Full text of Records of the Federal Deposit Insurance Corporation, Record Group 34 : Insurance of Bank Obligations in Michigan, 1836 - 1840 [1 of 2], Box 3, Folder 2

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Federal Reserve Bank of St. Louis

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MAiERIALS REGARDING THE INSURANCE OF BANK OBLIGATIONS
IN MICHIGAN, 1836-1842
Contents

Legislation

U.S. Exec. Documents and Reports of Bank Commissioners

Statistical Data

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STATUTORY PROVISIONS MICHIGAN CURRANT! PLAN OF BANK
OBLIGATIONS
(All references to Act of March 28, 1836, except as otherwise indicated)
A

BANK OBLIGATIONS COVERED
1836- 1842
Period:
Obligations covered:All debts (Sec. 4).
Percentage of total
circulating notes and
deposits covered by
100 (Sec. 4).
insurance:
B ASSESSMENTS AND OONTRIBUTIONS IN BANK OBLIGATION INSURANCE PLAN
Initial contribution:
Annual assessments:

1/2 of 1 per cent of capital stock (except that held
by State) to a maximum of 3 per cent. (Sec. 2 and 4)

Special assessment:

If fund reduced, regular assessments renewed until
restored to maximum. (Sec. 7)

C STATUTORY LIMITATIONS ON OPERATIONS OF INSURED BANKS


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I Responsibility of Directors and Stockholders
Directors:

Proportionate share of losses in case of fraudulent
insolvency, every insolvency to be deemed fraudulent
unless proved otherwise, incumbent on directors to repel
by proof the presumption of fraud. (Sec. 27 and 28)
Directors of bank liable in individual capacity in full
amount of real and personal property. (Sec. 25, Ch. XLVII,
Mar. 15, 1837)

Stockholders:

Liable to amount of stock held. (Sec. 25, Ch. XLVII, Mar. 15,
1837)

II Limitations on Loans and Investments
To officers and employees:
To directors-

Not to exceed 1/6 amount association entitled to issue.
(Sec. 28, Ch. XLVII, Mar. 15, 1837)

To stockholders:
Maximum to single borrowers: Not over 1/6 amount association entitled to issue.
(Sec. 28, Ch. XLVII, Mar. 15, 1837)
Total Loans and discounts:

Three times capital stock paid-in and actually
possessed. (Sec. 24)

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STATUTORY LIMITATIONS ON OPERATIONS OF INSURED BANES (cont.)
III Limitations on Ownership of Property

Banking house
and fixtures:

As necessary for convenient transaction of business.
(Sec. 26, Ch. XLVII, Mar. 15, 1837)

Time limit on '
real estate acquired
by collection of debt:


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Ownership of other
real estate:

Forbidden (Sec. 26, Ch. XLVII, Mar. 15, 1837)

Ownership of
corporate stock:
IV Limitations on Circulation, Deposits and Borrowings
Maximum deposits:
Maximum circulation:

Three times capital stock paid in and actually possessed.
(Sec. 24)

Rate of interest on deposits:
Maximum borrowings:
V Required Reserves
Total amount:
Proportion of reserves required to be actual cash:
Character of balance:
VI Limitations on Payment of Dividends
Percentage of earnings to be carried
to surplus prior to dividends:
If losges exceed undivided profits,
or in excess of net profits:
If reserve is impaired:
If capital is impaired:

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D

CHARACTER AND POWERS OF SUPERVISORY AUTBDRITIES OVER INSURED BANKS
I Character of Supervisory Agency

Name of Board:

Bank Commissioner of the State of Michigan (Sec. 15)

Composition and method
of appointment:
Appointed by governor with advice and consent of senate
and house of representatives in joint vote. (Sec. 20)
II Opening of Nev Banks
Authority approving
opening of new banks:

Legislature

Conditions to be taken into
consideration in approval of
charters or issue of certificates to begin business:

Compliance with provisions of Act. (Sec. 1-2,
Ch. XLVIII, March 15, 1837)

III Examinations and Reports
Number of required
examinations each year:

Three (Sec. 15)

Additional examinations
by supervisor:

If required by three banks subject to the Act.(Sc16

Minimum number of
condition reports each year:
IV Character of Assets and Management
Circulation and liabilities:
(tier powers:


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V Closing and Liquidation of Banks:
Powr to close for
violation of law:

Shall apply to court of chancery for injunction. (Sec. 18)

Power to close for
unsatisfactory condition: Shall apply to court of chancery for injunction if
insolvent. (Sec. 18)
Definition of insolvency: If circulation exceeds three times capital stock; or loans
and discounts exceed three times capital stock; payment
to bank fund three months overdue; one-half capitalstock
paid-in has been lost; payment of bills in specie suspended for 90 days: refuses to allow officers to be examined upon oatn- ny commissioner. Usec. 2
Powers of liquidation:
Receiver appointed by and responsible to court of
chancery. (Sec. 10)

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NOTES ON CHANGES IN TH: BANKING LAW PASSED IN 1838. (?ICHICAN)

Section 1.

(Old) 'desirous of forming an association for transacting
a banking business."
(New) "desirous of establishing a bank."

Old Sec.3.
(Old) "every association,"
(New) "every bank."
(Old) "30 percentum of such capital stock,"
"
(New) "30 per cent of each share of capital sto ck.

Old

ec.8.

"10 percentum of each share,"

New Sec. 3. "30 percent of each share."

Old

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ec.11. "The president and directors of such association shall before
commencing Operations, furnish good and sufficient security,
to be approved by the treasurer and clerk aforesaid, to the
latamgadxtm
aaditor general,"
Omitced.

New Sec. 8. "It shall be the duty of every banking association to cause
to be posted and kept up, in some conspicuous part of its banking house., a true statement of the names of all its officers,
agents and stockholders, together with an accurate statement
of the amount of the stock owned by each stockholder respectively; and such association shall file a true copy of such statement in the office of the county clerk of the apunty where such
association exists."
Old Sec.14. "
New Sec.10. Adds the following, "Provided, That the securities of every
such banking association shall at no time be less than the
amount which such associatiun Shall be autl_ori7ed at any such
to become indebted or to have outstanding ot in circulation."
Old Sec.15
New 3 ec.11.

"at least 10 percent thereon Shall be paid in specie
at the expiration of each succeeding year thereafter, until
the whole stock shall have been paid in."

Old ec.17.
New Sec.13. "or have outstanding is omitted." Reads "It shall not be
Lawful for any such banking association to issue or put in
circulation as money at any time, "
Old 3ec.32.
New ec.28. Provision adaed "Provided, That no money shall be drawn from
said fund, until the funds aid liabilities of the directors
and stockholders of any such association shall faAl and prove
insufficient to pay all debts due and owing for the same."


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Pace 2 NOTES ON CHANGES IN THE BANKING LAW (MICHIGAN) MADE EN 1838.

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New Sec. 26. "All banking a:;sociations incorporated under the act to which
this act os an amendment, shall, within ninety days from the
passage of this act, give the security required by the Sixth
section of this act, and shall in all other respects be subject to and governed by the provision of this act.
The above passed Dec. 30, 1837.

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LA,S uF 1IJ1iIGAN

1838.

Page 185 (No. 86).

An Act to amend the act entitled "An Act to amend an act to organize
and regulate banking associations, and for other purposes, and to suspend
the operation of the same.
Be it enacted by the Senate and House of Representatives of the
state of Michigan, That the act entitled "An act to amend an act to organize
and regulate banking associations, and for other purposes," approved the
30th day of December A.D. 1837, be suspended for the period of one year from
and after passage of th s act, as to any banking association which has not
gone into operation; and that the act to which said act is amendatory be
suspended for the same period, as to any banking association whereof the
capital stock has not already been subscribed, and ten percentum of which

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stock has not already been paid in to the treasurer, in pursuance of the
Seventh section of the act Last referred to;

Provided, That one bank only

may be established in the uounty of Uhippewa, under said amendatory act,
anything therein to the contrary notwithstanding.
Approved April 3, 1838.

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(.7

bank ,
Huron rl
Detroit c—,
Farmers' bank
bank of
kland
Bank of oingapore
bhiawassee Exchange banA
hank of Lapeer
Rarmers and ,dierchants' bank
Saginaw city bank
Farmers' bank .of ncmer
Bank of laRnchester
Bpnk of -uperior
Banz: of uibralter
01, Fprmers and 1"echanics' bank of lontiac
bank of Allegan
.42/ Grand river bank
Fprmerst bank of Genesee county
.2 3 Genesee county bank
4GBank of Utica
tn Goodrich bank

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114,14

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An Act to abolish the office of bank commissioners, and for other purposes
Section 1. Be it enacted 19,y the senate and 'louse of Representativ
of the State of aiichiaan, Ihat so much of an act, and all parts of acts of
the Legislature of this state, which create the office of bank commissioners,
and define, prescribe, or in any manner relate to the duties of said office
be, and the same are hereby repealed: rrovididgi. provided, That the court of
chancery shall oe, and in hereby authorized to proceed in all suits and
ceedings commenced therein, in the names of the bank commissioners, or
of them, against any bank or banking associatian subject to their visitation,
with the same force and effect, in all respects whatsoever, as if the said
offi.e of bank commissioners had not ceen abolished: And provided further, Tha
it shall be the duty of the attorney general of this state, whenever by the
governor required to institute an examination into the condition .lad affairs
of banks or banking associations in this state, and to do and perform all the
duties now or hereafter required to be done and peformed by said bank commiss
ioners, and for that purpose he is hereby fully vested with all the powers,
now or heretofore conferred upon said commissioners, or either of them.
Par. 2.

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This act shall take effect from and after its passage.

Appeaved, aiarch 25, 1840.

From Lpws of 'ichigan, 1939, p. 12
No. 66.

An Act more effoctually to protect the public against various frau . .

Sec. 5. ao bank shall hereafter be established undar or by virtue of
act entitled, "An act to organize and regulate banking associations," apala.aa
larch 5th, 18311, and the act amendatory thereof; nor shall it be lawful for
any bank or banking association established, or claiming, to have oeen
established under the pnvisions of said act, and which has not filed with t
auditor general of this state the securities required by law, or which
not have been organized and doing a regular and lawful banking business
at _Least, six months immediately preceding the passage of this act, hereafter
to issue or put in circulation any bank note, or to exercise any of the powar
and privilegs of a bank or banking association under or by virtue of said ac
except such as may be necessary for winding up its affiirs...

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From account of receipts and expendi
J-nuary 1, to Aovember 30, 1839.

Salaries o

bank commissioners (in paymcnt-

Lditor General's
rom uwg3atzee.xxxicrica "eport, Aov. 30), 1-41 (Laws ci

1-0449

k.

"he ban: fund wLs reported ovcrurawn fourthousand cne hundred ana thirteen
ollars, on the 30th Aovember laLt.
rom a careful examination of the krx-kx
ad books, I became satisfied that a warrant for $312.50, issued to
Pritchette, had been twice entered to the debit of this fund. rine
correction of this error reduces the cverdraft to three thousand eight
lundred dollars and fifty cents, for which no irovision has Leen

6tate Treasurer's Aeport, dated December 1, 1843, an account of thc
Dank fund is given with two entries; a debit to cash paid warrant of
Pic>7.79. nna n credit, by crene-al fund, to meet warrant, of the same

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A statement of Bank Fund, year 1838
H. Howard, Trensurer, in nertonnt 7ith 17i971

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(From Laws of
Michin, 1939, p.

76.

LAWS OF MICHIGAN.

LAWS OF MICHIGAN.

poslie tod°be provisions of an act to provide for the review of the seat of just
:
1M 17Fr. um ot the county of
I
Branch, approved March 21, 1836, as remains in said treasury, shall be refunded to the persons depositing
the same.
Approved March 14, 1837.
nrVII

AN ACT

to

[No. XLVII.]
organize and regulate banking associations.

Sec. 1. Be it enacted by the Senate and House of Representamode
of the State of Michigan, That whenever any persons, reeeeding in •
Went of any of the counties of this state, shall be desirous of
anrocistion.
forming an association for transacting banking business, such
persons shall make a written application to the treasurer and
clerk of the county where such business is proposed to be transacted; which application shall set forth the amount of the capital
proposed to be used by such association, and the place proposed
to locate the office for the transaction of the business of said association; and on application made as aforesaid by at least twelve
Notice.
freeholders residents of any such county, it shall be the duty of
any such treasurer and clerk to cause public notice thereof to be
given,for at least thirty days, in some public newspaper published in such county; and if no newspaper be published therein,
then notice shall be given in some paper published in an adjoining county,for the like period, and by posting up copies thereof in
twelve of the most public places in such county, which notice
shall set forth the amount of capital proposed to be used by such
association, and designate the time and place of opening books to
the capital stock thereof.
Sec. 2. It shall and may be lawful for the applicants, or a maTreasurer,
Ms bond. jority of them,to appoint a treasurer
for the time being, who shall
give a bond in the sum of thirty thousand dollars, with good and
sufficient sureties, to be approved by the treasurer and clerk
aforesaid, conditioned for the faithful discharge of such duties as
are hereinafter prescribed.
Sec. 3. The capital stock of every association to be incorpo,
Capital
stock.
rated under the provisions of this act shall not be less than fifty
thousand dollars, nor more three hundred thousand dollars, and
orpro-tives

forming an


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shall be divided into shares of fifty dollars each; and no such
association shall commence operations until the whole amount of frni itrdbpaid in.
the capital stock shall be subscribed, nor until thirty per centum
of such capital stock shall be paid in in legal money of the United
States.
irksome
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Sec. 4. It shall be the duty of the treasurer and clerk aforesuch
stock
of
capital
said, to open books for subscription to the
association, at the time and place mentioned, and to continue the
same open for the space of four days successively; in case a
greater number of shares than is sufficient to make up the whole
capital stock of said association shall be subscribed, the treasurer
and clerk shall apportion the said requisite number of shares ,trr„lift,
among the subscribers, in proportion to the number of shares
which each person has subscribed for respectively, in such manner as to secure to resident stockholders their proper proportions
of stock, as designated by the tenth section of this act; but no
person, resident of the proper county, shall, upon such distribution, receive less than five shares; if he shall have subscribed,for Distribution.
so many, unless the subscriptions for such number of shares shall
0,7 the
exceed the amount of shares of said capital stock. In case the nhe
subscribed
at
the
expiwhole amount of capital stock shall not be
ration of such period, the treasurer and clerk shall postpone such
meeting fur the space of thirty days, and shall give due notice of
such postponement in manner aforesaid; and shall, on the day to
which such meeting shall stand adjourned,open anew the books of
subscription, and shall continue the same open for the further.
space of four (lays, unless the necessary amount of stock shall be
sooner subscribed.
Sec. 5. In case the necessary amount of capital stock shall not Ipnitir:i n
be subscribed at the expiration of the last mentioned period, the
further continuance of such application shall cease and determine,
and the applicants shall be liable to the payment of all expenses
attendant upon such application; but should the necessary amount
of stock be subscribed during either or both of the above mentioned periods, the expenses attending such application shall be
paid by the association so to be formed,in its corporate capacity;
Provided, That such treasurer and clerk, or other proper officers, comm.&
m
tiorrinom
f rashall not be entitled to receive more than three dollars per day clerk.
each for their services in travelling to, returning from; and attending upon any meeting held under the provisions of this act.
Bu'lbet

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LAWS,OF MICHIGAN.

.2alomr so-

Sec. 6. Before any person shall be permitted to subscribe to
the capital stock of any association to be incorporated under the
provisions of this act, such person shall first make oath that the
stock for which he is desirous of subscribing is intended for his
own use, or for the use of the firm of which he is a partner, or for
the use of the person or persons or company whom he represents
By whom ad- as agent or attorney, and not in trust for another; which oath the
ministered.
treasurer and clerk, or either of them, are beret)), anthorized and
Limitation of required to administer; and no one person, firm, or company,
subscription, shall be allowed to subscribe exceeding one tenth part of the
capital stock of Fla association or corporation, nor shall he or
they be capable at any time of holding therein to exceed one-fourth
part of the capital stock thereof, unless the same shall come into
'his, her, or their possession, by action at law,in payments of debts
due from stockholders in their separate and private capacities;
Emmy deck.
una tretwur- no county clerk or treasurer shall be allowed to subscribe in
er
to
sicr=. sib- other than his or their own name or names.
Sec. 1. Every person, by himself, his agent or attorney, shall,
Ten per rent.
association, pay to the
W be Paid oll on subscribing* to the capital stock of such
subscribing.
centum
in specie on each
per
ten
aforesaid
treasurer appointed as
and
such treasurer
subscribed;
them
share of stock by him or
upon the
such
association,
of
To Whom
shall pay the same over to the cashier
Paid.
order of the president and directors, whenever the same shall be
but if such association shall fail to complete its orgaTote refund- organized;
.ed if "t"- nization within the time limited by this act, every such amount
paid in as aforesaid shall be refunded, without delay, to the subscribers respectively or their duly authorized agent or attorneys.
And any failure, for the space of five days, of the treasurer in
complying with the provisions of this section, shall be deemed a
Penalty in
misdemeanor, and shall be punishable by fine and imprisonment,
case of neglect of the
treasurer.
in a sum not exceeding three times the amount.of money withheld, and for a term not exceeding three years, at the discretion
of the Court before whom the same shall be tried and determined.
Sec. 8. Whenever the capital stock of such association shall
be subscribed, and ten per centum on each share thereof shall be
hereinbefore provided for, if within either of the periods
Meeting of paid in as
subscribers.
limited by this act, it shall be the duty of the treasurer and clerk
to call a meeting of the subscribers, at such time and place as
they may appoint, by giving, thirty days' previous notice thereof

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LAWS OF MICHIGAN.

79

in manner prescribed in the first section of this act, and at such
meeting shall lay the books of subscription before the subscribers
elect nine dF.
r
ecition of
then present, and thereupon the stockholders miry
directors, a majority of whom shall be competent to manage the
affairs of the association; and said directors, who shall be stockholders and residing within the state, and at least five of whom
shall be residents of the county wherein the business of such corporation shall be transacted, shall be empowered to elect one of
their number president; and on all occasions when a vote of the Ofvotes,
stockholders is to be taken, each and every share shall entitle the
holders thereof to one vote, either by himself in person or by
proxy, which proxies shall always be stockholders. No person
shall be a director of such association unless be shall be the holder
of at least five shares of such capital stock.
Sec. 9. All such persons as shall become stockholders of any swimmers
such association, shall, on compliance with the provisions of this ina"P"'"1act, constitute a body corporate and politic, in fact and in name,
and by such name as they shall designate and assume to themselves, which name shall not be changed without the consent of
the legislature; and by such name they and their successors shall
and may have continual succession, and shall in their corporate
capacity be capable of suing and being sued, pleading and being.
impleaded, answering and being answered unto, defending and
being defended, in all courts and places whatsoever; and that
they and their successors may have a common seal, and that they
and their successors, by such name as they shall designate, adopt
and assume as aforesaid, shall be in law capable of purchasing,
holding and conveying any e4tate, real or personal, for the use of
the said association.
Sec. 10. At least thirty per centum of the capital stock of such Thin
association shall be paid in in specie before such association shall truChbFeaid
be permitted to commence operations; one-third part of such commenceIn bef"e
capital stock shall be owned, subscribed, and continue to be held muu.
by residents of the county where such association shall transact
business: Provided, That so much of this section as requires that
one-third of the capital stock shall be owned in the county where Exception in
such associatitn shall transact businees, shall not apply to theItprpet.
county.
county of Chippewa.
Sec. 11. The president and directors of such association shall,security or
before commencing operations, furnish good and sufficient securi- r)"01..'°

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80

LAWS bl? MICHIGAN.

ty, to be approved by the treasurer anti clerk aforesaid, to the
auditor general, for and in behalf of the people of this state, to be
held as collateral securities when all other liabilities of such association shall fail or prove to be insufficient for the purposes intended, conditioned for the payment of all debts which such association shall contract, and for the redemption of all notes which
shall be issued or be outstanding or in circulation, Which securities shall be in the full amount which such association shall at
any time have in circulation or be indebted, and shall consist
KInd
of
meeither
of bonds and mortgages upon real estate within this state,
curity.
or in bonds executed by resident freeholders of the state, and shall
be forthwith lodged in the lianas of the bank commissioner,and a
copy thereof placed on file in the office of the clerk of the proper
county: Provided, That any presidcbt, director, or stockholder
Proviso.
of any such association, who may have rendered the securities
herein required, in whole or in part. and who may have disposed
of his or their Interest in such association, shall be relieved at
their option from all further liability by the bank commissioner,
upon the president and directors, and they are hereby authorized and required lo do so, furnishing, other good and sufficient
sureties equivalent thereto, to the satisfitction of the said bank
commissioner, and causing, the sante to be lodged and filed in the
same manner as hereinbefore directed.
Sec. 12. Whenever the president and directors of any such
Certificate of
name, &e. to
be tiled with association shall have complied with the requisitions of this act,
secretary of
stale.
the treasurer and clerk of the proper county shall file in the office
of secretary of state a certificate setting forth the name and location of such association and the amount of its capital stock ; and
said secretary of state shall immediately thereafter give public
notice thereof, by publication in one or Tiara of the newspapers
authorized to publish the laws of this state.
Sec. 13: It shall be the duty of the bank commissioner to visit
Duty ofbank
m i
the banking-house of such association as often as once in three
months,and at all other times when requested by the governor or
by any banking association in.this state, created by the provisions
of this act, or subject to the act to create a fund for the benefit of
the creditors of certain moneyed corporations,and to institute such
an examination into the affairs of such association as is required
in the fifteenth section ofan act lo create a fund for the benefit of

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LAWS OF MICHIGAN.

81

the creditors of certain moneyed corporations,approved March 28,
1836.
Sec. 14. It shall be the duty of the bank commissioner to re- Hen,
quire every such association to renew or change the securities required to be given by this act, under the like restrictions and regulations, whenever the public safety may require it.
per cent.
Sec. 15. In addition to the amount required to be paid in ,on the Ten
to he pond
capital stock ofsuch association before commencing operations, at
least ten per centum thereon shall be paid at the expiration of
each succeeding six months thereafter, until the whole stock shall
have been paid in, under the penalty of forfeiting to such association the amount of stuck which each individual refusing or neglecting to pay such instalment may have already paid in, and
the shares on which such payments shall have been made: Provided, That whenever any instalment is required to be paid in,
the directors shall first give public notice thereof in the manner °tint. of or
directed by the first section of this act, and that no instalment
shall be called in after such association shall commence operations
exceeding ten per centum at the expiration of each successive six
months, unless an earlier or additional call shall be authorized at
some stated or special meeting by a vote of the stockholders owning three-fourths of the capital stock.
Sec. 16. The shares of the capital stock of such association shar.how
shall be assignable according to the by-laws prescribed by such rilgt'et
association, but no assignment shall be valid or effectual until such
assignment or transfer shall be entered or registered in a book to
be kept for that purpose; nor shall any stockholder be capable of
assigning or transferring his or her stock in such association until
all notes, dues and debts,.of whatsoever nature, due to such association from such stockholder, either as drawer or indorser ofany
note, or otherwise,shall be first paid and discharged. It shall not Rebtrictim
be competent for such association to deal or trade in the stocks
of moneyed or any other corporations, or to increase or reduce
the capital stock thereof, without the consent of the legislature.
Limit of itSec. 17. It shall not be lawful for any such banking association MACS,
&C.
to issue,or have outstanding or in circulation at any time,In amount
of notes or bills loaned or put in circulation as money, exceeding
twice and a half the amount of its capital stock then paid in and
actually possessed; nor shall its loans and discounts at any time

82

LAWS OF MICHIGAN.

exceed twice and a half the amount of its capital stock so paid in
and possessed.
Sec. 18. The stock, property, affairs and concerns of such as()f directors
and presisociation shall be managed and conducted by nine directors, who
dent.
shall choose one of their own number president, and shall hold
Term of of
their offices for one year and until removed or others are chosen
rice.
Election,
and qualified, and shall be elected on the first Tuesday of January annually, at the banking-house of such association; public notice shall be given thereof at least sixty days previous to the day
of election; the election shall be held and made by such of the
stockholders as shall attend for that purpose, either in person or
by proxy,and a plurality of votes shall be sufficient for a choice;
and if it should happen at any election that two or more persons
have an equal and the highest number of votes, then the directors
in office at the time of such election, or a majority of them, shall
proceed to ballot, and by a ylurality of votes determine which of
the said persons so having an equal number of votes shall be the
director or the directors, so as to complete the number of nine;
Vacation of if any director shall cease to be a stockholder, his office shall be
vacated ; and whenever any vacancy shall happen among the
directors, by death, resignation, or removal,such vacancy shall be
filled for the remainder of the year in which the same shall happen by such person or persons as the remainder of the directors
for the time being,or a majority of them, shall appoint.
Sec. 19. In case it shall at any time happen that an election of
Special deedirectors shall not be made on the day when pursuant to this act
it ought to have been done, such association shall not for that
cause be deemed to be dissolved, but it shall and may be lawful
on any other tidy to hold an election for directors: Provided,
Thirty days' previous notice shall be given of the time and place
of meeting, as provided for in the first section of this act.
Oath of
See. 20. The directors, before they enter upon or execute any
reCtLUS.
of the duties of their offices except choosing a president, shall
severally take and subscribe an oath or affirmation that they will
once at least in every three months, unless absent from the state
or prevented by sickness, examine fully into the condition ad
operations of said association, and write down in a book, to be
kept by the bank for that purpose,a true statement of the condition and affairs of the bank at the time .of examination (naming
the time.) and subscribe under the same his or their own proper
,fbel:tnuna.
s and


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98

name or names, and faithfully report to the bank commissioner,
or such other authority as may from time to time be prescribed
by the legislature, whenever they shall discover any violation or
abuse of the privileges granted to such association by this act,
and that they will in all other respects diligently and honestly
perform the duties of their respective offices; which report shall Report
forthwith be communicated to the executive by said bank corninissioner or other authority, and by the executive to the legislature,ifin session, and if not in session, at its next meeting% which
said oaths or affirmations either of the directors is hereby authorized to administer to the president, and then the president shall
administer the same to the other directors; and every cashier,
clerk and servant of such association, before he enters upon tIte
ditties of his office, shall give bond, with two or more securities,gCligneersre7c.1t7ity.
to the satisfaction of the directors, conditioned for the faithful performance of his duties.
Sec. 21. The directors for the time being,. or a majority of
them, shall have power to make and prescribe such by-laws, rules
and regulations, as to them shall appear useful and proper, touching the arrangement and disposition of the stock, property,estate
and effects of said association; the duties and conduct of the officers, clerks and others employed therein, arid all such other matters as appertain to the business of a banking association; and
shall also have power to appoint so many officers, clerks and servants, for carrying on the said business, and with such salaries
and allowances, as to them shall seem meet.
Sec. 22. No president or di-rector shall be entitled to any emo- sahaieic
lument for his services, unless the same shall have been allowed
by the stockholders at a general meeting; five directors shall Quorum.
constitute a board for the transaction of business, of which the
president shall be one, except in case of necessary absence, when
he shall in writing appoint one of the directors, or the directors
present may appoint one of their number, to act, as president pro
tempore ; but for making ordinary sdiscounts, not less than three
directors shall constitute a board.
Sec. 23. A general meeting of the stockholders may be called General
t
"
whenever the directors, or a majority of them, shall jedge proper, mee
shall
give thirty days' notice as
of which meeting the directors
hereinbefore directed, which notice shall specify the object of such
meeting; and it shall and may be lawful for the stockholders of

84

LAWS OF MICHIGAN.

any banking association to be formed under this act, or of any
bank heretofore incorporated by the legislature of this state, to
remove any director or directors, a majority of all the votes being
given thereupon at a meeting held for any purpose, and of which
thirty days' previous notice has been given, and to elect others in
their stead; and it shall and may be lawful for persons holding
c.,•.rni
one-fourth of the stock in any such association or bank, at any
meeting,how
called,
time, to call in their own names a general meeting of all the
stockholders, by giving at least thirty days'notice thereof, but the
votes at any such meeting shall always be given according to the
provisions of the act by which said association or corporation
is created or authorized.
s,„,i..„„„„1 Sec. 2-1. It shall be the duty of the directors, semi-annually and
whenever required by the legislature, to furnish the bank embank, &e.
missioner, or such other officer or officers prescribed by the legislature, a statement, under- oath or atlirtnation, of the condition
of such banking association, stating the amount of deposites, the
amount of bills in circulation, the amount of their indebtedness to
other corporations,companies and individuals, the amount ofdebts
due from the directors, the amount due fil'om the stockholders, the
amodnt due from all other persons or corporations (not however
naming them,) the amount of specie in bank, the amount of bills
of other banks, the amount of their deposites in other banks, the
amount of their stock in companies, the amount of their real estate
and other property not herein specified, the amount of capital
actually paid in, and containing a true and faithful exhibit of the
entire state of such bank, which statement they shall also cause to
be published in some newspaper within the state; and the books,
inspections
papers and vaults of such association shall be open at all times to
the inspection of a committee,or commissioner or commissioners,
to be appointed by the legislature.
Sec. 23. The total amount of debts which such association shall
Limit of indebtedam. at any tune owe, exclusive of property deposited in the bank,
shall not exceed three times the amount of capital stock actually
Liability of
director,.
paid in and possessed; and for all excess and all deficits occasioned by insolvency of such bank, the directors in the first place
shall be liable in their individual capacity in the full amount of
Of mcknol_ their real and personal property; and each other stockholder shall
dem
thereafter be also liable to the amount of stock which he shall
hold in such association, in proportion to his or her amount of

Removal of
directors.


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Federal Reserve Bank of St. Louis

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85

stock: Provided, That any director who, if present, shall enter pro,.i0.
his protest, or, if absent, shall within five days after his return to
said bank, enter his protest against certain loans, discount;or issues, shall not be liable further than other stockholders for the
debts or losses accruing from such loans, discounts, or issues.
Sec. 26. The lands, tenements and hereditaments which it shall Restrictions.
be lawful for any such association to hold, shall be such only as
shall be required for its accommodation in relation to the convenient transaction of its business, or such as shall have been bona
fide mortgaged to it by way of security,or conveyed to it in satisfaction of debts previously contracted in the course of its dealings, or purchased at sales upon judgments which shall have been
obtained for such debts; and such association shall not directly
or indirectly deal or trade in buying or selling any goods, wares,
or merchandize, unless in selling the same when truly pledged by
way of security for debts due such association, or purchasing them
at sales on judgments which shall have been obtained for any
debts previously contracted in the course of its dealings and afterwards selling the same.
B.V.,=gf„r!,
Sec. 27. The bills, obligatory and of credit, under the seal of.
such association, which shall be made to any person or persons, bk..
shall be assignable by indorsement thereon, under the hand or
hands of such person or persons, his, her, or their assignee or assignees, so as absolutely to tranfer and vest the property thereof
in each and every assignee or assignees respectively, and to enable such assignee or assignees to bring and maintain an action
thereupon, in his, her, or their own name or names; and bills or
notes which may be issued by order of the said association, prorrtrt
mising the payment to any person or persons, his, her, or their'
order, or to bearer, though not under the seal of such association,
shall be binding and obligatory upon the same in like manner and
with like force and effect as upon any private person or persons, if
issued by him, her, or them, in his, her,or their private or natural
capacity or capacities, and shall be assignable and negotiable in
like manner as if they were issued by such private person or persons; and if such bills,obligatory and of credit, and such bills and
notes issued as aforesaid, are not paid when the same are due and Bino not re_
demanded at the banking-house of such association, or within 5'..!! hirty
thirty days thereafter, in the lawful currency of the United
States, such association shall be dissolved: Provided, The assa-

,
86

LAWS OF MICHIGAN.

tr i,n7f" ciation shall pay twenty per centum damages and all costs that
tnent.
may accrue; and nothing herein contained shall prevent an injunction being issued whenever any payments or demand shall
be refused,or the continuance thereof, if the said association,from
and after thirty days from the time of the first refusal to redeem
their bills in specie, shall not resume the payment of their bills in
specie on demand at their banking-house.
See. 2$. The whole amount of loans or discounts made to the
1•!miiiithsi
doc
ta
directors of such association, or to any individual, firm or cornor upon paper on which such directors,or any of them, or
any such individual, firm or company, shall be endorsers, shall
not any time execed one-sixth part of the amount which such
assoeintion shall be entitled to issue.
See, VP. The property of every individual member of such
asswintion, vested in such eorik irate funds, shall be liable in the
same manner as other personal property is or may be liable by the
laws of this state, to the payment and satisfaction of his or her
.111st debts, to any of his or her creditors ; and when any executl.m1 or attaelinusiit shall he issued against the personal property
of any such individual mer iber, and the creditor is desirous that
the same should be levied upon the property of such debtor in
the mid corporate funds, the officer to whom such execution or
attachment may is'directed, shall levy the same by leaving with
Nt A-net ‘f
N
execution or
lle*
' the cashier of such bank an attested copy of such
"
"
n or atexecutio
said
the
that
notice
a
written
nt,
and
attachme
the said
in
debtor
said
the
of
property
the
upon
levied
tachment is
be
shall
upon
levied
thus
,
property
such
and
corporate funds;
the
for
be
provided
law
by
shall
or
is
as
sold in the same manner
sale of personal property taken in execution or upon attachment:
and such corporate funds thus levied upon and sold shall be transferred to the purchaser by entering in the proper book of such
association a copy of the said execution or attachment and a
statement of the sale of such property by virtue thereof, which
entry the officer serving such execution or attachment shall be
permitted to make; and upon any execution or attachment being
levied in said bank,it shall be the duty of the cashier of said bank
to expose the proper book of the association to the officer and to
furnish him a certificate, under'his hand and in his official capacity, stating the number of shares the debtor holds in said association, the incumbrances and amount ofdividends thereon due.

