The plan referred to is as follows:

NOTE IV.

It proposes to vest the canal lands in the holders of the canal bonds, to be sold by them soon after the completion of the canal, in order to reimburse themselves for the moneys to be advanced for its completion, and afterward the interest, and then the principal of the moneys already advanced. It proposes also, that the canal tolls, and all the canal property, be vested in them for the like purpose.

As some doubts existed in relation to the security offered, Governor Davis, of Massachusetts, was desired by the foreign bond-holders, to inquire into and report to them the nature and sufficiency of said security; and also, to ascertain whether the canal could be completed with the $1,600,000.

Governor Davis, aided by Captain Swift as engineer, with great industry has made the necessary inquiries, and drawn up an able report upon the matters thus referred to him. The report we have not seen. It is said, however, to be favorable, and will, in all probability, obviate the difficulties now existing in relation to a further loan.

Should the loan be effected, and the canal finished, there can be no doubt but the canal lands, the canal tolls, and other property connected therewith, will, in a few years, pay the contemplated loan, together with the moneys which have been already advanced, and the interest which has accrued, and will hereafter accrue thereon.

Inasmuch, however, as our agents are still abroad, and nothing definite has been heard from either, the author forbears to comment upon the subject.

It is not, strictly speaking, within his province; and although he is less sanguine than some of his contemporaries, he entertains no doubt as to the completion and final success of the canal.

CHAPTER XXIII.

Banks in Illinois-At Shawneetown-At Edwardsville-At Cairo-Relief laws-Old State Bank-Late State Bank-Its history-Progress and decline-Legislative acts relative thereto-Banks go into liquidation.

THE cause of heat and cold in different latitudes, and of rain, hail, and snow, in different seasons, says a distinguished writer, with more truth than poetry, are explained by professors of natural science, to our entire satisfaction. The change of climate, the approach of storms, and the origin and cause, the course and progress of the wind, are also explained, and the future predicted with some considerable certainty. In banking, however, it is otherwise. Like the weather, it is affected by causes which control the latter, and possesses, in an eminent degree, some uncertainties peculiarly its own. While the storm and the tempest rage, and pestilence and famine reign, the fondest hopes that man e'er cherished, are frequently blasted. His property is destroyed by the tempest, or swallowed up by the earthquake; he is exposed alike to the tornado and to the avalanche-the consuming fire-the wasting pestilence-the devouring famine; and an excess of heat or cold, fixes frequently his destiny. In banking, similar contingencies not unfrequently happen; and to these, man's caprice and human depravity, the infidelity of agents and the instability of popular opinion, (banks being the creatures of the latter,) are often to be added.

Of the truth of these several positions, historic recollections, especially in Illinois, are decisive.

Men in business, it is said, are like patients in the last stages of the consumption-hoping for a favorable change, but growing worse and worse every day until they expire. If we are to credit reports said to be authentic; if the defalcations of clerks, agents, cashiers, and presidents, with which the public ear has recently been filled, are real; banks, and their officers are worse than formerly, and, like the consumptive patient, in spite of legislation must shortly expire.

All the banks in Illinois have ceased to be. Their history is brieftheir story is instructive, and the lesson taught will long be remembered. Under the Territorial government, three banks were chartered; one at Shawneetown, one at Edwardsville, and one at Cairo. There was also a bank at Kaskaskia: of the latter it is needless now to speak-it issued no bills, and of course defrauded no man. We regret our inability to say

as much in favor of the others. When these banks were chartered, the whole population of the State was less than thirty thousand-a bank for every ten thousand souls. At that rate, Illinois ought now to have fifty banks and upward; and were the losses occasioned by each to be in the same ratio as before, a part of such losses only would finish the canal.

The bank of Cairo, like the town in which it was located, existed for several years merely in imagination. It was revived in 1836, by speculating men for speculating purposes; flourished for a short time, with various success; and at last, like the lamp in its socket, went out of itself, and peaceably expired. Its charter was repealed on the 4th of March, 1843.

The banks at Shawneetown and Edwardsville, became deposit banks, and received the public moneys arising from the sale of public lands in Illinois, and converted it to their use. The former accounted in whole, or in part; the latter never. A suit was afterward brought by the United States against the latter, and a judgment for fifty-four thousand dollars obtained. No part of it, however, has been collected.

The bank at Shawneetown was incorporated on the 28th of December, 1816, by the name and style of "the president, directors, and company of the bank of Illinois." Its capital at first was three hundred thousand dollars, one third of which was reserved to be subscribed by the State. It was chartered for twenty years, or until the first of January, 1837. It commenced business immediately, and, by the aid of Government deposits, acquired an extensive credit; issued and redeemed its bills for several years, and paid specie as late as August, 1821-a considerable time after the Kentucky banks had failed. It finally yielded to the force of circumstances, and settled or compounded with Government for its deposits, and remained dormant till the 12th of February, 1835; when an act was passed by the Legislature, extending its charter for twenty years after the first of January, 1837. The bank was required to pay into the State treasury, for State purposes, one half of one per cent. annually, on its capital stock, and in consideration therefor was exempted from further

taxation.

On the 4th of March, 1837, another act was passed for increasing its capital stock one million four hundred thousand dollars; all of which was to be subscribed by the State, (the bank consenting thereto;) and in order to raise the necessary funds, State bonds were issued, and the faith of the State was pledged for their payment, with interest, in 1860.

