Summary of Legislative Debate on Bill concerning the State Bank, 24 February 18411
On motion of Mr HENDERSON, the bill in relation to the State Bank was again taken up, (the bill repeals the 25th section of the bank charter, by which a forfeiture of its charter is made if it suspend.)2
The bill was then ordered to a second reading.
Mr LINCOLN moved to dispense with the rules, and read it a second time by its title.
Mr LINCOLN expressed his views of the necessity of an immediate settlement of the question: it was he said so connected with the great measure of providing for the interest and credit of the State that he hoped it would be passed without further delay.
Mr KITCHELL said, he hoped the bill would not be read again, nor at all: he believed the bill was calculated to ruin the State.
Mr LOGAN said, that some gentlemen were total destructives, they wished to destroy the canal, the Bank and every thing—but he would like to know how could the people pay taxes of the whole circulation was destroyed? now, it depended on this Bank; if it was destroyed the currency of the State would be cut off.
The motion of Mr LINCOLN was then carried, and the bill was read a second time.
Mr KITCHELL then moved to amend by striking out all the body, of the bill and inserting a bill of his own composing requiring the Governor to appoint Directors, &c: not in order.
Mr McCLERNAND moved to refer the bill to the committee on Finance: he understood there was a better bill in the Senate offering more advantageous terms to the country than this bill, which would, he was informed, soon be sent to the House.
Mr McCLERNAND supported the reference, and referred to Mr Lincoln’s having on a former occasion expressed his intention of going against the Bank, as a mark of inconsistency.
Mr LINCOLN replied and explained: that he had deprecated the efforts made to crush the Bank and only acted consistently in recommending what he thought the best means of saving both it and the state.4
Mr McCLERNAND being about to reply.
Mr HENDERSON made an appeal to the House to avoid individual discussions.
Mr DOUGHERTY, advocated the reference to a select committee.
Mr DODGE expressed himself as opposed to any reference of the bill whatever; he wished it to be passed upon without delay.
Mr OLDS was opposed to a bill of this kind in any shape, but if such a measure should pass, he hoped it would be the best which the case would admit of: such a bill was now before the senate, a better bill than this, and therefore it would be desirable to refer this bill, in order to obtain the best bill of the two.
The question on the reference to the Finance committee, was then put and lost.
The question on the reference to a select committee, was then put and lost, yeas 26, nays 45.5
Mr BALDWIN then moved the indefinite postponement of the bill. Not in order.
Mr LOGAN moved to amend by adding an additional clause.6
Mr BROWN, of Sangamon, proposed a verbal amendment, which Mr Logan accepted, when after a brief discussion on the amendments between Messrs McClernand and Henderson it was agreed to.
Mr TRUMBULL moved to amend by inserting a clause to repeal the law preventing the passage of any law restricting the collection of debts by the bank.7
Mr CARPENTER enquired if we could legally repeal the law in question.
Mr HENDERSON said, that if such a proposition should prevail, it would be impossible for the Bank to accept of any terms: it would be vain for the Bank to attempt to go on, if she was obliged to take sore back horses, hogs, &c.[etc] in kind, in payment of debts due her.
Mr KITCHELL vehemently supported the proposition.
Mr M’CLERNAND offered an amendment requiring the Bank to execute a bond for payment of an additional bonus of three per cent.
Mr HENDERSON moved to amend the amendment by striking out three and inserting six: Mr H. said we might as well take the whole as a part. The amendment to the amendment was then put and lost.
Mr BENTLEY moved the previous question, which motion was laid on the table, on the motion of Mr Murphy, of Perry.
Mr LINCOLN moved to lay on the table Mr McClernand’s amendment; which motion prevailed.
Mr PARSONS moved an amendment requiring the Bank to loan the people of the counties $300,000 among them all, according to the census, in loans not above $500 for each loan.
Mr CARPENTER deprecated the proposi[tion] of forcing the Bank by law to make loans when it was complained that the bank had loaned out too much.
Mr PECK supported the amendment.
Mr CARPENTER replied briefly in opposition.
Mr PARSONS supported the amendment, and stated its object to be to give the people a currency wherewith to pay their taxes; he could not vote for taxation without some accompanying remedy aiding them to pay their taxes.
Mr KITCHELL compared such a proposition to giving children sugar plums to prevent them from crying. He enquired how the bank could be called upon to lend money when it is acknowledged that it has not a cent of money?
Mr HENDERSON explained.
Mr MURPHY, of Perry, regarded the amendment as intended, and as calculated to defeat the bill.
Mr OLDS offered to amend the amendment requiring the Bank to lend $600,000 annually.
Mr CAVARLY considered that the consequence of such measures would be imposing upon the Bank the necessity of making collections of all this money loaned out; but the Bank already had more money out than she could collect, and much of the distress in the country, was owing to this indebtedness; now the amendments proposed to increase the indebtedness and consequently to increase the distress of the people.
Mr MURPHY, of Cook, moved to amend by requiring that the Bank debtors be allowed to pay their debts by instalments at the rate of 10 per cent. &c.[etc] and to allow Bank debtors to renew their notes on payment of 10 per cent. on the amount due during the time of Bank suspension, and to limit the indebtedness of Directors or firms connected with them to the Bank to the sum of $5000, and that a violation of this law shall work a forfeiture of the charter.10
Mr CARPENTER moved to insert the word “originally” so as to read in the amount “originally due.”11
Mr PECK opposed the amendment.