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Federal Reserve Bank of St. Louis

LAWS OF MICHIGAN.

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per Per cent. on
Sec. 30. Such association shall not take more than seven
the
and
s;
centum per annum in advance on loans or discount
iD vidends.
Tuesday
first
directors shall make semi-annual dividends on the
of January and July in each year.
tem
of Nr. note
one noiSec. 31. No note or bill shall be issued by such association than
ler.
a less denomination than one dollar.
r offiin ttwal:
See. 32. Every such association shall. pay to the treasure
on r te "'the state, for the use of the state, one half of one per centum
payments,
the amount of the capital stock paid in, in semi-annual
July in
of
Monday
third
and
on the third Monday of January
s of
provision
the
to
subject
be
each and every year; and shall
credithe
of
benefit
the
for
this act and the act to create a fund
alterations of
tors of certain moneyed corporations, and to such
legislature:
the
by
made
said acts as shall be from time to time
fund until Proviso.
said
from
Provided, That no money shall be drawn
and prove
fail
shall
on
the funds and liabilities of any such associati
same.
the
insufficient to pay all debt...s due and owing by
vtTocor
renal
such banking assoSec. 33. Every director or officer in any
on to perform carciation, who is required under oath or affirmati
wilfully or negligently
tamn duties under this act, and who shall
statements or false
fail to perfirm those duties, or shall make false
exhibit false paentries in the books of such association, or shall
felony, and be subpers with intent to deceive, shall be guilty of
term not less than
a
for
prison
state
ject to imprisonment in the
two years.
d and received in!°"lion.
Sec. 31. This act shall be favorably construe
thereof printed
copies
and
courts of justice as a public act;
received as eviunder the authority of the legislature, shall be
dence without further proof.
.the provisions
Sec. 35. Every association incorporated under
one thou- Continuance.
of this act, shall continue until the fourth day of March,
•
sand eight hundred and fifty-seven.
to
Sec. 36. The legislature shall at any time have the power
t°:;roPrraine
inbe
to
alter or amend this act, and to dissolve any association
each
corporated under its provisions, by a vote of two-thirds of
house.
Sec. 37. No such'association shall be allowed to remove it;-Bankingbanking-house from the place in which it shall be first established,
without the-consent of the legislature.

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LAWS OF MICHIGAN.

IHasolution
by consent.

Sec. 38. Every such association may be dissolved by consent
at any time, by a general meeting of the stockholders, specially
Proviso. - summoned for that purpose: Provided, at least three-fourths in
value shall be present or represented therein; and upon the dissolution of such association, the directors for the time being and
the survivors, or survivor of them, shall be ipsofacto trustees for
settling all the affairs of the association, disposing of its effects,
recovering and paying jts debts, and dividing the surplus among
the stockholders, in proportion to their respective interest in the
stock, unless the stockholders at such general meeting shall appoint other persons for that purpose,in which case the persons so
appointed and the survivors or survivor shall be trustees or trustee for the purposes aforesaid; and that for all debts which shall
Responsibill- be due arid owing by such association, at the time of its dissoluduek.'r deb18 tion, the persons then composing such association shall be individually responsible to the extent of their respective shares of stock
and no further.
Approved March 15, 1837.

[No. XLV.III.1
AN Avroto amend an act entitled "An act to incorporate the trustees of the Spring Arbor Seminary,"
approved March 23, 1835.
Sec. 1. Be it enacted by the Senate and House of Representatives of the State of Michigan, That the trustees of said semirAamfication nary shall be divided by lot, as may be provided by the by-laws of
ot trustees.
said trustees; into four classes, to be numbered first, second, third
and fourth class; those falling into the first class shall go out of
office in one year from the first day of May next; the second
class shall go out of office in two years from the first day of May
next; the third class shall go out of office in three years from the
first day of May next; and the fourth class shall go out of office
in four years from the first day of May next; and the vacancies
shall be filled by the remaining trustees, at their first general meeting, after said vacancies shall occur.
Sec. 2. Said trustees are hereby authorized and empowered to
Power of
MIStetiO tO
sell
and give a deed of any lands which they now own and are
convey land.
desirous of selling; and any deed by them made for the convey
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L \\VS OF MICHIGAN.

89

ance of any land by them sold, shall be good and valid in law,to
convey the title of said land to the purchaser or purchasers, excepting twenty acres of land on which said seminary is now located.
Approved March 17, 1837.

[No. XLIX.]
AcT appointing commissioners to lay out and establish certain state roads.
Sec. 1. Be it enacted by the Senate and House of Representatives of the State of Michigan, That there shall be laid out and
established a state road, from NVIiitmanville to the state road at state rood,
or near Bainbridge,and Charles John Martin, C. Whitman, John
P. Davis and Jehiel Enos, be, and they are hereby, appointed
commissioners for that purpose.
Sec. 2. There shall be laid out and established a state road,
from Whitmanville to St. Joseph; and Eleazer Morton, John
Wolver and E. II. Spaulding, be,and they are hereby, appointed
commissioners for that purpose.
Sec. 3. There shall be laid out and established a state road,
from Cassopolis, thromdi Berrien to New Bullido ; and Abiel
Silver, Isaac Sumner and Pitt Brown, be, and they are hereby,
appointed commissioners for that purpose.
Sec. 4. There shall be laid out and established a state road,
from the village of Palmer, in the comity of St. Clair, to the
county site of the county of Lapeer ; and Benjamin C. Cox, John
M. Oakes and Andrew Palmer,be,and they are hereby,appointed commissioners for that purpose.
Sec. 5. There shall be laid out and established a state road,
from the village at the mouth of Black river, in the county of
St. Clair, to the county site Of the county of Sanilac; and Jonathan Burtch, J. L. Kelsey and M. Carrington, be,and they hereby, appointed commissioners for that purpose.
Sec. 6. There shall be laid out and established a state road,
from the village of Newport, in the county of St. Clair, to intersect the Fort Gratiot turnpike, in- the county of Macomb; and
Nathan Ward, Henry G. Folger and Jones Robertson, be, and
they are hereby, appointed commissioners for that purpose.

28

LAWS OF MICHIGAN.

and conveying any estate, real or personal, for the use of said
association. .
Sec. 5. At least thirty per cent of the capital stock of such
Capital how
paid.
association shall be paid in specie before such association shall be
permitted to commence operations, one-third part of such capital
By whom
stock shall be owned, subscribed and continue to be held by resiowned.
dents of the county where such association shall transact business:
Proviso.
Provided, That so much of this section as requires that one-third
of the capital stock shall be owned in the county where such association shall transact business, shall not apply to the county of
Chippewa.
and
&ad° ,
mortm to Sec. 6. The stockholders of such banking association shall,
ybeedtle,gotr before commencing operations, execute bonds and mortgages
of notes.
4
upon unincumbered real estate, within this state, which shall be
estimated at its true cash value by the treasurer, clerk, associate
judges, and sheriff aforesaid, or a majority of them, and be by
them taken in the name of the auditor general of said state, for the
use of said state, at a rate not exceeding its true cash value, exclusive of building' s thereon, to the full amount which such association shall be authorized to become indebted, at the time of rendering such securities, to be holden as collateral security for the
final payment of all debts and liabilities of such association, and
for the redemption of all its notes outstanding and in circulation,
after the liabilities of the directors and of the stockholders, and
the fund accrued in pursuance of the act to create a fund for the
benefit of the creditors of certain moneyed corporations, shall
have been found insufficient for the payment of the same ; and
t pre. the treasurer, clerk, associate judges and sheriff aforesaid, when
Whohall
eweine
ne required by any such association, and before the same shall go
Inn"
mortgaged.
into operation, shall proceed to examine the real estate proposed
to be mortgaged by way of security as aforesaid, and before entering upon the execution of such duty,each of such officers shall
and subscribe an oath, to be kept of record in the office of
take
Oath to be
taken.
the county clerk, before some officer authorized to administer the
same, that he is not, directly of indirectly, interested in, or the
owner of such land, and is not interested in the stock of the bank
about to be created, and that he is not an officer of, or interested
in any other bank, and that he will well and truly, according to
the best of his knowledge and belief, estimate the same according

to its true cash value. If they shall be of opinion that the securihttps://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

LAWS OF MICHIGAN.

27

the provities so tendered are ample and sufficient, according to
find that
sions of this act, and shall, upon actual examination,
incumthere exists upon such lands no prior mortgage or other
county
the
of
or
deeds
of
register
of
brances of record in the office
mortgage
each
on
indorse
shall
clerk, and such register and clerk
shall
tendered as security a certificate setting forth such fact,they
such
to
deliver
and
make out a certificate of approval thereof,
of
office
the
in
bank, and cause a copy thereof to be placed on file
mortsuch
every
the county clerk, and shall immediately cause
at the
gage to be recorded in the office of the register of deeds,
be, cause genera'.
expense of such bank, and as soon thereafter as may
to be by him
the same to be forwarded to the auditor general,
person who
placed on file in his office: Provided, That any
or in part,swift.,
how changmay render the securities herein required, in whole
upon such secushall be released at his option from all liabilities
the stockholdrities, by the auditor general, upon condition that
so, shall give
do
to
required
ers, who are hereby authorized and
directed, and
herein
other equivalent securities, in the manner
manner as
the
in
cause the same to be approved and lodged
from their cWhen Mt
shall,
officers
hereinbefore directed. In case the said
as SC-perproposed
lands
form their
interest in the stock of such bank, or in the
duties.
desigre
hereinbefo
duties
the
performing
of
curity, be incapable
regulations
like
the
nated, such duties shall be performed under
the peace of the
of
justices
or
justice
any
and restrictions by
such of the, beforesame county, amounting, in connexion with
act, to not less than
mentioned officers as shall be qualified to
compensation to every Their
three persons in number. The amount of
against such bank or its
such officer, shall be a legal charge
two dollars per day
officers, and shall not exceed at the rate of
employed therein.
to each for every day necessarily
.,t„,.
and stockholders ofcenift
be filed with
Sec. 7. Whenever the president, directors
with the requisitions ofsecreuiry of
any such association, shall have complied
secretary of state a
the
of
this act, they shall file in the office
of sixth association,
location
certificate, setting forth the name and
secretary of state
said
and the amount of its capital stock, and
notice thereof, by publi- To be pubshall immediately thereafter give public
authorized to publish the"
cation in one or more of the newspapers
laws of this state.
to
association to Statement
be b"ted up
Sec. 8. It shall be the duty of every banking
an
s part of its house
cause to be posted and kept up, in some conspicuou


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Federal Reserve Bank of St. Louis

150
seat of justice of any county, or the imposing of a tax
for making or improving a road, or for any other local
purpose in any county, where all or any of the inhabitants of such county are proposed to be taxed, and in
all cases of applicatioas to the legislature for the passage of laws authorizing the construction of dams in or
across the streams and waters of this state, which arc
by law public highways, shall give notice of such intended application, by advertisement to be published for
at least four weeks successively, at any time within
two months before such application, or before the first
day of the session at which the same is to be made, in
a newspaper printed in the county or each of the counties where the objects of such application are intended
to be carried into effect, and by posting up in three public places in said county, notices of such intended application, and also, in case of intended application for the
imposition of any tax as aforesaid, in the state paper.
Sec. 2. Every association intending to apply to the
legislat
ure for an act of incorporation, and every corpoNotice of intended appli. ration intending to apply for an alteration,
amendment
.
cation for acts
:psb the like notice of
of incorpora- or extension of its charter, shall ca
tion.
such application to be published in the state paper, and
also in it newspaper printed in the county in which such
'corporation is intended to be or shall• have been established.
Sec; 3. If no newspaper be printed in a county in
NVhen there
is no newspa. which any notice is required to be
published, such noper.
tice shall be published in like manner in the place nearest thereto in which a newspaper shall be published.
Sec. 4. If the application be for an act of an incorSpecifications poration, the notice shall specify
the amount of the capin notice for
incorporations ital stock requisite to carry the objects of such incorporation into effect; and if the application be for an alteration in any charter already granted, the notice shall
state specifically the aperation intended to be applied for.


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Federal Reserve Bank of St. Louis

157
See. 5. The notice of all other applications of which
In other nonotice is hereby required to be given, shall specify the fiees.
nature and objects of such intended application.
Sec. 6. This act shall take effect from and after the commence.
mem.
first day of May next.
Approved March 16, 1830.

AN ACT to crcrte a fund

for the benefit of the creditors of certain
moneyed corporations.

Sec. 1. Be it enacted by the senate and house of re- Banks hereofter chartered
prescntativei of the state of Michigan, That every
MO" subject to this
neyed incorporation having banking powers, hereafter not.
to be created in this state, or when their charter shall
be renewed or extended, shall be subject to the provisions of this act.
Sec. 2. For the purpose of creating and continuing
the fund herein established every such corporation shall
on or before the first day of January, in every year,
pay to the treasurer of this state, a sum equal to one Ban" t° PaY
1 per
t
half of one per cent. on the capital stock of such corpo- perofannumcen
Treas.
ot
.
ration paid in, after excepting therefrom such part of tu4io
said capital stock as is held by the state, and at that rate
for the time such corporation shall have been in operation, if less than one year.
Sec. 3. At the time of making any such payment,
the corporation making the same, shall cause to be deli- h a w of
Statement he amount
unt of
vered to the treasurer of this state, a statement signed capital
paid in
by the president and cashier of the corporation and verified by their oath, duly made before some officer authorized to adminitter oaths, specifying the actual amount of the capital stock of such corporation paid in,
and designating in such statement the amount of said
capital stock, as shall be owned by the state.
Sec. 4. The annual payments shall continue to be
Annual pay.
made until every such moneyed incorporation shall have mcnts limited.

-

_

158
centum upon its capital
paid into the treasury three per
a perpetual fund, to
stock, which shall be, and remain
Fund," and to be inviolably
be denominated the "Bank
Bank fund.
of such porappropriated and applied to the payment
of any
stock,
capital
the
tion of the debts, exclusive of
insolvent,
become
shall
of the said corporations which
the property and
applying
after
unpaid,
as shall remain
corporation, as hereafter proeffects of such insolvent
vided.
treasurer of this
Sec. 5. The auditor general and
bank fund
Accounts of
keep proper accounts of the said
the bank fund state, shall
this state; and
to be kept se separate and distinct from the funds of
perste
time to time report to the
the auditor general shall from
legislature the condition thereof.
be the property of the
Sec 0. The said fund shall
paid, in procorporations by which the same shall be
corporations
such
of
Theprepeey portion to the amount which each
of fund.
but the auditor general
shall have contributed thereto;
to
power and it shall be his duty from time
Auditor gen- shall have
therebelonging
moneys
eral mai in- time to invest the same and all
vest and sell.
provided by law; and whenever it
to, in the manner
the purpose of meeting any
shall become necessary for
stock or other securicharges on said fund, to sell any
any part thereof may have
ties in which such fund or
general shall have power to
been invested, the auditor
make such sale.
said fund, after deSec. 7. The income arising from
the bank commissioner,
ducting therefrom the salary of
be paid by the
Income nrihereinafter mentioned, shall annually
eing.from fund
by which
corporations
several
auditor general to the
to the aproportion
in
created,
the said fund shall be
shall
have
corporations
mount which each of the said
entitled
be
shall
corporation
contributed thereto; but no
after it shall become into any part of the said income,
charter shall expire.
solvent, or shall be dissolved, or its
Whenever the fund created by this act shall
Sec

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Federal Reserve Bank of St. Louis

159
be reduced by the payment of the debts of an insolvent
Fund when re.
eorporation, to be made as hereinafter ,provided below duced below
ra
the sum as provided in the fourth section of this act, %certain
ti how re.
every moneyed corporation then existing, which shall flowed.
be subject to this act, and every such corporation hereafter to be created, shall on or before the first day of
January in every year thereafter, pay to the treasurer
of this state such sum, to be designated by the auditor
general, not exceeding a sum equal to one half of one
per cent, on its capital stock, as hereinbefore provided;
which last mentioned annual payments shall continue to
be made by every corporation subject to the operation
of this act, until the aforesaid sum shall be reimbursed
and made to amount to the sum as provided in the fourth
section; after which,such annual payments shall be suspended, until it shall become necessary again to resort
to the said fund, by reason of the insolvency of any
such corporation as hereinafter provided, when said
payments shall be resumed in manner aforesaid, and so
on from time to time as occasion may require.
Sec. 9. Whenever any corporation subject to the opof court
erations of this act,shall become insolvent, and shall be(TetiFrancini
proceeded against as hereinafter provided, it shall be in iCatle of in.
bera.nzncy of a
the duty of the court of chancery, immediately after a
final dividend of the property and effects of such insolvent corporation and such other property as shall be
subject and liable for the payment of its debts shall
have been made among the creditors thereof, to _cause
an order to be entered on its minutes setting forth,
First. The total amount of debts against the said cor- Order of court
poration, ascertained and established by the said court,
including lawful interest thereon. Second. The nett
amount of moneys derived from the property and effects
of the said corporation, liabilities of the directors and
other stockholders thereof, and applied under the direction of the said court, towards the satisfaction of such

4•4.

161

160

Sec. 13. Whenever the charter of any moneyed cor- On
expiration
poration, subject to the provisions of this act, shall ex- of charter
bank
to cc.
pire, every such corporation shall be entitled to receive diveits
proits proportional share of said bank fund which such cor- portion of the
fund.
poration may have contributed thereto, after deducting
therefrom a proportional part of the charges upon the
said fund, and which share the auditor general is hereby authorized to pay to said corporation.
Sec. 1,1. No creditor of any insolvent corporation Of interest on
debts due by
shall, by virtue of this act, receive interest upon his insolvent
debt against such corporation, from and after the time banks.
such order is made, as is required by the ninth section
of this act, nor shall such creditor be entitled to interest
anterior to the presentation of his demand against such
corporation, to the receiver who shall be appointed to
take charge of the property and effects of such corporation.
Sec. 15. One person to be styled "the Bank Commis- Bank cont.
sioner of the State of Michigan," shall be appointed in missioner.
the manner hereinafter provided, whose duty it shall be, His duties.
once at least in every four months, to visit every moneyed corporation upon which the provisions of this
act shall be binding; and thoroughly examine the affairs
of the said moneyed corporations, to examine all the
books, papers, notes, bonds, and other evidences of debt
of said corporations; to compare the funds and property of said corporations with the statements to be made
by them as hereinafter provided; to,ascertain the quantity of specie the said corporations have on hand; and finally, to make such other inquiries as may be necessary
to ascertain the actual condition of the said corporations
and their ability to fulfil all the engagements made by
them.
See. 16. It shall be the duty of the said commission- commis/11.nd
er to visit and inspect the condition and affairs of ai4r to to8Pact on
request of
inoneyed corporation, more frequently than once in ev- three hanim
V

moneys then
debts; and Third. The total amount of
debts. Such
said
requisite to pay off and discharge thc
to take
appointed
order shall also direct the receiver
corthe
of
debts
charge of the property liable for the
genauditor
poration, to apply to, and receive from, the
• provided,
eral of this state, in the manner hereinafter
off and discharge
the sum which shall be required to pay
the said debts.
the auditor
Sec. 10. Upon such receiver filing with
certified
duly
order,
such
of
copy
a
Effect ef or- general of this state
der of court by the proper officer, and countersigned by the chanof chancery.
to
cellor, it shall be the duty of said auditor general
resuch
of
favor
in
draw his warrant on the treasurer
of the
ceiver, for such sum, not exceeding the amount
court
said
the
by
bank fund, as may have been declared
said
of
debts
of chancery, to be necessary to satisfy the
by
receiver
corporation; and the moneys paid to such
dithe
under
such warrant, shall be paid out by him,
crediseveral
rection of the court of chancery, to the
tors of the corporation.
genSec. 11. If at the time of filing with the auditor
When fund eral the copy of such order, the bank fund shall be ininsufficient.
corposufficient to satisfy all the debts of the insolvent
such
of
residue
ration, a sum sufficient to satisfy the
receisuch
debts as shall remain unpaid, shall be paid to
secver, in the manner provided in the last preceding
tion, out of the first moneys that shall thereafter be paid.
to the treasurer pursuant to the eight section of this
act; and the moneys so paid to such receiver, shall be
paid out by him in the manner required in the last preceding section.
Sec. 12. The moneys so paid out of the treasury and
all other moneys required by this act to be paid out of
Charge on
bank fund. the treasury, shall be a charge upon the bank fund hereby created.

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Federal Reserve Bank of St. Louis

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,••••

162
cry four months, if required so to do by any three
moneyed corporations subject to the provisions of
this act.
Sec. 17. The said commissioner shall have power to
Power of corn.
examine, upon oath, all the officers, servants, or agents
missioner,
of said corporations, or any other person, in relation to
the affairs and condition of said corporation; which
oath the said commissioner is personally authorized to
administer.
Sec. 18. If the said commissioner shall ascertain from
Proceeding of such inspection and examination, or in any other manfloriele ko:ear. ner, that any of said corporations are insolvent, or shall
mrra7.
sos.
have violated any of the provisions of their act or acts
of incorporation, or of any other act binding on such
corporation, the said commissioner shall immediately
apply to the court of chancery, upon bill or petition,
for an injunction against such corporation and its officers; and the same proceedings shall in all respects be
had, and the court shall possess the like powers upon
such application, as are provided by law in respect to
such applications when made by the attorney general or
by any creditor.
Sec. 19. It shall be the duty of the said commisscommissioner ioner in the month of January, in each year, to report
to make report to the le. to the legislature the manner in which he has dischargislature.
ged the duties imposed on him; and to accompany such
report by such abstracts from the reports made to him,
and by such other statements as he may deem needful.
Sec. 20. The commissioner shall be appointed by
Commissioner the governor by and with the advice and consent of the
how appointed
senate and house of representatives in joint vote, and
the said commissioner shall hold his office for two years
Term.
and until the successor is elected and qualified, but shall
be at any time removable by the governor for misconRemoval.
duct or neglect of duty.


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Federal Reserve Bank of St. Louis

163
Sec. 21. Before the said commissioner shall enter upon the execution of the duties of his office, he shall take Oath of corn
the constitutional oath of office, before the secretary of mi"Blener•
state or sOMC one of the circuit judges, and within ten
days thereafter shall cause such oath, certified by the
officer before whom it was taken, to be filed in the office
of the secretary of state.
Of disclosures
Sec. 22. The said commissioner shall not disclose the by commisname of the debtors of any moneyed corporation ex- sioners.
amined by him,or any information obtained in the course
of such examination, unless required in a court of justice or in the course of some proceeding authorized by
this_act.
Sec. 23. There shall be allowed to said commission- salary of
""
er the annual salary of three hundred dollars, to be paid "mminl
quarterly out of the bank fund.
Sec. 24. It shall not be lawful for any such moneyed
.mo utt ofof
corporation, to issue, or to have outstanding or in cir- A
bank bills and
culation at any time, an amount of notes or bills loaned of
loans and
or put in circulation as money, exceeding three times diqcounts;
its capital stock then paid in and actually possessed; nor
shall its loans and discounts at any time exceed three
times the amount of its capital stock so paid in and possessed.
vio..
Sec. 25. If any such moneyed corporation shall
Penalties.
make
late the last preceding section, or shall neglect to
reany annual payment to the treasurer of this state,
after
months
three
quired by this act, for the space of
made, and
the time when the same ought to have been
the auditor
after being notified of such delinquency by
half of its
general of this state, or shall have lost one
the payed
suspend
have
capital stock paid in, or shall
shall reor
days,
ments of its bills in specie for ninety
be exto
tion
fuse to allow the officers of such corpora

164
mined upon oath by the said commissioner, in relation
to the affairs and condition of such corporation, every
such corporation may be proceeded against by the said
commissioner, and dissolved by the chancellor, as an insolvent corporation, as hereinbefore provided.
Sec. 26. Every officer, agent or clerk of a moneyed
fralae Btate"
corporation,
who shall make false statements or false
went, &c.
deemed felony entries in the books of such corporation, or shall exhibit false papers with intent:to deceive said commissioner as to the condition of such corporation, shall be deemed guilty of felony, and shall be subjected to imprisonment in state prison, for a term not less than three nor
more than ten years.
Sec. 27. Every insolvency of a moneyed corporaProof of fraud tion subject to this act shall be deemed
fraudulent unless its affairs shall appear, upon investigation, to have
been fairly and legally administered, and generally with
the same care and diligence, that agents receiving a
compensation for their services, are bound by law to
observe; and it shall be incumbent on the directors of
every such ins )Ivent corporation to repel by proof the
presumption of fraud.
Liability of
Sec. 28. In every case of a fraudulent insolvency, the
directors in
case of insol. directors of the insolvent company, by
whose acts or
vency of bank
commissioners the insolvency was wholly or in part, occasioned, and whether then in office ornot, shall each be
liable to the stockholders and creditors of the company
for his proportionate share of their respective losses,
the proportion to be ascertained by dividing the whole
loss amongst the whole number of directors liable for its
reimbursement.
No stockhol.
Sec. 29. No Stockholder of any moneyed corporato bo ap.
Pointed a bank tion subject to this act shall be appointed a commission-zommissioner er under and by virtue of this act; and it shall not be


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Federal Reserve Bank of St. Louis

165
lawful for the said bank commissioner, directly or indirectly to purchase or in any manner whatever to be concerned in any bank stock in this state, whilst holding
his office.
Sec. 30. Every moneyed corporation subject to this
act, shall be entitled and allowed to receive the interest hans or titsas established by the act of incorporation on all loans, counts.
by them tnade or notes or bills by them discounted or
received in the ordinary course of business with the addition of one half of one per cent. saving and exceoting
such corporations as are authorized to receive seven
per centum.
Sec. 31. No moneyed corporation subject to this act,
I npt ibi lo°n
B
:
shall issue any bill or note of the said corporati-m,unless
withthe same shall be made payable on demand and without demand
out Interest.
interest.
Sec. 32. Every moneyed corporation of this state Corporations
ex.
heretofore existing may become subject to this art upon heretofore
isting may he.
complying with its provisions,
come subject
to this act.
Approved March 28, 1836.
AN ACT to incorporate the members of the Detroit Young Men's &ciety.
the senate and house of reby
See. 1. Be it enacted
Michigan, That the memof
presentatives of the state
bers of the Detroit Young Men's society and all such
!: bopersons as shall be associated with them for the purposes ;eat and
they
and
cerporate
be
hereinafter mentioned, and their successors
are hereby ordained, constituted, and appointed a body
politic and corporate, in fact and in name, under the
name of the 'Detroit Young Men's Society, for the purpose of moral and intellectual improvement,and by that
name they and their successors may have perpetual
succession and shall be capable of suing and being sued,
pleading and being impleaded, answering and being an-

(CI


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Federal Reserve Bank of St. Louis

U. S. Executive Documents, 26th Congress, 1st Session
Document No. 172, pp. 1095-1101

FARMERS' BANK OF GENESEE
Reported by Bank Commissioners
November 20, 1937
A.

Stock subscriptions to the Farmers' Bank of Genesee, November 20, 1837

Total subscribers' names
Total number of shares
Total amount paid in

20
2000
$10,000

Al. Transfers of the stock of the Farmers' Bank of Genesee County
14 transfers in 1837 -- Total number of shares 1030
14 transfers in 1338 -- Total number of shares 1095

(9)
Copy of the entries in a book in the Farmers' Bank of '6enesse County
December 30. -- At a meeting of the stockholders of the Farmers'
Bank of Genesee County, the foliowing persons were duly elected directors:
H. R. Jerome, T. J. Drake, R. M. Morrison, Lyman Stow, E. R. Ewing, A.
Miller, Curtis Bellows, W. Davis, Simpson Buck.
At a meeting of directors on same day, H. R. Jerome was elected
president. Oath of office was administered to the president by Thomas J.
Drake. The oath of directorship was then administered by the president.
R. M. Morrison was then appointed cashier. The bond of $250,000 was filed
and approved by the treasurer and clerk. The bank then went into operation by exchanging $47, and discounting T. J. Drake's note of $25 out of
exchange funds. Meeting then adjourned till January 1, 9 A. M.
January 1. -- Directors met and reconsidered the appointment of
cashier; vacated his office, because he did not file a satisfactory bond.
January 3. -- At a meeting of directors, the president was dirwith R. J. S. Page on the subject of his becoming cashier.
confer
ected to
January 4. -- At meeting of directors, R. J. S. Page was appointed cashier, and the oath of office administered. Thomas J. Drake,
Lyman Stow, and R. M. M-)rrison having, by transferring all their stock,
vacated their offices as directors, R. J. S. Page, Benjamin Bowers, and
Levi Gilkey were chosen in their stead.

•

Mr. Page's services as cashier were engaged at the salary of at
the rate of $600 per year for the first six months. Directors then ordered that, when securities were approved, the president and cashier should
was
issue a sum not exceeding $10,000, for the purpose of exchange. It


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-2-

then ordained by the president and directors that the following be the bylaws regulating the Farmers' Bank of Genesee County.
The meeting then adjounred till 17th February.
Feburary 1, 1838. -- We, the undersigned, have this day examined
into the affairs of the Farmers' Bank of Genesee county, and find them, in
our opinion, perfectly solvent.
H. R. JEROME, President
R. J. S. Page, Cashier
February 17, 1838. -- None of the directors being present, and
R. J. S. Page having a power to vote for a majority of the stock, vacated
his office as director, and appointed in his place Peter Stiles, and in
the pace of.E. R. Ewing, James Cummins; the other directors remain as they
were originally chosen.
(C) Total receipts given by H. R. Jerome, as treasurer, for the first ten
per cent. on the subscription of the capital stock of the Farmers'
Bank of Genesee County, for 1837, $7,250.

•

(C1) Total notes in the Farmers' Bank of Genesee County which are designated upon the same as "stock-notes," amounting to $6,830;(one item)
* Minuted on back as error 0300, should be $1,050; credited
by error 0250; also endorsed 060 in specie.
(D)

Notes in the Farmers' Bank of Genesee County for 1838

Total makers
Time 40 days to 3 yeqrs
Total amount

24
$10,965.00

(1 note; received on the within note $106, March 8, 1838)
(D1) Receipts
1838 -- 6 receivers -- Amount $1,170.00.
The language of all the receipts is, that the sumo were received
for exchange purposes.

•

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Federal Reserve Bank of St. Louis

a

U. S. Executive Documents, 26th Congress, 1st Session, Ho. of Reps., Treas.
Dept., Doe. No. 172, pp. 1101 -1104 -

ip

(E)
Grand Blanc, March 15, 1838e
R. J. S. Page, being duly sworn according to law, deposes and says:
That he is the cashier of the Farmers' Bank of Genesee County, located
in the village of Flint, in the county of Genesee; that he MRS appointed
cashier on the 4th day of January, in the place of R. M. Morrison; the bank
went into operation a few days previous to his appointment; that the bonds
and mortgages had been approved, and the president and directors were appointed; Horace R. Jerome was the president. The notice filed in the Secretary of
State's office, and published, named the location of said bank at the Flint
Rapids, a place about six miles distant, the intended place of resident of the
president. That the bank never went into operation at that place, but all its
business was transacted at the Flint village; the capital stock was
one hundred
thousand dollars.
The amount of fifteen hundred dollars, or thereabout; principally
in silver, was in the bank at the time he took charge of the business as
cashier;
this sum he sent to Detroit, at the request of Delos Davis, one of the
stockholders, to meet a specie certificate of that amount from the City Hank
of Detroit, which had been sent to him by the said Davis--the certificate was
for
the redemption of the notos of the bank; that he does not know whether
the
thirty per cent. required by law, previous to the bank going into operati
on,
was or was not paid in; that he (the said cashier) was made a directo
r when
appointed cashier, and was alone at the bank, and had not it in his power
to counsel the directors or president in regard to transmitting the specie
to Detroit to meet the certificate aforesaid; that if the aforesaid thirty
per cent. had ever been paid in, it had been withdrawn fromihe bank
previously
to his taking charge of the bank as okshier.

•

That Horace R. Jerome was appointed by the applicants, under the law,
as the treasurer of the bank; that he (the said Page) was one of the
original
subsoribers to the stock of said bank; that the manner in which he paid
in
his first installment of the ten per cent, was as follows: he receive
d from
the treasurer of the bank a specie receipt of five hundred dollars, for which
receipt he tem his note for five hundred dollars, payable to the cashier
of
the Farmers' Bank of Genesee, in specie; this took place previous to his subscribing for the stock; when he subscribed for his stock, he present
ed to said
Jerome, treasurer of the bank , the said receipt, and reoeived from
him the notes
given him (the said Page) as aforesaid; that his stock was
taken by hims(the said
Page), at the request of said Jerome* expressly for the said Jerome,
he not intending to take any stook on his awn account; and that he accordi
ngly transferred
the said stook to the sail Jerome, as agreed upon, immediately
afterwards; that when
he was appointed cashier, the said Jerome transferred to
him one hundred shares
of stock, upon which no per centage had been paid in; and
that he gave his note
for fifteen hundred dollars* payable to the cashier of
the said bank, as his instalment of thirty per cent. on said stook; since which time
he hastaken up said
note, by paying into the bank fifteen hundred dollars in
the notes of said
bank. Stock-notes of a similar character were given in
at the same time, and
in the sane manner, by all the stockholdqrs; and, so far
as he has any knowledge,
he has reason to belive the receipts to the stockholders now in the bank,

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from H. R. Jerome, as treasurer, were taken for the original instalment
of ten per cent. as specie, in the same manner as his awn was taken by said
bank, with the exclusion of the sum of fifteen hundred dollars, or thereabouts, which was in the bank as before mentioned in specie; whether this
was paid in on the stock-notes or not, or whether it came into the bank
afterwards, he does not know. No specie was paid into the bank while he
was cashier, except the sum of sixty dollars, by Albert Miller, of Saginaw,
a stockholder and director; which sum was endorsed on the stock-note in part
payment of the same.
A few days since, W. W. Gitt, of Detroit, transferred to him (the)
said Page) fifty shares of stock, on which nothing whatever had been paid;
and the stock-note of the said Gitt was given up to him. Forty shares were
likewise transferred to him by E. R. Ewing, of Flint, on which no instalment
had been paid; and his stock-note was likewise surrendered to him, (the said
Ewing).

