, 1864-01-01

the Eec1eton o. OH coufL upon Lie CoAslAt4~
tional question was erroneous. However
disappeared, for unless ali history Is at tausk,
bank Issues based solely on the credit OF tho
State, If Issued In amounts large enough TO
supply the circulating medium, Will neee5-
saIily greatly depreclate, because there Is no
sufficient specie fund set apart and r Ieaas'
The experience Of England and France, shoW-
ing concluelye1y that government can only
eafrly carry on bankfng, through banks estab-
l;fhea and controlled In theiT management
by private capital, which sllall bo superior to
and to . great extent independent Of mere
political Considerations.
TIE STATE BANK CHARTERED.
In 1895 tic State Bank Of Illinois mas char-
tered, with capital Of 81 400 o@ So to be sub
served, to be subscribed for by the State
Whenever tic Legislature shcn1d think prop
cr 10 subscribe for It. IN 1887 it, c.....at MAS
increased by s2 Co0, 900, this whole SIN to be
subscribed for By tho State, and It's bonds to
be is6ucd for Tie sauc. This bank 1as char
tered by the Democratic Legislature Of the
State, Parties were then divided into Wings
and pelnoents. While no parry vote was
taken uron the subject, 1t SO happened that
majority Of the Wings yoted against the
measure, and majority Of the Democrats for
It, State BaEks were then in Democratic H.
yor. In the organization Of the bank, how
ever, gentleman Of Wliy politics got che
control, and waB elected President, in conse-
quencc Of which most of the active spirits
Belonging to the Democratic party, who had
been influential in obtaining the charter, but
who had failed to secure the management, be-
ccme its inveterate cnemieR, and never ceased
to wage war against It.
ILLEGAL CIRCULATION.
It will be recollected that in tho history Of
fr crrha f. f1,a
of the United States deposits from tho Bank
of the United States, the State Banks, though
at first the favoritts Of the Government, sab
eeqncntly fell under its displcasure, and tho
Democratic party, under the leadership of
Mr. Benton, who vas styled BY Ills admirers
"O1d Bullion" BECAME fearfnl1y .antagonis-
tic to banks, and devoted to the theory Of .
hard money currency.
No one can question that since that time,
for the most part, the trash In circulation In
this State, In lieu Of money, has been hard
enough. No less can it be questioned by any
history Of these times, that legitimate banks,
Of bona jsde capital, laye been badly treated,
and their managers unjustly, .Yickedly, I'M
merciful1y ind reck1csBly abused. Tho result
has been that, In nearly every instance, where
a corporation has attempted to do legiti-
mate business, under the sanction q, and n
conformity to the 1aw, upon actual capital,
spcecesful operators have been those who
commenced their operations in defiance Of
the Law, carried them on boldly without ref
ercnce to the public good, and sailed their
offered by the partisan prejudice against
banks and monicd institutions, and made
their great opctator rich by tho use Of an
! illegal circulating medium, which their In
sanc hatred Of legitimate banking, upon
actual capital, had forced themselves to use.
Dr. .I1- 81 ~ 3r,{r to -,
history Of all Scottish and Yankee enter
| pr:scs at lnancicring : currency, which Is
| equal, in success, to that Of 1fr George
Smith, with his Wisconsin Marine and Fire
| Insurance Company.
| The charter was granted by the Territorial
Legislature Of Wisconsin fol. IN insurance
| company, with power to receire money on
deposit and to loan the same. 1t was not
authorized even to grant certificate Of de-
| post, and go far from its having any banking
| powers, 1t was expressly prohibited from do
ing my banking business, or Issuing anything
in the form or similitudc!of bank no:es, to
be used as circulating medium in lieu OF
money. Tct no sooner had Mr.: Smith OBJ
tafDcd the charter, than he commenced
EraWing drafts In sums of one, two, three
and five dollars, III Ihc form and simil}tulo
Of bank notes upon another Scotch firm in
strachan & Scott, and to pnt them in clrcu-
1ation. They were coldly received at first
nay repu1Eed, and it 10 not probable that they
| Nould have eycr got into tayor, or the subsc-
quent issues Of that institution ever obtained
| considerable circulation or credit, but for the
| folly OF the State Of Illinois In destroying Its
I Own State bank.
