In force 4th March, 1837.
AN ACT to increase the capital stock of certain banks and to provide means to pay the interest on a loan authorised by an act entitled “an act to establish and maintain a general system of internal improvement.”1
Capital of State Bank increased two millions.
Stock to be subscribed by the State.
Capital of the Bank of Illinois increased 1,400,000.
Consent of the bank to be first given.
To the board of fund commissioners.
Sec.[Section] 1. Be it enacted by the people of the State of Illinois, represented in the General Assembly, That the capital stock of the State Bank of Illinois shall be and the same is hereby increased in the sum of two million dollars, exclusive of the one hundred thousand dollars reserved to the State, by the first section of an act entitled “an act to incorporate the subscribers to the Bank of the State of Illinois,” the whole to be subscribed for by the State as hereafter directed.2 The capital stock of the Bank of Illinois at Shawneetown shall be and the same is hereby increased in the sum of one million four hundred thousand dollars, to be subscribed as hereafter directed;3 Provided the consent of said banks shall have been thereunto first given, by an entry on their books, under the direction of the board of directors, which shall be certified under the seal of the corporation to the board of fund commissioners, to be elected under the provisions of an act entitled “an act to establish and maintain a general system of internal improvement,”4 and to the Secretary of State, the same to be by him filed in his office.
Fund commissioners to negotiate, a loan on the faith of the State.
Not exceeding three millions of dollars.
Sec. 2. Said board of fund commissioners be, and they are hereby authorised and empowered to negotiate a loan on the credit and faith of this State, as, and for the
<Page 2>exclusive and sole purpose hereinafter provided, for a sum or sums not exceeding three millions of dollars, as the same may be needed and wanted for the purposes hereinafter set forth, which shall be required to be paid at such times and such instalments as the same may be needed to carry into effect the object of this act.
Fund commissioners to constitute stock.
Stock to bear an interest not exceeding 6 per cent.
Places at which the same may be paid.
Faith of the state pledged to redeem said stock and pay the interest.
Sec. 3. Said board of fund commissioners shall constitute certificates of stock for the said loan or loans, to be called “the Illinois Bank and Internal Improvement stock,” which shall be signed by the Governor, and countersigned by the Auditor and Treasurer, with the great seal of State affixed thereto; bearing interest not exceeding six per centum per annum, payable semi-annually at either of the banks hereinafter named, or either of their branches, or at some bank in the city of New York, Philadelphia, Boston or Baltimore, or either, as may be agreed upon, and reimbursable at the pleasure of the State at any time after the year one thousand eight hundred and sixty, and the faith of the State is hereby irrevocably pledged for the payment and redemption of the stock hereby created, and the interest accruing thereon. Said board of fund commissioners shall take and use all proper means and measures for the transferring of said stock.
Sec. 4. It shall be deemed a good and valid execution of the power to borrow herein conferred, for the said fund commissioners to cause the said certificates of stock, when created, to be sold; Provided that the said stock shall not, in any case, be sold for less than its par value.
To pay such per cent on same as subscribers pay
No forfeiture of stock so subscribed shall be incurred.
Sec. 5. It shall be the duty of the said board of fund commissioners, to subscribe on behalf of the State the two millions of dollars stock, as provided in the first section of this act, to the State Bank of Illinois and pay such per centum on every one hundred dollars so subscribed at the time of subscribing, as shall have been paid by each stockholder on each and every share owned by him, and thereafter pay such instalments as may be due on each one hundred dollars, at the same times and in the same proportions, and under such regulations as now are or hereafter may be required of and adopted in relation to the individual stockholders on each share respectively held by them; Provided nothing herein contained shall authorise a forfeiture of any interest of the State in said Bank in any wise whatever to the said Bank.
Commissioners shall subscribe 1,000,000 when notified by Illinois bank of acceptance.
Remaining 400,000 to be subscribed as other stock.
Sec. 6. Said board of fund commissioners shall, so soon as notified by the Bank of Illinois at Shawneetown, of their acceptance and consent to the provisions of this act, as provided for in the first section of this act, subscribe on behalf of the State for one million of stock authorised to be subscribed by the first section of this act, and shall in
<Page 3>all respects observe and conform to the provisions of the fifth section of this act, which are hereby expressly made applicable to their proceedings under this section, the proviso inclusive; the remaining four hundred thousand dollars may be divided into shares, and subscribed for, governed, and regulated in all respects as provided for in the original and supplemental acts incorporating and extending the charter of said Bank of Illinois at Shawneetown.5
Commissioners may sell said stock.