•

On the 17th day of February last, at a regular meeting of the
stockholders, agreeable to notice given according to law, for the purpose
of choosing directors, and transacting the general business of the bank,
he (the said Page) had power of attorney covering a majority of the stook.
At this meeting James Cummins was appointed a director in the place of
E. R. Ewing, whose place was vacated by transfer of his stock, and Peter Stiles
in the place of R. J. S. Page, who had resigned as director, That he took
the transfers of said stock, at the request and solicitation of the said Gitt
and Ewing, but that he did not consider the transfers as legal ones; and,
therefore, neither entered the transfer on the books of the bank, nor gave
any stock-notes of his awn for the said shares.
After he became cashier of the said bank, bank bills to the amount
probably of twenty-five or thirty dollars, signed by H. R. Jerome as
president, and R. M. Morrison as cashier, were burnt by the said Jerome, after
having been redeemed by the bank, not wishing to have bills in oirculation
with the names of different cashiers; that he has no means of knowing what
issues of notes bearing the signatures of Jerome and Morrison were put in
circulation, there beine no entries in any book of the bank designating
the issues; that, since he has been cashier, he has signed bills to the amount
of one hundred and sixty-five thousand dollars. Of this amount, he has nut in
circulation, on discounted paper of others, and the ordinary expenses and
business transactions of the bank, probably about ten thousand dollars. Of the
mount signed as aforesaid, the president, (H. R. Jerome) took into his
possession about fifty-four thousand dollars, expressly for exchange purposes,
for which he left a note, which, he thinks, is in the hands of Delos Davis of
Detroit. There remains in the bank redeemed bills to the amount of between
three and four thousand dollars. There is else the sum of fifteen hundred dollars in
the Detroit City Bank, redeemed by it by the specie deposited there as aforesaid.
The balance of the said amount, signed by him as aforesaid, was placed in the hands
of Delos Davis an Rufus Brawn, jr., of the city of Detroit, for the purpose of
exchange-those persons being agents for the bank. That he knows of no other
indebtedness of the bank, except it be for the engraving of the bills and the
services of the officers; that, at two different times, certificates of deposites
were given by the bank to the Exchange Bank of Shiawasseei the first was in the
of David Root, as stockholder of said bank, and, at the same time, a receipt

•


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Federal Reserve Bank of St. Louis

-3-

•

was taken of him to cover the amount; this certificate was for the sum of
twelve thousand dollars. The second is in the name of Simpson Buck, also
a stockholder in the said Txchange Bank, for the sum of twelve thousand
dollars. This certificate was given to George W. Clarke, the cashier of
said bank, and at the sane time Simpson Buck's receipt was taken, covering
that amount. The first was given to commence the operations of said xchange
Bank of Shiawassee, and the second for the purpose of making a report of the
condition of said bank. The first certificate was given under the instructions
personally given to me by Mr. Btu*, a director of the Farmers' Bank of Genesee;
the second, by written instructions from the same director. No entries were
made of these transactions in any book of the bank.

•

To meet the liabilities of the bank, there is in the bank discounted
paper to the amount of between six and eight thousand dollars, as he thinks.
There are receipts in the bank given by various directors and stockholders,
for various sums, amounting to probably about two thousand dollars; which sums
were taken by them for exchange purposes. Notes for the amount taken by Horace
R. Jerome, Delos Davis, and Rufus Brown, jr., were given by them for the
respective amounts received by them for exchange purposes, as aforesaid. No
returns have been made of exchange paper or otherwise, from either of the
aforesaid persons. The notes given as aforesaid, by Jerome Davis, and Brawn,
were left by mistake in Detroit. That he prepared a statement, early in January,
of the affairs and condition of the Farmers' Bank of Genesee, as cashier, in which
he showed an amount of twenty thousand dollars in specie on hand.
Thiswas
made up by certificates of dersosite, as follows: One
from the Bank of Oakland,
signed by Daniel Leroy, president, for the amount, he thinks,
of ten thousard
dollars; another, from the ClintonCanal Bank, for ten
thousand dollars. Be
thinks the last was signed by William S. qtevens, president.
Those certificates were loaned for the purpose of enabling a statemen
t to be made. No
deposi+es were actually made.
The certificates were to be returned on the
same day on which they were received. These transactions took
place, and the statement was made up, at Pontiac, where he went for that purpose.
Mr. Jerare was
with him, and received the statement, and took it himself to
Detroit. This statement was signed by the president and ceshier. In Detroit, the presicbist
supplied
a deficiency of ten thousand dollars, which was necessary to make
the exhibit
of thirty thousand dollara,(the thirty per cent. necessary to be paid
in). The
statement, as filed with the commissioner, rust have been signed by
himself alone,
as it exhibited thirty thousand dollars, being the rull amount
necessary as
aforesaid.

He also prepared a statement of the condition of the bank, dated
the
1st Of February, and also an answer to the interrogatories of the
Legislature.
The statement and interrogatories were based upon the following
facts: The
specie in the bank, and the personal property of the bank, (which was
considered
as specie), was two thousand dollars. Ten thousand dollars in
silver was brought
and paid into the bank at the time, by Davis and
BTown, (Delos Davis and Rufus
Brown, jr.,) from Detroit; two certificates of deposite-sone of
five thousand
and one of fifteen thousand dollars. The last certificate of
firteen thousand
dollcrs was from the Farmers and Mechanics' Bank, end signed by
John A. Welles;
as also was the one for five thousand dollars, as he thinks.
The specie and
certificates were there for four or five days, and were taken away
again by
the same nersons, with the express understanding that they were
taken by them
as agents for the bank. That he went in with Messrs. Davis
and Brawn aforesaid

•


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Federal Reserve Bank of St. Louis

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to Detroit, and there signed and filled out all the bills mentioned above
as signed by him as cashier of the Farmers' Bank of Genesee. This was about
the 6th of February, he thinks. The bills were all dated the 4th day of
January.
The deponent further states, that, on the 10th day of March instant,
Delos Davis, a stockholder of the bank, came to him at the bank, and stated
that the bank commissioners would probably be there on Monday or Tuesday,
and that he had on the way ten thousand dollars to place in the vaelts of the
bank for the purpose of examination by the commissioners.
He said it was
in charge of Dr. Scovill, and would be at Grand Blanc that night, (the 14th);
that he ((the said Page) refused to receive it unless it was the bona fide property of the bank, and to be used for its business; and told him, unless it could
be so considered and used, he must take it away again. He (Davis) replied,
that if I thought it was best to do so, it should be done. He (Page) told
him that the exhibition of this money would give an increased currency to the
bills, which, under the circumstances and condition of the institution, he was
not willing to countenance; and should not receive the money, except in the
manner above stated. He knows noth5ng further of this specie.

•

He further states, that there is no set of books open in the bank, and
never has been; that the papers are in the bank, in the charge of his wife,
with directions to give the key of the bank to the commissioners; that he
has no papers with him here to refer to, to correct his recollection in regard to sums and dates, but that the same are as accurate as his recollection
now enables him to present.
R. J. S. PAGE.

Sworn and subscribed in the presence of the undersigned bank commissioner.
K. PRITCHETTE.

•

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Federal Reserve Bank of St. Louis

•U.

S. Executive Documents, 26th Congress, 1st Session, Ho. of Reps., Treas.
Dept., Doc. No. 172, pp. 1107-1117 Z3
Bank Commissioners' report, made to the Legislature April 6, 1638.
The undersigned, in obedience to the resolution of the honorable
the House of Representatives, have the honor to reports That, immediately
upon the appointment of the present board of commissioners, they commenced
the important duty of examining the institutions subject to their inspection,
and have been constantly and assiduously devoted to the areuous task to the
present time. It is a subject of regret, that the time allowed them has not
yet been sufficient for the investigation of all the moneyed institutions subject to their supervision, previous to the resolution of the House.
It was the design of the commissioners, at the earliest period
possible, to have presented to the Executive, agreeably to the provisions of
the statute, a detailed account of the condition of all such institutions.
This would have enabled them to have presented, at one view, the resources,
responsibilities, and condition of the several banks, in such a manner as to
enable every individual to judge of their solvency, and to obtain a correct
idea of the pecuniary condition of our State institutions.
The early call of the House for information as to those institutions
which have been examined, added to the interest which the whole community
feel in this important matter, have induced the undersigned to lay before the
Legislature at this time such information as a partial examination has placed
in their possession.
The absence of our associate, Thomas Fitzgerald, Esq., who is now
engaged in the western portion of the State, in the examination of the banks
located within the limits of the third judicial district, prevents his joining
in this report, This is especially to be regretted, since we are unable thereby, for want of information to give the result of his investigations into
the condition of the banks in the last mentioned oircuit.There are established
therein two chartered banks, a branch of the Bank of Michigan, and eleven
banking associations, organized under the act to organize and regulate banking
associations. Of the affairs and condition of these, the undersigned have
reason to believe a report will, at an early day, be made by Mr. Fitzgerald.
In the first and second judicial cirouits, there are nine banks
established under special charters, which are subject to the examination of the
commissioners. The Farmers and Mechanics' Bank of Michigan, the Bank of
Pontiac, and the Bank of Macomb County, (all of which are chartered institutions)
not having elven their assent to the provisions of the "Act suspending for a
limited time certain provisions of law," tco., are not subject to such examination.
There are also established within the limits of the said circuit, under the
"Act to organize and regulate banking associations," and the amendment thereto,
thirty-three banks.

410

To the institutions located in the first and second judicial circuits, the
investigations of the undersigned were confined. Of the banks therein above


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Federal Reserve Bank of St. Louis

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•

enumerated, four have done nothing more
than to organize and file their
certificates in the office of the Secre
tary of State; these are the Commonwealth Bank, at Tecumseh; the Bank
of Auburn, in Oakland county;
Citizens' Bank, at Ann Arbor; and
the Adrian Bank, at Adrian. No bills have
been issued by either of these banks
.

The Farmers' Bank of Sharon, and Saginaw City Ban,
the Detroit
City Bank, the Tank of Michigan, and the Michigan
State Bank, have not yet
been visited by the commissioners.
Annexed are the statements of all the banks within the
said circuits,
with the exceptions above named, exhibiting their
resources and liabilities, as
sworn to on the day when the said institutions were
respectively examined.
The accompanying exhibit will display, under appro
priate heads, much useful
information relative to the affairs and condition of
the institutions of
the State. From the examinations which the undersigne
d have been able to
make, they have reason to believe that, in the main,
these statements are
correct. In the instance, however, of the Bank of Manch
ester; facts have
been developed which have destroyed their confidence in
the statement of
its condition made by the cashier of the institution,
under the solemnities
of an oath. Such measures have already been taken to secur
e the interests
of the billholders, that there is reason to hope that no
loss will be sustained,
and no great delay in the discharge of the responsibi
lities of the bank suffered,
by its creditors. In the meantime, investigations are
in progress which will
enable a full history to be made of the transactions
of its officers and the
condition of its affairs. In the instance, also, of
the Farmers and Mechanics'
Bank of Pontiac, there is reason to doubt the accuracy
of the statement as to the
amount of its specie in bank, reported as the bona-fide
property of the institution. The facts in this ease, likewise, when maturely
developed, will be duly
reported to the proper authorities.

•

The commissioners have deemed it an object of the highe
st importance
to see that in all instances ample securities were given
by the directors
and stockholders for the final discharge of the liabilitie
s of the several institutions. The securities by bonds and mortgages of uninc
umbered real estate,
required by the sixth section of the amendment to the
general banking law, are in
some instances already perfected; in others, they are now
in preparation.
In this first examination, many things were exhibited
in the transactions
and condition of institutions requiring change and
correction; and it has been
the intention of the commissioners to have every insti
tution under their control
put into a nroper and safe condition, which will insur
e public confidence. The
annexed statements and exhibits will present some insta
nces where such changes
have been required, and have since been made.
A second visit to these institutions, which will
be made without
delay, will enable a more explicit exposition o f facts, and
a more complete exhibit to the public of their true condition.
In the examination, the following banks were found in such
condition,
and their transactions in relation to the provisions
of law under which they

•


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Federal Reserve Bank of St. Louis

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•

evre establlahed, of such a character, that it was necessary to apply to the
chancellor or the State for proceedings against them, agreeably to the Statute.
Injunctions have been accordingly issued against the following banks, viz:
The
' The
:The
'The
The
The

Fareere' Bank of Genesee County, at Flint. j"
Jackson County Bank at Jacksonburg.
Farmers' Bank of Sandstone, at Barry. -4
Exchange Bank, at Shiawassee.
Bank of Lapeer, at Lapeer.
Wayne County Rank, at Plymouth. f )

A detailed report of the examination of the Farmers' Bank of Genesee
County is already in possession of your honorable body. The facts connected
with the remainder of the abovenamed institutions, against which proceedings
have commenced, will new be detailed; for the more full explanation of which,
copies of various papers relative thereto are hereunto annexed. 2he occasion
is here taken to remark, that the investigations in some instances are not yet
completed, but will be pursued until all the facts are fully developed for
the information of the public.
On the 22d day of ?ebruary last, the undersigned, together with their
associate, Thomas Fitzgerald, Esq. visited the Jackson County Bank located
at encksonburg.

•

The president and cashier were absent; the bank was in charge of
Charles Van Dorn, who had been appointed teller temporarily. The teller
presented to the commissloners a letter, from Paul 3. Ring, the president,
addressed to two of the directors, which expreesed the hope that the
commissioners would not insist upon an examination at present, for the reason
that, in the absence of the writer, satisfactory information of the state of
the bank could not be afforded them. The commissioners, however,having expressed their intention to Proceed immediately to the examination, the teller
expressed his willingness to exhibit the books and papers, and afford such
information as was in his possession. Search being made for the stock-book,
it could not be found: the teller presumed it to be in the trunk of the cashier,
to which he had not access.
On ezamination of the books of the bank, the following circumstances
were exhibited; the names of all persons and coroorations with whom accounts
had been opened, were written in pencil; the entries in ink. In a few minutes,
therefore, the whole face of the business transactions of the bank could
have at any time been entirely changed. On the 5th day of Nrember, 1837, there
appeared to have been an entry of a specie deposits of 320,000 in the Farmers
and Mechanics' Bank of Detroit. This entry had been erased with a knife, but,
on careful examination, the original entry was legible.

•

There was also an entry of a specie certificate from H. H. Brown & Co.,
Detroit, for 110,000. The date of this entry had been also the 5th November.
This date had been erased, and a new date substituted. The language of the entry
had also been altered, but, being written over, the original words could not be
traced. This certificateof deposite was not to be found, and was presumed to be
in the hands of the absent cashier. the teller, and Mr. Fitch(one of the stockholders who was present during this examination) were of the opinion that this


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Federal Reserve Bank of St. Louis

-4-

, 41,

certificate was the first instalment
of specie paid in.
The commissioners proceeded to an
examination of the specie of the
bank. Gold coin was exhibited
loose in a drawer, which, being counted,
amounted to the sum of one thousand
and thirty-seven dollars and seven
tyeight cents; about 9150, in loose
silver, was also counted. Beneath the
counter of the bank, nine boxes were
pointed out by the teller, as containing one thousand dollars each.
The teller selected one of these boxes,
and
opened it; this was examined, and appea
red to be a full box of American
half-dollars.
One of the commissioners then selected a box,
which he opened,
and found the same to contain a super
ficies only of silver, while the remaining portion consisted of lead and tennenny
nails. The commissioner then
Proceeded to open the remaining seven boxes;
they presented the same contents
precisely, with a single exception, in which the
substratum was window-glass
broken into small nieces. The teller, as well
as A. F. Fitch, the stook-holder
above mentionel, disclaimed all knowledge
of the transaction. How, when, or
by whom this fraud had been perpetrated, they
could not tell. The teller
stated that the boxes had been in the bank for some
time past; but whether
the contents, or any part of the same, had been there
within the last twentyfour hours, they did not know and could not
swear.
Immediately on the discovery of this fraud, the
teller and Mr. Fitch
went into an adjoining apartment, and, after
a little consultation, produced
from under a bedstead two boxes-- one without
a lid and apparently full of
coin, the other with half a lid and about half
full. These they stated to
be also the property of the said Bank of Jacks
onburg. The commissioners
counted the coin in the several boxes above
mentioned, and found the contents
to be as follows, to wit:
Box
Box
Box
Box
Box
Box
Box
Box
Box
Box
Box

1st contained
2d
3d
4th
5th
6th
7th
8th
9th
10th
11th

$205.43
137.50
261.00
242.25
294.00
243.00
279.50
248.50
603.00
671.50
723.50

The coin not in boxes as above mentioned
amountei to

Total amount of coin in bank

$3,909.18
153.00 in silver
1,037.78 in gold
$5,099.96

On reference to the statement of the bank, dated
February 19, 1338,
the third day previous to this examination, (whic
h is appended to this report, marked No. 1,) will appear that on that day
the bank claimed, under the
signatures of three of its directors, to be
possessed of the sum of $20,000 in
specie, independent of the certificate of
deposito for $10,000. This statement

,


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Federal Reserve Bank of St. Louis

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•

was copied from the statement-book of the bank, and is certified by
the teller
as a correct copy of the same. So disgusting an exhibition
of dishonesty and
falsehood is unworthy of a single comment.
The condition of this institution
at the time of the examination, as drawn from the exhibit made at that time by the
teller, would appear to be as follows, to wit:
Resources.
Discounted notes and other band
Due from other banks
Bills of other banks
Specie
Certificate of deposits
'_]xpense account •

$37,694.42
4,341.00
3,139.00
5,099.96
10,000.00
939.32
$61,263.70

Liabilities.

•

Canital
Circulation
Deposites
Profit and loss

'30,000.00
44,940.00
586.49
439.00

Total liabilities
Total resources

$75,965.49
61,263,70

Showing a deficit of resources to meet its liabilities of
14,701.79
If to this be added the certificate of deposits of
10,000.00
(which could not be found, and which it is probable is not a real asset of the bank,)and also
bills of the bank put in circulation and not entered upon any book which was accessible to the
commissioners, and which subsequent information has
shown to be
20,000.00
There will appear to be a real deficiency of
assets to meet the liabilities of this bank of

44,701.99

Such is t7re character and condition of the Jackson County Bankt
On the 23d day of February last, the commissioners entered into an
examination of the condition of the Farmers, Bank of Sandstone, located at Barry,
in the county of Jackson.

41,

The certificate of this bank was filed, according to law, in the
office of the Secretary of State on the 29th January, 1838. The capital stock
was named as $50,000. The security furnished was the personal bond of the
directors. The thirty per cent. on the eapital stock, required by law to be
paid in specie, was never actually so paid in, but a certificate of specie
deposite appears to have been used instead of coin.


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Federal Reserve Bank of St. Louis

•

-3No stock-book was ever opened, and no list of stockholders or directors was posted up in the banking-house. The list of stockholders and officers
of the bank hereunto annexed, (marked No. 2,) was furnished by F. N. Baldwin,
the cashiers The following statement, prepared and signed by the cashier
at the date of the examination, exhibits the condition of
this institution as
stated by the officers:
Statement of the resources and liabilities of the Farmers' Bank
of Sandstone, February 23, 1838.
Resources.
Bills discounted
Notes of other banks
Specie
Expenses and profit and loss
In agents' hands, for exchange

$6,985.00
400.00
236.00
161.69
27,424.00
$35,507.16

Liabilities.

S

Capital stock paid in
Deposites
Discounts received
Circulation

$15,000.00
450.00
80.C2
46,933.00
$62,463.C2

If from the amount of liabilities as above stated, viz: $62,463.82,
we deduct the amount of resources, $55,507.16, it will exhibit a deficit in
the means belonging to the bank for the payment of its debts of $26,956.66.
The discounted bills, notes of other banks, end specie, were fol nd in the
bank as exhibited in the above statement. The amount of $27,424, as specified therein as in the hands of agents for exchange purposes, appears by
receipts in the bank to have been advanced to the following persons, viz:
to L. D. Smith, (presiclent) $17,000; A. Clark,(teller), $10,000; G. Butler,
(director), $424. For these amounts no security was taken, other than the
receipts of the abovenamed individuals.
The circulation is stated above at $46,933.00, but no entries were
made in the books from which the actual sum could be ascertained; and there is
reason to believe that the amount actually in circulation in the eommun4 ty,
and in the hands of agents for that purpose, greatly exceeded the sum specified . The entire issues of this bank were made in violation of the law,
without endorsement by a bank commissioner. An account of the discounted
bills mentioned in the above statement was entered in a book in the bank, but
no other book of entries was kept, from which any thing could be discovered


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Federal Reserve Bank of St. Louis

-71110

o

of the affairs of this institution. There was, indeed, a book present
ed,
purporting to be the cash-book of the bank, in which entries were made exhibiting the pretended amount of specie, foreign notes, and domestic
bills,
in bank on the morning and evening of each day, for a
large proportion of the
time after the bank went into operation. But so clear was the evidenc
e that
the entries were made for the purposes of deception, and the whole
prepared
for the occasion, that it wes entitled to no consideration.
The investigation of the Wayne County Bane / located at Plymouth,
in the county of Wayne, encables the undersigned to present the following
statement of the mode in which this institution was established, its subsequent transactions, and present condition.
This bank was organized and went into operation on the 13th day of
December, 1837, with a capital of 1100,000.
The ten per cent. reouired to be paid in on the capital stook, in
specie, at the time of subscribing, was paid in by depositing with the treasurer
checks for specie drawn by the stockholders on the Michigan State Bark. These
checks have never been presented to the last Mentioned bank, but still remained, at the time of the examination, in the safe of the "ayme County 'Sank.

S

When the bank went into operation, two certificates of specie depositer
for 115,000 each were obtained by the president, J. D. Davis, "to the credit
of the Wayne County Bank, subject to the order of the cashier thereof", signed
by H. H. Brown & Co. The arrangement by which the abovementionei certificates
were obtained seers to have been through :10C1ure, the cashier of the Bank of
Clinton, with the president of the Wayne County Bank.— 'What that arrargenent was,
does not fully appear; but the cashier of the last named bank stated that
McClure claimed a loan of the bank, which he said had been pro-lised him, and
threatened to withdraw these certificates if it was not given • This
loan
to McClure was refused. The cashier of the bank had so little confidence in
the certificates, as he stated, that he had made no entry of them upon the
books of the bank, nor did he consider them as a payment in fact of the
thirty per cent. required by law. There has been actually paid
in by the
stockholders, in specie, on their stock, the sum of 1750. The
amount of specir
in bank at the time of the examination was $3,425.10, a large proporti
on of
which had been deposited by stockholders, and the amount Was subject
to the
draft of the depositors. The following is a statement of the funds of
the
bank, made on the lith day of February last.
.tatement of the funds of the 7Ayne county 3ank,'Pebrue.ry
13, 1838.
Resources

411

Liabilities

lills discounted
5,24,391.23
Discounts received
364.37
Specie
12,110.60
Notes of other banks .... 4,597.00
Cash items
1,991.55
Incidental expenses
321.77
$43,777.02


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Federal Reserve Bank of St. Louis

.mroma•••••

Capital stock paid in
Circulation
Profit and loss
Individual depositss

110,200.00
31,326.00
52.04
2 198 98
43,777.02

In this statement, the amount of specie, 12,110.80, comprised
the abovementioned checks for specie, and $415 in specie, at
that time actually
paid in on stook. The specie checks were included in the amount of
410,200
then exhibited as the amount of capital stock paid in.
The following is a statement of the affairs and oondition of the
bank, furnished by the cashier on the day of the examination of the same,
March 8, 1838.
Resources
Loans
Expense and furniture account
Bills of other banks
Specie
Cash items

$23,516.23
346.27
5,738.00
3,426.10
11,557.09
44,583.49

Liabilities

•

Stock paid in
Circulation
Deposites

3750.00
34,779.00
9,054.49
344,583.49

In this statement, it will be perceived that the specie checks are
no longer estimated as an amount paid in on the capital stock of the bank;
and the sum of $750, therein sot dawn, was actually Paid in specie, and
possessed by the bank. On the other aide of the statement, however, under the
head of "cash items," these specie checks to the amount of 39,750 are made use
of as among the resources of the bank. It will be at once observed that these
checks cannot be used by the institution among its resources, without incurring
a responsibility to the same amount to the drawers thereof; and that they
should,
if so considered, be also put dawn on the side of liabilities, as stock paid in.
If they are added to the side of liabilities, or deducted from the statement
of the resources, (whioh will produce the same result), there will be exhibited
a deficit in the resources of the bank of the said sum of $9,750. The balance
of the amount of "cash items" is composed of a post-office draft and loans to
individuals, subject to immediate demand. It is probable, however, that some
error must have occurred in the statement, and that the deficit above mentioned
does not really exist—at least not to the amount above stated. Bills of the
bank to the amount of 36,000 were delivered to James H. Mulford, of Illinois,
to be put into circulation there, and accounted for or returned by him by
the
let of April instant. His obligation with securities was taken to the bank;
and it is presumable that the cashier, by mistake, failed to enter it among
the loans or other resooroes of the institution in the statement here exhibited.
This, however, cannot now, with certainty, be ascertained.


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Federal Reserve Bank of St. Louis

No list of the stockholders could be obtained at the bank, and no stock-

-9..

book had ever been opened, nor list of stockhold
ers or directors ever
posted up in the banking-house.
By reference to the books of the bank, and the statement of
the
cashier, it appeared that the bank has issued its bills since the 10th
January last without endorsement by a bank commissioner, to the &mount of
#4,000.
The amount due from the directors of the institution was at that
time $15,500-- an amount far exceeding that allowed by law.
The security given for the final discharge of all liabilities of
the bank was the personal bond of the directors alone, in the penalty of
$300,000. Additional sedurities were required by the commissioner who
visited the institution; but the same not having been perfected as agreed
upon, application was made to the chancellor for the institution of proceedings, agreeably to the provisions of the statute in such cases made and
provided.

I

The next institution of a similar character, which underwent the
examination of the undersigned, was "the Bank of LapeerP located at the
county seat of LPpeer county. This bank went into operation on the 8th
day of December, 1837, with a capital of 150,000.
About $1,000 of the 30
per cent. on the capital stock, required to be said in in sPecie, was so
paid in; the greater proportion, however, of the amount, was in a certificate
of specie deposite, issued by "the Farmers and Trechanics' Bank of Michigan."
This certificate was Obtained by A. Goodrich, one of the directors of the
Bank of Lapeer, who procured it by giving his check for the amount,of the same
date, and without making any actaul deposits in the bank. The amount of this
certificate was S15,000. It was considered as applying on the subscriptions
of different individuals who held shares of stock, and amounted, when added
to the specie paid in, to more than the sum required. No entry, however,
appears by the books in the bank ever to have been made of this certificate;
nor were any regular accounts ever opened with the stockholders, excePt
such as appears in a minute taken from the books, hereto appended. The
certificate was taken away a few week: afterwards by the said Goodrich.
Norman Davidson was the president of the institution from the commencement of its operations until the 1st day of February last, and
Alvin
N. Hart was cashier until the 12th day rf the sane month. J. T. Benedict
was then chosen president, and S. D. Cady ceshier. The lest named individuals (the present officers of the bank) being both absent at the time of
the examination, and the books in a very imperfect state, the testimony of
the former cashier and two of the directors was resort'a in for information.
Their affidavits will be found among the annexed papers.
The following is a statement of the affairs and condition of the
bank at the time Yr. Hart resigned.as cashier, as near as he can ascertain, viz:
Resources

•

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Federal Reserve Bank of St. Louis

Rills discounted
Specie
Cash left in hands of R. F. Brawn & Co.
Aaron Goodrich, (on check)

$20,893.00
1,201.77
2,125.50
40,000.00
164,720.27

1
-10Liabilities
Capital stock paid in
Circulation, (say)
Expense account, (say)

115,000.00
65,000.00
1,000.00
7-81,066.00

The books exhibit issues only to the amount of 322,000; hut,
from the estimates made by Mr. Hart, at least the amount of 366,000 must
Wive been in circulation on the 12th of February last. There was, also,
in the bank at that time, in sheets, signed by the former president
and cashier, (say) 110,000; which has been taken out, and probably
thrown
into circulation. Bills also signed by the new president and cashier are
in circulation; but to what amount, there is no means of ascertaining.
Bills with the last mentioned signaturesr, to the amount of 3800, wore found
in another institution.
Discounted paper, as specified in the annexed affidwit of H. B. Lynn,
was found in the bank, amounting to $19,393; als4 specie to the amount
of 31,201.77.
No entries or evidences of debt were found in the bank against
H. H. Brawn & Co., or Aaron Goodrich.
The testimony of Mr. Hart shows that another book, kept by the
bank, and in which certain entries were made by him as cashier, was delivered to the present cashier, S. D. Cady. This book was not to be found in
the bank.
There was also exhibited to the undersigned, as one of the books
of the bank, a book purporting to be the "cashbook", kept by the cashier.
In this book the amount of specie on hand was entered on the merning and
evening of each day, commencing on the 2d day of January, and endin,
' on
the 10th day of February last. It showed the sum or $15,000 in bank from
the 2d day or January to the 13th day of the same month; and from that date
* gradual diminution of specie, until the amount was only $1,200.09.
The entries were apparently all made at the same time, and with the
sane pen and ink; and it Wn2 ascertained, to the satisfaction of tly
commissioners, that the entries were so made soon after the present
of'icers
took possession of the institution, and were prepared for the 'purpose df
exhibiting the same as the true statement of the cash affairs of the
bank.
That the entries were false, will fully aonear by a reference to the
facts
above stated. The annexed affidavits of H. B. Lynn, teller in the bank,
A. N.Hart former cashier, and Aaron Goodrich and B. F. Towne,
directors,
(marked Nos. 3, 4, 5, and 6,) wAll tore fully exhibit the affairs
of the
institution, and the transactions of its officers.
The securities for the final discharge of the debts of the bank
consist of the personal bond of the directors and mortgages upon real
estate.

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The Exchange Bank of Shiawasse4/next claimed attention. This
institution was established and went intb operation on the 3d day of
February last, in the county of Shiawassee. The individuals most active
in organizing and conducting the business of the association were
residents of the State of Ohio and the city of Detroit.
The subscribers to the capital stock who resided in the county
of Shiawassee seem to have been induced to embark in the enterprise at their
solicitation. Securities, consisting of bonds and mortgages, which may
probably be sufficient to cancel the debts of the institution, were
chiefly given by them. It seems, upon investigation, that the resident
stockholders knew little of the management or concerns of the bank. At the
time of the visitation of this bank, which was on the 19th day of March
last, the president and cashier were both absent. The key of the safe was
delivered to the commissioner by Lenuol Brawn, one of the directors, who had
obtained it from the president. It contained an imperfect set of books,
which, however, were said to contain all the entries made by the officers
of the bank.

•

The paper marked (A) and hereunto annexed, exhibits the entry in the
only book which is intended to show who are the stockholders of the bank.
The paper marked (B) is a copy of the only entry giving the names of the
directors and officers. It appears that the individuals who solicited the
inhabitants of Shiawassee county to become subscribers to stock, promised
to advance, themselves, all the specie requisite to put the institution
into operation; and, indeed, notes for their nroportional amount were given
by some of the subscribers, payable in thirty days, in specie; while of
others, no such notes were required. These notes were afterwards given up
by said Brown.
No part of the capital stock of the bank appears ever to have been
paid in. Two certificates of specie deposites were obtained from the
Farmers' Bank of Genessee CounWfor which discharges were given at the
Another
sane time they were received, and intended to he used in the bank.
certificate seems to have been put into the bank, purporting to be issued
by the New Haven Bank, for $3,000; which was afterwards sold, but soon
returned to the bank as a forgery. Seven coppers were found in the safe.
No other coin appeared at any time to have belonged to the bank. No
bills of other banks were found. There was one counterfeit note of
$500 on one of the New York banks. There is but one entry in the books
purporting to show the issues of the bank. The amount which then appears
to have been issued is $4,875. By reference, however, to a statement
found in the bank, a copy of which marked (C) is hereunto annexed, it
will appear that there have been issued, of the bills of the bank, $34,326.
At the time of the examination, there were found in the bank, in its awn
bills, returned, the sum of $8,933, which, if the statement be correct,
would exhibit a circulation of $25,393. There appears, also, to be due on
expense account, and to depositors, the sum of $291.13.

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e-

The statement before referred to exhibits the amount due from
individuals to the bank at 320,961.37.
Endorsed notes, hereunto annexed, (marked D), were found in the
bank, amountine, to the sum of
4,242.65
Exchang.e checks and receipts
$2,900600
Receipts and notes in the hands of A. Morehouse (president),
for collection, for which his receipt is Oxen, and in bank.. 6,520.00
$13062,65

For the other items, which appear by the statement to be due,
no evidence of the debt was found in the bank.
In the statement above referred to, the cash in bank, which is
stated at $14,174, was made up, so far as can be ascertained, by the
certificates of deposite above rentioned; no cash ever having been actually
the property of the said bank.

•

The affidavits of Hosea Baker and Lemuel Brawn, two of the
directors, hereunto appended, (marked E. and F, will exhibit more explicitly
the transactions of this bank.
All of wheh is respectfully submitted.
ALPHEUS BELCH
KINTZING PRIICHETTE,
Bank Commissioners.

Detroit, April 6, 1838.

