, 1879-03-17
An Old Story Itetol.t by "0ntn.ss

Ah VIA SfnfY 4tGtOlH by hNnth.~
tnTrespondence Cincinnati Enquirer.
New Yonk, March 13.-1n thi. letter shalt
give the history Of stntc-banking In some pronk
ncnt States negllborly to Ohio.
Illinois has had n long experience with banks.
Tile Industrious history Of the Ssntc by Dnvid.
sou md Stuyc goes inuutely Into banking aues-
ttons. The flrst Legislature met at kaskaskiu.
composed nf twelve members, who MI boarded
With ono family Aila loIge.i In ono room. Money
was very scarce, and tho common currency was
racroon antl dcerslsins. In Imitation Of tlb
financial aspirations Of Ohlo Gt,d Kentucky, tho
young Legislature authorized screral bnnks, ns
at shawncctown, Edwnrdsvlllc, and Kaskask!a,
all banks OF Issue. fl addition, tho l.cr!sia-
turo forced tho circulation Of these banks by
postpontng the collection Of debts unlcss the
creditor would receive their notes. The Govern
mcut deposited i.B receipts for public lu,,1s
with the Edwardsvillo Bank, which stole
$4,000 Of it, md, notwithstanding q judy
incht, tl!e euni was negcr collected
plentiful: band Of Regulators" wah as-
celebrated CITY Of Cairo, alterward commcnlo-'
rated BY uickeus. was chartered by the LcgistR-
t,,rc, With = hank OF q capital Of s2oJ,001.
krcutcd by "watct.lots." The hank soon cx-
uuld artl silver wcre driven out Of circulation
by tic wildcat currency. 4 monster bauk waA
created by tho Legislature, with capital Of
S2.009,o 900, but not dollar OF stock was cvcf
subscribed for. The immigrants came into tho
Suite pcnniLcss. like tho people among whom
they settled; TAPER towns dotted the mnp
eysrywllere, but would not grow; a accond
sta,e lAnk was chartered mud iocatcd at YAM
dalia, with four br1uches, and its notes were
tnnt:c receivable for all taxes, costs, fees, and
salarscs; dcbtors wcro allowed three years. stay
by rcplevy unless the creditor took the hank's
nutcs. Fcuplo wctD encouraged to borrow
tfttt nStn1H md 1.offffefen
as r,lich rs he wanted. Nobody paid tho bank
anything back. and the State Legislature gEave-
ly 1netnoralizcd Congress- to let thrr local papct
preciated 10 q! cen,a on Tic dollar, aid nom
residents paid ull their taxes IN it. Tile 6tate
lost s5Do, 0o0 By the bank experiment
1n lo34 1t was propuscd to Introduce slaves,
50 as to match t,lc banks w'th somcth!ng as dis
crclitablc socially. In 1918, when tho Stats
Government vent into operation, it's rcvcnu
was little more than ss,0oo; session o! tn
son crushed tiau United States Bank, Gov. Dun
ca. countenanceu new State Bank. with sI1
branches u'rd a capital Of 81, 800, ,0o0. The Dem
otrats got tho Idea that GeI. Iackson'B opposL'
local ba'lks. Tie stock was cagcrly taken, and
ran up to & premium Of 1D per cent. ltnmo-
dlatcls rccklcss syssesn OF internal IMPROVE
tllcnts was entered upon; the State Banks were
nMmbcr of their branches. Nest Of the bank
uilleess wesn WhiEs, and u putlcal strife arose
over those institutions. The Secretary Of tbs
4 Treasury Was applied to to make the State Bank
Government depository, hut political antago-
,llsln prevented II. Suddenly tllG panic of 1857
OCCURRED, nn this banks OF Illinois suspended
spcs!c-plylncnts; a special session Of tue Leg
i1lature lrgaized tho bank. nk.suspens!ons, and In
tcrnal improvements went on. I'licso banks
contained all the deposits Of tic State, which
was nov virtually bankrupt. Abraham linroln
WINS member Of the Legislature Il Tint period.
1n lsI2 fl'e higc institution tailed, With cir
r,t1rtfutt nf Al NM {hE4 nIn E1rtr If Alnsrr
town, which hat loaned Lie State $st, ,003 to
build tho State Capitol at Springfield, WIS
squalr inv9lve;' a company OF sl'aspcrs then
bousht the bailk'charicr and spccu'atca i'll Stata
4 railroad systetn. WAS then devised, to cost
sl0,t00, 100, hut the liability ultimately amonnt-
"a IL alo1t -O,ouhHNl. III 1s4U Tic w!i3le sys-
sale .. several millions of thr stato bo,'t1s Il,
New fnrk the free hanktng-systcnl Of stlt Statn
wns introduced !at9 lliii!o1s. and naby Wildcat
baHss obtatued credit. Most OF this inoney WIS
u !hc improvement sysicm the Stats wns icts
with debt Of more ti!nn $1i.tHNl ,W0 Indiana,
'n The same year, 1s7, had disposed Ut Sll,UO3-
00o 9f her bonds to buifa only forty miles of ful-
PENNSYLVANIA rnn up her debt about the sall,o
time to j 10, ,000, ,0Mlt a1ld before tho Civil Wnr
Missouri had mora than $.000hoD debt. or
the debt Of Illinois, inore than 81, COZ was on
account Of ihe worthless banks. There wns q
annual deficit III ihc 1il!no!s finances Of $780, COO
na,l t!,e State credit vas exhausted. Thu peo
PIE we're Indebted to the merchants, the mcr
body w!lo carrscl one OF their rags in his pocket
s1uts bonds dcclined IL tic market to Il cent?
on the dollar, md In 1919 tho Two lea1lng banks
won't out of cxfstcnce with S4,h0o co.. clrcula
ton. Utter dearth and stugnatton In every
kind Of business prevailed
The cry nruko out for repuatation. Gov.
Ford aftcrwnrl said: tit Is my solemn belief
TINT, Wien catne into office, had tho power
fs1k ,aI.H 7{1tfs A41fn In ,r11t.
ticians oil neither side would never have darsd
10 risk thcis popularity by defending Ill increase
oi tnxes. Some III the counties refused to pay
tMxr3. In 1913 there wns not over $.00, 900 to
Ss0J. O00 HI gDud money III tho poekots Ut tho
whu!u people VI tlt|luis."
l!llnpis Reconstructed herself by completing hot
caual, which brought immigration into tho Stats
and encouraged tic public character. The st4ta
compromised with .le baiks, mil got rid ot
tuure than s., ,00u. .0o0 Of her debt 1}y prudence,
and economy, alpi good iluunctcsing. tho bouds
arose from II to ~ per cent, thu hanks began to
pay out their specie, urd everything went well,
Illinois soon Ind 1lNlf)Ol ubl,latf6n The rs.