Summary of Legislative Debate on the State Bank, 11 February 1841
A very interesting debate sprung up in the House yesterday upon a bill to repeal the act making the State Bank the fiscal agent of the State.1 The discussion took a wide range and was viewed with a good deal of interest, as involving, indirectly, the question whether the Bank should be sustained in a further suspension of specie payments.2 There is a manifest disposition on the part of some of the Van Buren men to prop up the Bank, and it is perfectly apparent that the party are prepared to detach a fraction of themselves to go with the Whigs in sustaining the Bank—their usual policy—and then throw the odium of the suspension upon the Whigs.3 Mr. Lincoln said that he was tired of this business. If there was to be this continual warfare against the Institutions of the State, the sooner it was brought to an end the better.4 If the great body of the party would act upon conservative principles, he was willing to go with them, but this scheme of detaching a fragment from their party to help the Whigs pass a measure and then turn round and kick and cuff us for it, he had seen practised long enough. The Bill was finally referred to the committee on Banks and Corporations.5 The debate was exceedingly interesting and occupied nearly the whole of the day. The chief speakers were Messrs. McClernand and Lincoln, and the encounter between them was peculiarly sharp and personal.6
1On March 4, 1837, the General Assembly had approved an act authorizing the auditor of public accounts to contract with the State Bank of Illinois to receive on deposit and disperse state revenue. In February 1839, the General Assembly enacted another law, as the Panic of 1837 enveloped the state, stipulating that if the state owed the State Bank of Illinois more than $10,000, the auditor of public accounts was to issue, upon the return of warrants by the bank, certificates in favor of the bank for payment of the balance due. These certificates were to bear six percent interest annually from the time of issuance to payment. On December 23, 1840, William J. Gatewood from the Senate Committee on Finance, to which the Senate had referred a resolution regarding the deposit of public money in the State Bank of Illinois, introduced a bill in the Senate that would have repealed the 1837 and 1839 acts and authorized the state treasurer and auditor of public accounts to neither deposit public money in the State Bank or draw warrants on public money in the Bank. The Senate passed the bill on January 5, 1841. On January 15, the House of Representatives referred the bill to the Committee on the Judiciary. The Committee on the Judiciary reported back the bill on January 23 with amendments, in which the House concurred. On February 11, the House again took up the bill. After a lengthy debate, The House refused to vote on the bill as amended by a vote of 42 yeas to 43 nays, with Lincoln voting yea.
Illinois Senate Journal. 1840. 12th G. A., 109-10, 119-20, 133, 137; Illinois House Journal. 1840. 12th G. A., 187, 194, 230, 267, 277, 371, 373-74.
2Section twenty-five of the bank’s incorporation act stipulated that if the bank refused or neglected to redeem, for ten days after demand, its notes or evidence of debt in specie, the bank would discontinue operations and its charter would be forfeited. An act supplementary to the incorporation act gave the bank an additional fifty days to suspend specie payments. Under provisions of the incorporation act and an act supplementary thereto, if the bank did not resume specie payments within sixty days after suspension, it would lose its charter. In May 1837, the bank suspended specie payments in response to the Panic of 1837. In July, a special session of the legislature commenced to deal with the banking crisis. On July 21, the General Assembly passed an act suspending until the end of the next general or special session of the legislature provisions of the law requiring the bank to forfeit its charter for refusing to redeem its notes in specie for sixty days. In December 1839, the state’s debt crisis forced the bank to again suspend specie payments. Governor Thomas Carlin called the legislature into special session to deal with the crisis. In his message to the General Assembly, Carlin attacked the bank and demanded an investigation of its affairs. The legislators complied by establishing a joint select committee. Despite Carlin’s hostility, the legislature passed an act on January 31, 1840, resuscitating the bank with, as Lincoln described in a letter to John T. Stuart, “some trifling modifications.” The act revived the bank’s charter and suspending stipulations on specie payments until the end of the next legislative session. On December 5, 1840, the Whigs, hoping to protect the bank against Democrat demands that it resume specie payments by the end of the special session or forfeit its charter, boycotted the General Assembly, thereby preventing the necessary two-thirds quorum for adjournment sine die. When the situation became acute, Abraham Lincoln, Joseph Gillespie, and Asahel Gridley, occupying their seats as a token representation of Whigs for procedural votes, exited the House chamber through windows to prevent a quorum and frustrate plans of the Democrats.
Illinois House Journal. 1839. 11th G. A., special sess., 30, 51, 69, 219-20, 221, 222; Illinois Senate Journal. 1839. 11th G. A., special sess., 25, 26, 41, 156, 159, 163, 166; Michael Burlingame, Abraham Lincoln: A Life (Baltimore, MD: The Johns Hopkins University Press, 2008), 1:138, 147, 162; John H. Krenkel, Illinois Internal Improvements 1818-1848 (Cedar Rapids, IA: Torch, 1958), 166; Charles Hunter Garnett, “State Banks of Issue in Illinois” (Essay, University of Illinois, 1898), 30-35.
3In Illinois, the Democrats and Whigs battled over paternity of the State Bank, each side blaming the other for fathering the faltering bank.
Proceedings of Whig Meeting at Springfield regarding Van Buren State Convention, 11-12 December 1839; Illinois State Register (Springfield), 14 December 1839, 3:2.
4Many Democrats and some Whigs in the General Assembly were suspicious of the State Bank in particular and banks in general due to the perceived role of financial institutions in the Panic of 1837 and subsequent state debt crisis. As the Senate was deliberating this bill, the House of Representatives was considering another bill, which was similar in content. Anti-bank rhetoric marked debate on the floors of both the House and Senate. Some of these same issues were evident in the conflict over the Second Bank of the United States.
Illinois State Register (Springfield), 15 January 1841, 2:1-2; Robert P. Howard, Illinois: A History of the Prairie State (Grand Rapids, MI: William B. Eerdmans, 1972), 202-7; Charles H. Garnett, “State Banks of Issue in Illinois,” 35-37.
5 The House referred the bill to the Committee on Banks and Other Corporations by a vote of 49 yeas to 36 nays, with Lincoln voting nay.
Illinois House Journal. 1840. 12th G. A., 375.
6The Committee on Banks and Other Corporations reported back the bill on February 23, recommending its passage. The House tabled the bill by a vote of 38 yeas to 35 nays, with Lincoln voting nay.
Illinois House Journal. 1840. 12th G. A., 471.
Copy of Printed Document, 1 page(s), North Western Gazette and Galena Advertiser (Galena, IL), 19 February 1841, 4:1.