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U. S. Executive Documents, 26th Congress, 1st Session, Ho. of Reps.,
Treas. Dept., Doc. No. 172, pp. 1092-1095 -

BANK OF MICHIGAN
Reported by Bank Commissioners
March 29, 1838

In Obedience to the resolution of the Legislature of the 26th
instant, requiring the bank commissioners, or either of them, to report forthwith to the Legislature the condition, affairs, &c. of the(Farmers, Bank
of Geneisee County; the undersigned have the honor to report:
That, on the 15th day of March instant, they had an interview with
Robert J. S. Page, the cashier of the Farmers, Bank of Genesee County,
from whom an affidavit was obtained setting forth the establishment, condition, and management of the said institution: a copy of which affidavit is
hereunto annexed, and to which reference will be hereafter made in the progress
of this report.

•

On the 16th instant, the undersigned visited the banking house of the
said institution, and obtained free access to the books, paperai and property
of the same. The president and cashier were absent, and there was no officer
in charge of its affairs. It appeared, on examination, that no set of
books had ever been kept. A stock-book was found, in which was pasted a sheet
of paper containing the original subscriptions to the stock of said bank; the
subsequent transfers were exhibited in this book, in the handwriting of the
cashier. A copy of the contents of the stock-book is contained in the accompanying paper, marked (A) ,)
A book containing the proceedings of the board of directors, from the
30th of December, 1837, to the 17th February, 1638, was also found in the bark.
By the entries in this book, it appears that, on the 30th day of December,
1837, at a meeting of the stockholders, an election of directors took place;
after which, at a meeting of the directors on the sane day, H. R. Jerome was
elected president, and R. M. Morrison appointed cashier. The security of the
bank, consisting of a bond of $250,000, was filed and approved by the treasurer
and clerk, and the bank commenced operations. On the 4th day of January a new
appointment of cashier took place; and Robert J. S. Page being duly chosen, took
the oath of office. "c'or further information herein, reference is wade to a
copy of the contents of said book, accompanying this report, marked (B) No
other books of any kind appeared to have been kept by the said institution.

•

A file of notes, designated generally on the face, the remainder by
endorsements, as "stock-notes", and a file of receipts given to the several
subscribers to the stock, by H. R. Jerore, as treasurer of the bank, were
examined by the undersigned, and a list of the sane made; copies of which


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Federal Reserve Bank of St. Louis

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are herewith transmitted, marked (C). A list of the file of discounted
notes and receipts for the bills of the bank, taken for the purpose of exchange, was also made by the commissioners, a copy of which is likewise
transmitted, marked (D). Unendorsed notes were also discovered to the amount
of $168,656.50, of the following dates and tenor, to wit:
Two notes given by H. R. Jerome-the first dated Flint, January 4th,
1838, payable five years after date, for the sum of $8,358.50; the second dated
at Detroit, February 8th, 1838, payable five years after date, for the sum of
$54,000,

Two notes given by Delos Davis-the first dated at Flint, January
4th, 1838, for the sum of $300, payable five years after date, and signed
D. Davis; the second dated at Detroit, February 8th, 1838, payable five years
after date, for the sum of $50,628, and signed Delos Davis.
Two notes given by R. Brown, jr.-the first dated at Flint, January
4, 1838, nayable five years after date, for the sum of $1,500; the second
dated at Detroit, February 8, 1838, payable five years after date, for the
sum of $51,170.
The above-described notes, dated January 4, 1838, are made payable
to "the president, directors, and company of the Farmers' Bank of Genesee
County". Those bearing date February 8, 1838, are made payable to "the
Farmers' Bank of Genesee County, Michigan". None of the abovementioned notes,
of either description, beer interest.

•

T he bill* on the bank signed by H. R. Jerome, president, and R. J. S.
Page, cashier, were counted by the commissioners, amounting to the sum of
$3,455. No specie nor foreign bills of any description were among the assets
of the bank. Two packages of bank-bills unexecuted, containing eighteen hundred
sheets of the smaller denomination of notes, were found in the bank.
The undersigned have briefly stated the results of their examination
and effects of the Farmers' Bank of Genesee County. With a
condition
of the
view, however, of presenting to the LOgislature a complete exhibit of their
investigations, as contemplated by the scope of the resolution of your honorable
body, they proceed herewith to present a succinc+ account of the manner in
which this institution appears to have been put into operation, and its subsequent transactions, so far asthey are informed.
The application made for the formation of the association, under the
first section of the "Act to organize and regulate banking associations," and
the certificate filed in the office of the Secretary of State, agreeably to the
twelfth section of said act, set forth the location of its office for the transaction of business as at "Flint rapids". No office, however, was ever opened
at that place. The banking-house was at Flint village, about six miles distent,
and all its business was transacted there. The capital stock was one hundred
thousand dollars. The treasurer, appointed under the second section of the
beforementioned act, was Horace R. Jerome, now the president of the bank. The
securities given in compliance with the llth section consisted of bonds and
mortgages, copies of which are filed in the office of the county clerk of Genesee.


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Federal Reserve Bank of St. Louis

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-3The originals have never come into the hands of the commissioners, nor have
they been enabled to ascertain where they are to be found. It is not certain
that any part of the first ten per cent. was over paid in, in specie,
agreeably to the seventh section of the banking law. The whole amount of
specie which appears at any time to have been the bona-fide property of the
bank was about one thousand five hundred and sixty dollars; but whether paid
in as a percentage on its stock (if we except the sum of sixty dollars) cannot
be ascertained. The mode in which the payment of the first ten per cent. in
specie was evaded, appears to have been as follows: The subscribers to the
stock gave to the treasurer of the bank their individual notes for the amount
of the instalments payable in specie. These were designated "stook-notes."
The Treasurer gave them, in return, receipts for specie to a like amount as
having been paid in by the said subscribers.
Whether the additional thirty per centum, required by the tenth
section of the law, was ever naid in, the undersigned have not been able to
ascertain. If paid in at all, it must have been withdrawn within a few days
afterwards. There is no evidence, however, that any instalments of the capital
stock of the said institution were ever mid in according to law. The specie
above mentioned as the property of the bank is said to have been remitted
to the Detroit City Bank on or about the 15th of February last, for the redemption of its notes by thFct institution.
The commissioners have no means of arriving at the amount of issues
the
made by
bank. The cashier, R. J. S. Page, states that about the 6th
day of February last he went to the city of Detroit, and signed bills to an
amount which he estimates at about $165,000, all of whf_ch were dated the 4th
day of January. Bills to the amount of twenty-five or thirty dollars are said
to have been burnt. These bills were signed by H. R. Jerome, president, and
R. M. Morrison, cashier. Whether any bills so signed are in circuletion is
not known. There is no entry in any book of the bank designating its issues,
or showing the amount of its liabilities.

•

To meet the liabilities of the bank, there are discounted notes
(principally endorsed paper) to the amount of $10,965; receipts, given by
individuals who received bills for "exchange purposes, " amounting to $1,170.
To which ma/Added the notes of Messrs. Jerome, Davis, and Brawn, amounting to
the sum of 1166,656.50.
A statement of the condition of the bank was made in January by the
cashier, which exhibited twenty thousand dollars in specie. This statement
was made up in Pontiac, to which place the president and cashier had repaired
for that purpose. The exhibit was prepared from the following materials,
to wit: A certificate of deposite from the Bank of Oakland, signed by
Daniel Le Roy, president, for $10,000; a certificate of deposite from the Clinton
Canal Bank, signed by William S. Stevens, president, for $10,000. No deposite
was made in either case. The certificates were loaned for the purpose of making
the statement, and returned to the banks from which they were borrowed on the
same day. Th 4 s exhibit was increased to 130,000 by the president; in Detroit;
by what means the commissioners are not inferred.
A statement was likewise prepared, dated the 1st of February, together
with an answer to the interrogatories contained in the resolution nf the
Legislature, based upon the following materials, to wit: The specie in the
bank, and the personal property belonging thereto, was estimated at 12,000;
$10,000 in silver was brought to the bank and paid in by Delos Davis and

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Rufus I9rown, Jr., together with cwo certificates of deposite from the
Farmers and Mechanics' Bank of Detroit-one for 35,000, and the other for
$15,000-signed by John A. Welles. These certificates, together with the
specie, remained in the bank for a few days, and were taken away again
by the same persons by whom they were bought.
A further effort to exhibit the bank in a sound condition appears
to have been made in anticipation of the examination of the commissioners, as
may be seen by reference to the affidavit of the cashier, R. J. S. Paee, who
refused to receive the specie sent for the nurpose. To this affidavit, hereto annexed, marked (E), and from which the facts above stated are principally
drawn, the Ler;islature is respectfully referred for a detail of various
particulars which were not deemed properly within the scope of a report.
In conclusion, the undersigned have the honor to state that they
have appended to their report all the materials which came into their
possession in the process of their investigation of the affairs of the
Farmers' Bank of Genesee bounty.
The case being such as
guard the public against further
the ohanoellor for an injunction
up of its affairs. All which is

demanded prompt and efficient measures to
loss, an applioation was immediately made to
against the institution, and the winding
respectfully submitted.

K. PRITCHETTE(
Bank Commissioners.
A. FELCH

Detroit, March 29, 1838

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U. S. Executive Documents, 26th Congress, 1st Session
Document No. 172, pp. 1122-1148.

Z-4
January 18, 1839

To the honorable the Senate and House of Representatives of the State of
Michigan:
The undersigned, the bank commissioner of the State of 'ichigan, in obedience to the provisions of nineteenth section of the act to create a fund
for the benefit of the creditors of certain moneyed corporations, by
which it is made their duty, " in the month of January in each year, to
report to the Legislature the manner in which they have discharged the
duties imposed upon them; and to accompany such report by such abstracts
from the reports made to them, and by such other statements as they may
deem needful," have the honor, conformably thereto, to present the following report:

•

The manner in which they have discharged the duties imposed upon them, being the first branch of their present duty, will claim a brief
attention, before entering on the subject-matter of their report.
The peculiar embarrassments which they have had to encounter,
and the weighty responsibilities conseluent thereupon, clothe this duty
with a new character. It becomes an act of justice to themselves, and
to those who have honored them with so important a trust.
At the period the commissioners entered upon their labors, every
portion of the State was flooded with a paper currency, issued by the institutions created under the general banking law. New organizations were
daily occurring, and the public mind was everywnere agitated with apprehension and distrust. The State was in the midst of the evils consequent
upon an excessive and doubtful circulation. Rumors of the most frightful
and reckless frauds were daily increasing. In this emergency, prompt and
vigorous action was imperiously demanded, as well by the public voice as
the urgent necessity of the case. Upon a comparison of opinions, the commissioners united in the conclusion that their duty was of a two-fold character: the first, and most obvious one, was to take immediate and decided
measures in ascertaining and investigating the affairs of every institution suspected of fraud, and closing the door against the evil without delay; the second was a duty of far more difficult and delicate a nature)
and involving the assumption of a deep responsibility.

•

The public interest seemed to re,luire that some distinction
should be made between cases of wilful fraud, and those of a mere violation of the law. The first class could proceed but from one motive; the
second might arise from misapprenension of the law, inflated views, error,


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ignorance, and various other causes, not the least of which were the Dressing necessities of those who, being largely indebted, seized the opportunity
of present relief, with the expectation that a short delay would enable them
to realize the means of redemption.
In those cases where the commissioners could induce securities to
be given, and excite vigorous efforts, with any prospect of success, to
withdraw their excess of circulation and render certain the final redemption of all liabilities, they considered it their duty to the public to
overlook former irregularities, and allow and encourage the banks to sustain themselves, and those engaged in them, to preserve their honor and
character. This conclusion was based upon the fear of the dreadful consequences which would ensue should the vast amount of paper-money in circulation be left suddenly in the hands of the comiunity, with no prospect of
redemption but through the tardy aid of the laws.
With these determinations the commissioners commenced their labors, and traversed the 'State in every direction where public apprehension or private information pointed at fraud. The result of their first
efforts was placed in the hands of the Legislature, and is on the files
of your honorable body.
The -econd branch of their labors has anxiously and painfully
occupied them until this time. How far the gradual withdrawal and redemption of a vast amount of the circulation, the valuable and ample securitieL
obtained, by inducing a compliance with the amended laws in many institutions which they have subsequently found it necessary to enjoin, have
justified their interpretation of their duties, and the responsibilities
they have assumed, is confidently submitted to a candid consideration.
Had the commissioners confined their sense of duty to the strict
letter of the statute, their task would have been comparatively easy, put
in no jeopardy their characters and reputation, and restricted their efforts to a less expensive and less arduous service.
The injunctions obtained within the last few months have been
numerous. This arises from the fact that the public have ceased almost
entirely to receive the money of the safety-fund banks; credit being withdrawn, their notes have accumulated in large sums in a few hands; and,
coming home in masses, they have lost the ability, which might have been
maintained if presented in small sums, to redeem them; their exertions
have been paralyzed: indifference has been manifested in making any provision for them;and the annual instalments have been neglected. The
reasons, therefore, which induced the commissioners to second their efforts, have no longer room for exercise; a disposition is manifested to
escape liabilities; the dangerous responsibility resting on the commissioners is, therefore, no longer demanded; and the safety of the public,
in whose hands the irredeemable paper lies, has satisfied them that the
assets and securities should be placed in less interested hands.

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Federal Reserve Bank of St. Louis

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The difficulty of maintaining an impartial action has led the
commissioners to the adoption of the rule, that the first information conveyed of the insolvency of a bank should be through an injunction. Had the
doubtful condition which a bank presented upon investigation been hereto fore bruited abroad, it would have been vainly urged to reinstate its credit; and now, when all but the notes of those of undoubted character have
ceased to be a currency, the proclaiming the disaster would have no other
effect but that of anabling the vigilant, and those nearest the source of
information, to dispose of them to their more careless or remote fellowcitizens.
In obedience to the second requirement of the statute) quoted
in the opening of this report, three documents, (marked A, B, and C,)
being copies of the several reports made to the Executive during the past
year, are herewith transmitted,together with an abstract of the statements
furnished by the banks, showing ther liabilities and resources.
Injunctions have been issued against the Goodrich Bank and the
Bank of Oakland. The manner in. which the books of the former were kept)
and the wish of the stockholders to close their concerns, dictated the
course. Its circulation is very small, and w - 11 all be paid. The latter institution, having no available means to redeem its circulation,
and having failed to pay in the annual instament required by law, was proceeded against for insolvency and infraction of that statute. Its assets
and securities are, it is believed, ami4y abundant to cover all its liabilities. 'he Bank of Utic47has been also enjoined, for similar reasons
with those stated in regard to the last mentioned institution, and the
probability of its redeeming all its liabilities rests upon a similar
footing.

•

An injunction was obtained against the Oakland County Bank,
xhich is a chartered institution, for refusal to allow an examination
to be perfected, or to furnish a statement of its affairs. An injunction had some time since been obtained against it for an alleged violation of its charter, but removed by an application made by the bank to
the chancellor. From the circumstances which induced the previous application, and from the partial examination lately made, the imperative
obligations of duty demand the recommendation, which is here made, that
the Legislature should authorize a committee to examine into its operations and conditions.
A')
The Saginaw City Bank/has been enjoined, on the ground of insolvency. It numbered among its assets, as specie, a certificate for
te1E,000, deposited in the city of New York, in the hands of a highly
respectable commercial house. On this certificate the president and
cashier have always insisted they were authorized to draw. This certificate supplied the place of capital stock of the bank, which had been
loaned by the cashier of the Farmers and Mechanics' Bank, through the
instrumentality of the late cashier of the Bank of Clinton;Ao set the
bank in operation, and had afterwards been returned. The high standing
of the gentleman who had the control of this institution, and the respectable character of the certificate, induced a departure from the


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from the customary rule of the commissioners not to recognise specie certificates.
The assurances of the president, as to its availability in the
redemption of the circulation, were received. The conduct of the bank
for some time justified this confidence; but, at the last examination,
it was perceived that this essential item to the solvency of the institution was still estimated as specie, to the amount of $13,239, while a
large circulation was afloat, which the bank had ceased to redeem on
presentation at its counter; it was not, therefore, deemed prudent or
safe any longer to recognise as an available asset that which was practically useless. The violation, also of the provision of the statute
requiring the payment of the annual instalment, left no choice but the
course adopted. The bank had furnished the necessary securities re-luired by the amended act, which with its other assets, should be sufficient to secure its liabilities.
The Clinton C-nal Bank is also under injunction. This bank was
also put in operation by a loan from the same source; but, subsequently,
passed into other hands, from whom abundant security was obtained for the
ultimate redemption of its then liabilities. The president, David Paddock, Esq., obtained the contol of the bank, and furnished a most valuable part of the securities. Every assurance was received that immediate
measures should be taken to lessen its circulation; this, to some extent,
was done, but untoward circumstances prevented the immediate fulfilment
of the engagement. Subsequently, the stock was transferred to other
hands, without any information to the commissioners, who had relied upon
the character of the president, (Judge Paddock) who had given so strong
a Eua'ranty of good faith by furnishing valuable securities. Assurances,
however, were given, on application to the gentleman above named, that
the purchaser (J. L. Conger) was then absent to negotiate a loan for the
reinstatement of the institution; that nothing had been done, or would
be allowed, injurious to the public interest; and that he had ample security from the purchaser to guaranty its safety. The loan, however, was
not effected; and it is to be apprehended that a considerable amount of
the notes was abstracted and disposed of in a fraudulent manner. No imputation, however, is cast upon the integrity of Judge Paddock, who does
not consider himself responsible for the acts of the bank subsequent to
the disposal of his stock. He has claimed from the auditor general a
release of his securities, by the substitution of those offered by Mr.
Conger, under the proviso of the sixth section of the amended act of December 30, 1837. The auditor general, however, under the sanction of the
commissioners, has refused to surrender the securities. As no entries
were made of the bills abstracted, and as the stockholders, upon the discm.ery of the fact, burnt all the remaining sheets found in the bank, the
amount of circulation is doubtful; yet, so far as can be ascertained by
the receiver, from bills in his hands and within his knowledge, there is
reason to hope that the securities, is realized, will go far to redeem
the liabilities of the bank.

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The Bank of Shiawassee and the Bank of Auburn have never gone
beyond their organization, and are among the cases hereafter mentioned
as requiring legislative interference.
An injunction has been obtained against the Bank of Coldwater,
it having failed to effect the negotiation mentioned in document marked
(C) herewith transmitted, from which the ability was anticipated of redeeming its circulation. Confidence, however, is entertained that it
will be able to pay all its liabilities.

•

Application has likewise been made for injunctions against the
Bank of Allegan'and the Berrien County Bank;'and judicial proceedings
are in process of institution, through the attorney general. In the case
of the Bank of Allegan; the application is a renewal of one made by the
late commissioner, Thomas Fitzgerald, Esq., for violations of law and
general insolvency. The condition of the Berrien County Bank, at its
examination in July last, is exhibited in the report above mentioned,
marked (C). It will there be seen that the operations of the bank were
then suspended; that certain requirements were then insisted upon; and
that their moneys and effects were removed out of their hands, and beyond their control, until a faithful compliance with these requirements
was made. A failure has taken place in the full performance of these engagements, although much has been accomplished in the redemption or withdrawal of its bills from circulation, and in the decrease of its other
liabilities. This result proves the correctness of the policy adopted,
of suspending the operations of the institution, instead of putting an
abrupt termination to its action by a writ of injunction. No further desire, however, on the part of the bank, seemed to exist; at all events,
no further effort was made to better its condition; and an injunction
was therefore applied for, as above stated.
The People's Bank of Grand River, located at Grand Rapids,
which commenced operation in violation of law, was, in consequence, suspended by the commissioner, as reported to the Executive in the document last referred to. On a subsequent visit and examination, the bank
at the suggestion,of the commissioner, assigned all its effects and assets into the hands of trustees, satisfactory to him, for the benefit
of its creditors. This course seemed to be the only proper one to adopt,
under the peculiar circumstances of the case. The requisite certificate
of organization not having been filed according to law in the Secretary
of State's office, the association wqs, in consequence, not cognizable
as a corporate body, or within the jurisdiction of the chancellor. All
the indebtedness to the public, with the exception of one or two hundred
dollars, has been already cancelled, and no loss will be sustained by
the public.

•

The Farmers? Bank of Homer and the Bank of Battle Creek have
been allowed a reasonable time to effect negotiations of loans, for
j;he purpose of redeeming their circulation, which those having the control of both these institutions are sincerely anxious to withdraw from


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the community. The commissioner believed it a duty, in the advancement
of the public interest to second these endeavors, (which, without doubt
are faithful and earnest) by affording them the opportunity to raise
competent means to effect this purpose. This course was pursued under
a conviction that the public could sustain no injury, but be materially
benefitted, by the measure, by receiving good and current funds for the
notes of these banks, in from one to two months at farthest, instead of
waiting the result of a protracted process in chancery.
The hank of Battle Creek, there is good ground for assurance,
will be in possession of the means to effect this desirable object in
the course of two weeks, a favorable issue to the pending negotiations
for that purpose being confidently entertained.

•

The Bank of Singapore has not been visited, the roads being
impassable at the time the commissioner was engaged in his tour of examination. An early investigation of its affairs, however, will be instituted, and made the subject of a special report.
tt
The Bank of Manchester has been engaged solely in redeeming
its circulation and discharging its responsibilities. It has reduced
its circulation from more than $100,000 to $25,514, and its resources
are abundantly sufficient to pay all its responsibilities. The stockholders will, however, in all pr-floability, find it for their interest
to close the institution.
Besides the banks in the second circuit, included in the
list hereto annexed in the general abstract, there hfts been organized
under the general banking law, the Commonwealth Bank atTecumseh; the
Citizens' Bank;'/at Ann Arbor; and the Michigan Centre Bank/at Michigan Centre; neither of which has issued bills, although all have given
security. In these instances, as in some others, the interest of the
community reauires, in the opinion of the commissioners, an abrogation
of chartered privileges, and a provision of law authorizing the proper
authorities, under such salutary restrictions as will secure the public
against all possible injury, to discharge the securities given. In the
instances above mentioned, and in some cases in the third circuit, it
is believed that such a course will be perfectly satisfactory to those
who are interested, and who find it no object to embark or proceed in
banking operations.

•

The railer& Bank of Washtenawf, at Ann Arbor, with a circulation of about $400, and the Bank of Superiorj at Superior, with a circulation of only about i;50, came to the conclusion, some time since, to
close uP their concerns. In both instances their bills have uniformly
been redeemed, and still are redeemed, on presentation. In these, and
other cases, where no possible loss could occur, the commissioners could
see no good object in instituting adverse proceedings to close up their
concerns by a long and expensive process in chancery; and no authority
seems anywhere in the law to be given for an amicable surrender of chartered rights upon payment of responsibilities.


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The commissioners would therefore beg leave to recommend to the
Legislature a careful examination of this subject. Perhaps the permission
of an assignment, to operate as a surrender of chartered privileges, might
be given, under the supervision of the commissioners, and made available
to any of the safety fund banks now existing, with a view to the immediate
payment from their assets of all responsibilities to the public, and a final division of all remaining balances among the stockholders. It would
be necessary, also, to provide that, upon the payment of all, or nearly
all, of the liabilties of the institutions, the auditor general, with the
advice of the commissionsers, should have the authority to discharge the
securities, or such portion of them as might be deemed proper under the
circumstances of the case; or, perhaps they might be allowed, upon application to the chancellor, to settle up their own afairs under his direction.
But, whatever plan should be adopted, in detail, to accomplish
the object in view, a law for that purpose cannot be too strictly guarded
to secure the public interest. Dormant rights of organized associations
cannot, consistently with the public weal, be permitted long to exist;
and the immense amount of real estate now under incumbrance for hank securities is a matter of so much importance as to require of the proper
authorities an attention to the subject.
Should the proper provisions of law for this purpose be made,
it is believed that many, who are now interested in banks, would avail
themselves of the privilege of closing the institutions under their control, without the opprobrium of public adverse proceedings before a judicial tribunal.
Should the Legislature, however, determine against the enactment of such a law, the commissioners will deem it their duty, in all
cases proper for such action, to apply for injunctions.

•

On an examination into the affairs of the Bank of Washtenaw,
the 14th day of December last, there was in bank, of the bills of the
safety fund banks of this State, under injunctions, the amount of
$14,207. It also appeared that the sum of $6,288.75, in like funds,
was lately disposed of to Olney Hawkins, in the purchase of a mortgage
certificate of sale, making the large amount of $20,295.77 in uncurrent funds, now or 1-stely in the possession of the bank, most of which
have been received since the 16th of July last. It also appeared that
large amounts of the same depreciated currency had, in the mean time,
been used by the bank, in payment of its notes, and in the discharge
of its other liabilities. It appearing, also, before the commissioner,
that one of the officers of that bank, had been engaged in purchasing
such notes at a depreciated value, and had made his deposites in the
Bank of 60ashtenaw, and that he had used, in the payment of his own
debts, some of the proper resources of the bank, a bill in chancery
was filed, charging improper conduct on the part of the officers, and
apprehended insolvency of the institution.


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The bank had, moreover, failed, as was alleged, to pay its notes
on demand, or within sixty days thereafter. Immediately before the service of the injunction, (to wit, on the 7th January instant,) the commissioner again visited the bank, for the purpose of making an examination
into its condition; but such examination was refused.
There are, also, other violations of the law, and other instances of improper conduct on the part of the officers, which are fully set
forth in the bill.
At the time of the last report, a negotiation was in progress
by this bank, to effect a loan to enable it to redeem its circulation;
and hopes were entertained that it might be abel to accomplish so desirable an object. Twenty thousand dollars were obtained by the bank,
about ten thousand of which were used to pay drafts and its paper in
another bank. The remaining ten thousand seem to have afforded little
or no relief in paying its circulation, or in restoring the credit of
the institution. The circulation of the bank is now about forty-eight
thousand dollars.
The history of banking, and an examination of the conflicting
opinions which are maintained upon the subject of currency, would require a volume rather than the limits of an ordinary report. But the
internal energies and resources of a new country, in their constant
exercise and development, so soon shake off the consequences, and obliterate the sense of disaster and distress, tat more reflection seems
heretofore to have been bestowed upon temporary expedients, than upon
that thorough investigation of the subject which would lead to a permanent remedy against the recurrence of similar evils.
Standing, as Michigan does, upon the ruins of her credit and
currency, it behooves her to carefully examine the causes which have
precipitated to almost entire destruction the edifice so lately erected
and, by the light of other examples and her own experience, to rear upon a safer and surer foundation that which her present condition calls
upon her to establish.
In aid of this object, a brief retrospect of the operation and
consequences of her present system may not be deemed unprofitable.

•

On the 15th day of March, 1837, the act popularly entitled the
banking
law", was passed, upon the plausible principle of in"general
a
free
troducing
competition into what was considered a profitable branch
of business heretofore monopolized by a few.favored corporations. In
little more than one year, forty-nine banks were organized, with a nominal capital of $3,915,000, and about forty went into actual operation under its provisions. These institutions professed to have an actual and
available capital of ',.;;1,745,000; 30 per centum of the nominal capital being presumed to have been paid in according to law, in gold and silver,


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they were authorized to issue and put into circulation bank bills to the
sum of 44,362,500, being twice and a half the amount of capital paid in
and possessed. The feature of the act which authorized banking under
the suspension law, (that is to say, giving the sanction of law to the
issue of promises to pay, not liable to redemption in gold and silver on
demand,) gave an irresistible impulse to their career by opening the door
for the debtor to liquidate his liabilities by transferring to the public
at large his indebtedness to individuals. The result is well known; and
it is believed that it is not too strong language to assert, that there
are no species of fraud, and evasion of law, which the ingenuity of dishonest corporations has ever devised, which have bot been practised under
this act.
The loan of specie from established corporations became an ordinary traffic, and the same money set in motion a number of institutions. Specie certificates, verified by oath, were everywhere exhibited,
although these very certificates had been cancelled, at the moment of their
creation, by a draft for a similar amount; and yet such subterfuges were
pertinaciously insisted upon as fair business transactions, sanctioned
by custom and precedent. Stock notes were given for subscriptions to
stock, and counted as specie; and thus not a cent of real capital actually existed, beyond the small sums paid in by the upright and unsuspecting farmer and mechanic, whose little savings and honest name were
necessary to give confidence and credit. The nius of institutions thus
constituted were spread abroad upon the community in every manner, and
through every possible channel; property, produce, stock, farming utensils, every thing which the people of the country were tempted by advanced
prices to d'spose of, were purchased and paid for in paper, which was knwn
by the utterers to be absolutely valueless. Large amounts of notes were
hypothecated for small advances, or loans of specie, to save appearances.
Quantities of paper were drawn out by exchange checks -- that is to say,
checked out of the banks by individuals who had not a cent in the bank-no security, beyond the verbal understanding that notes of other banks
should be returned at some future time. Such are a few among the numberless frauds which were in hourly commission. Thus, a law vhich was established upon principles well digested and approved, and hedged around
with so much cave, and guarded with so many provisions, that few, it was
supposed, would venture to bank under it, became, by the base dishonesty
and gross cupidity of a few who had the control of the specie of the
country, nothing less than a machine of fraud.
The singular spectacle was presented, of the officers of the
State seeking for banks in situations the most inaccessible and remote
from trade, and finding at every step an increase of labor by the discovery of new and unknown organizations. Before they could be arrested
the mischief was donei. large issues were in circulation, and no adequate
remedy for the evil,Gold and silver flew about the country with the
celerity of magic; its sound was heard in the depths of the forest, yet,
like the wind, one knew not whence it came or whither it was going.
Such were a few of the difficulties against which the commissioner had
The vigilance of a regiment of them would have been scarceo contend
ly adecjuat, against the host of bank emissaries which scoured the coun-


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try to anticipate their coming and the indefatigable spies which hung upon
their path; to which may be added perjuries, familiar as dicers' oaths, to
baffle investigation,
'
Painful and disgusting as the picture appears, it is neither
colored or overcharged, and falls far short of the reality.
The result of the experiment of free banking in Michigan is,
that, at a low estimate, near a million of dollars of the notes of insolvent banks are due and unavailable in the hands of individuals.

•

It has been said, with some appearance of plausibility, that
these banks have at least had the good effect of liquidating a large amount
of debt. This may be true; but whose debts have they liquidated? Those of
the crafty and the speculative -- and by whom? Let every poor man, from
his little clearing and log-hut in the woods, make the emphatic response,
by holding up to view, as the reward of his labor, a handful of promises
to pay, which for his purposes, are as valueless as a handful of the dry
leaves at his feet. Were this the extent of the evil, the indomitable energy and spirit of our population, who have so manfully endured it, would
redeem the injury. But when it is considered how much injury is inflicted
at home, by the sacrifice of many valuable farms, and the stain upon the
credit of the State abroad, the remedy is neither so easy nor so obvious.
When we reflect, too, that the laws are ineffective in punishing the successful swindler, and that the moral tone of society seems $o far sunk as
to surround and protect the dishonest and fraudulent with countenance and
support, it imperatively demands that some legislative action should be
had, to enable the prompt and rigorous enforcement of the laws, and the
making severe examples of the guilty, no matter how protected and countenanced.
The difficulties and embarrassments which have grown out of
this state of affairs is exciting an endeavor in many, who have become
entangled in these institutions, to avoid the liabilities they have incurred, and induces the perpetration of acts and subteffuges which, under other circumstances, they would have loathed and rejected with contempt. So far has this been carried, that men upon whose character and
credit institutions had obtained confidence, have used every device to
shift their responsibility, indifferent into whose hands or control the
institution should fall, provided they themselves were indemnified -careless of the rights and interests of those who embarked in the enterprise, or received the bills, on their faith and credit. So that the
singular exhibition has been made of banks passing from hand to hand
like a species of merchandise, each successive purchaser less conscientious
than thepreceding, and resorting to the most desperate ineasures for reimbursement on his speculation.

•

The chief difficulty which presented itself for the exercise
of a discretion on the part of the commissioners was the consideration
how far it was compatible with the public interests that the errors and
informalities of the original organization and management of a bank
should be overlooked, provided it should justify a reasonable lenity by


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promptly recting the existing abuses, and making satisfactory arrangements
for the redemption of its circulation and the ultimate payment of all liabilities.
It is believed that the course adopted, after anxious and mature
deliberation, of allowing banks an opportunity to make themselves sound,
where a proper spirit was displayed to do so, has saved large sums to the
billholders which would have otherwise been lost by the sudden winding up
of such institutions. The difference between the circulation at the commencement of their labors and the present time, is a sufficient evidence
of the prudence and advantage of this policy adopted by the commissioners.
Such banks as have not shown an ability to redeem their bills, or a disposition to make the proper effort so to do, have been promptly enjoined.
The commissioners deem it an act of strict justice to declare that those
institutions which have sustained themselves with honor and credit amid
so many temptations and examples of fraud have certainly given a guaranty
of character and ability which should remove, from them at least, all general imputations, and entitles them to the applause and confidence of the
peoples of Michigan.

•

Some amendment is undoubtedly necessary, and is earnestly recommended, to enable a more summary and speedy winding up of the affairs of
those institutions now under injunction, and for making available, as early
as practicable, their assets and securities. Under the present law, the
order in which the mears and securities are to be realized and exhausted
will protract the payment of their liabilities to an indefinite period,
and make them utterly useless to the great body of the billholders, whose
daily necessities compel them to sell at an enormous loss. The banks themselves, through their agents, are thus enable to buy up their circulation
at an immense depreciation, and their debtors to pay their liabilities in
the notes of banks purchased at a great discount,
The daily advertisements for the purchase of safety-fund notes
in exchange for land and goods, and the placards everywhere to be seen in
the windows of merchants and brokers, are a sufficient argument for the
necessity of the measure proposed.

