The weekly times-record. (Valley City, N.D.) 1912-1922, 1919-05-29
ARKANSAS

Arkansas, when she appeared upon the stage in the
full regaia of statehood, meant to make effective de
but The first act of the first state legislature is entitled
IAN Act establish the Real Estate Bank Of the State
of Arkansas There then 1885, corporations in
the state and bg biz Arkansas then just farming
The capital of the bank to be two million dollars 1t
to be raised by loans the security OF real estate
and the bonds which the state to be surety furnish
led the guarantee Of the public credit and insured conf
Conway October 26h 1885, Branches tnis pa1k we're
to be established the cities of Washington Columbia
and Helena, in Arkansas The principal office to be in
Little Rock the capital of the state Land in the
state permitted to subscribe foe stock and they
were receive credit in the bank ehaf the amount
stock subscribed by EACH The governor to appoint
two directors and the stockholders to elect d
recors annually for each of the four bank locations
Later the state Incorporated the Bank Of the State of
Arkansas at Little Rock with branches at Fayetteville and
Batesvlle The capital stock to be million dollars
to be raised by the sale of state bonds loans and other
funds that might into the hands Of the state. The
bank to be managed by president and twelve directors
appointed by the legislature. @5.%
The Real Estate Bank authorized to loan it's funds
upon farm lands as security The controller OF the
ency speaking Of these banks says: The both
these banks short and disastrous might have been
expected and the extent of the disaster magnfed by
the brevty Of their existence the wonder BEING how 50
much wreck and ruin could have piled up in so short
time. In the light of their multiplied foles, some good
may have been accomplished in the great object lesson
they presented to the balance Of the world and to future
generations but it bitter experience for Arkansas"
In order to launch the two banks above referred to-
the state issued it's bonds in the sum of two million EIGHT
hundred twenyseven thousand dollars Owing to the in
ability to pay interest," not to mention the principal of
THESE bonds the aggregate Indebtedness account of this
issue amounted to four Million. two hundred TWENTY-FIVE
thousand dollars in 1869 According to the tenth census
volume 6O3 this portion of the debt of the state of Ar
kansas amounted in 1863 to 81 49, The people of
the state adopted constitutional amendment repudiang
the bank bonds and other bonds the aggregate total Of
over $12 O0000000.
Such was the history of Arkansas experience in
the banking business costly and disastrous ex-
ana as the controller of the currency suggested
the only benefit possible is that other states profit by the
3oles OF Arkansas The credit of the state of course
wat temporarily ruined and permanently impaired in con-
sequence OF these acs For example, for period of EIGHT
years. the average value Of the securities of Arkansas
only nineteen cents the dollar In some years. it went
down to seven cents the dollar What further proof
can be required of the deadly influence of this kind of f.
nanclering on state credit? During this same period
other states that went into the banking business suffered
like tate For example, the average value of the secur
ties OF North Carolina during this period of eight wears
was twenty-five cents the dollar of South Carolina
tWenyslx cents the dollar of Alabama fortvve cents
on the dollar of Louisiana forty-ne cents on the dollar
OF tennessee ttty-three cents on the dollar.
On the other hand those states that refraned from
entering into this business found their bonds and
ties above par The bonds of Michigan California Mary
land Connecticut Rhode Island Massachusetts, Ohio and
ther states during this period sold at more than one hun
dred cents on the dollar The credit was good