The Constitution adopted on the 26th of August, 1818, declared that there shall be no other banks or moneyed institutions in Illinois, but those already provided by law, except a State bank and its branches. It became desirable, therefore, for the Legislature (as was then supposed,) to receive the Shawneetown bank into close communion, (when its charter was renewed,) to aid the gigantic system of internal improvements about to be commenced.

On the 22nd of March, 1819, a bank was incorporated by the name

and style of the "president, directors, and company of the State bank of Illinois," to continue for twenty-five years, with a capital not exceeding four millions of dollars-a real mammoth, considering our wealth and population-one half of which was to be subscribed by individuals, and the other half by the State, when "the Legislature thereof should deem it proper."

No attempts having been made to set this mammoth institution a-going, its charter was repealed at the next session of the Legislature in 1821, and another bank chartered in lieu of it, with a capital of five hundred thousand dollars, to be owned by the State, and to be managed and superintended by the Legislature.

The act was entitled "an act establishing the State bank of Illinois." It was a singular specimen of legislation, and deserves, therefore, to be fully considered. The Legislature, like others elsewhere preceding it, was actuated apparently by the impression, that paper money could be made to supply every financial want.* During the American Revolu tion, when continental money for the first time was issued, to doubt its value or its final redemption, was exceedingly hazardous. It implied a want of patriotism; and many, smarting under the appellation of tories and speculators, had their stores forcibly broken open, and their goods sold at limited prices, by committees of their neighborhood.

When the army of the Revolution was destitute of food and raiment, and almost perishing from want, a patriotic old lady, it is said, exclaimed : "What a shame it is, that Congress should let the poor soldiers suffer, when they have power to make just as much money as they choose!" The paper money of Russia, issued by the emperor, and predicated on taxes; the assignats of France during the reign of terror, and the throes and convulsions of anarchy; the paper money of some of the American States, when colonies of England; the Mississippi scheme of John Law, and the South Sea bubble in England, all of which were "parts of one stupendous whole," ought to have taught our Legislature wisdom. The times, however, were perilous. Corn, in 1824, was sold at Cincinnati for ten cents a bushel; wheat, from twenty-five down to twelve-and-a-half cents. Flour, at Pittsburgh, was, at that time, a dollar per barrel. Other produce in the same ratio. A bushel and a half of wheat would buy a pound of coffee; a barrel of flour would buy a pound of tea; and twelve and a half barrels of flour, a yard of superfine cloth. The Legis lature of Ohio had passed a law to prevent property from being sold on execution, unless it would bring a certain amount to be fixed by apprai zers. Kentucky also adopted "the relief system;" and stay-laws and replevin acts followed in quick succession. Commonwealth banks, or State loan-offices, issued their thousands, and their millions; and the creditor had no alternative, but to receive it in payment of his debts, or to await the arrival of better times.

* See John Law's opinion on this subject, page 162.

Governor Adair, in his annual message to the Legislature of Kentucky, said, that "the paramount law of necessity" had compelled the Legislature to adopt measures, against which much could be said; but added, that "a half million of agitated and endangered people had been thus tranquillized, without the infliction of legal justice or the example of violated morality."

In the history of nations, as well as of individuals, there are occasional moments of frenzy, in which every movement baffles all human calculations. The politician, the moralist, and the philosopher, are equally surprised. The court of appeals in Kentucky immediately declared the relief laws unconstitutional. The people at once divided into two great political parties upon the subject, and the contest was carried on with extraordinary violence. A new court of appeals was established, and the relief laws declared constitutional; and in a few years thereafter, when a sudden and unexpected change came over the scene, preparations were made to defend the records of the new court with powder and ball. In 1826, the friends of the old court obtained a majority in the Legisla ture, and the whole system was abandoned.

The relief system, it was then conceded, did not effect the object intended: did not produce an equitable adjustment of the affairs of debtor and creditor. In every age of the world, that relation has been one of deep solicitude. In a savage state, it is of but little consequence; because, where there is but little wealth, there is no theatre for its display. As soon, however, as man begins to accumulate, and form associations other than what mutual dependence and common danger require; wealth becomes important, and the desire for its accumulation, a prominent feature in our character. Hence, the relation between debtor and creditor; and hence, too, its importance.

It is, however, to be hoped, that so long as a sense of justice shall animate the councils of our nation-so long as our eagle shall maintain its ascendency in her sky, and the American flag wave in triumph on her shores, no temporary expedients will again be resorted to.

By the act last referred to, a bank was created, to continue for ten years, with a capital of five hundred thousand dollars; known and distinguished by the name and style of "the president and directors of the State bank of Illinois." Four branches were established: one in Madison county, at Edwardsville, one at Brownville, in Jackson county, one at Shawnee Town, in Gallatin county, and one at the seat of justice, in Edwards county; in addition to the above branches, there was the principal bank also. The president and directors were elected by the Senate and House of Representatives, on a joint ballot; six directors for the principal bank, and five for each of the branches. The cashiers were appointed by a majority of the directors. Its officers were authorized to procure plates, etc.; and two thousand dollars out of the public treasury were appropriated to defray the expenses. The plates, like those of the Mormon prophet, constituted all of its capital. Three hundred thousand