•

Many worthy men, with the most upright intentions, have become
involved in these institutions, and are willing to make every personal
sacrifice to maintain their honor and character. With no knowledge whatever of banking business, they have become entangled, either through false
notions on the subject, arising from ignorance, or by the dishonesty of
their agents and associates. There are other institutions) organized by
honest men, who, warned by the examples around them, have refused to proceed, and no business has been transacted. Their property, however, is
encumbered by the furnishing of the securities required by law. These
cases, as before suggested, whould be met by some legislative provision,
which would afford a means by which their securities might be released
without the expenses of an injunction. A process which would compel the


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surrender of the corporate privileges of such banks as have not advanced
beyond organizatiol should be devised, lest, at some future period, when
OUT present calamities are forgotten, they may commence operations
in
less scrupulous hands.
There is a subject, not heretofore adverted to, which seems to
merit a passing consideration. Several of the institutions chartered by
the State are owned in other etates; and in one instance notes are isued
stamped payable abroad, and almost its entire capital and circulation is
used without the limits of this State.

•

That this practice is not likely to decrease, may be shown by
the fact that, since the establishment of the new banking system of the
State of New York, the control of the charters of other banks without
that State is sought for with a view to the benefit of an increase of
circulation, by the use of foreign bills payable at their counters, the
circulation of their own notes being limited, and under the restriction
of the comptroller. Thus it will appear that corporate powers and privileges have been granted, not for the benefit of our citizens, but for
those of other States. Our credit is, in effect, loaned for operations
elsewhere, which, if unsuccessful, and the institutions fail, will fix a
stain upon the character of our paper, greatly to the injury of the credit of the State. Whilst every encouragement which the most liberal policy can suggest should be held out to induce the introduction of foreign
capital, it is equally important that the honor and credit of the State
should not be left liable to jeopardy, with no commensurate profit or advantage.
Notwithstanding the disastrous effects of the beneral banking
law, there are still to be found among intelligent men strenuous supporters of the policy of the system. This may arise from the nt.tural indisposition to desert preconceived opinions, especially if rooted in the
mind by a strenuous advocacy, or from the false application of a just
principle. The principle upon which the system was founded was the plausible one of free banking, throwing open, as was contended, to the whole
community, a competition in a profitable branch of business, heretofore
confined to the larger capitalist. Let us examine the application of
the principle, which, as stated, claims the ground of the establishment
of equal rights in banking.
The advocates of the scheme will not deny that capital is
necessary to leg:timate banking. If this be admitted, the system merely combines the minor capitalists with corporate powers and exclusive
privileges. And in what manner is this freedom accorded to minor capitalisits? Their associated wealth is not placed upon a footing of
equality with that of previously existing corporations. To their acttal

•

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capital paid in, in gold and silver, they must add real estate securities
to treble the amount they are liable to become indebted; and to these, a
personal liability beyond the amount of their stock. And this is denominated the establishment of equal rights and free competition in banking.
Is it not rather analogous in principle to a trade loaded with excessive
duties, and, in effect, a stimulant to fraud and violation of law? If
this is not plain, is it not undeniably evident that the system inevitably
tends to associate all the capital of the country with exclusive powers and
privileges not enjoyed or exercised by those who have no possessions or capital beyond their industry and labor? Instead, therefore, of protecting
equal rights, is it not giving combination and permanency to associated
wealth?
In support of this view, is the reasoning of a distinguished
writer on finance:

•

"A reform will not be accomplished in banking, as some suppose,
by granting charters to all who apply for them. It would be as rational
to abolish a political aristocracy by multiplying the number of nobles.
The one experiment has been tried in Germany, the other in Rhode Island.
Competition in that which is essentially good -- in farming, in manufacturing, and in regular commerce -- is productive of benefit; but competition in that which is essentially evil, may not be desirable. No one has
yet proposed to put an end to gambling, by giving to every man the privileges of opening a gambling-house."
It is not a thought necessary here to enter into an inquiry of
the defects of the banking system of the United States, which, in almost
every State in the Union, has, at different times, thrown its affairs into disorder, paralyzed its industry, destroyed for a time its enterprise,
and produced almost universal oppression, distress, and bankruptcy.
That the State of Michigan will avoid the consequences of similar errors, without the early adoption of some remedial measure, is
scarcely to be expected.
The )3.estion is, how the emergency shall be met, and the door
of escape opened by a timely and prudent forecast?
As long as the control of the cash and credit
the community
is in the hands of individuals, rendered irresponsible to moral influence
by their corporate capacity, with the temptation and power to acouire
wealth at the expense of the community, by a contraction and expansion
of paper issues: and the consequent variation in the prices of property
and labor, so disastrous to the many, and so beneficial to the few, will
inevitably occur.

•

The power to vary the standard value of coin would not be endured for a moment; and yet the granting to corporations the exclusive
authority and unrestrained opportunity of creating paper money, in effect


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sanctions and encourages the exercise of a similar power. In vain has the
constitution reserved the coinage of money to the General Government, so
long as numerous corporations can unsettle the measure of value by the substitution of paper for coin. The very object of the constitution is violated by this introduction of new standards and measures of value, liable to
the fluctuations of accident and design.
It is but proper to remark, that a difference of opinion exists
among the undersigned in the foregoing view taken of this system.

•

If it be true, as maintained by an able writer on currency,
"that it is the public credit that supports the banks, and not the banks
which support public credit; as the deposites are the property of the community generally, and as the profits derived from circulation come from
the community generally, they ought to go to the community generally, and
be used (if used at all) to lighten taxation;" "and if the policy of permitting private companies to enjoy all the advantages of supplying a country with paper money" is not only of doubtful expediency, but, from past
and present experience, evidently dangerous, and liable to shameful and
destructive abuses, the policy of supplying and regulating the circulating medium (a power which is incident to sovereignty, and should never
have been surrendered) by the establishment of a State institution, under
the control of the State itself, is perfectly evident; and to this conclusion all the States seem rapidly approaching.
With this conviction, be commissioners deem it not inconsistent
with the scope of their duties earnestly to recommend the repeal of the
general bankirg law, and to express a union of sentiment in the recommendation by the Executive af a State institution, under the control of the
State itself, to be subject at all times to the most rigid scrutiny, and
to the strictest guards against the tendency of banks "to lend too much,
and put too many notes in circulation" -- the fruitful source of so many
evils. The propriety is respectfully suggested, of taking into consideration the abolishing, either gradually or at once, of all issues under
the denomination of at least five dollars. All experience proves that
the , ages of labor are the first to suffer, and the last to benefit, by
changes in the value of money. The laboring classes, therefore, who,
from various causes, are least able to protect themselves, should, as
far as practicable, be protected in the character of the money they receive. The measure suggested would tend to make the wages of the daily
laborer 'ayable in real money, and protect the poor man from the losses
which so unequally and heavily fall upon him by the changes and fluctuations in the value of a paper currency.
All which is respectfully submitted.

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Federal Reserve Bank of St. Louis

K. PRITCHETTE
A. FELCH
D. V. BELL
Bank Conunissioners

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REPORT OF THE CONDITION OF THE BANKS IN THE FIRST
JUDICIAL CIRCUIT; JULY, 1838
The undersigned has the honor to report the condition of the
several institutions, created under the general banking law, within the
limits of the first judicial circuit, in a tabular statement hereunto annexed.
This opportunity Is taken f'rthç to report, that the Bank of
Gibralter and the Farmers' Bank of Oakland aving neglected and refused
to furnish the securities required by the sixth and thirty-sixth sections
of the amendatory act of December 30, 1837, applications were made for injunctions, so far as to restrain these institutions from all further proceedings, except such as may be necessary in the redemption of their bills
and the final settlement of their affairs. The discretion exercised by
the chancellor relieves the undersigned from any further repsonsibility
touching these institutions.

•

t,4/ Injunctions have also been obtained against the Bank of Kensington and the Farmers and Mechanics' Bank of Pontiacy At a previous
examination of the first-named institution by A. Felch, Esq., the commissioner was furnished with a false statement, sworn to as accurat5 by
the former officers of the institution. The books appear to have been
kept with a view to this deception, by false or imperfect entries of
the transactions of the bank. The undersigned found it impracticable
to obtain any accurate knowledge of the condition of its affairs; but
sufficient was developed to exhibit most shameful mismanagement, if not
fraud, and the entire insolvency of the bank. An injunction was accordingly obtained, and Kinsley S. Bingham, Esq., appointed receiver.
The Farmers and Mechanics Bank of l'ontiac presented a more
favorable exhibit in paint of solvency; but the undersigned having satisfactorily informed himself that a large paoportion of the specie exhibited to the commissioners, at a previous examination, as the bona-fide
property of the bank, under the oath of the cashier, had been borrowed
for the purpose of exhibition and deception; that the sum of ten thousand
dollars, which had been issued for "exchange purposes," had not been entered on the books of the bank, reckoned among its circulation, or explained to the commissioners; and, likewise, that a considerable debt
due to the State, through a loan mrlde by the commissioner of internal
improvement, James B. Hunt, Esq., was denied by the bank to be due from
it, but insisted upon as the debt of the cashier; together with other
circumstances calculated to impair all confidence in its statements, it
was considered by the undersigned due to the public interest to close the
door against further violations of law. An application for an injunction
was made; which was granted, and William Draper, Esq., appointed receiver

•

An injunction was granted, some time since, against the Wayne
County BankyThis bank had gone into operation in direct violation of
law; the per centage on the capital stock, as re uired by the statute,


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having never been paid in, according to law. The institution having made
considerable issues, which it could not redeem, was entirely insolvent.
The service of this injunction was withheld by the attorney general, in
the exercise of his discretion; it has since been served, and A. H. Buel,
Esq., appointed receiver.
The undersigned has to express his regret at being compelled
to report that the additional securities required by the act of December
30, 1837, have not all been perfected. Every exertion has been made by
the commissioner to effect a compliance with this important provision of
the law. Considerable embarrassment and difficulty have undoubtedly been
incident to the performance of this reluirement; but when it is reflected
that more than six months beyond the period allowed by law has elapsed,
the neglect is inexcusable. Nevertheless, the spirit of the law having
been complied with in the majority of instances -- the principal defect
in the securities arising from a difference of opinion between the banks
and the commissioner upon the mode and evidence of the appraisement required by law -- and every disposition being displayed of complying with
the wishes of the commissioner, no detriment is likely to result to the
public.

•

The only bank in operation whose securities have not yet been
placed in the hands of the auditor general, are those of the Detroit City
Bank. 'The commissioner has, however, been repeatedly assured by the cashier of that institution that they are in process of speedy completion.
It is due to the institutions in operation within the limits
above mentioned to state that they have made very commendable exertions
to withdraw all excess of issues from circulation, and to reduce their
liabilities to the utmost of their ability. The payment of specie, without an exception, it is believed, was resumed at the date re,luired by law,
and is, in most instances, continued; notw4 thstanding the destructive
drain upon their vaults, growing out of the embarrassments of the times,
and the imperfect confidence in bank bills.
It is hoped, however, that a prudent course on the part of
these institutions will restore the public faith, and justify the expectations of the friends of the system.
All which is respectfully submitted.
KINTZING PRITCHETTE,
Bank Commissioner.
'PC His Excellency Stevens T. Mason,
Governor of Michigan.

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(B)
Report of the affairs and condition of the several banks within the limits
of the second judicial circuit of Michigan: September, 1838.
Monroe, September 19, 1838.
The undersigned having again, agreeably to the requisitions of
law, completed his examination of all the banks more immediately under his
supervision, takes occasion to report to your excellency the result of the
same.
In a tabular statement, hereto appended, will be found an exhibit of the condition of the several banks now in operation in the second
judicial circuit of this State. The date of the last examination, when
the statements were made by the officers of the several institutions, respectively, is therein given. /rom repeated investigations, and from the
answers given by such officers, at different times, to interrogatories propounded to them by the commissioners, it is believed that reliance may be
placed in the information contained in the exhibit.

•

411

The Merchants and Mechanics' Bank of the City of Monroe, the
Millers' Bank of Vvashtenaw:/the Huron River Banky the Detroit and St. Joseph Railroad Bankiand the Merchants' Bank of Jackson Countyhave, respectively, complied with the provision of law requiring them to execute
and file bonds and mortgages on unincumbered real estate, for the final
security of all the creditors of the institution. The Bank of Manchester,
and the Bank of Superior have not yet completed their securities, although
property has been appraised by the regular officers, to an amount sufficient for the purpose, and papers have been executed and recorded to an
amount amply sufficient to cover all present responsibilities. The labor
of examining and perfecting title-deeds has necessarily caused much delay.
Tt is believed, however, that, in a few days, the institutions last named
will have their securities filed in the auditor's office, in strict and
literal compliance with the provisions of the statute.
Such, during the last few months, has been the condition of our
exchanges, and such the want of confidence in the moneyed institutions of
the west, that the notes of our banks have been constantly flowing in for
redemption. Unable, under existing circumstances, to extend their business,
or to afford facilities to business men, they have been compelled to use
every exertion to preserve their credit, by meeting promptly every demand
of the billholder and creditor. It affords pleasure to the undersigned to
be able to state that the banks of the second circuit of this State t a
list of which is given in the statement above referred to) meet promptly
their paper, when presented at their counters, in specie, or some satisfactory equivalent. The Bank of Washtenaw:Is an exception to this remark.
The undersigned has, however, reason to believe that a loan has been effected by that institution, which will enable them, within a few days, to redeem their paper agreeably to the provisions of their charter.


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The Bank of Manchester, for some time past, has been engaged
solely in redeeming its circulation. By the statement made by the former
cashier, A. G. Irwin, previous to the last report of the condition of the
bank, it appeared that the circulation was $34,000. It was, however, afterward ascertained that there were in the hands of certain individuals,
without security, bills of the bank to the amount of $73,334; making a total amount of bills out, $107,354.
Security was promptly obtained for the amount thus improperly
advanced by the cashier, and that officer removed from the bank. Much
credit is due to the Messrs. Fargo, of Lanchester, for their exertions
and promptness in seconding the endeavors of the public officers in securing the interest of the community, who held the bills of the bank.
The circulation is now reduced to $45,334. Under the management of its
present officers, the institution is blieved to be, in every respect, entitled to public confidence.
In accordance with the provisions of an amendment to the general banking law passed December 30, 1837, the undersigned has endorsed, officially, bills of the following banks, to wit:

•

Merchants and Mechanics' Bank of the City of Monroe
Millers' Bank of Washtenaw
Huron River Bank
Detroit and St. Joseph Railroad Bank
Merchants' Bank of Jackson County

$700
4,000
700
2,020
4,241

A small portion only of the bills thus endorsed have been put
in circulation.
The issue of endorsed bills contemplated by the banks above mentioned was intended to supply, to a small extent, the circulating medium
for transacting the flouring business of the State during the present autumn. The banks would receive therefor eastern drafts and acceptances,
which the miller and the merchant were enabled, upon the shipment of their
flour, to give; and thus be able to sustain their circulation by obviating
to a certain extent, the difficulty arising from a constant demand for specie. During the severe pressure of the times for the last few months, the
banks of the interior have suffered little from demand for gold and silver,
when eastern funds were at their demand.

•

While large amounts have been due from our citizens to the merchants of the eastern cities, our resources and our industry have hitherto
afforded limited means for the discharge of the responsibilities. The abundant crop which has the present season crowned the labors of the husbandman,
has opened upon us a more cheering prospect in this regard. Extensive arrangements are made in almost every part of the State for the exportation
of the surplus produce. It will be found sufficient to afford much imme-


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diate relief in pecuniary matters, and is an earnest of the time -- we
hope not far distant -- when the debts due to the east will be discharged,
and the exports of our State will exceed our imports; when increased activity will be given to the industry and productive labor of our citizens; and
our banking institutions, founded on a permanent basis, and affording a
safe circulating medium for business purposes, will enjoy the confidence
of the community, and facilitate their business operations.
,
1Annexed is a table, marked (CI; which exhibits the amount of
circulation of the several banks in said circuit, as reported by the commissioners on the 6th day of April last, and the amount on the day of the
last examination. It shows a diminution of the circulation in the twelve
banks now in operation in that circuit, of $191,437. The table also exhibits the amount of specie in the several banks at the times above mentioned. The amount of bills in circulation is still constantly decreasing.

•

In a report made to the house of Representatives of this State,
on the 6th day of April last, it was stated, that, upon the application of
the bank commissioners, injunctions had been issued against the Farmers'
Bank of Sandstone, and the Jackson County Bank, both located within the
second circuit. Since that time, Amasa Givson, Esq., of Jackson, has been
duly appointed receiver, and is actively engaged in settling the concerns
of those institutions, under the direction of the chancellor.
The undersigned has found it his painful duty, since the report
last mentioned, after repeated visits and examinations, to apply to the
chancellor for injunctions against the following banks in said circuit,
viz:
iq The
The
- - The
'7The
The

Lenawee County Bank,
Bank of Brest,
Bank of Clinton,
Bank of Saline, and
larmers' Bank of Sharon
Lenawee County Bank /

Immediately after the organization of this bank, on or about the
50th day of December last, the sum of $30 ,000, which was paid in on the
capital stock, was refunded; and the promissory note of one of the stockholders, residing in the State of Ohio, with endorsers, was taken for the
amount. Bills of the bank were at the same time put into circulation.

•

At an examination made on the 16th day of April last, the statement of the officers of the bank, and the entries upon the books, exhibited
a circulation of $15,210; but, upon strict inquiry and investigation, it
was ascertained that the sum of $6,200, or thereabouts, was in the hands
of two individuals, for exchange purposes, which was not entered on the


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books of the bank, among the issues, and for which no charge of indebtedness was made to any individual, nor security taken. The cashier expressly
denied that any other amount had thus been advanced to individuals.
By an act of the Legislature, at the last session, this bank was
permitted to reduce its capital stock from 4,100,000 to C50,000. After the
passage of this act, and without a vote of the directors, (or other formal
proceeding, so far as could be ascertained on examination,) his promissory
notes, to the amount of $15,000, were given up to Ethard Bissell, a debtor
of the bank, and one of the stockholders. This was intended, as it was explained by the cashier, to be a withdrawal of that amount from the thirty
per cent. paid in on the original capital stock, making a deduction corresponding with the reduced capital. No entries corresponding with this change
and withdrawal were, however, made on the books of the bank. The whole
amount of specie in bank, on the day of the last examination, was 02.75.

•

At another examination by the undersigned, on the day of the
service of the injunction, to wit, on the 21st of June last, it appeared
that there had been for some time in the hands of Edward Bissell, of Toledo, for exchange purposes, bills of the bank to the amount of $18,000; and
in the hands of Charles H. McClure, bills amounting to C6,500. No minutes
of these transactions appeared upon the books, nor among the papers of the
bank, at any previous examination. It appeared that receipts had been taken for the amounts by the cashier, Frederick E. Whiting; but the whole
transaction had been concealed from the knowledge of the commissioner. It
is due to the president to say that he denied all knowledge of the transaction. Promissory notes have been obtained for the two last mentioned sums.
Specie in bank was only 434.20.
From the imperfect manner in which the books and papers of the
bank had been kept, and the fact that little confidence could be placed in
the entries there made, it was found difficult to ascertain the actual
amount of the assets and liabilities of the institution. The books exhibited, at the time last mentioned, the circulEtion of the bank at $22,642.
The amount actually in circulation, however, must have been about $42,363.
Discounted paper in bank amounts to about the same sum as the circulation.
There had also been violations of the provisions of law in other particulars not above mentioned.
Securities by bonds, and mortgages on real estate, were given
to an amount to insure, it is confidently believed, the final discharge of
all liabilities.
Bank of Brest

•

This bank was examined by the undersigned on the 2d day of
August last, when the following statement of the resources and liabilities was given, under oath, by one of its officers: (See attached tables).-'


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For the specie specified in said statement, there was
exhibited an individual's receipt for
An accepted check on the Farmers and Mechanics' Bank
Gold and silver

42,000.00
1,146.00
9 754.92
900.92

Of this amount, it was stated by the cashier that the sum of
42,000 in silver had been in the bank about six weeks, and that the sum of
47,497 in gold was received the day before said examination. It was paid
in by Lewis Godard, and was passed to his credit on a small book containing
an entry to said Godard's name of an "Kxchange account".
On the 11th day of August last, another examination was made by
the undersigned, at the banking-house of said institution. The specie of
the bank was found reduced to the sum of 4138.89. The accepted check above
mentioned had also been disposed of.
It appeared by a reference to the records of the proceedings of
the board of directors, that at a meeting of the board, held on the 4th day
of August, a resolution was adopted authorizing a loan to Lewis Godard of
47,500; and on the same day, his note at ninety days, with endorsers, was
accordingly discounted, and the amount given in bills of said bank. Immediately after the discount was made, the bills thus paid out were presented
by another individual at the counter of the bank, and redeemed in specie.
It was admitted by the president that, at the time of making the discount,
he did understand that said bills were to be presented for the specie.
The amount of specie disposed of between the examination on the
2d and that on the 11th of August, including the accepted check, was as follows:
In the redemption of bills as aforesaid
Taken to Detroit by cashier
To Lewis Godard on certificate of specie deposite
Total

$ 7,500.00
1,000.00
2,000.00
410,500.00

which, with some small amounts paid in redeeming bills, reduced the amount
of specie to said sum of 4138.89.
By reference to the above statement, there will be seen an item
of 416,000 for a "loan on bond and mortgage." At the examination on the 2d
day of August, it appeared that a loan of that amount had been made to the
trustees of the town of Brest; to secure which, the bank received an assignment of two bonds, executed by Lewis Godard, for the sum of 435,400, payable
in one, two, and three years, and also of mortgages of one hundred and
eighteen village lots in Brest, accompanying said bonds. At the meeting of


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the directors above mentioned, the following resolution, in referen
ce to
one of said mortgages, was adopted, viz:
"Resolved, That a mortgage, bearing date 15th of June, 1838,
assigned by the Brest company to the Bank of Brest on the 26th
day of June,
1838, the amount of which if $19,200, the same to be
assigned to the Brest
company by the Bank of Brest, as they have received nothing
from the bank
for the same."
The reassignment was gratuitously executed by the bank, in accordance with said resolution.
The circulation of the bank, as appears by the above statement,
was, on the 2d day of August, $39,425. It appeared, however, by examination of an entry on a small book, that there had been advanced to Lewis
Godard, on "exchange account", at three several times, bills of said bank
to the amount of
$27,313
There was credited to him the specie above mentioned
7,497
Leaving balance in his hands

0

$19,816

There had also been issued by the bank, and sent to Lyman A.
Spalding, of Lockport, in the State of New York, bills to the amount of
$25,000. An arrangement was entered into with Mr. Spalding to accept
drafts of the bank to that amount; and the bills above mentioned were palced
in his hands, it was stated, by the cashier, as collateral security to
him.
It was, moreover, declared that they were not to be put into circulation by
him. It further appeared that the bank had drawn on said Spalding to an
amount nearly equal to the sum in his hands. Some of the drafts upon him
have been paid, and others protested. These bills of the bank in the hands
of Mr. Spalding, and also those in the hands of Mr. Godard, were not in cluded in the statement of the circulation.
The whole amount of bills of the bank out on the 11th of August was, ther fore as follows:
Circulation, as per statement
In possession of L. A. Spalding
Advances for exchange to L. Godard

$39,425
25,000
19 816
$84,241

At a meeting of the directors, held as aforesaid on the
4th day
of August, the following resolution was adopted:

•

"Resolved, That the president and cashier be authorized
to issue
postnotes of the bank, payable twelve months after date, at the Phoenix
Bank
in the city of New York, bearing interest at seven per cent. per annum,
for
the purpose of raising funds to pay drafts which had been drawn by the bank.


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In accordance with said resolution, post-notes were issued, on
the same day. They were sent to L'ockport, as the president declared, for
the purpose of having them exchanged for the notes of the bank in his hands,
as before stated. They were to receive the endorsement of certain individuals, as a guaranty for their final payment. The issuing of post-notes by
bank's subject to the provisions of "An act to create a fund for the benefit of certain moneyed corporations, and for other purposes," is in direct
violation of said act.
The facts above stated, exhibiting important changes in the condition of the bank within a very short period; the doubtful character of a
portion of its assets, under the denomination of "notes of other hanks;"
the failure to comply with the provisions of the amendatory act, requiring
certain securities to be filed; and the character of some of the transactions of its officers, were such as to render an application to the chancellor, for an injunction against the institution, imperative.

•

After such an ap, lication had been made, and before the service
of process, the bank, by a vote of the board of directors, assigned all its
property and effects to Alexander D. Fraser, Esq., of Detroit, for the benefit of the creditors of the institution. At a hearing subsequently had before the chancellor, on motion to appoint a receiver, the validity of said
assignment underwent discussion; and it was the opinion of the chancellor
that it was not competent for a board of directors, for the purpose of closing the afairs of a bank, thus to assign; and that such an assignment,
with the object above mentioned, must be considered against the general
policy of the laws of this State, and, consequently, invalid. The motion
to appoint a receiver was granted. The appointment has not yet been made.
Although the bank has failed to comply fully with the provisions of the statute relative to securities, yet bonds and mortgages to a
large amount, on iinincumbered real estate, have been executed and filed;
and the undersigned has no hesitation in saying that the billholders and
other creditors of the bank will be paid the full amount of their claims.
Bank of Clinton
This bank was organized under a charter granted by the Legislature in March, 1836.
An examination of the affairs of this institution was made by
the undersigned on the 30th day of July last, when the following statement
of its affairs and condition was given by the cashier: (See attached tables).

•

Another examination was made on the 17th day of August last. It
then appeared that the day succeeding the prior examination, (to wit, on the
31st day of July,) the sum of t7,500 in gold, a part of the specie of said
bank exhibited to the commissioners, had been withdrawn, and delivered to
Charles H. McClure, late cashier of said bank, and a receipt, of which the
following is a copy, was left in the bank:


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"Received of Bank of Clinton seven thousand five hundred dollars, in gold, which I agree to see returned in same coin, or in silver,
without unnecessary delay.
"C. H. McCLUBE.
"Clinton, July 31, 1838."
The specie was taken by said McClure to Detroit, on the day
last mentioned, and delivered to Lewis Godard, who gave his receipt for
the same. The whole amount of specie remaining in bank at the time of said
last examination was about 43,300.

•

A loan had been made by the bank, as appeared on such examination, of $16,000, to Jira Payne and Charles H. McClure, directors of the
bank, for which two certificates of stock in the "Miners' Bank" of Dubuque,
for one hundred and sixty shares each, were hypothecated. No entry of said
loan could be found on the books of the bank, and no evidence of debt was
given, other than the pledge of the certificates aforesaid. At the same
time, a loan had been made to said McClure of t4,000, on his draft on "S.O.
Martin, Esq., cashier, Dubuque," with endorsers. The "office notes in Transitu," mentioned in the above statement, ($12,000,) were said to ba a part
of the bills received on the two last mentioned loans, to be deposited in
the Bank of Wiskonsin. No entry was made on the books of the issue of the
4'120,000, the amount of said loans, in the bills of the bank.
It appeared, moreover, that the bank had violated the law in
the amount of its circulation, in the amount loaned or discounted to directors, and in neglect to pay its notes when presented at its counter. The
circulation of the bank, as exhibited by its books, was also much less than
that exhibited by the statement. A portion of the resources of the bank
were found to be of so doubtful a character as to warrant the fear that they
would be unavailable in the discharge of its liabilities.
An injunction was allowed on the 20th August. A motion for the
appointment of a receiver is still pending before the chancellor.
Bank of Saline
This bank was visited y the undersigned, and an examination of
its condition made on the 14th day of July last; and on the 17th day of August last the place of its location was again visited for the purpose of examining the affairs of the institution, when the banking-house was found
closed. The books, papers, property, and effects had that day been removed
to Detroit. On the 31st day of August last, the undersigned examined, under
oath, the president and one of the directors, relative to the affairs and
condition of the same, and the transactions of its officers.

•

On the 16th day of August last, the board of directors adopted
a resolution to assign all the property and effects of said bank to Alexander D. Fraser, Esq., of the city of Detroit, for the benefit of creditors.


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The assignment was made on the same day, and the property and effects delivered to him on the day succeedin.
This course appears to have been taken by the directors at the
suggestion of Abel Godard, one of their number, and was done in anticipation
of proceedings being instituted against them by a public officer, and with
the design of closing up the affairs of the association.
In the aforesaid examination of the president and one of the directors, it was stated that, on or about the 4th day of August last, postnotes to the amount of $20,000, or thereabouts, were issued by said bank,
payable at the Phoenix Bank in the city of New York, in one year from date,
with interest, and were given to Lewis Godard for the purpose of transmitting
them to Lyman A. Spalding. They were to be used for the negotiation of a
loan. They were not endorsed by a bank commissioner.
It further appeared that, about four months previous to the examination, the sum of $15,000 or $20,000, in bills of said bank, were sent
to said Spalding, in sealed packages, which, it was said, were to remain unopened, as collateral security for certain drafts to be drawn on said Spalding.

•

At the time of said assignment, there were in the hands of
Lewis Godard, for exchange purposes, $17,000, in bills of the bank, which
were delivered to him agreeably to a vote of the directors in December last.
In the previous examination by the undersigned, noting in the
papers, books, or securities of the bank, was exhibited, indicating the two
last mentioned instances of the disposition of its bills; and, from strict
examination of the itmediate officers of the bank, under oath, nothing was
disclosed of these transactions.
At the examination on the 14th day of July last, the specie of
the bank amounted to $3,080.06. These was delivered over to Mr. Fraser, under the assignment, only $60 in specie. On the day of the assignment, by
note of the directors, there was paid to one of their number, in redemption
of the bills of the bank, $600 in specie; and to another, $800 on account
of deposites.
The securities of the bank, though not in compliance with the
Provisions of law, are sufficient to meet all responsibilities.

•

\
Farmers' Bank of Sharon
1
The officers of this institution appear to have conducted its
affairs with an anxious endeavor to comply with the provisions of the statute, and to sustain the credit of the bank. The constant presentation of
its bills for redemption had, however, on the 8th instant, nearly exhausted
its specie and other immediate means of discharging its debts. Suits had
been commenced against the bank, on its bills and sucht under the difficulties of present embarrassment, was the condition of their affairs, that it


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Federal Reserve Bank of St. Louis

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was deemed both politic and necessary to wind up its concerns. Of this, the
directors were themselves fully aware. The circulation is C17,158.
The securities are not in accordance with the requisitions of
law; yet an amount more than equal to all liabilities has been executed and
recorded, and no loss can be sustained by the creditors.
The above statements exhibit some of the facts which induced
proceedings, by injunctions, against the banks above named. The undersigned
has been fully aware of the difficulties with which our institutions have
had to contend; and it has been his endeavor not only to avoid throwing unnecessary embarrassments in the way, but, by every means in his power, to
assist and induce them to arrance their affairs in such a manner as to deserve and secure the confidence of the community.
At the same time, in accordance with his duty to the oublic, he
has not hesitated to proceed against such institutions as, from improper or
fraudulent conduct in the officers, or from insolvency, or other causes, were
undeserving of credit. The public must have the means of discriminating, and
the line must be distinctly drawn between the good and the bad, the solvent
and the insolvent, before the currency of Michigan, furnished by her own institutions, can afford a safe circulating medium.

•

The banks now in operation within the limits aforesaid, the
undersigned is happy to state, have generally exhibited much anxiety in endeavoring to comply with the provisions of law, to reduce their liabilities
to the smallest possible amount, and by every means in their power, to preserve, unimpaired, their credit. It affords pleasure to believe that these
institutions are not only in a solvent condition, but that they will soon
be abie to extend business facilities to the community, and to give a currency of undoubted character.
All which is respectfully submitted.
Alpheus Felch
Bank Commissioner
To His Excellency Stevens T. Mason,
Governor of Michigan.

(a)
Report of the affairs and condition of the several banks within the limits
of the third judicial circuit of Michigan: September, 1838.

•

The undersigned, immediately after being notified of his appointment as bank commissioner , in the place of Thomas Firtzgerald,
resigned, took the oath of office, and entered on the discharge of his duties.


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S
Believing the public mind to be exceedinly anxious for correct
information of the standing and condition of the banks generally, the undersigned has completed his tour of examination, with all possible expedition,
consistent with a due regard to the proper and efficient discharge of his
duties, and the consequent labor attendant thereon, and the time naturally
reiuired in travelling over an extensive and nconveniently situated district.
The undersigned has now the honor herewith to transmit to your
excellency a statement showing the present condition of the several banks
under the supervision of the bank commissioners, within the third judicial
district.
Upon officially visiting the Berrien County Bank, the undersigned found its operations suspended by his predecessor, Colonel Fitzgerald.
On investigation of its affairs with that gentleman, much was
exhibited betraying either culpable mismanagement, or gross ignorance of
banking.

•

Colonel Fitzgerald, however, with the usual vigilance and promptitude characteristic of all his official acts, had, previous to my arrival, caused the arrest of some of the officers of the institution, under
the provisions of the act of December 30th, 1837; and required of the proprietors to furnish on the entire reorganization of the bank, and its being
placed on a sound and permanent basis, or suffer a forfeiture of the lands
pledged; which , together with their assets in bank, individual responsibility, and the real estate security given in conformity to law, must, in
the worst event, be more than sufficient to satisfy and pay all their liabilities.
in this condition, after confirming a requisition made upon the
directors to place their money and effects beyond their control, and in the
hands of persons in whom both Bolonel Fitzgerald and myself had unlimited
confidence, I left them; and within the last few days have been informed, by
letter from Colonel Fitzgerald, that efforts are being made by them to comply fully with the requirement aforesaid, and that they had since withdrawn
several thousand dollars of their own bills from circulation.
The result of mature deliberations of both the undersigned and
his predecessor, and of legal advice obtained, induced them to adopt and
confirm the course taken with this bank, as the one most advisable under all
circumstances connected, to prote.t and secure the public against loss.
The bank will either soon comply with the requisitions made, or
in injunction will be applied for against them.