Sec. 7. For the purpose of carrying into effect the provisions of the last two sections, said board of Fund commissioners may, from time to time, sell and dispose of the certificates of stock authorised to be issued by the second and third sections of this act, as the money may be needed from time to time.
Additional directors to be appointed by the Legislature.
Their powers and duties.
Sec. 8. In addition to the nine directors authorised to be elected by an act entitled “an act to incorporate the subscribers to the Bank of the State of Illinois” there shall be elected bienially by joint vote of both branches of the Legislature, five other directors, who shall be citizens of this State, and whose rights, powers and duties shall be in all respects the same as those of the directors chosen by the stockholders.6
Said bank may establish offices of discount and deposite.
One to be established at Jacksonville.
Sec. 9. There shall be elected biennially, by joint vote of both branches of the General Assembly, nine directors of the Bank of Illinois at Shawneetown, whose rights, powers and duties shall be in all respects the same as those of the directors chosen by the stockholders of said Bank of Illinois at Shawneetown.7 There may be established by the said Bank of Illinois at Shawneetown, three offices of discount and deposite, within the State, whenever the interest of the community or Bank require it for the purpose of discount and deposite, and the transaction of such other business as may be legally confided to them by said bank, under the provisions of its charter and this act;8 and to commit the management of all the aforesaid offices of discount and deposite under such regulations as they shall from time to time think prudent to adopt, to such number of persons as they shall choose, one of which offices of discount and deposite shall be permanently established at Jacksonville, with such amount of capital as the mother bank can safely supply under the provisions of this act, and another of said offices of discount and deposite shall be established at Lawrenceville and one at Alton,9 and in addition to the offices of discount and deposite as aforesaid, the said bank may establish two other offices of discount and deposite at such time and places, as may be deemed for the public interest.10
Dividends and profits of said stock shall first be applied to the payment of interest upon loan.
Balance and the premiums to pay interest on internal improvement loan
Further powers of the board of Fund Commissioners.
Deposite balance in bank.
Duty of banks receiving such deposits.
Sec. 10. The dividends and profits declared and accruing upon, and from the stock, by the provisions of this act, a-
<Page 4>thorised to be subscribed on behalf of the State in said banks, shall first be applied to the payment of the interest upon the loan or loans authorized by the provisions of this act, as the same becomes due, and the balance together with the premiums that shall be realized by the sales of certificates of stock herein authorized to be made, shall constitute a fund for, and be applied to, the payment of the interest which may be or become due and owing upon the loans effected under the authority of an act entitled an act to establish and maintain a general system of Internal Improvement,11 and shall be held inviolably, and applied solely for that purpose and none other. And the said board of Fund Commissioners shall adopt such measures as may be most expedient and proper for the payment of the interest of the said loans when due, and whatever balance of said dividends and profits as may remain from time to time after the payment of the interest as aforesaid, may be deposited by said board of Fund Commissioners in any Bank or Banks of this State, at such rates of interest as may be agreed upon until the same may be wanted, said banks to facilitate the transaction of the purposes contemplated in this section, opening therefor a separate account to the credit of such deposites with said board of Fund Commissioners.
Fund commissioners may deposite in banks all funds borrowed under the act to establish and maintain a general system of internal improvement and other funds
Board may agree upon the rates of interest with banks.
Deposites shall be subject to draft.
Banks shall be the fiscal agents of the State.
Sec. 11. Said board of Fund Commissioners may deposite with the said banks, with reference to a fair distribution of the benefits of said deposites to the different sections of the State, all the funds borrowed under an act entitled an act to establish a general system of Internal Improvement, and all other monies provided for the use of the fund created by the act the title of which is hereinbefore last recited, not otherwise disposed of by law, until the same may be wanted in the progress of the works, or for the objects contemplated by said act, the said board of Fund Commissioners obtaining such rates of interest from said banks for the use of the same, as may be agreed upon, and said deposites shall be subject to the drafts and checks of said board of Fund Commissioners, whenever the same may be needed in the progress of said works, or for the objects contemplated by said act, payable whenever they may direct. Said banks hall in all respects be, and they are hereby constituted, made and appointed the fiscal agents of the State in the collection, receipt, transfer, and disbursement of the Internal Improvement funds,12 subject to laws now in force, and hereafter to be made.
