856, a
sufficient amount of bonds was disposed OF to enable
the bank to go into operation though many moditica-
II tons and amendments were made in the new act
all going to show the impolicy and impracticability
Of establishing a sound banking system mortgages
9 Of real estate. The bank was also authorized and
compelled to establish in different parts of the State
seven branches or Offices of discount and deposit.
This was sufficient to arrass and cramp any bank, as
experience had already proved by other banks Of the
q city.
4 To review the movements and the monetary condi-
tion of the country from 1887 to l843 isllo our pur
4 pose nor have we room. Suffice it to say the Ct
zens' Bank went into liquidation in 1S43 causing
great disappointment to its stockholders and entail
ing on the community l4sllare of the manifold evils
and difficulties arising from the overtlading, over
banking in the years 1885, S6 and '57 brought about
in part by the mischievous and dangerous policy of
the deposit bank system adopted in 1884 by the Gen
eral Government. .=-sI
i Under the acts of the Legislature of 1S42 and 1843
4 the bank went into the hands Of commissioners Of
liquidation was blotted from the rolls of financial
credit and entirely forgotten except by those who
had become stockholders by subscribing and mort
gazing property During the interval from 1913 to
1850 the best stockholders were changing from those
strictly good personal responsibility to those ola weak
er knd-the wise and chary evincing at all times
: disposition to get rid of their stock by disposal
transferring even at loss. The interest on the bonds
was not punctually paid, and the indications were
that many stockholders would be hopeessy and lire
trievaby ruined without the State being any better
provided to redeem its obligations granted to the
!, bank when they became due. ----.
: Seven years ago-say July lS49--the condition o
the bank was indeed desponding its liabilities being
$7O66 454 and its assets Sc, 1885 1885, showing def
n cit of over 100000. .
i At this period it was conceived the bank had no
forfeited its charter and privileges. Suggestion
e were made that it could be revived many of it
stockholders conending that the constitutional obi
cations could not interfere, because the charter of tn
: bank had never been taken away by the Legislature
Z Great opposition was brought forward to proven
# any revival, and the friends and stockholders
the bank equally strenuous in sustaining thei
> views and Strengthening their intentions to reorga1
IS ize But still it was deemed the part of prudenc
and wisdom that the approval of the representative
of of the people in the Legislature should be secured be
il fore the project should be carried out. So strong
ae the appeals SO powerful the arguments educed in bt
half Of the country stockholders that the measure
Id ceived the legislative sanction after being warmly
cir strongly urged by the managers of the bank an
in 1862 theact for reorganization passed both House
of the Legislature, but met with the veto of the E,
ecutive and was returned to the Senate when it afte
Y. wards passed both Houses and became law, nluc
" to the qualification of the propretors of the ban
az And, to make the act of the Legislature more bin
he ing an express clause was inserted in the Const
tuition of the State adopted in 1852 granting penal
powers to the Legislature pass such laws might
R. deemed epedent for the relief of the Citizens Ban
IS From that date the bank may be considered as b
X ing introduced to the financial and commercial wor
as new bank with cash capital of one million al
lat half of dollars; 100000, oaehird was to be su
f seribed, and made up by the mortgage department
10 stockholders of the old bank and one million of &c