•

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In the course of his investigations, the commissioner, after reviewing the affairs of the St. Joseph County Banlaideemed it proper to apply
for an injunction against them; which has been granted. Although the business operatons of this institution appear to have been conducted from the
commencement, with propriety and fairness; and although they have decreased
the amount of their circulation since their last report, and have made zealous and laudable, but ineffectual, efforts to sustain themselves; yet the
impoverished condition of the bank demanded such a determination and result;
both of which were not only anticipated, but desired, by the directors of it,
and had the law enabled them, they would have voluntarily surrendered their
effects and wound up.
As it is, the commissioner considers the amount of their disLounted paper alone (which is generally, if not entirely, good) sufficient,
with proper management in its collection, to pay all its liabilities to the
public, and without recourse to its landed securities.

•

Against the Bank of Allegan, an application had been made for an
injunction, by Colonel Fitzgerald, while in office, which the undersigned
supposed had been granted and served; but, on visiting that place, on his '
way to Singapore, found that no service of a writ had been made. The attornez, general, as the commissioner is informed, from assurances having been
given him that the bank would in a short time be restored to a sound and
legal condition, in his discretion withheld the application.
This action on the part of his
deemed a supersedeas to any agency of his
made only sufficient examination into the
satisfy himself that, in case of failure,
all its liabilities.

predecessor, the commissioner
in the matter; and consequently
affairs of the institution to
its resources would probably pay

The undersigned was officially called ,to visit and examine a
new bank, styled the "Peoples Bank of Grand Rirveefs which he did on the
7th of August last; and, finding the institution in operation without having complied with the important requirements of the law, and in direct violation of its provisions, immediately suspended its operations, by requiring to be put in possession of its moneys and effects until the whole law
should be complied with, or in default thereof, legal proceedings should
be had against it.

•

The directors of the institution are said to be men of unblemished reputation, and it is probable that no fraud was intended, but that
their course of operation was induced by an honest misconstruction of some
of the important provisions of law.
.)
1, 4
The Coldwater Bank,'it will be observed, exhibits a very limited amount of cash resources wherewith to redeem and pay a large amount
of circulation and deposites made with them; and the commissioner would
have felt it incumbent on htm, in the ordLnary discharge of his duties,


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to have applied for an injunction gainst them, but, from statements of
the officers of the bank, made under oath, and a thorough examination into all its affairs, he was induced to delay, at least for the present,
such action; believing that under any contingency, the public interest
would not suffer, but would, in all probability, be much better served
by such determination than by any summary foreclosure. In explanation,
it will be stated, that, to meet their present exigencies, they are negotiating a loan with one of the New York State banks, on individual responsibility, which, if obtained, is designated and will be employed in the
redemption of their circulation, and payment of their deposites. A more
permanent source of relief (though somewhat more remote) will be afforded
them, as they expect, by making collections from the merchants and farmers,
their debtors, in grain and flour, which the past abundant harvest willl
readily enable them to do, and at such prices as will afford a profitable
competition in an eastern market, and thus enable them to collect their
debts, and, by the sale of these pledges, establish a credit at the east,
subject to their drafts for such funds as are most valuable and needful
to them. About a week since, the undersipmed was advised by letter, dated August 24th, from the cashier of that bank, that the negotiation above
referred to had been made, and "would be carried into effect in about two
weeks." The bank is virtually inoperative at this time, excepting so far
as their present means will enable them to redeem their circulation, pay
depasitors, or made collections; the commissioner having required of them
to subscribe an affidavit, in which they promised a suspension of all operations whereby their liabilities might be in any manner increased, until
upon further investigation, he was satisfied of their ability to resume
fully.
The undersigned takes this opportunity to say that he has great
confidence in the integrity and honor of the president and other officers
of the bank; that their assets are substantial, the united responsibilities of the directors very great, and their real estate securities ample
and perfect; and from this combination of facts, constituting a guaranty
to public security, he was induced to afford them an opportunity to sustain themselves, and thereby readily pay their debts, rather than close
their operations by injunction, and wind them up, under a process, though
sure in its determination, yet naturally productive of delays and embarrassments to the public, and frequently of much loss, in consequence thereof, to the billholders and depositors.
Into the affairs of the Branch Bank of Michigan at Kalamazoo,
the commissioner was unable to make an examination, in consequence of the
absence of the cashier at Detroit, and the indisposition of the person
left in charge.
An examination Into the condition of this institution will be
made as soon as practicable, and the result reported to your excellency immediately thereafter.

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•

The payment of their tribute to the "safety fund" has been by
:ilany of the banks neglected; but the importance of the requirement has been
impressed, and its compliance insisted on; and assurances are given that all
arrearages shall be paid, and the law strictly conformed to hereafter.
Most of the banks under the general banking law have furnished
the full amount of real estate securities required by it; some have even
exceeded their quota, while others have not fully complied with the law.
The banks in default have invariably been required by the undersiEnedto
perfect their securities as soon as the actual amount of deficiency can be
ascertained from the auditor _eneral; and to this end, as well as to have
correct and authentic information of the amounts and condition of the securities pledged by all the banks within the district, a letter has been
addressed to that officer, requesting to be furnished with a statement of
that description.
A full and immediate compliance with the law, in this respect,
has been promised by the banks whose securities are now imperfect; and although, in the present state, no injurious result to the public is apprehended, still it is important that the law should be fully observed, and
the commissioner is determined to enforce it to its extent.

•

All the banks within this district, except those in suspense
and under injunction, were, at the time of their examination by the commissioner, redeeming their bills in circulation, in specie, or other funds
satisfactory to the billholder, as he is informed and believes. And it
may here be noticed, that since their resumption of specie payments, an
average of one-third the aggregate amount of their whole circulation has
been redeemed and withdrawn.
In conclusion, the undersigned begs leave to state that he considers the present responsibilities and resources of the several banking
institutions now in operation within this district an abundant and ample
guaranty for the payment of all their present liabilities to the public;
and, although the cash resources of some of them are much diminished, owing
to the constant draught upon them, produced by a combination of embarrassments, they have, notwithstanding, hitherto sustained themseVes; and it remains to be ascertained how long they may continue erect, and how far their
common participation in the relief promised by the sale and exportation of
oru immense surplus crop, their ability in consequence to make collections,
and a reliance upon their own proper resources, will be productive of substantial benefit, of freedom from peculiar embarrassments, and a restoration of public confidence in their integrity and ability.
The commissioner most respectfully submits the foregoing, and
has the honor to be your excellency's obedient servant.
DIGBY B. BELL
Bank Commissioner
To His Excellency Stevens T. Mason
Governor of Michigan.


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Federal Reserve Bank of St. Louis

U. E. Executive Documents, 26th Congress, 1st Session,
Dovument No. 172, pp. 1155-1185.

Z-5
February 2, 1839
Report of the examination and investigation of the affairs and condition
of the Bank of Ypsilanti
The bank was organized under a charter granted by the Legislature, and commenced business on the 13th day of October, A. D. 1836. From
the time of its organization until the 27th day of September last, the controlling interest in this institution was held by Timothy Tredwell, who was
the president of the bank, and Horatio Stevens and others, of Buffalo, in
the State of New York. At the examinations which had previously taken place
it was uniformly stated to the examining officer that the capital stock had
been paid in according to law. There was, however, in the bank a considerable amount of paper signed by the principal stockholders with endorsers,
duly entered on the books as discounted bills.

•

On or about the 27th day of September last, a sale was made of
the majority of the stock, by Mr. Tredwell and others, to Theodore Fomeyn,
and the transfers duly entered on the books of the bank. On that day a
change was made in the officers of the institution; and Theodore Romeyn,
George H. Tracy, James Woodruff, and Henry Howard, were elected directors,
to fill vacancies occasioned by the assignment of their stock by the former directors; and at the same meeting, A. H. Ballard was elected president
pro tem,, and George H. Tracy was appointed cashier. On the 20th of November, Marvin Minor and ueorge Davis were chosen directors, and T. Pomeyn was
elected president.
By the contract of sale above mentioned, stock upon which there
had been paid between 00,000 and $100,000, was transferred to T. Fomeyn
and his associates. A bonus was paid upon the stock; and for the amount
paid in upon the same, Mr. Fomeyn was to take up and discharge the same
amount of discounted naper in the bank, upon which the individuals selling the stock were responsible. In accordance with this agreement, a
change was immediately made in discounted paper to said amount; the promissory notes of these former stockholders being withdrawn, and the amount
supplied with other endorsed paper. The cashier of the bank at that time)
George H. Tracy, stated under oath that the latter paper was perfectly
good. The regular entries of the transaction were made on the books of
the bank.
It is, perhaps, proper here to remark, that some time in the
fall Mr. Fomeyn called on me, and said that he was about to negotiate for
the majority of the stock of the bank; and that, if he made the purchase,

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it would be with a view to connect the institution with the Bank of Central New York, then about to be established at Utica, so far as to put thesE
bills in circulation there, and to have them redeemed at the latter institution. To me, upon reflection, the plan seemed objectionable; and these
objections were made known to Mr. Tredwell, and also, afterwards, to Mr.
Romeyn. There was nothing, however, in the plan then proposed which would
have involved a violation of law; the objections were rather on the score
of public policy. I, however) soon after recieved a letter from Mr. Romeyn, announcing that he had made the contemplated purchase, and should
thereafter be held responsible for the management of the institution. Upon further conversation, and more fully expressing my views upon the manner in which alone the business of the bank could be done, in order to
give the contemplated circulation in a foreign State, Mr. Fomeyn declared
that he thought it no object to consummate the arrangement, and had already concluded to relinquish the idea, and sell or retransfer the stock.
This was immediately previous to the sale from him, hereinafter mentioned.

•

During the time which Mr. Romeyn had control of the institution,
he received bills of the bank to the amount of $25,000, for which his receipt was given. This receipt was dated November 21, 1838. The bills
thus received, as appeared by the oath of the cashier, were taken by Mr.
Fomeyn to the Bank of Central New York, to be exchanged for other funds,
or to be deposited in that institution to the credit of the Bank of Ypsilanti; or, if a satisfactory arrangement should not be made, they were to
be returned by him to the bank. It appeared, moreover, that, some time
during the months of October and November last, bills of the bank to the
amount of $20,000, had been put into the hands of Messrs. Strahan & Scott,
in Chicago, to exchange in that region; and $2,000 in other funds, with
which to redeem their bills. An arrangement, previously made by Mr. Tredwell with another individual in that vicinity, had given an extensive circulation in Illinois, and afforded eastern funds in exchanLe.
Previous to this transfer, the bank had drawn, and had then
outstanding, and not arrived at maturity, time-drafts, issued in the redemption of its bills and other purposes, to the amount of about $40,000.
Mr. Tredwell assumed the payments of these drafts, and received for the
same an assignment of certain amounts due from the City Bank of Buffalo,
Canal Bank of Albany, City Bank of New York, and from P. P. Kissam, D.
Ballentine, George Calver, and Tracy & Miller. The amount of these assignments exceeded the amount of drafts assumed by Mr. Tredwell, and left a
balance to be paid to the bank by him of $5,394.53.
It appeared that a negotiation for the purchase of the stock
owned by said Romeyn was entered into by Philo S. Fawson, on the 23rd day
of "ovember last, and finally consummated, and the stock transferred on
the 28th day of December last. Said Rawson represented himself as the
agent for Arby K. Laynard, John , olter, Abraham Van Camp, Charles Barnard, A. F. Garr, S. S. Phelps, and R. F. Field, of the State of New York,

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and H. Gill, of Ohio; and the stock was apportioned among, and transferred
to, those individuals, who still hold the same. In the affidavit of Theodore Romeyn. (annexed, marked o. 1,) and also in the annexed affidavit of
Philo S. Rawson, (marked No. 22) will be found a more explicit statement
of this negotiation. It appeared that said Rawson had correspondence with,
and authority to act for, the three first individuals above named; but had
no communication with, and no authority to act for, the others. Their names
were furnished to him by said Maynard and Colter. From inquiry, it is ascertained that the above named Maynard, who is the principal stockholder,
and president of the bank, is a man of little or no reputation, and entirely without means to invest in bank stocks. Little satisfactory information
as to the other individual stockholders above mentioned could be obtained;
and the want of knowledge on this subject evinced by Mr. Rawson, the agent,
was such as to destroy cinfidence both in the men, and in their means to
sustain a banking institution. It was also stated by said Rawson that
funds for the redemption of the paper of the bank had been prom!_sed by
them, but had not been furnished.
In the arrangement made for the purchase of said stock, said
Romeyn was to receive a bonus of a0,000. This sum was paid to Mr. Romeyn by Lewis Godard, who received therefor from said Rawson a promissory
note or that amount, furnished by said lilaynard and Colter. in this as
in the former sale of the stock, the purchasers assumed the payment of
certain notes which had been furnished by the former stockholders to the
bank, by substituting ohter ,aper in its stead.
'
Immediately after the transfer of said stock to said Rawson and
others to wit, on the 28th of December last, a change was made in the officers of the bank. John Griswold, P. S. Rawson, Allen Stewart, and Gilbert
Shattuck, were elected directors. The affidavits of these two last named
directors will be found annexed, lmarked No. 3 and No. 4.) John Griswold
was elected president pro tem., and Mark Hopkins was chosen cashier pro
tem. On the 30th of December liark Hopkins resigned, and Robert .liockwood
was elected cashier pro tem. On the 19th of January Philo S. Fawson was
elected cashier pro tem., in place of Robert Lockwood; resigned. John
Griswold resigned as president.

•

At the meeting of the directors on the 28th of December, paper
to the amount of $100,000 was presented by P. S. Fawson, and entered as
discounted paper; and the promissory note::; which were put in by saikRomeyn, when he purhhased in as above mentioned, were withdrawn and given
up to him. A list of the paper so received will be found annexed to the
disposition of P. S. Rawson, marked (A). This paper, it appears by said
Rawson's statement, was received by him in a letter from said Maynard and
Colter; and no member of the board of directors knew whether it was good
or not, nor indeed, whether the pretended signers and endorsers had even
an existence. Even Rawson, who represented the paper, and represented it
to be good, declared that he knew none of the individuals. Further inquiry has been made, and nothing can yet be ascertained to induce the belief that the paper is other than worthless.


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In the arrangement between said Rawson and said Romeyn, the latter agreed to assume and pay certain time-drafts upon several banks in the
State of New York, then outstanding, and upon a part of which he was responsible as endorser to the amount of $40,721.18; and there was assigned
to him, and put into his hands on that account, certain discounted paper
from the bank, to the amount of
$19,886.94
An order on the Buffalo City Bank for Ypsilanti notes .
10,000.00
Uncurrent money
4,504.00
Notes of Bank of Ypsilanti
102000.00
Total

$44,590.94

A copy of the contract annexed to the affidavit of Mr. Romeyn
will exhibit more fully the terms of this arrangement. It is stated by saiO
Romeyn athat, of these drafts, $27,000 have been paid, and provision made
for about $10,000 more.

•

The following statement of the affairs and condition of the bank,
furnished on the day of the last examination of its affairs, (January 23d,)
by Robert Lockwood, late cashier, corresponds with the entries upon the
books of the bank. It is but justice to remark, that the commissioner has
the utmost confidence in the correctness of Mr. Lockwood's entries while
the books were under his charge. His affidavit will be found annexed,
marked No. 5,ek(See tables attached).
By reference to the above statement there will be found among the
liabilities an item in the name of Philo S. hawson, agent, of $17,286.84.
This entry exhibits a balance of credit to said Rawson, of two drafts, furnished by him to the bank -- one for $10,000, on the Bank of Owego; and one
of the same amount on the Steuben County Bank. Rawson presented to the directors letters from Maynard and Colter, directing him to draw on said banks
for said amounts, to be used in the business of the Bank of Ypsilantiand
the drafts made accordingly were passed to his credit as agent. It will be
seen, by reference to the above exhibit of the resources of the bank, that
those institutions are debited to those amounts, less some small drafts that
had been made upon them by the Bank of Y silanti. Rawson's drafts have been
forwarded to the drawers, but no return has yet been received. Nothing from
these banks authorizing him to draw was exhibited by said Rawson.
There were found in the bank two notes, signed by James M. Graham,
and endorsed by A. A. Reid and F. Blake, dated December 1st, 1858, for
$10,000 each; and a receipt, signed by Theodore Romeyn, acknowledging the
receipt of another note of the same date and amount, and with the same signatures, for the purpose of obtaining a re-discount of the same.

•

In relation to the three notes above mentioned, it appeared that
Lewis Godard presented said notes, together with a draft for $1,500, made
by G. B. Harleston on A. G. Ogden, and accepted by the latter, at the counter of the bank; and by direction of John Griswold and P. S. Rawson, they
were discounted, and regularly entered on the boods as discounted paper.


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Bills of the bank, signed by the new officers, given for the amount, were
handed to Mr. Rawson, and by him furnished to Lewis Godard and Mark Hopkins, in the city of Detroit.
The affidavit of said Rawson, annexed, (marked No. 2,) exhibits
this pretended discount to said Godard as in fact little more than an advance for exchange. The paper was not even endorsed by him, and it is expressly declared that he had no right to use the bills thus furnished for
any other purpose than to obtain other funds. It is, however, certain that
the money was immediately put into circulation at Monroe, on the Maumee river, and along the lake shore of Ohio, while no funds were furnished to the
bank for the same.
The abovementioned three notes against Graham, amounting to
430,000, were obtained by ason Converse of George B. Harleston, as appears by said Harleston's affidavit annexed, (marked No. 6.) At the time
they were furnished him, they were in blank, and without endorsers. The
signer (Graham) had been dead almost a year previous to the date of the
notes; and, upon inquiry, no individuals can yet be found in the vicinity
bearing the names of the pretended endorsers. In what manner the notes
were obtained of said Converse by Lewis Godard, does not appear. It is,
however, ascertained that a large amount of the bills received by Godard
and Hopkins went into the hands of said Converse, and were used by him.

•

Bills of the bank, to the amount of 450,000, were signed by the
new officers of the bank -- John Griswold, president, and R. Lockwood,
cashier; but a portion of this amount was not issued from the bank.
There was found in the bank, at the examination on the 23rd ultimo, a receipt given by John Griswold, dated January 4, 1839, for $10,000;
on this receipt was an endorsement of $3,100.

•

Balance
Receipt of John Griswold
u
of P. S. Rawson
II
of P. S. Rawson
rt
of P. S. Rawson

$ 6,900
500
5,000
2,000
20,000

Total of exchange receipts

v34,400

The receipt last above mentioned, on which a balance of 20,000
appears to be due, is dated December 29, 1838, and was given for $45,000,
to be returned or accounted for on demand. This receipt was given when
the new stockholders went into the charge of the bank. Said Rawson received
in bills of the hank $20,000, and took up the receipt of Theodore Romeyn
given by him, as before stated, for $25,000; giving his said receict for
the total amount of $45,000. It is, moreover, alleged that said Romeyn
soon after returned the 425,000 taken by him, to Mr. Rawson, and an endorsement nf the same was made on the receipt of the letter.


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A resolution had been previously passed by the Board, authorizing said Rawson to destroy all the bills of the bank which should come in
with the signatures of the former officers; and Rawson swears that he did
accordingly destroy the bills last above mentioned. No person appears to
have been present when they were destroyed, and the fact was not mentioned
to the acting cashier by said Rawson until some days afterward.
By the above statement, it appears that the circulation of the
bank, as exhibited by the books, was, on the day of its suspension, $82,112;
but there was out for exchange and other purposes, as above recited, a large
amount of its bills not included in that sum. From the most accurate information which could be obtained, the total amount of bills of the bank
executed and not in bank was little less than 140,000. Some of the receipts above mentioned are included in the above statement under the desiknation of "items".
At a meeting of the board of directors, on the 30th day of December, a resolution was adopted appointing "Mr. Griswold and Mr. Rawson a
committee to select some proper person to go to Chicago, and there make
some arrangement (which may be in his discretion modified by circumstances)
for the redemption of the notes of the bank, and that the cashier be authorized to give such person as may be selected letters of credit to treat
with the present agents of the bank, (Strahan & Scott,) or with any other
Jerson, in the premises." In pursuance of this resolution, John Griswold
was selected as such agent, and the cashier gave drafts on Strahan & Scott
for the $20,000 in their hands belonging to the bank. By reference to the
annexed affidavit of John Frink, (marked No. 7,) it appears that said Griswold had arrived in Chicago with a large amount of the bills of the bank,
and opened an office there, and that he made an exchange of the notes of
the Bank of Ypsilanti, at par, for, the depreciated paper of the safetyfund banks of this State. But there are no means of ascertaining as yet,
whether the amount in the hands of Strahan & Scott has been received by
him, or other funds to the same amount.
It is deemed unnecessary to go more fully here into a statement
and transactions of this bank, or the conduct of its offiaffairs
of the
other facts relative to the same, I beg leave to solicit
many
ior
cers.
a perusal of the annexed affidavits and accompanying papers. In some respects the details of the transaction are not so fully disclosed as could
be wished; and some things stated in the affidavits will be found, as yet,
without full explanation. A full disclosure of all the facts can evidently be obtained only by continued investigation, as amny of the transactions
appear to have been done by men entirely unknown in this part of the country, and some of their proceedings took place beyond the limits of our own
State.

•

An injunction, obtained by an individual, was served on the bank,
on the day when the examination was made at which the above facts were disclosed. As there is, however, some reason to believe that the injunction


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•
was obtained at the instigation of the friends of the present stockholders
in the bank, it was deemed proper, by the attorney general, who also attended the examination, to file a new bill in chancery, and to obtain additional,
process against the institution, with a view to close up its concerns.
Theaffidavit of John Griswold, annexed, tmarked No. 72) has been
obtained since the above was written; and also the affidavit of T. Romeyn,
(marked No. 8.) There will be found in them statements, in relation to the
facts above recited, which well deserve the attention of the Legislature.
A comparison of statements in the several affidavits exhibits some discrepancies, which render it difficult, in some particulars, to ascertain the
precise facts in the case.
All of which is respectfully submitted.
A. FELCH, Bank Commissioner.

No. 1.

•

Sir: In accordance with your request, I shall now, as succinctly as possible, explain to you the circumstances of my connexion with the
Bank of Ypsilanti. It will be more convenient to do this in the form of an
ordinary communication, than in that of a formal affidavit.
The first point on which you desire a full explanation is the
subject of the purchase of the stock by me, and the time and mode of payment.
The majority of the stock of the bank was owned by T. Tredwell,
Esq., its former president, and by Mr. Horatio Stevens, of Buffalo. The
contract for it was made in 6eptember last, and about the 30th of that
month it was transferred on the books.
You desire me to state, with particularity, "the mode of transfer and payment." The bonus paid for the capital of the bank was a metter
of private contract, in which the public certainly have no interest; and,
although I have no personal objection to disclose it, still, as if affects
the affairs of others, I do not wish to say anything about it.

•

Stock on which upwards of $90,000 had been paid was transferred
to me. The old officers and a majority of the old directors vacated their
situations; new officers and directors were chosen ; certain peper was offered by me for discount, and approved by the new board; other paper was
taken up and given to Messrs. Tredwell and Stevens, in payment for their
stock; certain moneys deposited in other banks, and in the hands of agents,
were transferred to the credit of Mr. Tredwell, who, in consideration of
them, assumed the payment of some bills that had been drawn by the bank,
and were not yet matured.


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I understand you to wish particular information as to the nature
of the paper taken out of the bank by Mr. Tredwell, and of that put in by
me. The former I am unable to answer. It was undoubtedly good paper, and
such as could have been collected. The paper put in by me was, (with perhaps a single exception, and that of small amount). such as, from the names
on it, would have been approved by any bank in the state. A considerable
part of it was actual business paper, owned by me at the time, and some of
which was afterwards paid; and the remaining portion of it was obtained from
my personal friends, by giving them counter-security. My own name was not
in the bank for a single dollar, either as maker or endorser of paper; and,
if I recollect rightly, none of the new directors' names.
The situation of the bank at the time of its transfer to me was
in round numbers, as follows: circulation about $80,000; due depositors
about $20,000; specie about $14,000; notes of other banks, and balances due
from them, about $8,000. The other resources of the bank consisted in discounted paper. I wish to be understood as giving these amounts merely from
recollection, not having the statement at hand. They are, however, substantially correct.
The above amount of circulation may appear large, but will be
understood from the following fact:
An agency of the bank had been long established at Chicago.
The bills of the bank transmitted to theagent there were always counted
as office notes on hand, until advice was received of their circulation,
when they were charged as such; and the moneys received for them (as they
were exchanged only for money) were passed to the credit of the bank. At
the time of the transfer to me, Mr. Bellentine had in his hands about
30,000, an order for which was given to Mr. Tredwell, and of course the
whole amount charged as bills in circulation.
The amount of drafts assumed by Mr. Tredwell was about 640,000.
The amount of money and other assets put in his hands exceeded that sum
by about 86,000, out of which he was to be allowed for expenses and exchange in converting these items into funds current at the place where the
drafts so assumed had been made payable, and to account to the bank for
the remainder. I have now given,you, as nearly as I can, the state of the
bank at the time of my purchase of its sock, and of the manner in which the
transfer was completed. For what has taken place since then, the old officers and stockholders ought not to be held responsible.
I understand you to request from me an account of the manner in
which the affairs of the bank were conducted while I remained connected
with it.

•

At the time of the transfer, Mr. Follett, the former cashier, declining to continue, Mr. G. H. Tracy consented to act as cashier, but with
the understanding that it should be temporarily; and shortly aferwards I was
chosen president.


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By the arrangement made with Mr. Tredwell, the bank was deprived
of all her cash resources, except the specie and foreign notes actually in
the vaults, and small sums due from other banks. Unfavorable rumors growing out of the change soon began to circulate. A pretty severe run upon
the bank here, and upon its agents in Chicago, commenced, and was continued
for some time. I provided in Buffalo 410,000, and in Utica 15,000, and
made an arrangement in Philadelphia for 420,000 more, if wanted; and the
bank sustained herself completely.
These funds were advanced out of my own resources, and by my
own exertions. As they were put into the bank, her drafts for some of the
amounts were given; and this will account for the amount of these in existence until very lately.

•

An important arrangement was made by us for the redemption of
our bills at Chicago. A contract was made with Strahan & Scott, of that
place, by which that house agreed to take 410,000 of the notes of the bank,
and disburse them. At the end of ninety days they were to return to the
Bank of Ypsilanti that amount in currency equal to that of the State Bank
of Illinois, and in the mean time were to redeem all notes of the Ypsilanti
Bank that might be offered to them, at two and a half per cent. discount,
in Illinois money, and to disburse them again in the most advantageous way
for the bank. On the 24th of October, 410,000 of the notes were given to
them under this arrangement, and in November an additional sum of like
amount. They were also furnished with 42,000 of eastern funds, to aid
them in their redemption.
It is proper to say, that, from advice received from them from
time to time, it appears that the amount in their hands has hot been decreased. Of course, this amount was not included in the statement of circulation.
I understand that you considered this arrangement objectionable.
I am willing to admit that it was out of the ordinary train of business;
but you will allow me respectfully to remind you of the state of things at
Chicago. More than half the circulation of the bank was in that vicinity,
and, unless some arrangement had been made for its redemptionthere, it
would have at once returned to the bank. It is evident that some arrangement was rendered absolutely necessary by this fact: Mr. Ballentine, who
before had redeemed the notes of the bank in Chicago, was about to discontinue; and it is believed that the contract with Strahan & Scott was as
favorable as any that could be made; and, indeed, not only from its terms,
but from the high character of that house, and the credit reflected from
their undertaking the agency, it promised unquestionably great benefits to
the bank.

•

It will not be expected that we shall give in detail every act
done by us until our transfer of the stock of the bank was completed. The
books of the bank will show that the policy pursued was one of contracting
the circulation and general liabilties of the bank. The deposites were reduced to almost nothing, and the circulation to about two-thirds of its


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•
amount at the time when we assumed the management. Notwithstanding the removal of the State deposites, and the run upon the bank before alluded to,
its credit was fully sustained. Everything presented at its counter was redeemed, and, as far as I know, general satisfaction was given.
If I am not mistaken, a comparison of the proportion between the
immediate liabilities of the bank and its cash resources at the time of its
purchase by me, and the like proportion at the time of my sale, will demonstrate the truth of my position, that the policy pursued during the interval was that of steady and actual contraction of business and liabilities.

•

Not a discount was mdde during this time, so far as my knowledge
extends, to a single director -- certainly not to myself, directly or indirectly. All that were made, were done with a view to accomodate business
men, and for business purposes. I took no money whatever on my own account
from the bank, except when I exchanged other for it; and even this was specially deposited in the Bank of Michigan, and not used until after I had
resigned my situation as director. All the bills of the bank which I used
were such as I myself had redeemed when out of the State, and this amounted
to but a few thousand dollars. A number of bills (amounting in the whole
to $2b1000) were taken by me to the State of New York for certain purposes
which were afterwards abandoned, and he whole of the money returned, as
will hereafter appear. The same identical bills were returned, except a
package of :51000, which were exchanged in the City Bank of Buffalo for
another package of the same amount, but of smaller denomination.
A rigid examination of the books of the bank will show you that
my statement of its management, while I had control of it, is, in all respects, correct.
I come now, in the course of this statement, to another part of
the matters in which you have requested a full disclosure. I refer to the
circumstances connected with my sale of the stock of the bank.
My object to purchasing ih
ntiol of this stock was with a
view to connect the bank with one in the State of New York. Yourself will
recollect the conversations had with you on this subject. Arrangements
were made, to a certain extent, for this purpose; in carrying out the details, however, difficulties arose that had not been anticipated.
Some of the stockholders of the bank objected to any of its
notes being issued, except in the form of regular discounts; in which case
but a limited number could be given to any one institution, from the restrictions imposed by the sixteenth section of the charter of the Bank of
Ypsilarti.
Mr. Pritchette, one of the bank commissioners, supposed that
all the notes thus issued should properly be charged as circulation.


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Federal Reserve Bank of St. Louis

•

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Yourself expressed very unfavorable opinions on the subject of
the policy of the intended course.
I therefore determined to propose to those to whom a portion of
the circulation was to have been loaned, either at once to take the bank
from my hands, or to release my contract with them; and mentioned this freely to any friends in conversation.
On the day on which I expected to leave Detroit, I received a
letter, of which the following is a copy:
Detroit, November 23, 1838

•

"Dear Sir: I am requested by some eastern capitalists to
purchase a bank, and they referred me to you for the Bank of Ypsilanti.
Understanding you owned the controlling interest of that bank, I take
the earliest opportunity of advising you on the subject. If you want
to sell, what are your terms, and what is the condition of the bank,
and what is the'amount of capital, &c? Please advise me as soon as convenient, and give me a brief history of the matter; and if you wish to
sell, and terms suit, I am ready to purchase, in trust for others; and
the bank will go into responsible hands.
I am, truly, yours, in haste,
P. S. Pawson.
T. Pomeyn, Esq.
On the same day I wrote in reply the following:

Detroit, November 23, 1838.
Sir: Your letter of this date is before me.
ing town, and therefore must answer briefly.

I am on the point of leav-

I have in my name a majority of the stock of the Bank of Ypsilanti, and, if other arrangements are not perfected, I am disposed to
transfer it to any gentleman who can satisfy me of his disposition and
ability to support it. The capital paid in is 000,000, of which I control near nine-tenths. If I sell, I rant to receive ten per cent. premium on the whole amount of stock.
As I am at present in great haste, I must beg you to excuse me
for not going more into detail.

•

I say to you frankly, that I will, without reserve, inquire into the validity of the recommendations which you have done me the favor of
enclosing; and if they are satisfactory, and the arrangement now on hand
(I refer to one contemplated with an eastern bank) be not consummated, I
will enter into a negotiation with you.


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Federal Reserve Bank of St. Louis

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•

In haste, but very respectfully, your obedient servant,
T. Fomeyn
At this time I did not know Mr. Rawson, except very slightly.
A note of lir. Lawson's, for some amount, had been put into my hands the
day before, as collateral security for an endorsement; but I took a guaranty from the person delivering it, and made very slight inquiries as to
Mr. Lawson, and did not retain the note but a short time. As to his history and occupation, I knew nothing. The letters of recommendation which
he enclosed were of a satisfactory kind. I shall allude to these more
particularly hereafter.
Before leaving Detroit, and onthe above day, I saw Mr. Rawson, who told me that he was poor, but that he had been acting for some
time as agent for some highly respectable men, who were desirous of engaging more extensively than they had done in western operations; that
he had purchased large amounts of flour and wheat, and other products in
Ohio, and latterly in Michigan, and that he had experienced great difficulty from the inability and unwillingness of the banks to discount drafts
for him; that some of his friends, and those for whom he acted, had formed
a company, and were desirous of concentrating their reans in a bank, and
operating through it; and that he could advance 420,000 in cash towards
sustaining the bank after paying for its stock. I replied that I would
think over the matter, and would write to him from Buffalo. Accordingly
I did, write from that place as follows:
Buffalo, November 30, 1838
Dear Sir: I wrote to you a few days since very briefly on the subject
of selling you the Ipsilanti
I have been for some time satisfied that the bank will not
answer the purposes of those for whom it was originally purchased by me,
as its circulation must be limited to the amount of its capital stock
paid in, and the bank commissioner has assured me that any of its notes
loaned to other institutions Al be debited to it as circulation. I will
rake you a proposition, subject, however, to the contingency of the alteration of a contract with the bank already spoken of.
The capital stock of the Bank of Ypsilanti paid in, is 0_0,000.
The circulation is about 460,000. The bank is indebted to the
City Bank of Buffalo in the sum of 410,000, for which a bill has been
drawn on New York; collateral to this, the like amount of notes of the
bank has been deposited. There is a farther indebtedness to the State of
410,000, for which a bill has been drawn on the Canal Bank of Albany.