Bank shall furnish quarerly statements of its condition to the board.
Shall furnish same to general assembly, at regular and called sessions.
Sec. 12. Said bank shall furnish the said board of Fund Commissioners quarterly with statements of the amounts of capital Stock actually paid into their respective vaults, of all the debts due and owing to the said banks, of all
<Page 5>the monies remaining on deposite, public and private, of all the notes of said banks outstanding and in circulation, the specie on hand or account of the same, together with all such other matters and things as may pertain to, and are connected with, the condition and solvency of said bank; they shall also lay before each house of the General Assembly, at every regular and called session within ten days after the meeting thereof, a general statement embracing all the information and facts contained in the said quarterly reports.
Notes of Bank shall be paid where issued.
Sec. 13. All notes issued by said bank or their branches, or offices of discount and deposite, payable on their face elsewhere than in this State, shall be nevertheless payable at the said banks or branches, or offices of discount and deposite, which may have issued the same, in the same manner and under the same responsibilities as now are or hereafter shall be the notes of said banks or branches, or offices of discount and deposite, issued by them and made payable at their counters.
General assembly shall have the right by its committees to examine the bank & branches.
Fund Commissioners may examine.
Required to examine biennially and report.
Sec. 14. The General Assembly shall have the right to examine by committee into the condition of said banks and their several branches and offices of discount and deposite, and all the books and accounts of said banks necessary to the examination hereby authorized, shall be submitted to any committee which may be appointed by the General Assembly for that purpose, and the Fund Commissioners shall also have the right to make a like examination into the condition of each of said banks, and they are required to make biennial examinations thereof, and make reports to each session of the General Assembly, which may be held after the making of such examinations.13
If the bank accepts provisions of this act, the Governor shall appoint directors.
Any Banks herein named may accept provisions of this act.
Sec. 15. That if the banks in this act mentioned should accept the provisions of this act in the manner prescribed herein, during the recess of the Legislature, it shall be the duty of the Governor to appoint the directors upon the part of the State, who shall continue in office until their successors shall be elected, as prescribed in this act, and the provisions of this act shall be considered as applicable, jointly and severally, to said banks, and either of them may accept the same.14
Approved, March 4th, 1837.15
1On February 11, 1837, Jonas Rawalt introduced HB 236, originally titled “A Bill for the Relief of Persons in Cases of Ejectment, in the House of Representatives. The House referred the bill to a select committee. The select committee reported back the bill on February 21 with an amendment. The House refused to table the bill and proposed amendment until July 4 by a vote of 17 yeas to 63 nays, with Abraham Lincoln voting nay. The House tabled the bill and proposed amendment and ordered 200 copies of the bill printed. On February 25, the House took up the bill, referring it to another select committee. The select committee reported back the bill on February 27 with amendments, in which the House concurred. On March 1, the House passed the bill as amended by a vote of 48 yeas to 22 nays, with Lincoln voting yea. The House amended the title so as to read “A Bill to Increase the Capital Stock of Certain Banks, and to Provide Means to Pay the Interest on a Loan Authorized by An Act Entitled, ‘An Act to Establish and Maintain a General System of Internal Improvement.’” On March 1, the Senate referred the bill to the Committee on the Judiciary. The Committee on the Judiciary reported back the bill on March 2 with amendments. The Senate amended the committee’s amendments by amending the ninth section and by adding an additional section. The Senate adopted the committee’s amendments as amended. The Senate passed the bill as amended by a vote of 24 yeas to 13 nays. On March 2, the House concurred with the Senate amendments to sections one, three, eight, and fourteen, but rejected those to sections nine, eleven, twelve, and thirteen. It also rejected the new section. The next day, the Senate refused to recede from its amendments, creating a committee of conference to resolve the disagreement between the two houses. The House followed suit, appointing representatives to the committee. On March 4, the committee of conference agreed that the House would concur in the Senate amendments to sections eleven and twelve without amendment, and to the Senate amendments to sections nine and thirteen with amendment. The House would also concur with the new section with amendments. Both houses concurred in the committee of conference’s report, and theCouncil of Revision approved the bill, and the act became law.
