The Montgomery advertiser., 1906-12-16

ly added to the speculative mania of that period. which ended with such dis a5trous results to the people. The first session of the Legislature passed an acf 'To incorporate the subscribers to the Bank of the state of Alabama, ap- proved December Fl. lSz0. The promot- CTS ofthis bank failed to raise the nec- essary amount of money and 1t was not established. This caused more vide spread determination to have State Bank. and another act was passed Des cember 2g. 1S23 This differed from the first in this important particular that the capital stock was not limited ana was to be all furnished hy the State. The following public funds were set apart by the act to constitute a part of the capital of the hank, the pro- oeeds of the sales and rents of the Uni- versity lands not to exceed $lO0.0oO, the amount which might arise from fhr three per cent fund, the proceeds Of the sale of the 1,620 acres of land granted by Congress for the seat of Government of the State, the proceeds of the lease of the salt springs, all escheats and all other public funds or which the State might thereafter be- come possessed. .
 In addition to this, the Governor and five commissioners, afterwards re- duced to three, were appointed by a joint vote of the Legislature, who were authorized to issue State stock redeem able after period not exceeding ten years. at a rate of interest not eS- ceeding six per cent and for amount not exceeding s10e.00D, 10 aid In in- creasing the capital of the bank.
 This act was entitled "An ActH to establish the Bank of the State of Alabama" and 1t may be interesting by way of throwing further light up- on the intent of It's promoters to quote the preamble which was in these words: g
 Whereas It is deemed highly im- portant to provide for the safe and profitable investment of such public funds as may now or hereafter be in the possession of the State and to se-, cure to the community the benefits, as far as may be, of an extended and un- depreciating currency; therefore be 1t enacted" etc.
 In view of future development. the use of the words to provide safe and profitable investment of such public funds" etc, and to secure Ian extended and undepreciating currency" etc. might be regarded in the nature of a huge joke. but for the calamttous re- suits. The public funds were all squandered and the .'extended and un- depreciating currency" passed at from fifty to seventy-fiye cents on the dol- lar.
 This bank began operations in 1S25. and by legislative enactments, It's capital stock was increased from time to time. On January 12th, 1928, there was authorization of issue of $100.O00 of six per cent bonds. This was follow ed three days afterwards by an Act authorizing the sale of tho Sixteenth section lands, donated by Congress for schools anu for the placing of the proceeds of sale in the bank. The total amount as thus used was $1,30O, 900. Not content with putting into this con money, an act was passed January 12th,- 1883 providing for investment of a large part of the funds of the. 'Unf- versity in the stock of the State bank.
 Laws were enacted by various Leg islatures authorizing issue of bonds for said bank and branches as follows: Jan. IT,, 's2. To establish a
 branch at Montgomery ..S 100000 Nov. 16, 's2. To establish
 branch at Decatur u, .s e. 100000
 branch at Mobile ... s,OoO.OoO Dec. 12. 's2 To increase cap
 ital of bank at Montgomery 50O,000 Jah 10. '35. To establish a
 branch at Huntsville :. .. 500,o00 Jan. Q. '36. To increase credit
 of branch at Huntsville -, 5OO,OOO Jan. 9, '36. To, increase capital
 of branch at Mobile. .. 1,000, ,000 Jan. 8, '36. To increase capital
 of branch at Montgomery 5O0.000 June 30. '37. To enabzIe bank
 to resume specie. payment 5000, ,000 Dec. 23. '37. To still further
 assist the banks .. .. .. 2,500,O00
 Total :. ..... :. =. q. SIS, ,sOO.OOO
 Certainly with this vast amount of bonds with which to realize money, one of the objects set forth in the preamble of an act already cited 'to secure to the community the benefits as far as may be, of an extended cur rency," ought to have been accom- plished. These bonds were redeem able at different periods, some bear ing five and some six per cent. The last amount named, S2,500,000, was to be sold in Europe, and during the war between the States, while Cover nor Watts was in the executive chair, money was shipped through the block ade to pay interest on some of these bonds held in foreign countries
 How Money Was Loaned.
 The Legislature had to elect the President and Directors and the mem bers were sure to succeed when they asked for loans for their friends. One clause of the act required the money to be loaned in the several counties