•

There are very small amounts due to depositors, and I believe
no balances in favor of other banks.


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Federal Reserve Bank of St. Louis

•
I will sell stock to the amount of $93,703.25, and surrender
the entire control of the bark.
For this, and for my services in the premises, and the responibility assumed by me, I expect ten per cent. more than the par of the
whole amount of stock.
I will assume the payment of all the drafts that may be made at
the time of the transfer, on receiving from the bank funds sufficient to
cover them.
I will take in payment all notes which may have been discounted
by the bank since I assumed the control of it; and for the remainder I
will take furds current in the city of Detroit. If the note:, of the bank
are paid to me, I will take care to give them a good circulation.
1 will expect of you that you cause the
old notes of the bank
to be destroyed, and not re-issued, as I promised Mr. Tredwell (when I
purchased from him) that this should be the case. Such are the leading
outlines of the principles on which I am willing to sell; and if satisfactory to you, I think we will have no difficulty, on my return, in consummating a brergain.

•

Yours, &c.,
Theodore Bomeyn
Subsequently, I wrote to Mr. Pawson, in effect as follows, (I
have not retained a copy of this letter:) that he could have the bank on
the terms mentioned in ty former letter, as the directors of the institution in New York, who had intended to use its notes, were willing to release me from my bargain with them, and did not wish to encumber themselves with the management of the bank, and I could not conclude an arrangement with their stockholders as individuals for this purpose; that if he
desired to take the bank, he must have his own directors selected, and all
things prepared for a complete change, as I would retain no responsibility
and would give full notice of the change.
On my way home, I received at Buffalo a line from him, simply
stating that he was entirely prepared.
The only persons whose names I recollected as having been mentionedto me by him as his friends in this matter, were Mr. Maynard and Mr.
Gill. The former I supposed, and certainly understood, was a resident of
Onondaga county, New York: the latter of Columbus, Ohio. I inquired, and
was informed, as to both of these, that they were exceedinly respectable
men. From the examination of Mr. Pawson before you, it appeared that Mr.
Maynard is a resident of Chenango county. Of this gentleman I know nothing.
My inciuiries were as to a different person.

•


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Federal Reserve Bank of St. Louis

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•
I returned home on the 24th day of December. On the 28th I
transferred to Mr. Rawson and to others, according to his directions, all
my stock in the bank. A scrip for about $15,000 was not in my possession
at the time; but, as I considered it subject to my control, it was assigned
with the rest, with full notice of the fact of its having been subjected to
a temporary hypothecation.
The mode of transfer was as follows: The stock was transferred
upon the books, and the old officers and directors resigned. A new board
was Chosen , who passed upon certain paper. Mr. Rawson then gave me, in
payment for my stock, an equal amount of the old discounted paper of the
bank. I wish it distinctly understood, that neither myself, nor any old
director, examined the new paper offered for discount, or had in any way
anything to do with it.
You will recollect that I had taken from the bank $25,000 of its
notes. These I brought back with me. Mr. Tracy declined to receive them,
or to give me up my receipt, lest the matter should be afterwards misrepresented. I accordingly gave them to Mr. iwson; and, not satisfied with taking up my receipt, I took from him an acknowledgement of the delivery to
him of the whole amount, which was exhibited to you, and admitted by him.

•

At the same time, or the next day, the directors ordered the
execution of the agreement accompanying this communication, marked B, by
which I assumed the payment of all the drafts of the bank. This instrument speaks for itself.
The mode of transfer was the same that was adopted when I
purchased. In both cases, the intention was to leave all responsibility
with the new directors.
Mr. Rawson wished me to take the premium on the stock in some
paper which he held. I objected, as not knowing the names. He then proposed that I should take certain stocks of a third person; and, after some
hesitation, I acceded to this, and took them, as at the time there was a
prospect of converting them into money.
I have now stated to you, with entire frankness, all the circumstances connected with my contract for the sale of the control of the
bank, and the manner in which it was carried into effect. While no one
will actually deny my legal right to sell bank stock to any person who
would pay me for it, I am ready to admit my obligation to the community
to see that the control of the institution went into safe and responsible
hands. I now wish you to refer to the letters of recommendation which Mr.
Rawson brought to me. (Schedule A). You will find them to be from persons of different btates; you will see that they speak of him while yet a
youth, and follow him down to the present time, during fifteen successive
years; and that they all concur in their testimony as to his integrity and

•

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Federal Reserve Bank of St. Louis

-15-

•
respectability. The representations which he gave of his backers in the
business were entirely satisfactory; he had with him a letter of credit for
*20
000 of money; and I submit to you, under the circumstances, if I was
'14
not entirely justifiable in treating with him. Since the transfer, he has
exhibited to me a formal power of attorney from A. K. Maynard, regularly executed and authenticated, authorizing the purchase of the stock of the bank,
and also of a mill.
I now come to speak of my conduct since the transfer of the bank.
It will be recollected that Mr. Hopkins declined to act as cashier. Mr. R. Lockwood had been in the bank for some time, and I requested
him to stay until matters were settled, as he was acquainted with the situation of the bank, and I had full confidence in his capacity and integrity;
and, as my own liabilities on the drafts of the bank were large, I was desirous of having some one with whom I was acquainted remain there temporarily. He agreed to stay for a few days, and for a few days only.

•

I solemnly declare that, from the time of my resignation as director, on the 28th day of December, I never intermeddled with the affairs
of the bank in any way whatever. I kept entirely aloof from it, and know
nothing of its operations, except as to the amount of its redemptions, as
they were mentioned to me incidentally by Mr. Lockwood and others.
The day after the assignment of the stock, I received t5,000 in
specie, which I gave to the bank, and for which I received nothing but an
open credit. This specie was used by the bank in its redemptions, and I
never received anything but ordinary country funds for it.
I proposed to a friend to take the order on the Buffalo City
Bank, for the money there deposited, and disburse it westward, where it
would have a good circulation, and pay the draft due that bank. He referred it to his partner in Buffalo. Before any answer was received, I wrote
again, arranging in another quarter for the payment of the draft, which has
been taken up, and enclosing an order for the bills deposited in the bank,
as I found that such an increase of western circulation might operate disadvantageously. I am advised that but a part of these have been circulated;
the rest are on my hands.
Of the other drafts assumed by me, to a large amount, all except about 44,000 have been provided for.
Of the discounted paper assigned to me to pay these drafts, I
have only received about one hundred dollars. A small amount was taken in
notes of the Bank of Ypsilanti, which are still on my hands; and about three
hundred dollars were paid into the bank to my credit, where it remains, being covered by the injunction.

•

Of the ten thousand dollars paid to me in the notes of the bank,
(also for the purpose of paying these drafts,) about eight thousand dollars
were paid into the Farmers and Mechanics' Bank of this city. As soon as I


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Federal Reserve Bank of St. Louis

- 16 -

understood that the Bank of Ypsilanti was made the object of suspicion and
remark, and that her notes were returned to her counter constantly for redemption, I went to the above bank and withdrew every dollar she had, being about four thousand dollars; which notes are still in my hands.
I loaned to a gentleman of this city five hundred dollars (which
were not used by him) while the bank was in good credit, and which I am expected to take back.
To another T advanced five hundred dollars; and the moment I
received information of the discredit of the paper, I wrote him a rote requesting the return of the money.
Except a very few hundred dollars disbursed by me in small sums
I used none of the money, except as above stated.
I challenge any individual to come forward and say that I have
been instrumental in extending the circulation of the notes of the bank except as above stated. Let any man who has received them from me answer.
The result of the whole is, that, of the ten thousand dollars
paid to me, more than one-half perished on my hands.

•

I now come to speak of my conduct while the bank was making its
last effort.
Mr. Lockwood brought to me a note for ten thousand dollars, that
had been discounted at the bank, and wished me to procure its re-discount.
I was satisfied this was impossible, but told him I would make the effort.
The only thing which I could do, was to exchange, te.uporarily, notes of the
Bank of Ypsilanti, to the amount of five thousand dollars, for other money;
which I did, by pledging my own private property and individual credit for
the return of the sum advanced. All this went to the Bank of Ypsilanti,
and all that I hold for it is the like amount of their own depreciated paper, and the ten thousand dollar note above mentioned.
I also went to the Bank of Michigan) and left with her teller
two hundred and fifty dollars, to redeem what Ypsilanti money might be offered at her counter. This amount is also rbn my hands.
I was induced to make the last exertions for the bank, because
I had a direct interest in sustaining her credit, not only from my recent
connexion with her, but from the amount of her money in my hands. I did
it in good faith, urged to it by her officers, and assured by them that a
large amount of Ohio and other funds was daily expected. I did it, after
unfavorable rumors had come to my ears, and against the advice of friends.
The result of the whole is, that I have never circulated but a small amount
of the notes of the bank; that, at my own risk, I prevented their circula-

•

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Federal Reserve Bank of St. Louis

p 17 -

•

tion in numerous instances, thereby incurring loss myself; and that I have
supplied her with exchanges from my own resources, and to my own disadvantage, to nearly the amount of all that I have used. If the notes of the
bank are worthless, then I am a direct loser to the amount of thousands
by my connexion with her.
You have now a statement of all my connexions with the Bank of
Ypsilanti, and I am sure that you will do me the justice to say that it is
in every respect confirmed by all the testimony, oral and written, which
has been elicited on this subject.
It only remains that I speak of what I have said and done publicly in this matter.
Before I assumed the control of the bank, I mentioned to yourself that I had it in contemplation, and did the same to Mr. Pritchette.
So soon as it had passed into my hands, I wrote you advising
you of the fact, that I alone was responsible for its management.
I gave the same information to all the lietroit banks.

•

Immediately upon my return, I announced, to all who spoke to
me on the subject, my intention of relinquishing the management of the
bank.
When I had done so, I advised the Detroit banks of it, and all
the agents and correspondents of the bank were advised of it, and everything was done to give full publicity to the matter.
So soon as I heard of unfavorable rumors concerning the bank I
advised the bank commissioner of them. Yourself was absent, and I spoke to
Mr. Bell, and requested him to go and examine its affairs. He declined, as
it was out of his district. I went myself to the attorney general, and
asked him to attend.* The examination was finally made by you and Mr. Morey/
Yourself can say whether I did not do everything in my power to aid it.
Before concluding this communication, I wish to say one wore
about an individual whose name has been connected with the Bank of Ypsilanti. I refer to Mr. Lewis Godard. While I was interested in the bank, Mr.
Godard had nothing to do with it, directly or indirectly. He is interested
in a valuable property in the village of Ypsilanti, and had just finished a
large flouring mill. I promised him all such accommodations as he would be
entitled to from the nature of his business, but nothing more; and even

•

* Not until the day after the bank stopped payment.


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Federal Reserve Bank of St. Louis

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•

this was not granted to him. Except in the Detroit City Bank, I never held
a dollar of stock in any bank in which he was interested, until a few weeks
ago. In the Ban;: of Ypsilanti, he never, to my knowledge, has had any interest. Of his agency for the bank, since I went from it, I knew nothing
until the matter was detailed to us by Mr. Lockwood and Mr. Rawson.
I have now given, as fully and particularly as I could, a statement of all affairs which connect me with the Bank of Ypsilanti. Yourself
can bear witness to the fact that they are dorroborated by every entry in
the books of the bank, and by all collateral and extrinsic testimony. They
go to show -1st. That the control of the Bank of Ypsilanti was purchased by me in
good faith, and in an open and honorable manner.
2d.
That, while I held the control, its affairs were conducted fairly and prudently.
3d.
That my transfer of it was bona fide and absolute, and justifiea
by circumstances.
4th. That, since its transfer, I have been entirely disconnected with
it, and am in no way responsible for its present condition.

•

5th. That I have in no manner aided in expanding its circulation; but
have so managed for the safety of the public, and the benefit of the bank,
as to be myself the loser.
6th. That nothing has been done covertly, or under the rose; but full
publicity has always been given by me to every act connected with it.
7th.
fair.

That I have invited and aided the investigation of the whole af-

In conclusion, i have to ask of you that you will excuse me for
such a long communication, and one entering so much into details.
you
sending
myself and to the public that frauds, if any, should be traced
to
due
It is
blame should attach where it belongs.
that
home, and
THEOBORE hOMEYN
A. Felch, Esu., Bank Commissioner, &c.
State of Michigan) ss.
)
Wayne County

•

On the 30th January, 1839, personally appeared before me Theodore
Romeyn, who being duly sworn, made oath, that the matters and things set forth
in the foregoing communication to Alpheus belch, bank commissioner, &c., are
true,.to the best of his knowledge and belief.


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Federal Reserve Bank of St. Louis

I. S. ROWLAND
Notary Public, W. C. M.

•

-19-

•
Schedule A.

Palmyra, August 3, 1823
The undersigned, inhabitants of the town of Palmyra, certify that
they have, for some time past, been acquainted with Philo S. Rawson, and
have no hesitation in saying that his character, in their opinion, is unimpeachable as to integrity, honesty, and good conduct; and further certify,
that he would be perfectly competent to the management of a mercantile store
in the capacity of clerk.

•

Joel McCollum
Alexander R. Tiffany
Leonard Wescott
Israel J. Richardson
Thomas Rogers (2d)
Gaius C. Robinson
Thomas Baldwin
D. Rogers
Benjamin Nichols
Gain Robinson
V. G. Barney

James Field
P. Grandin
Platt Williams
L. Tucker
Seymour Scovell
N. W. Wilcox
Alva Henslee
Kingsley Twiller
William Wells
Giles Landon
Geo. N. Williams

August 8, 1823.
Having just examined a certificate signed by a large number of
highly respectable gentlemen of Palmyra, recommending Philo S. Rawson as
a young man of fair character, and, in their opinion, competent to the
management of a mercantile store in the capacity of clerk, it gives me
great pleasure to state, (notwithstanding I cannot speak of his present
fitness for such a situation, not having been personally acquainted with
his deportment or acquirements for the last two years,) that said Philo
was a member of my family from the fall of 1820 to the spring following;
and that from his then regularity of conduct, knowledge, and his strict
moral integrity, I could not anticipate any other character than the highly respectable one given of him in said certificate; and so far as my acquaintance will wqrrant, I most cheerfully join with those gentlemen in
their recommendation.
DUDLEY MARVIN.

Palmyra, October 6, 1823

•

I have been particularly acquainted with Philo S. Rawson for three
years past; and it gives me pleasure to state, in his behalf, that I have
ever regarded him as a youth of strict integrity, industrious habits, and
unoffending manners.


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Federal Reserve Bank of St. Louis

D. K. JONES.

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•

Canandaigua, (N. Y.), April 13, 1828

I have for some time been ac( uainted with the bearer, Mr. Philo
S. Rawson, and have always considered him a young gentleman of correct and
honest principles, and entitled to the fullest confidence in whatever situation or employment he may be engaged.
He had been in the employ of Messrs. Mead & Lyon, of this village, for some considerable time.
I feel a pleasure in recommending Mr. Rawson to the favorable
notice of those among whom it may be his lot to cast.
JOHN A. GRANGER

Columbus, May 16, 1838.

•

SIR; I understand that you wish to be made acquainted with the
character and reputation of Mr. P. S. Rawson. Sir, it affords me great
pleasure to be able to communicate to you my highest opinion of Mr. Rawson. 1 have known him for many years, and have never known him to deviate
from the path of rectitude; and can recommend him to you as a moral, intellectual, and business man, and worthy the confidence of any business, and
presume that he will fulfil any engagement that he may make with you.
Yours, in haste,
H. Gill
To Mr. Bell

Columbus, May 26, 1838.
I hereby cerfify that I am well acquainted with Mr. P. S. Rawson, and can cheerfully concur in the above remarks of Mr. Gill.
Yours, in haste,
J. S. SHERMAN

Lockport, May 20, 1858

•

I have been acquainted with P. S. Hason for several years part.
I have had considerable dealings with him, and have always found him fair
and honorable.
I consider him a competent and capable business man, and as a
salesman in a dry-goods store unsurpassed in this vicinity.


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Federal Reserve Bank of St. Louis

MARK HOPKINS.

-21-

•
Lockport, May 18, 1838.

I have been acquainted with P. S. Rawson for several years, and
have had considerable dealing with him. I have ever found him, so far as
my dealings with him extended, fair, honest, and honorable.
S. CAVERNO

Lockport, April 9, 1831.
This may certify that Philo S. Rawson has been in our employ as
a clerk for about two years past, and we consider him a young man of strict
integrity, industrious habits, and well calculated for the mercantile business; and would recommend him to the favorable notice of those among whom
it may be his lot to fall.
HAYWARD & RAWSON

•

Ypsilanti, (Mich.), June 2, 1838
To whomsoever it may concern:
This will
quainted with Mr. P.
industrious business
cheerfully recommend
ness man.

certify that I have been for several years past acS. Rawson, and know him to be a gentleman of correct,
habits, good moral character, strictly honest; and I
him as every way worthy of the confidence of any busi-

MARVIN MINOR

Hartland, August 22, 1829.
This will certify that Mr. P. S. Rawson has been in my employment as a clerk for some time past, and that I consider him strictly moral,
honest, and well calculated for the mercantile business.
MkRVIN MINOR

•

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Federal Reserve Bank of St. Louis

Sandusky City, May 10, 1838

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•

Sandusky City, May 10, 1838.
SIR: The bearer of this letter, Mr. Rawson, requested from me
a letter of credit to you, which I cheerfully give; and I can say that it
affords me the greatest pleasure to be able to communicate to you my highest opinion of Mr. Rawson, for I have had many years of personal acquaintance with him, both in business for himself and others, and have always
found him prompt, honest, and fair, in all matters of dealing, and would
recommend him as such to you; and I have no doubt but that he will fulfil
all and any engagements that he may make with you, and he has many friends
who can say and do the same for him.
I am, truly, yours in haste,
HORACE APLIN
Mr. Bell

Canandaigua, March 16, 1838

•

SIR: This letter will be handed you by the bearer, Mr. Rawson, whom I have had many years of personal and business acquaintance with;
and it is gratifying to me to say that he posseses a fund of information of
business and of men, and I can say that I think Mr. Rawson worthy of any
confidence that may be reposed in him by you or any other business man. As
a salesman in a dry-goods store, he stands high with us; and, sir, if you
and Mr. Rawson do not make a bargain, any assistance you may show him in
getting into business will be gratefully received by your old friend and
humble servant.
LAFFERT COISON.
Mr. L. Godard

Lockport, May 19, 1838.
SIR: The bearer of this, Mr. P. 6. Rawson, I have been acquainted with for some years. He wishes a letter of credit from me to
you. It is truly gratifying to me to say that I think him worthy the confidence and credit of any man. I think him a man of correct business habits and industry, and believe that he will fulfil any engagements that he
may make with you or any other man. He is well known, and much respected
by all who know him personally. I have never known him to deviate from
the path of rectitude and morality.
I am, truly, your humble servant,

•

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Federal Reserve Bank of St. Louis

D. M. THOM

-23-

Lockport, May 19, 1838.
I concur with Mr. Thom in his statement above, in behalf of Mr.
P. S. Rawson, and would recommend him to the attention of business men, or any
man, in the community in which he may think proper to locate himself.
JUSTIS DOBBIN
Mr. Bell

Schedule B. •
Articles of agreement made and entered into, this 29th day of December, A. D.,
1838, between the president, directors, and company of the Bank of Ypsilanti,
of the one part, and Theodore Romeyn, of the other part.
Whereas the said bank has drawn the bills or drafts specified
and set forth in schedule R. hereunto annexed: and whereas, on most of these
drafts said Romeyn is an endorser, and therefore liable for the payment of the
same, and has actually made arrangements and advances for that purpose:
Now, this agreement witnesseth: That, in pursuance of the understanding between these parties, the said Romeyn is to pay said drafts at maturity, and indemnify and save harmless the said bank against the same.

•

In order to eompensate said Romeyn for his advances and responsibilities the said president, directors, and company do hereby assign, transfer, and set over to him the notes, accounts, receipts, moneys, and other choses in action, specified and set forth in schedule B, hereunto annexed, with
just right and full power to convert or sell the same, and appropriate the proceeds at his pleasure; he being alone liable for the payment of said drafts.

(Bank Seal)

In testimony whereof, the said president, directors, and company
have caused these presents to be executed, by affixing
thereto the seal of said bank. And the said Romeyn hath
executed the same, by fixing hereto his hand and seal.
R. LOCKWOOIr Cashier
By order of the board:
T. Romney, (Seal)

No. 2
State of Michigan) )
County of Washtenaw) ss:
Philo S. Rawson, being duly sworn, on his oath says: That he is a
director of the Bank of Ypsilanti; and, on Saturday last, was appointed by the
board of directors cashier pro tem.

•


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Federal Reserve Bank of St. Louis

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I

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•
Deponent saith that he became a stockholder in said bank on the
28th day of last December, and has also, since that time, acted as the agent of
A. K. Maynard, John Colter, Charles Barnard, A. F. Carr, S. S. Phelps, R. F.
Field, Abram Van Camp, and H. Gill, who are also stockholders. Deponent purchased the stock held by the individuals above named, on the day above mentioned,
of Theodore Romeyn. The abovementioned individuals now own a majority of the
stock of the bank. The object of purchasing the controlling stock of the bank
was to obtain facilities in the purchase of wheat, and in the provision busines'.
The purchase was made by deponent, as the agent of the abovenamed individuals.
Deponent had had correspondence with some of these individuals relative to the
purchase of the stock of a Michigan bank, (without naming any particular bank.)
A bonus of ten thousand dollars was paid to Mr. Fomeyn by deponent, which added
to the amount paid in on the stock so transferred, made the sum of one hundred
and eight thousand dollars to be paid by Mr. Romeyn. For the purpose of paying
the amount, deponent received promissory notes, a list of which is hereunto annexed, marked A. They were received, by letter, from said Maynard and Colter.
When hir. Romeyn made the transfer of the stock, new directors were chosen and
sworn into office. The notes mentioned in the list annexed were presented to
the new board, who ordered them to be received, and substituted instead of other paper then in the bank. This was done, and the paper so received was given
up by deponent to said Romeyn, for the amount of ninety-eight thousand dollars
aforesaid. The bonus of ten thousand dollars was paid by giving a note to a
third person, who, in consideration of the same, paid the amount to Mr. Romeyn.

•

Deponent also had directions, by letter, from Maynard and Colter
to draw on the Owego Bank and the Steuten Bank for twenty thousand dollars; and
after the purchase of the bank stock, as above receited, he made drafts to that
amount, and deposited them in the Bank of Ypsilanti. They were passed to deponent's credit, as agent for the stockholders.
Deponent does not know the sieners of the paper mentioned in the
annexed schedule, but was informed by Messrs. Colter and Maynard that they were
responsible men, and the paper was good. None of the directors who allowed the
paper to be substituted, as above mentioned, knew the signers or endorsers.
Deponent says that he was made a director of said bank on the
28th day of December last. '
1 vote was passed by the directors that the old
paper of the bank returned from circulation should be destroyed, and new notes
executed to supply their place.

Bills to the amount of $25,000 were destroyed by this deponent under the order of the board, and new notes of the bank to the amount of fifty
thousand dollars were executed, being signed by R. Lockwood as cashier, and by
John Griswold as president. Of the bills thus signed, thirty thousand dollars,
or more, were issued from the bank. Ten thousand dollars were received by John
Griswold for exchange purposes. There was also paid out on discounted paper as
follows:


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•

Three notes signed by James M. Grakin, endorsed by A. A. Reed and F.
Blake
$30,000
George. B. Harleston's draft, accepted by A. G. Ogden ..
1,500

A short time before the atovementioned notes were discounted, this
deponent applied to Mark Hopkins and Lewis Godard to see if some arrangement
could be made by advancing bills of this bank, to obtain the means of redeeming
such of its circulation as might be brought in. Hopkins and Godard went the next
day to Toledo and Maumee to make an arrangement for that purpose; they returned
with the paper above mentioned, and said that they had made an arrangement, and
that, if the bark would discount the paper above mentioned, the bills of the Bank
of Ypsilanti issued for that purpose would be protected and kept in circulation
in Ohio and that this bank would immediately be furnished with Ohio and eastern
funds and specie to one-half the amount. The notes for discount were left at the
bank by Mr. Godard or Mr. Griswold. The amount, less the discount, in bills of
the Bank of Ypsilanti, was taken by deponent into Detroit, and delivered to said
Hopkins and Godard, on the 9th instant; they were to go to Toledo and Maumee,
and return with funds as above mentioned: they have not yet returned, having
been detained, as deponent is informed, by the absence of the person who was to
furnish the funds, and no such funds have been furnished. The bills of the Bank
of Ypsilanti above mentioned were not to be put in circulation unless funds to
half the amount were received as above stated. Deponent further says, that said
Godard has not received any bills of this bank, to the knowledge of this deponent, other than above mentioned; and that said Godard had no right to use any
portion of the bills thus put into his hands.

•

Deponent says that he made an arrangement, about the first of December last, with said Godard, by which he paid, through him, the bonus of ten
thousand dollars to Mr. Romeyn, the amount of which was paid to said Godard in
nenas furnished by the new stockholders. This arrangement was first proposed to
Mr. Romeyn, and carried into effect about the last of December.
Deponent further says, that on the 29th of December last he received twenty thousand dollars in bills of the bank, and gave a receipt for
forty five thousand dollars, including therein a receipt for bills of the bank
of twenty-five thousand dollars, given previously by Mr. Romeyn. This amount
has since been returned by Mr. Romeyn, and endorsed on deponent's receipt above
mentioned.
Mr. Romeyn has no control or direction of the bank, and has not,
since the sale from him, interfered at all in its affairs. Said sale from him
was bona fide and in good faith.
Lewis Godard was to be paid for his services in effecting the arrangement above mentioned, and was not to have the use of any part of the money.
Deponent had letters authorizing him to act as agent for the abovenamed Maynard, Van Camp and Colter; but had nothing from the other new stockholders authorizing him to so to act, nor had they ever requested him to buy the stock
for them; their names were given deponent by said Maynard and Colter.

•

P. S. RAWSON
Subscribed and sworn to before me, this 24th day of January, A. D. 1839.
A. FELCH, Bank Commissioner.


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•

A.

Signed J. W. Hubbard; endorsed J. C. Munger, U. T. Scott, dur April 12 . . $10,000
Signed A. T. Warren; endorsed H. C. Wanzer, Orrin Harding, due April 11. . 10,000
Signed C. Williams; endorsed James M. Lord, A. S. Doyg, due April 1.5 . .. 10,000
Signed T. S. Gage; endorsed John hussell, Isaac Vandelip, due April 9. . . 10,000
Signed D. C. Kingland; endorsed 0. W. Stone, Mr. Branson, due April 15 . . 10,000
Signed Silas Lake; encorsed A. B. Craig, Thos. G. Sprankin, due April 26 . 10,000
Signed M. A. T. Schuyler; endorsed J. H. Kellogg, James E. Duff, due
April 7
10,000
Signed W. H. Bond; endorsed J. A. Wood, Amos Thomas, due April 19 .. .
10,000
Signed J. Underwood; endorsed John Worden, W. T. Herrington, Hugh Merritt,
due May 4
10,000
Signed Epm. Marble; endorsed A. T. Grummond, E. S. Barnard, due April 7
10,000

No. 3.
State of Michigan,
County of ivashtenaw,)

S8
'

Allen Stewart, being duly sworn, says: That on the evening of December 29, 1838, Aoel Godard called on him at his house, and requested deponent
to become a director in the Bank of Ypsilanti. Mr. Godard said that he had no
interest in the bank, but was requested to name some fit person, and wished deponent to take the office. Deponent went to the bank, and, after having a small
amount of stock transferred to him, was made a director and sworn into office.

•

Certain paper (being the same mentioned in schedule annexed to
P. S. Pawson's affidavit) was presented, but deponent knew nothing of the signers, and cannot say whether any definite action in relation to it was had by the
board.
Deponent knew that bills of the bank were signed by the new officers, but was not told for what purpose. He was told also by said Rawson that
money was to be furnished to the Sank of Ypsilanti by exchange with the Bank of
Wolfsborough, in New Hampshire.
ALLEN STi,WART
Subscribed and sworn to before me, this twenty fourth day of January, in
the year of our Lord, one thousand eight hundred and thirty nine.
A. FELCH, Bank Commissioner.

No. 4
State of Michigan,
)„
County of Washtenaw,) ".

•


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•
Gilbert Shattuck, being duly sworn, on aoth, says: That he was
one of the original subscribers to the stock of the Bank of Ypsilanti, and still
holds the shares subscribed by him; that on the 28th day of December last, Abel
Godard came to deponent's house, and requested him to go to the village of Ypsilanti, and said that there was to be that day an election of directors of said
bank at Ypsilanti, and requested deponent to receive the office of director, and
to act in that capacity; deponent attended said meeting, and was elected a director and sworn into office. Abel Godard was in the bank when the meeting of directors was organized, but took no part, and did not appear by the books to be a
stockholder in said bank.
At the meeting of directors above mentioned, P. S. Rawson, presented certain paper for about t100,000. The signers were not known to deponent;
but, upon the assurance that they were responsible men, the paper was approved,
and the cashier authorized to receive it, and give up for it certain discounted
paper then in the bank, which had been given by the former stockholders.
At the time deponent occupied the office of director, it was understood to be for temporary purposes.
Deponent further says, that on the 21st instant he inquired of
P. S. Rawson whether Lewis or Abel Godard had any interest in the Bank of Ypsilanti. He replied that he had not. Deponent then inquired why Lewis Godard
took so much interest in making an arrangement to obtain exchanges at Maumee
and Toledo. Said, Rawson replied, that if Godard effected the arrangement, he
was to have a part of the proceeds for the purpose of buying wheat. He stated
that he had himself previously entered into a negotiation for said exchange with
one r4ers, and that said Godard went down to Toledo with the funds, and to close
the arrangement; that he did not trust said Godard with the funds until he had
given security by by a certain note, amounting, as deponent understood, to twenty five or thirty thousand dollars.

•

Deponent further says, that he was not acquainted, until one day
he became director of the bank, as above mentioned, with Mr. Romeyn. That
while he has been director, said Romeyn has had no control of said bank and has
not, to the knowledge of deponent, interfered in any manner in its concerns.

No. 5
State of Michigan, County of Washtenawlss.
Robert Lockwood being duly sworn, on oath says: That he became
cashier pro tem. of the Bank of Ypsilanti, on the 29th day or 30th day of Decerber last, and had charge of said bank in that capacity from that time until
the 18th day of January instant. He was offered the office of cashier by Theo.
Nomeyn before the transfer of the stock by him, who has liable on the paper of
the bank; declined it. Mark Hopkins was previously appointed cashier. Mr. Hopkins resigned as cashier on the 29th af.December. 1338 at which time deponent
received !.he temporary appointment. Enlio b. Eawson was appointea casnier on

•


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Federal Reserve Bank of St. Louis

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the 18th of January instant, and still holds the office.
While deponent was in charge as cashier, to wit, on the 8th of
January instant, he was told by some one of the directors (he thinks by John
Griswold) that a resolution had passed the board of directors, authorizing the
burning of the notes of the bank which had been returned from circulation. He,
Griswold, who was then president of the bank, also requested deponent, as cashier, to sign notes of the bank to the amount of thirty thousand dollars, and
afterwards informed deponent that they had concluded to make an issue of fifty
thousand. He (Griswold) afterwards said they wanted some bills of the bank,
for the purpose of making exchanges. Deponent signed bills of the bank, to
the amount of fifty thousand dollars, on the 8th and 9th instant. Of this
amount, ten thousand dollars were paid to John Griswold, the president of the
bank; and his receipt, dated January 4th, 1839, taken for the same; of which
receipt the following is a copy:
"Bank of Ypsilanti, January 4, 1839.
"Received of R. Lockwood, cashier, ten thousand dollars of the
notes af said hank, for exchange, and which I promise to return, or account
for.

•

"J. GRISWOLD."

