Papers Of Abraham Lincoln

Abraham Lincoln to Jesse K. Dubois, 6 April 18571
Springfield, April 6 1857Hon: J. K. DuboisAuditor &c.[etc]Dear Sir:
In answer to your querries in relation to the 4^th 8^th and 9^th sections of the bank law of Feb.[February] 14. 1857— and the other provisions of law therein refered to, I give as my opinion2

First: That no stocks whatever can be received by you at any greater value rate of valuation than ten per cent less than the market price of said stocks,3 such market price to be ascertained, according to the old law–4

Second: That no non-interest paying bonds can, in any event, be received by you at any greater rate than fifty cents to the dollar ^and not even for that much, unless their their market price shall be as high as sixty^ the old law not being altered by the new, in this respect–5

Third– That in relation to the banks already in existence no new duty is imposed on you by the 8^th section of the new law, unless such banks apply for the issuing of new circulating notes, in which case, it is your duty to be satisfied that they have the fifty thousand dollars actual cash capital, before you issue such new notes–6 Note. As to the old law, I would abide the constructions of the old Auditor, till further advised–

Fourth: That in relation, both to old and new banks, in the very language of the 9^th section section of the new law “No more circulating notes shall be issued, under any circumstances to any bank or association organized under said act until the Auditor shall be satisfied that such bank or association has such actual capital as is required in the first” (8^th really meant) “section of this act.”7

This opinion is given as to your duty under the new law after it takes effect, and is not intended to apply to the time of it's ^between^ passage, and its taking effect–8
Yours trulyA. Lincoln

1Abraham Lincoln wrote and signed this letter.

2No letter from Jesse K. Dubois to Lincoln discussing banking legislation or requesting his formal legal opinion on banking legislation has been located for the years 1856 or 1857.
Lincoln references a law enacted by the Illinois General Assembly on February 14, 1857, amending the general banking act passed on February 15, 1851.
“An Act to Amend ‘An Act to Establish a General System of Banking,’ Passed February 15th, 1851, and the Acts Amendatory Thereof,” 14 February 1857, Laws of Illinois (1857), 23-25.

3Lincoln is discussing section four of the 1857 banking law, which stipulated that stocks on which interest was regularly paid were valued at ten percent less than their market price.
“An Act to Amend ‘An Act to Establish a General System of Banking,’ Passed February 15th, 1851, and the Acts Amendatory Thereof,” 14 February 1857, 24.

4Section two of the general banking law of February 1851 required the market price of stocks to be calculated according to the average rate at which such stocks had been sold in New York within the six months preceding the time that the stocks were deposited with the auditor of public accounts.
“An Act to Establish a General System of Banking,” 15 February 1851, General Laws of Illinois (1851), 163, 175.

5Section two of the 1851 law specified that bank bills or notes could not be issued by the auditor of public accounts on bonds that did not regularly have at least six percent interest paid unless at least two dollars in bonds—not including interest—were deposited with him for every dollar in bills that he issued.
“An Act to Establish a General System of Banking,” 15 February 1851, 163-64.

6Section eight of the 1857 banking law required the auditor of public accounts to verify that a bank had a minimum of $50,000 cash capital on hand before issuing any new notes or bills on behalf of that bank.

7Lincoln is explaining that section nine of the 1857 law explicitly noted that the auditor of public accounts was required to verify that a bank had the required minimum $50,000 cash capital in the bank prior to issuing any new or additional circulating notes on behalf of that bank. Section nine of the law mistakenly references “the first section of this act” when it actually references section eight.

8The Illinois General Assembly specified that the 1857 banking law went into force on the date of its passage; therefore, there was actually no gap between the date of its passage and the date it took effect.
If Dubois penned a reply to this letter, it has not been located. Lincoln, however, wrote Dubois at least two more letters related to Dubois’ duties as state treasurer. Lincoln’s legal advice to Dubois also played a role in the case People ex rel. Billings v. Bissell. In the case, George W. Billings purchased two state bonds for $1,000 each in May 1841. By January 1, 1857, the state of Illinois owed Billings unpaid interest on the bonds. In February 1857, the Illinois General Assembly passed an act which “authorized and required” the governor of Illinois to address arrears of interest that were due and unpaid on the state’s public debt as of January 1, 1857, via the issuance of new state bonds. Billings requested that Governor William H. Bissell issue new bonds to allow him to collect $1,860 in unpaid interest on his 1841 bonds. Bissell refused, and Billings retained Lincoln, William H. Herndon, John T. Stuart, and Benjamin S. Edwards and sued in the Illinois Supreme Court for a writ of mandamus compelling Bissell to issue the new state bonds. Stephen T. Logan represented Bissell. In December 1857, the court denied the writ of mandamus.

In his opinion, Justice John D. Caton acknowledged that the central issue in the case was whether or not the court had “jurisdiction to control the executive department of the government.” Admitting that it was a “grave question” reaching “the very foundation principles upon which our government is based,” Caton stated that the three branches of government were essentially equal and that in order to work in harmony each branch “should, to a certain extent, control or restrain others.” However, Caton asserted, the Illinois Supreme Court had “no power to compel” the other branches of the state government “to perform any duty which the constitution or the law may impose upon them.” Each branch must be independent of the other, he argued, and therefore the court “does not possess the right to exercise coercive powers” over the governor of the state. The court had no power to compel Bissell to issue the bonds, and Billings’ only remedy was the impeachment and removal of Governor Bissell by the public.

The bonds in question in this case were known as the “McAllister and Stebbins bonds.” In 1859, Lincoln sent and received at least four more pieces of correspondence related to these bonds.
“An Act to Amend ‘An Act to Establish a General System of Banking,’ Passed February 15th, 1851, and the Acts Amendatory Thereof,” 14 February 1857, 23-25; Abraham Lincoln to Jesse K. Dubois; Abraham Lincoln to Jesse K. Dubois; Opinion, Document ID: 74760, People ex rel. Billings v. Bissell, Martha L. Benner and Cullom Davis et al., eds., The Law Practice of Abraham Lincoln: Complete Documentary Edition, 2d edition (Springfield: Illinois Historic Preservation Agency, 2009), http://www.lawpracticeofabrahamlincoln.org/Details.aspx?case=137940; “An Act to Fund the Arrears of Interest Accrued and Unpaid on the Public Debt of the State of Illinois,” 18 February 1857, Laws of Illinois (1857), 104; Abraham Lincoln, Stephen T. Logan, and Ozias M. Hatch to James Miller; Abraham Lincoln and Stephen T. Logan to James Miller; James Miller to Abraham Lincoln, Stephen T. Logan, and Ozias M. Hatch; James Miller to Abraham Lincoln.