The true Democrat., 1857-05-05
Historical Sketch
Of the Real Estate Bank and the Stat'
 Hank of inc State of Arkansas.

and western Virginia,) only twenty. But ow- Ing to concurrence of causes which need not here be enumerated, the system in the next few years rapidly extended itself, and reached it's eliminating point just about the time that Arkansas was admitted into the Union.
 The constitution of the State provided for the establishment of two banks. The subject that first engaged the attention of the first leg islature that assembled under this constitution, was that of banking. The first act that was passed by it, was the act to establish the Real Estate Bank; and the second was the act to establish the State Bank.
 The advantages that were expected to be derived from these institutions, are very distinct v set forth in a report from the committee on banking, submitted to the legislature by Mir. Ringgold on the 4th of October, 1886.
 "The privilege of banking," said the com mittee, is certainly of infinite Datte, and 1t IS doubtless susceptible of vast improvements as well in regard to revenue as the interests of the people *
 "I he charter of the State Bank pledges the faith of the State for one million of dollars; and it has been the policy of other States to pro cure means from foreign capitalists, and little doubt remains but the present period of time is esteemed to be the most suspicious for such a purpose, as it is believed that the State could borrow any desirable amount of capital at an annual charge of five per centum, if not upon better terms. That capital being loaned at eight per centum per annum, being three per centum in favor of the State, a lded to the bank ing privilege of issuing three for one on the actual capital so vested, will produce an accu- mutation sufficient to redeem the whole in less than twenty years.
 "Arkansas, should we not charter the banks asked for, will be at least twenty years behind where she would be, if liberal policy is ex- tended by the present legislature.
 "There is no view of the subject, as regards the State Bank charter, but what the result is of minute ualue to the State.
 "All these things properly considered, will, in the opinion of the committee, do away all those id1e prejuaices so commonly entertained against banking institutions without any as- signable reasons, other than those founded or want of sufficient information as regards the beneficial effects"
 When this legislature assembled the whole debt of the State was less than nine thousand dollars. Before it adjourned it passed acts to involve the State in debt to the amount of more than three millions through the issue of bonds, by the sale of which capital was to be procured to put the banks in operation.
 At this very moment, though Mir. Ringgold and his co-adiutors were ignorant of It, the bank
 ing system of the Union had received blow from the effects of which it did not recover fol years.
 Among the causes of its extension was the free sale of American securities in the London market A failure in the harvest in England having created great demand in that country for gold for export to buy brcadstutfs, the Bank of England found itself under the necessity of diminishing its issues, and especially of curtall, ing the credits it had so literally granted to he "AmeriCau houses" that IS, to the private bank ing aEd brokerage firms in London that dealt largely n State bonds and other American SC. curitcs. This curtallment of their acCommO- datioHs compelled the American houSes'' ln London to press on their connections Tn the United States who in their turn pressed on the rest of the community. About the same time the Congress of the United States passed an act to distribute the surplus revenue" among the States. The measure would have been a wise one if the surplus revenue" had existed iu the form of "surpius specie" in the vaults of the banks But this "surplus revenue'' nev- CT had an existence, except in the form of mere inscriptions of credit on the books of " the pet
 
 to transfer these book credits, from point to point, without ary regard to the laws of trade, all the banks in the Union, in May, 1937 stopped specie payments
 Under these circumstances, it was impossible to find a sale for Arkansas bonds bearing five per cent interest, and the next legislature, which commenced its session, Nov ', 1887, took measures to raise the rate to six per cent.
 Great pains were taken to persuade the peo. pie that they would never be called on to pay either the principal or the interest of these bonds. Thus, Mr. John Wilson, the first Pres ideut of the Real Estate Bank, in report male in Nov, 1S37 after stating that the stockhol ders had mOrtLaged to the State l21 300 acres of land, valued at S2,6J3,OOO, proceeded as follows:
 "When 1t is taken into consideration that the State has d lien on S6O3,9 900 worth of prop erty, more than her own guarantee amounts lo, and against which she could have recourse at any time, in the event of that necessity; and when it Is further taken into consideration that these lands which stand as permanent Secur- ty to he State, are among the Uery best ja the Cmtei Sgtes-that a large portion of them are highly lmproved-that nearly fifteen thousand acres of them ale already in a state of cultiva- tou-that cultivation Is rapidly extending yearly enhancing their value-that they are in a region of country where the production of cotton must ever make them valuable-that they must ever furnish he greater portion ofthe exports of the State and all to it's weaIth.-it cannot be doubted, and the undersigned is convinced that every candid individual of this community will be fully satisfied that the security furnished bv the stock kholiers of the Real Estate Bank is so u.l and ample that had 1t not been cheerfulv offered by the stock holders themselves, 1t could in truth be said it is So far beyond what is ac- tually necessary for that security, that it would be injustice iu the State to ask 1t from the citl- zens-that, in fact, too large an amount of prop. crty has been locked up, and that the State has tiken a security, which individuals, in the or dnary transactions of men, would have deemed as unnecessary and oppreSSve--a policy which It Is believed no government, when exercising it's power to promote the individual interests of It's citizens, should ever pursue It Is not how ever, mentioned here, by the undersigned, as a matter of complaint, but that those who may have entertained fears for the safety of the State. may know their fears have been idle and un- necessary, and that those who have evinced their hostility to the success of the institution over which he has the honor to preside. and have thrown obstacles in the way of its Solng into operation may at least see that the founders of 1t have placed it on basis of sttch permanent safety, both to the State and to indi- viduals, as to leave themselves beyond the reach of suspicion or censure, and the security ef the institution itself, beyond doubt
 " It has been estimated that the appraisers have overvalued the property which stands pledged as this security To say such is the fact, would be hazardlng an assertion which th.l ,Io ,,.oJ, individuals who were appointed by the execu- tve as appraisers, to appraise the property of subscribers for stock iu the Real Estate bank, to iiX upon its fair cash value and furnish certili- rdtes oi the same were men personally known to the Governor, as gentlemen of standing character and intelligence, or were recommend ed to him as such by members of this legsla- ture, some of whom are members present. They were required, and did, in all cases, give their certificates under oaH. Every appraise- memt has appended to 1t the certificate of a