The amount of 0.0,000 was delivered
although the entry was not made on the book until
signed was completed on the 8th and 9th instant.
on the books of the bank, but was considered as a
is endorsed the sum of $3,100. A further part of
on discounted paper, as follows:

to said Griswold January 4th,
the full amount ordered to be
This amount was not entered
cash item. On this receipt
said new issue was paid out

James M. Graham's note, dated December 1, 1838, at three months, :"10,000;
endorsed A. A. Reed and F. Blake.
James M. Graham's note, dated December 1, 1838, at four months, $10,000;
same endorsement.
James M. Graham's note, dated December 1, 1838, at five months, 1:10,000
same endorsement.
George B. Harleston's draft accepted by A. G. Ogden, dated December 10,
1838, at four months, 0.,300.
The paper abovementioned was presented to deponent by Lewis Godard, who care to the bank on the 10th of January, with John Griswold and Philo
S. Rawson. Mr. Griswold and Mr. Rawson gave directions to deponent to discount
the above paper 1 and said that the money was to be made use of for the purpose
of raising funds to aid the bank until the new stockholders came on with funds.
The money on the discounted paper, after deducting the discount, was delivered
to Mr. Rawson. Deponent does not know that Mr. Godard was any interest in the

•

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Federal Reserve Bank of St. Louis

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•
bank. There has been redeemed, within the last two weeks, about $30,000
of the bills of the bank, and the bank stopped payment on Friday last. An
injunction was served on the bank on the 20th instant. "o assets of the
bank have been suffered to go out of the bank since that time, to deponent's knowledge. The circulation, as exhibited by the books, is $82,412.
There are also in the hands of Strahan & Scott, of Chicago, $20,000 in bills
of the bank, which deponent understands is still the property of the bank.
There is no minute on the books, and deponent Las seen no receipt. There
Is also in the bank a receipt, of which the following is a copy, viz:
"Received from the Bank of Ypsilanti forty-five thousand dollars,
to be retunred on demand, or accounted for.
nP. S. Rawson.
"Ypsilanti, December 29, 1838.
There is an endorsement on this receipt, of $25,000, under date
of January 7, 1839. The receipt was left, by the former cashier, in the
bank. There is no entry of the transaction on the books. There is also
deposited in the City Bank of Buffalo $3,497, which deponent understands
is subject to the order of the bank.
Deponent is not acquainted with any of the new stockholders of
the bank.
Deponent says that a paper annexed, marked B, exhibits a true
statement of the affairs and condition of said bank on the day of making
the affidavits, as exhibited by the books. The amount entered in said
statement, as due from the Bank of Owego and the Steuben County Bank, are
balances which appear to be due from those institutions. P. 8. Rawson
drew drafts on those banks for $20,000, which were charged to those banks
respectively, and credited in the books, to said Rawson, as agent. Deponent has drawn, as chsheir, on said banks, for the redemption of the paper
of the Bank of Ypsilanti, and for other purposes. The amount stated to be
due from them is the balance between the original amount and said drafts.
Deponent knows nothing of the validity of said drafts, excepting that Mr.
Rawson declared that they would be honored.
Deponent further say., that Mr. Romeyn has not, to the knowledge of deponent, had any interest in, or control of, said bank, since
his connexion with the situation.
ROBERT LOCKWOOD
Subscribed and sworn to before me, this 23rd day of January, 1839.

•

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Federal Reserve Bank of St. Louis

A. FELCH, Bank Commissioner.

No. 6.
State of Michigan, Wayne County, os.
George B. Parleston, being duly affirmed, deposes and says: That
some time the last of December, or the first of January instant, Mason Converse, of the city of Monroe, called on affirmant, and inquired if he had
not some paper which affirmant could lend to him for a short time. Affirrant, supposing that said Converse wished said paper for a short time only,
and to relieve himself (Converse) in some way, told him that he had three
notes signed by James M. Graham; and that if he (said Converse) would not
place them beyond his own control, he would let him have them for a short
time. Said Converse promised this should not be done, but did not explain
to affirmant for what purpose he wished said notes, saying that he would explain what he wanted them for at some other time.
Affirmant then let said Converse have the three notes mentioned
above, merely as a loan; without the least compensation, and without the
least idea that the notes were to be placed in the Bank of Ypsilanti, as
affirmant is informed has been done.

S

Affirmant further says, that some days after the above transaction, affirmant was informed by said Converse that he was coming to Detroit,
and affirmant handed him a draft for thirteen thousand dollars, accepted by
A. G. Ogden, cashier of the Phoenix Bank in the city of New York, for the
purpose of getting the said draft cashed in the city of Detroit. Affirmant
says that the draft above mentioned was not delivered to said Converse for
any other purpose than to obtain the money on the same, for his (affirmant's)
own benefit; and he further says, that he did not obtain any money on the
same draft until the morning of the 27th instant, when said Converse paid
affirmant the sum of eight hundred dollars, in the notes of the Bank of Ypsilanti, signed by J. Griswold as president, and R. Lockwood, cashier; and
that he has the whole of said amount now in his possession. Affirmant further says, that the said Converse at the same time gave deponent one order
on Millard Earl, of Perrysburg, Ohio, for the remaining five hundred dollars;
but affirmant has not yet received the same.
And affirmant further says, that the said Converse came to Monne
on or about the 14th instant, and before the Bank of Ypsilanti had stopped
payment, and told affirmant that he had the amount of said draft in the
notes of the Ypsilanti Bank; but declined giving the same to deponent for
the reasons, as he alleged, that he had promised that the notes should be
circulated out of this State.
Affirmant further says, that he never knew that the three notes
said Converse were to go into the hands of Lewis Goddard, or
to
so loaned
was
to
be
what
done with them; and that he has received nothing for them,
and says, that there was no endorsement on the notes when delivered to said
Converse; and that James M. Graham, the signer of said notes, died some time
last spring, and that he explained to said Converse the nature of the trans-


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-31-

action between Graham and himself, as a reason why he wished said notes
should not be placed beyond his own control.
GEORGE B. HARLESTON.
Subscribed and affirmed this 30th day of January, 1859, before me,
E. TAYLOR,
N. P. Wayne Co. M.

No. 7.
State of Michigan,
)
.
County of Washtenawo

•

John Frink, being duly sworn, on oath says: That he resides in
Chicago, in the State of Illinois, and left that city on Saturday last.
That about ten days since, John Griswold, of the city of retroit, arrived
in Chicago, and took an office for the purpose, as he said, of circulating
and redeeming the bills of the Oakland County Bank; but did not, to deponent's knowledge, put any of the bills of that bank into circulation. Deponent further says, that said Griswold carried with him, as he is informed
and believes a large amount of bills of the Bank of Ypsilanti; and that he
saw him exchange with E. A. Clark about 4:400 of the notes of said bank, receiving therefor, at par, depreciated bills of several of the safety fund
banks of Michigan. Deponent further says, that Messrs. Strahan &
Scott,
who have previously received the bills of the Bank of Ypsilanti, ceased
taking the same on Thursday of last week. Said Griswold still continue
d
to keep his office as aforesaid in Chicago, when deponent left; but does
not know what amount of the bills of the Bank of Ypsilanti has been
put
into circulation by him.
JOHN FRINK.
Subscribed and sworn

o before me, this 1st day of February, 1839.
A. FELCH,
Bank Commissioner.

No. 8.
State of Michigan,)
Wayne County, ) ss.
•

John Griswold, being duly sworn, says: That he was requested
by P. S. Rawson, and, as he believes, by T. Romeyn, Esq., about the
28th


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•

or 29th of December last, to gq to Ypsilanti and take a transfer of stock
in the Bank of Ypsilanti, and become a director of the same.
The reasons which were given for this request were, that the
bank was about to change hands, and that there was some business to be
done, which required that some new directors should be chosen to officiate
for a short time. Upon this request, deponent went to Ypsilanti, stating
at the same time that he was about going went, and should not be able to
stay a long time. On arrival there, some stock was transferred to deponent, by Theodore Romeyn, Esq., in order to qualify him for a director, but
no consideration was paid for the same. After receiving the transfer of
stock, deponent was elected as a director, at the same time with Messrs.
Stewart, Shattuck, and Fawson, and was then elected president of the bank;
it being then understood that such election was but a temporary one, and
that deponent would continue in office but a short time.

•

Deponent was present at the first sitting of the board; at that
time Mr. P. S. Rawson presented to the board several notes for ten thousand
dollars each, for discount; upon being asked if the paper was good which was
presented, Mr. Rawson stated that he knew the makers and endorsers, and that
it was good paper. From this state of facts, the board directed the notes
to be discounted, and it was accordingly done. Deponent knew nothing of the
maker or endorser of the notes, except what was stated by Rawson. Deponent
understood that pater then in bank was delivered to Mr. Romeyn in payment
for his stock, and the notes so discounted were substituted in its plate.
Deponent further says, that on the 4th day of January he was
coming into Detroit, and, before he left the bank, Mr. Rawson asked if he
would bring some money to Mr. Godard for the purpose of being exchanged.
Deponent replied in the affirmative; upon which Mr. Rawson, as he believes,
handed to him a package, which he (deponent) supposed contained one thousand dollars only, and which he brought into Detroit, and delivered, as requested, and took Mr. Godard's receipt - a copy of which is hereto annexed,
marked A. By reference to the receipt (written with a pencil, however) it
appeared that it was given for the sum of ten thousand dollars, and which
is the same money for which deponent's receipt is now in bank. The whole
package so brought in was in the old notes of the bank. And deponent further says that he never took one dollar of the new notes out of the bank.
Deponent further says, that the board directed the old notes of
hand to be destroyed, and appointed Mr. Rawson to superintend
bank
on
the
such destruction; but he has no knowledge that any were actually burnt, except what was derived from Mr. Rawson, who informed him he had burnt some
twenty-five thousand dollars.

•

After the board had decided that the old notes should be bunt
resolved
that some new notes should be executed, and there was accordit was
signed
new notes to the amount of forty or fifty thousand dollars ingly
president,
and R. Lockwood cashier. The new notes, so signed,
deponent as
were done expressly upon condition that they should be used out of the Stat.',
in Ohio or some distant place, where they would not soon return. On the 8th


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Federal Reserve Bank of St. Louis

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•
or 9th day of January, deponent was present when Lewis Godard presented
some notes for about thirty thousand dollars for discount. Mr. Rawson
stated that the notes were good, and deponent consented that they should
be discounted; which was accordingly done, and the money, being all new
notes, delivered to Mr. Rawson, or Mr. Godard, with the express understanding that it was to be used for exchange out of the State.
Deponent further says, that he started west for Chicago, about
four weeks since, and at that time he had not to exceed the sum of five
hundred dollars in Ypsilanti bills, none of which were the new bills. Deponent, however, had a draft on Strahan & Scott for ten thousand dollars,
which deponent presented to them, and on which he obtained the sum of ten
thousand dollars.
Deponent further says, that he has exchanged about four or five
hundred dollars of Ypsilanti notes for the notes of the Banks of Clinton,
Brest, Saline, and Macomb County, but in no instance has he made any such
exchange, and taken such notes at par; and that he has not exchanged or
put away notes of the bank to a larger amount than is stated above.

•

Deponent further says, that he never considered himself as the
permanent officer of the bank; and that it was merely as a favor to those
who were interested that he accepted the office for a time.
Deponent further says, that Strahan & Scott continued to redeem the notes of the Ypsilanti Bank until about a week since; and that
he had induced them to continue the redemption, by depositing with them
one thousand dollars of the notes of the Oakland County Bank, as collateral security, on his own responsibility. The notes so deposited were
the property of the Oakland County Bank, and he is accountable for the
same. About the time deponent left for the west, he asked Mr. Romeyn
whether every thing in regard to the bank was straight and in good faith;
to which he replied that it was, and that he considered it as solvent as
any bank in the State. Deponent further says, that he knew nothing about
the affairs of the bank, but relied entirely on the statement of Mr. Romeyn and others.
That the above conversation with Mr. Romeyn occurred about the
time of the transfer; and that, since then, he knows nothing of any connexion of Mr. Romeyn with the bank.
J. GRISWOLD.
Subscribed and sworn to before me, this 2d day of February, A. D. 1839.


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Federal Reserve Bank of St. Louis

A. Felch, Bank Commissioner.

A.
Received of John Griswold ten thousand dollars of the notes of
the Bank of Ypsilanti, for exchange, and to account for to the Bank of Ypsilanti.
L. GODARD.
January 4, 1939.

No. 9
State of Michigan, Ilvayne county, ss.

•

Theodore Romeyn, being sworn, says: That he had a converstion
with Mr. Godard this morning, and that he stated that he (Mr. Godard) received the sum of ten thousand dollars in the bills of the Bank of Ypsilanti, as is shown by the receipt of Mr. Godard, in the hands of Mr. Griswold; and that he returned two thousand one hundred dollars in Ohio funds,
three thousand in drafts of the bank, and five thousand dollars in the
notes of the bank; all of which were returned before the bank was enjoined.
THEODORE ROMEYN.
Subscribed and sworn this 2d day of February, 1839, before me.


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Federal Reserve Bank of St. Louis

A. HUH, Bank Commissioner.

o

3, 2xecutive Documents,'26th Congress, let Session, Ho. of Reps.,
Treas, Dept., Doc, me. 172, pp1,1105-1106A7
Z2.

Abstract of the returns of thirty-three banks and banking associations, made
to the Legislature, pursuant to a joint resolution of February 1, 1838
:Capital
;paid in

(1) Bank of Michigan
(2) Farmers & Veohanics Bk of Idchigan
(3) Miehigan State Bank
(4) Bank of River Raisin
(5) Bank of V,ashtenaw
(6) rank of Tecumseh
(7) Erie & Kalamazoo Railroad Lank
(8) Bank of Constantine
(9) Bank of Ypsilanti
(10) Rank of St.. Clair
(11) Calhoun Cotulty Bank
(12) Bank of Clinton
(13) St. Joseph County Bank
"(14) Bank of Alleran
(15) Grand River tank
(16) Rank of Brest
(17) Bank of Gibraltar
(18) Bank of Kensington
(19) Farmers & Mechanics Bk of Pontiac:
(20) Farmers' Rank of Genesee County
(21) Millers' tank of 7ashtenaw
(22) Clinton Canal Bank
(23) Buren River Bank
(2)4) Farmers' Bank of Sharon
(25) Commereial Bank of Michigan
(26) Bank of Oakland
(27) Bank of Marshall
(28) Genesee County Hank
(29) Hank of Shiawassee
(30) farmers' Bank of Oakland
(31) Detroit City Bank
(32) rank of Niles
'33) Goodrich Dank
1(
.4 Due United States, $489,039


https://fraser.stlouisfed.org
Li
Federal Reserve Bank of St. Louis

500,000.
400,000
200,000
150,000
100,000
25,300
66,000
26,415
100,000
40,000
45,00o
40.000
30,000
30,4000
50.000
50,000
30,000
15,000
15,000
30,000
15,000
15,000
30,000
15,000
15.000
15,000
40.000
15,000
15,000
16,000
60,000
30,000
30,000

Liabilities
Deposites
tion

4274.373.20
191,164.16
244,028.30
39,093.11
9,656.92
14.514.00
9,930.14
8,025.97
5,471.58
14.672.00
9,376.62
306.77
850.00
2,028.140
18,127.90
1,723.00
6,683.00
4.144.59
1,155.66
25040
7.143.38
13.440.63
699.15
2,000.00
865.00
64,964.25
22,681.48

Due other :
banks, 'CO..
not on
deposits% :

Specie

Loans

Resources
Eotes of
other
banks

( 41,156,258.80 498,488.65 4 53,471.00
342,573 $68,458.861
122,432.60
646.789.76 64084.07
148.913
178,920.27
251,111.98 47,891.39
114.474. 40,622.78
253,466.97 23,868.32
22,319.00
16,412.33
90,537
77,103
6,13940
175,311.19
7,300.40
8,694.07
70,010
5,460.00
81,430.66 13,565.55
151.50
63,170
5,429.00
126,881.96 10,876.65
871.93
9,48040
32,014.23 15.410.44
82.54
30,493
108,760
136,216.87 18,167.21
22,47340
1,281.77
64.211
76.00
84,520.13 14,53249
923.90
17,50040
60,154
3,180.33
46,876.47 16,230.69
67,000
15,621.00
70,660.62 15,100.33
9,995.52
19,812
11,775.00 30,789.00.
6,148.73
800.00
50.00 Certifet's
2,565.77
3'),109
63.284.98 18,152.24
65,448
278.00
19,639.00
71,783.62 17,699.37
5.102.00
43,851.00 10,000.00
11,543
10,910
500.00
6,760.00 15,000.00
12,080
12,050.00 16,858.58
1,335.00
500.00
4,371
4,371.00 32,000.00
1,200.00
1,500.00
282
103.00
275.00 22,312.00
1,428.25
3,164.85
75.00
33,567.05
37,335
3.146
2,215.00
24.833.09 28,430.71
7.100
15,000.00
250.00
13,371.74
23,307
8.084.34
19,575.25 17,411.18
49.581
61,021.70 22,079.38
14.491,00
56.16
6,940
4,696.24 12,337.82
1,9514,50
102
3,920.00
82.00 15,570.70
2,078.38
3,051
1,161.00
1,970.95 15,750.00
18,600
30,168.50
1,060.00
52,724.04 60,107.30
46,993.78 35,348.38
1,100.00
31,834
22,681,45
1,500
17,663.08
10,506.00
2,844.86

_22 i,aolusive of bank furniture, &c.

41111.

Deposits',
&c., in
other
banks
$280,422.00
46,190.51
110,599.10
2,045.75
3,295.99
2,370.95
hone
7,103.68
14,817.07
6,201.72
27,166.30
4,481,38
1,665.19
6,500.00
5,000.00
835.00
km.
1.449.79
None
537.60
28,722.11
None
None
None
None
None
None

_11 Incumbered to the amount of $17.333.34.

Peal eutate
and
pereonal
property
i37.771.48 ,
11,600.18E!
20.973.00j/
7,336.62
7,163.35
750.00
2,000.00
3,292.58
7.035.06
1,841.02
Offioe fur.
150.00
50.00
224.44
1.975.26
300.00
1,200.00
1,371.39
one
1,250,00
359.62
946.00
926.15
None
538.30
202.13
153.43
1,073.32
None

A

ld

7. S. Exeoutive Docukonts, 26th Congress, let Session, o.
of Reps.,
Treas. Dept., Doc. 1-.0. 172, pp
1106
Z 2.
Abstract of the returns of thirty-three banidi and banking associations, made
to the Legislature, pursuant to a joint reSolution of February 1, 1838
:Capital
:paid in

(1) Rank of )1chif7an
(2) Farwers & echanloe Bk of 1, 1ehigen
(3) Michigan State Bank
(4) Bank of River Raisin
(5) Rank of Vashtenan
(6) I3ank of Teeumseh
(7) 2710 & Kalamazoo hailroad hank
(8) Bank of Constantine
(9) Bank of Ypsilanti
(10 Hark of St. Clair
(11) cslhoun cs.tati Bank
(12) Bank of Clinton
(13) St. Josepll. County Bank
(14) flank of AlleFan
(15) Grand River 4tilak
(16) Bank of Brest
(17) Bank of Gibraltar
(18) Bank of Itensington
Farmors& Mechanics Bk of Pontiac
(20 Farmers' rank of ,
Jeneeee County
(21 Millers' Rank of lksishtenew
(22) Clinton Canal Bank
(23) Huron River Bank
(24) Farmers' flank of Sharon
(25) cammoveial rank of Miobigan
Bank of Oakland
27) Bank of Marshall
28)
2()) Genesee County iftnk
(29) Donk of Shim:asses
(30) Farmers' rank of Oakland
(31) Detroit citr Am*
22) lisnk of Biles
n3) Goodrich Bank
Pue United States, 4489,039

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

.r.500,000
400,000
200,000
150,000
100,000
25,300
66,000
26.415
100,000
40.000
45.000
40,000
30,000
30,000
50.000
50.000
30.000
15,000
15,000
30,000
15,000
15,000
30,000
15,000
15,000
15,000
40,000
15,000
15,000
15.000
60.000
30.000
30,000

Liabilities
bepoiltes
Circulation

4274.373.20
191,164.18
244.028.30
39,093.11
8,464.95
9.656.92
14.514.00
9.930.14
8,025.97
5.471,58
14,672.00
9.376.62
306.77

4342,573
148,913
114,474.
9
.1.
0
1..r
3
70,010
63,170
30,493
100,760
6,211
60,154
67,000
19,812

TAle other :
banks, 50;06
not on
dor)ositot
,68.,1458.812/
40,622.78
1:412:
(
)
3
;
151.50
871.93
82.04
1.261.77
76.00
3,180.33
9,995.52

850.00
2,028.40
18,127.90
1,723.00
6,683.00
44144.59
1,155.66
250.0G
7,143.38
13.440.63
699.15
2,000.00
865.00
64.964.25
22,681.48

35.109
65,448
11.543
10,910
12,080
4.371
282
37,335
3.146
7,100
23,307
49,581
6,940
102
3.051
18,600
31,834
1,500

27840
500.00
1,200.00
75.00

56.16
2,078.38
1,050.00
22,681.45

Focolusive or hank furnituros &c.

Apecsie

Loans

Pesouroes
fotes of
other
banks

$1,156.258.80 4098488.65
646,789.76 64.384.07
251,111.98 47.091.39
23,868.32
253.466.97
175.311.19
7,300.40
81.430
13.565.
55
.
66
126.881.96
10.876.65
32.014.23
15.410.44
136.216.87
13,167.21
84,520.13
14,532.09
16,230.69
146.876.147
70,660.62
15,100.33
11,77540
30,789.00
50.00
Certifet's
63;284.98
18,152.24
72,783.62
17,699.37
43,851.00
10„000.00
6,760.00
15,000.00
12,050.00
16,358.58
32,000.00
14,371.00
22,312.
00
275.00
3,164.85
33,567.05
24,833.09
28,430.71
19.575.25
61.022.70
4,696.24
82.00
1,970.95
52,7214.013
46.993.78
17,663.08

15,000.00
13,371.74
17,411.18
22,079.38
12.337.82
15,570.70
15.750.00
60,107.30
35,348.38
2.844.86

Deposites,
&c., in
other
banks

t 53.471.00
122,432.60
178,920.27
22,319.00
6,139.00
5.460.00
5.429.00
9.48040
22.473.00
923.90
17,500.00
15.622.00
6,148.73
800.00
2,565.77
4639.00
3,102.00
500.00
1.335.00
450040
103.00
1,428,25
2,215.00
250.00

8,084.34
4,49140
1,954.50
3;920.00
1,151.00
30,168.50
1,100.00
10.506.00

inoumborod to the mount of

i280.422.00
46,190.51
110,599.10
2,045.75
3,295.99
2,370.95
hone
7,103.68
14,817.07
6.201.72
27.166.30
4.481.38

Real estate
and
personal
•

••

$37,771.48_,
11,600.18V,
20,973.0q&
7.336.62
7,163.35
750.00
2,000.00
3,292.58
7,035.06
1.841.02
Offioe fur.
150.00
50.00

1,665,19
6.500.00

224.44
1,975.26
300.00

5,000.00

1,200.00
1,371.39
*,one
1,250.00
399•62
946.00

•

835.00

one
1,449.79
ono
537.60
28,722.11
Mons
Vane

MOns
Name
Nam
!Ow

$17,333.34.

926.15
.one
538.30
202.13

153.43
1,073.32
romp

-0.1z

Joi

r. Executive Documents, 26th Congress, 1st Session, ';.(). of Reps.,

Treas. Dept., Doe. No. 172, pi:11105-1106,7

Z2.
Abstract of the returns of thirty-three banks and banking associations, made
to the Legislature, pursuant to a joint resolution of February 1, 1838
rams

(1) Bank of Michigan
(2) Farmers & Nochanics Bk of Kichigan
(3) Miohigan State Bank
(4) Bank of River Raisin
(5) Rank of 1,ashtenaw
(6) :ank of Tecumseh
(7) Erie & Kalamazoo Lailroad ank
(8) Bank of Constantine
(9) Bank of Ypsilanti
(10) Bank of St. Clair
(11) Calhoun County flank
(12) Bank of Clinton
(13) St. Joseph County Bank
(14) Bank of Anew=
(15) Grand River Bank
(16) Bank of Brest
(17) Rank of Gibraltar
(18) Bank of Kensington
(19) Famors & Meohanios 3k of Pontiac
(20 Farmers* Bank of GOMOSOO COUUtf
(21) tailors' Bank of Washtenaw
(22) Clinton Canal Dank
(23) Huron River Bark
(24) Farmers' Bank of Sharon
(25) Commeroial Bank of Viohignn
(26) Bark of Oakland
(27) Bank of Marshall
(28) Genesee County Bank
(29) Bank of Shlawassoe
(30) Farmers' bank of Oakland
(31) Detroit City Bank
(32) tank of Bass
'it3) Goodrich Bank
.4
(

Due United States, 4489,039


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

:77171ITil
:paid in

,00,000
400,000
200,000
150,000
100,000
25,300
60,000
26.415
100,000
40,000
45,000
40.000
30,000
30,000
50.000
50,000
30,000
15,000
15,000
30,000
15,000
15,000
30,000
15,0100
15,000
15,000
40,000
15,000
15,000
15,000
60,000
30,000
30,000

Liabilities
Deposites
Circu
tion

:;274.373.20
191,164.18
244,028.30
39,093.11
8,464.95
9,656.92
14,514.00
9.930.14
8,025.97
5,471.58
14,672.00
9,376.62
306.77
850.00
2,028.40
18,127.90
1.723.00
6,683.00
4,144.59
1,155.66
250.00
7,143.38
13.440.63
699.15
2,000.00
865.00
64.964425
22,681.48

Due other
banks, &0*,
:
not or
deposit** :

.342.573 4'48,458.8a/
148,913
134,4714. 40.622.7e
16,412.33
90,537
77,103
0,694.07
70,010
151.50
671.93
63,170
62.54
30,493
60
1,281.77
7
108,
64,211
76.00
60,15)4
3,180.33
67,000
9,995.52
19,812
35,109
65,448
11,543
10,910
12,080
4.371
282
37.335
3,146
7,100
23,307
49,581
6,940
102
3,051
18,600
31,834
1,500

278.00
500.00
1,200.00
75.00

56.16
2,078.38
1,060.00
22,681.45

Kaolusive of bank furniture, &c.

Loans

Specie

Resources
totes of
other
banks

41,156,25800 $98,488.65 ; 53,471.00
646,759.76 64,384.07
122,432.60
251,111.98 47,091.39
178.920.27
22,319.00
253.466.97 23,868.32
7,300.140
175,311.19
6,139.00
5,1460.00
81,430.66 13,565.55
126,881.96 10,876.65
5,429.00
32,014.23 15,410.44
9,1480.00
136,216.87 18,167.21
22,1473.00
84,520.13 14,532.09
923.90
17,500.00
46,876.47 16,230.69
70,660.62 15,100.33
15,621.00
11,775.00 30,789.00
6,148.73
50.00 Certifot's
800.00
63,284.98 18,152.24
2,565.77
19,639.00
71,783.62 17,699.37
5,102.00
143,851.00 10,000.00
500.00
6,760.00 15,000.00
16058.58
1,335.00
12,050.00
1,500.00
4437140 32,000.00
103.00
22,312.00
275.00
3,164.85
1,428.25
33,567.05
2,215.00
24,033.09 28,430.71
15,000.00
250.00
13,371.74
19,575.25 17,411.16
8,084.34
14,491.00
61,021.70 22,079.38
1,954.50
4,696.24 12,337.82
3,920.00
82.00 15,570.70
1041.00
1,970.95 15,750.00
52,724.04 60,107.30
30,168.50
1,100.00
46,993.78 35.348.30
17,663.08
10,506.00
2,844.86

:)eposites,
in
other
banks
-i280,422.00
46,190.51
110,999.10
2,045.75
3.295.99
2,370.95
None
7,103.68
14,317.07
6,201.72
27,166.30
4.481.38
1,665,19
6,500.00
5,000.00
OM,

835.00
T:one
1,449.79
None
537.60
28,722.11
Eons
Nono
Bone
none
None
None

Incumbsred to the amount of $17,333.34.

rgWY esta7
-and
personal
proporty
37.771.48_,
11,600.166;
20,973.00
7,336.62
7,163.35
750.00
2,000.00
3,292.58
7.035.06
1041.o2
Office fur.
150.00
50.00
2214.14
1.975.26
300.00
1,200.00
1,371.39
None
1,250.00
359.62
946.00
926.15
onts
538.30
202.13
153.43
1,073.32
Eons

A

la

(V3q

'1"b

S. Executive Documents;'26th Congress, 1st Session, Ho. of Reps.,
Treas. Dept., Doc. No. 172, pp. 1105-1106 Z2.
U.

•

Abstract of the returns of thirty-three banks and banking associations, made
to the Legislature, pursuant to a joint resolution of February 1, 1.838
Name

:Capital
:paid in

Liabilities
Deposites
Circulation

*i•

,-(1) Bank of Michigan
'(2) Farmers & Mechanics Bk of Michigan
(3) Miohigan State Bank
()4.) Bank of River Raisin
(5) Bank of 1Nashtenaw
(6) Bank of Tecumseh
(7) Erie & Kalamazoo Railroad Bank
1(6) Bank of Constantine
/(9) Bank of Ypsilanti
(10) Bank of St. Clair
(11) Calhoun County Bank
(12) Bank of Clinton
(13) St. Joseph County Bank
L_,;(1)4) Bank of Allegan
(15) Grand River Bank
(16 rank of Brest
(1 sank of Gibraltar
Bank of Kensington

,(19) Farmers & Mechanics Bk of Pontiac
(2o) Farmers' Bank of Genesee County
-(21) Millers' Bank of Washtenaw
(22) Clinton Canal Bank
(23) Huron River Bank
(2)4) Farmers' Bank of Sharon
(25) Commercial Bank of Michigan
'(26) Bank of Oakland
(27) Bank of Marshall
_ (28) Genesee County Bank
(29) Bank of Shiawassee
(30) Farmers' Bank of Oakland
'(31) Detroit City Bank
(32) Bank of Niles
-1(33) Goodrich Bank
17 Due United States, $489,039

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

$500,000
400,00o
200,000
150,000
100,000

25,300
66,000
26,413
100,000
40,000
45,000

4os000
30,000
50,000
50.000
50,000
3v=
15,000
15,000
30,000
15,000
15,000
30,000
15,000
15,000
15,000

40,000
15,000
15,000
15,000
60,000
30,000
30,000

3274,373.20
191,164.18
244,028.30
39,093.11
8,W4.95
9,656.92
14,514.00
9,930.14
8,025.97
5,471.58
14,672.00

9,376.62
306.77
850.00
2,028.40
18,127.00
1,723.00

6,653.00
4,144.59
1,155.66
25o.00
7,143.38
'3,440.63
699.15
2,000.00
865.00
64,964.25
224681.48
dB.

Due other
banks, &o.,
not on
:
deposites

Specie

Loans

Resources
Notes of
other
banks

$342,573 $68,458.362//- 41,156,255.50 398,438.65 $ 53,471.00
148,913
646,759.76 64,334.07
122,432.60
251,111.98 47,891.39
114,474. 140,622.78
178,920.27
90,537
22,319.00
23,568.32
16,412.33
253,466.97
8,694.07
77,103
7,300.40
175,311.19
6,139.00
70,010
151.50
5,460.00
81,430.66 13,565.55
63,170
126,551.96
5,1429.00
10,576.65
871.93
30,493
32,014.23
9,480.00
82.54
15,410.44
108,760
136,216.57 18,167.21
22,473.00
1,281.77
64,211
84,520.13 14,532.09
76.00
923.90
46,576.47 16,230.69
60,154
17,500.00
3,130.33
67,000
70,660.62 15,100.33
15,621.00
9,995.52
19,812
11,77500 30,759.00
6,148.73
50.00 Certifct's
800.00
35,109
63,234.93 18,152.24
2,565.77
278.00
71,753.62 17,699.37
65,448
19,639.00
11,543
5,102.00
143,351.00 10,000.00
10,910
6,760.00 15,000.00
500.00
12,080
500.00
1205000 16,858.58
1,335.00
1,200,00
4,371
4,371.00 32,000.00
1,500.00
282
275.00 22,312.00
103.00
37,335
33,567.05
75.00
1,428.25
3,164.35
3,146
2,215.00
24,333.09 28,430.71
7,100
15,000.00
250.00
NO

23,307
49,581
6,940

56.16

102
3,051

2,073.38

18,600
31.534
1,500

1,050.00
22,681,45

2 / Exclusive of bank furniture, &c.

19,575.25
61,021.70
4,696.24
82.00
1,970.95
52,724.04

46,993.78
17,663.08

13,371.74
17,411.13
22,079.38
12,337.82
15,570.70
00
.
15,750
60,107.30
35,3)46.38
2,514.36

8,084.34
44491.00
1,954.50
3,920.00
1,151.00
30,168.50
1,100.00
10,506.00

Deposites,
&c., in
other
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$280,422.00
46,190.51
110,599.10

2,045.75
3,295.99
2,370.95
None
7,103.68
14,517.07
6,201.72
27,166.30
4.481.38

1,665.19

Real estate
and
personal
property
337,771.48 /

11,600.141,
20,973.00j/
7,336.62
7,163.35
750.00
2,000.00
3,292.55
7,035.06
1,541.02
Office fur.
150.00
50.00
22444

6,500.00

1,975.26
30000

5,000.00

1,200.00
1,371.39
None
1,250.00
359.62
946.00

835.00
None

1,449.79
None

537.60
28,722.11
None
None
None
None
None
None

Incumbered to the amount of $17,333.34.

926.15
None
538.30
202.13

153.43
1,073.32
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[ Doc. No. 42.]

84

Z-TABLE

Name, place, and date.

Loans and
discounts.

Real
Due from
estate. 1 banks.

_
Farmers and Mechanics, Detroit, Jan. 1, 1835,
,a) Bank of Michigan, Detroit, Dec.31, 1834
tank of River Raisin, Monroe, Dec.31, 1834

-

-

$229,531
.870,481
80,203

$12,958
9,836
-

$96,154
137,520
8t2

1,180,215

22,794

234,496

(a)' The Bank of Michigan has a branch at Bronson.

TABLE II.—
Michigan State B Ink, Detroit, Oct. 26, 1835
Bank of Pontiac, Pontiac, Nov. 2, 1835
(a) Bank of Monroe, Monroe, Nov. 5, 1835 (6) Bank of Waslitenaw, Cape Ann, Oct. 31, 1835

76,976
25,307
19,519
34,208

21,574

156,010

37,714

16:140

(a) "This Bank has been in operation but one month since its resuscitation."
(b) "This Bank issued its first bill on the 5th of September, 1835."

TABLE III.—
(a) Wisconsin, Green Bay
(a) Not yet commenced operation. Its authorized capital is $100,000, all of which has
TABLE IV.—
Total of table1, 3 Banks, 1 Branch, Dec. 31, 1834
Total of table 11, 4 Bank:, Nov. 1835
Aggregate

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22,794

156,010
1,336,225

234,496
37,714

22,794

272,210

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