The bank went into operation ut a most
unfortunate period. It vas ut a time when
speculation wos rife a1l over the country, nnd
| csrecially in the Vest. The tide Of etnigra-
tion had Get vezy strong into this State, and
those who had been but few months in 1t
| had cained fabulous wealth in the rise Of the
lands ard lots they had purchased The In
dicn title TO the lands about Chicago had just
begun to be extinguishcd and the lands were,
for the first time, offered for sale bY the Gem
eraI Government.
! TIE CANAL SCHEME
| About this time the Legislature authorized
igEn Canal, and towns wc,e lald ont and sur.
yeyed along lis entire length. The whole
people seemed crazed with their progress,
and magnificent scheme of Internal I'm
proTemcnts wns adopted BY the Lcgisla'
Iure, and railroads commenced at both ter
prosecuted until the State became 30 hope
iefsly in debt tlat the Governor, in specia
message to the Legislature, proclaimed that
there Was not money enough in the Treasury
to enable him to pay tie postagc on the OIL
cisl communications sent to him through th' III
Vas vas rearly s1s,oco, Goo, without hard
II dollar Of useful improvement
to bc shown for it. Nearly I'LL that had ncer
dcnc on the railroads was in detached pieces
and II. the roads Ind been completed, 6s
sparsc was tie population, and so poor ref'
Of The State, that there would rot have beck
business enough to pay for running til!
roads. Despondenys seemed to have seizet
| the State Most Of the banks thloaghou
. tie United States E:d suspended specie pay
! ment, and The debtors to our State Bank nns
Bank of Illinois, were utterly unable to pay
They ere obliged to mortgage Or conve.
| their lauds to the Bank, to secure their in
debte1ness, and the Dank, either to wind u]
OF continue in 4 state Of suspended payment
The Legislature had, ct special session Il
july, 1857, authorized tic suspension Of spc
| Lad sanctioned the continuance Of the sus
pension. The banks Lad to advance money t.
the State to enable the wheels Of Govern
, 1ncnt to move"
LOANS OF THE STATE BANK.
t'The authority from which have quote
! | sayE: Tic St2te Bank, to obtain favor from til
| Legislature, was compelled to make loans 7
t.e State, and to advance It's bills for Aud
| tors Warrants for q large amount, to defra
! | tie ordinary expenses Of Government; tn
.. revenues being again Insufficient, and tn
, ! Legislature afraid to increase tho taxes
: Wien came into Office, says GOV. Ford, ian
this was In January, 1872, the State owed tn
n1pety-four thousand dollars. A somewha
= similar connection With the State asalstc
much to break tho SEaWneeto~n Bank Iha
: Bank IVES first induced to lend the Stat
+ about Sc, Goo, to finish the State House; an
: iu September, 1888, upon the recommends
! ton nd urgent request Of Gov. Carlln, an
I uc1n his promise to deposit $500, 900 IN 3nte
< nal Ituprpycment Bonds, as collateTli sccu
;, ity, which promise WAS ueTer performed, tt
u | Bank wae Induced to 1end the Commtssionel
4 Of Public Wolks tho further sum Of S2oo,oo
y Which was never repaid to it."
! ATTACKS UToE TIE Rank.
! The State Bank at this time was pursuit.
- q wise md conservative course. 1t conttnt
!. it's operations to collecting and securing !
:. debts. making no loans except very u1odera
:. advances upon shipments to New Orleans
- - tion of specie payments In tho spring. M
y y tler the Bank nor the people bad any app1
~ y Ecns1on that it would be interfcrea With
r. the Legislature. But on tho assembling
r. that body, in the winter Of 1917, sever
Is rad:cal lla5d.mo1ey men, who Ind -, made
"a "a Benton, as Bullionists, opened their batteri
~ ulon tic Bank, and by force Of partisan q
=. rcals to the preludiccs nnd fears Of member
81 and subsequently more potent appeals to
49, personal interests Of the members and th'
r+ t friends, tie Legislature finally concluded
,et ct wird up the Bank. This is one Of the nj
~ ~ shameful chapters in the political history
=. =. the State. While it was known and admit
~ 10 that II the Bank had not aided the stats,
- enbarrnEsnents would have been much le
:. and that by destroying 1t we should, to
~ great extent, deprive the State Of unlfo
~ and rclinhlc currency, there was an unansH
~ ~ ahle argument which addressed Itself to
>*,A~1 Ay41 h