Illinois House Journal. 1836. 10th G. A., 1st sess., 558, 659-60, 712-13, 727, 780-81, 808, 810, 823-24, 833, 839, 841, 849, 855; Illinois Senate Journal. 1836. 10th G. A., 1st sess., 574-75, 592-93, 596, 607, 611, 623, 628, 634.
2In the 1835 incorporation act, the capital stock of the State Bank of Illinois was $1,500,000. This section would increase the capital stock to $3,500,000.
3The capital stock of the Bank of Illinois as chartered in 1816 was $300,000. This section would increased the capital stock to $1,700,000.
“An Act to Incorporate the President, Directors and Company of the Bank of Illinois,” 28 December 1816, Laws of the Illinois Territory (1817), 11-19.
4Section one of the internal improvement act created a three-person board of fund commissioners to negotiate loans, buy and sell bonds, deposit and withdraw money, and administer the various fiscal aspects of the internal improvement program.
5In 1835, the General Assembly passed an act extending the charter for another twenty years from January 1, 1837. In 1837, it supplemented the charter with another act. Section two authorizing the Board of Fund Commissioners to secure a loan not exceeding $3,000,000 would allow the state to subscribe to the stock of the State Bank and the Bank of Illinois as stipulated in sections five and six.
“An Act to Incorporate the President, Directors and Company of the Bank of Illinois,” 11-19; John H. Krenkel, Illinois Internal Improvements 1818-1848 (Cedar Rapids, IA: Torch, 1958), 127.
6Sections eleven, twelve, and thirteen of the act governed the election of directors. In 1839, the General Assembly adopted an act that repealed provision for election by the General Assembly.
7Section four of the 1816 charter stipulated twelve directors. In 1839, the General Assembly adopted an act that repealed provision for election by the General Assembly.
“An Act to Incorporate the President, Directors and Company of the Bank of Illinois,” 13.
8The original charter allowed for only one office of discount or deposit at Shawneetown.
“An Act to Incorporate the President, Directors and Company of the Bank of Illinois,” 11-19.
9On March 2, 1837, the Senate added the words “and another at Alton.”
Illinois Senate Journal. 1836. 10th G. A., 1st sess., 592.
10On March 4, 1837, a committee of conference added the last sentence, beginning with “and in addition,” and running to the end of the section.
Illinois House Journal. 1836. 10th G. A., 1st sess., 839.
11Section twenty-one of the act authorized the fund commissioners to secure loans not exceeding $8,000,000 to prosecute work on the internal improvement system.
12Section twenty of the internal improvement act created a fund to finance construction of the public works envisioned in the act.
13On March 4, 1837, a committee of conference added the last sentence, beginning with “and the Fund Commissioners,” and running to the end of the section. This section was originally the thirteenth section.
Illinois House Journal. 1836. 10th G. A., 1st sess., 839.
14On March 2, 1837, the Senate added this section. On March 4, a committee of conference added the last sentence, beginning with “and the provisions,” and running to the end of the section.
Illinois Senate Journal. 1836. 10th G. A., 1st sess., 592; Illinois House Journal. 1836. 10th G. A., 1st sess., 810, 839.
15In enacting this legislation, members of the General Assembly hoped to use the State Bank of Illinois, Bank of Illinois, and other banks in establishing the internal improvement system. Supporters of the act believed that if the state owned a majority of the bank stock, it could use the dividends to finance public works projects. The State Bank of Illinois had declared a dividend of nine percent in 1836, giving credence to this belief. During a special session of the General Assembly in July 1837, the House of Representatives adopted a resolution asking Governor Joseph Duncan to convey if the directors of either bank had agreed to the provisions of the act. Duncan reported that the State Bank of Illinois on July 7 had entered on its books the acceptance of its board of directors to the increase in stock. No communication had yet come from the Bank of Illinois as to its course of action. During the same session, the House briefly considered and tabled a bill that would have repealed most of this act until both banks agreed to its provisions. The Bank of Illinois accepted later in 1837.
Illinois House Journal. 1837. 10th G. A., special sess., 23-24; Krenkel, Illinois Internal Improvements 1818-1848, 127-28.
Printed Document, 5 page(s), Laws of the State of Illinois, Passed by the Tenth General Assembly (Vandalia, IL: William Walters, 1837), 18-22, GA Session: 10-1