Mr BAILEY spoke in support of the amendment.
The amendment to the amendment offered by Mr Carpenter, was then put and lost, yeas 25, nays 51.12
Mr LINCOLN moved to amend the amendment by striking out the last section of Mr. Murphy’s amendment, which motion prevailed, yeas 45, nays 32.13
The question on the amendment as amended was then put, and it was agreed to.
Mr McCLERNAND moved to amend by adding that if the Bank accept the terms of the bill then the private Stockholders be made personally liable for the debts of the Bank.
Mr LINCOLN moved to lay the amendments on the table, which was carried, yeas 47, nays 31.14
Mr BALDWIN offered an amendment calling for an expression of the people at the polls in August next, as to the expediency of this measure, and suspending the action of the law in the interim.
Mr FRANCIS moved to lay the amendment on the table, which having been withdrawn to allow an opportunity for mr Henderson to speak on the subject, mr Courtright again renewed it, and it was carried, by yeas 45, nays 32.15
Mr WHITE moved to amend by requiring the State Bank to pay $150,000 of Auditor’s warrants.
Mr COURTRIGHT moved to lay the amendment on the table.
Mr PECK moved to amend the amendment by excluding Auditor’s warrants issued to members of the Legislature; which amendments were laid on the table, without a division.
Mr WHITE moved the previous question.
Mr PECK moved to lay the motion for the previous question on the table, which was lost, yeas 33, nays 45.16
Mr CAVARLY moved to amend by allowing the Bank to suspend until a majority of the Banks of Ohio, Indiana, Kentucky and Missouri should resume specie payments.
The call of the previous question was then sustained.
Mr LINCOLN moved to lay the amendment offered by mr Cavarly on the table, which motion was lost, yeas 30, nays 47.17
The question on the amendment of mr Cavarly, was then put, and it was rejected, yeas 38, nays 40.18
The question on ordering the bill to be engrossed for a third reading was then put and carried, yeas 42, nays 36.19
1Abraham Lincoln wrote the text of the original bill. Peter Green of the Committee on Banks and Other Corporations, to which the House of Representatives had referred a memorial from the State Bank of Illinois, introduced the bill in the House on February 22, 1841. The House tabled the minority report of the Committee, which condemned the bill as legalizing the suspension of specie payments, and refused to print 2500 copies of the memorial by a vote of 25 yeas to 51 nays, with Lincoln voting nay. The House also refused to print 500 copies by a vote of 27 yeas to 48 nays, Lincoln voting nay. The House refused to engross the bill by a vote of 38 yeas to 38 nays, with Lincoln voting nay. The House later rescinded this vote. The House took up the bill again on February 24.
Illinois House Journal. 1840. 12th G. A., 457, 459-60, 481; Illinois State Register (Springfield), 5 March 1841, 2:2-3.
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.
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. Earlier in this session, both the Senate House deliberated a bills to replace the State Bank as the public repository. 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.
A Bill to Provide for the Safe Keeping and Delivery of the Public Monies; A Bill to Provide for the Safe Keeping and Disbursement of the Public Revenue; Illinois State Register (Springfield, IL), 15 January 1841, 2:1-2; Robert P. Howard, Illinois: A History of the Prairie State (Grand Rapids, MI: William B. Eerdmans, 1972, 202-207; Charles H. Garnett, “State Banks of Issue in Illinois,” 35-37.
5The House Journal recorded the vote as yeas 35, nays 45, with Lincoln voting nay.
Illinois House Journal. 1840. 12th G. A., 481-82.
6Logan offered an amendment, authored and written by Lincoln, striking out the third section and inserting a new section.
Illinois House Journal. 1840. 12th G. A., 482.
7Trumbull proposed repealing the thirty-first section of the incorporation act, which prohibited the General Assembly from passing any law retarding, obstructing, staying, protracting, or in any wise suspending the collection of any debt or debts due the bank.
10Murphy’s amendment added three new sections to the bill.
Illinois House Journal. 1840. 12th G. A., 483-84.
11This would have amended the first of Murphy’s sections.
Illinois House Journal. 1840. 12th G. A., 484.
13Lincoln voted yea. Murphy’s last section read: “Sec. 7. Any violation of the provisions of this act on the part of the bank shall work a forfeiture of its charter.”
Illinois House Journal. 1840. 12th G. A., 484.
15Lincoln voted yea. The House Journal records Trumbull as offering this amendment.
Illinois House Journal. 1840. 12th G. A., 485.
19Lincoln voted nay.
On February 27, the House and Senate concurred on an amended version of Lincoln’s original bill, and the act became law. Despite Lincoln’s efforts to prop up the Bank, it collapsed in February 1842.
Illinois House Journal. 1840. 12th G. A., 487, 503, 505-7, 507-8, 510-11, 544, 545, 555; Illinois Senate Journal. 1840. 12th G. A., 408, 415, 417, 418-419, 430; Charles H. Garnett, “State Banks of Issue in Illinois” (Essay, University of Illinois, 1898), 38.
Printed Document, 1 page(s), Illinois State Register (Springfield), 5 March 1841, 2:2-3