State Bank of Missouri

City: Saint Louis

State: Missouri

The Missouri General Assembly chartered the State Bank of Missouri in 1837 in response to President Andrew Jackson's successful war on the Second Bank of the United States. Jackson's policies forced the closure of the St. Louis branch of the Second Bank, leaving the state devoid of an adequate means of obtaining credit and leading to demands for a state-chartered bank to promote Missouri's economic development. The constitution of Missouri allowed the General Assembly to charter one currency-issuing bank, with no more than six branches, including the parent bank, and a capital stock of $5 million, half of which for the use of the state. Hoping to avoid the wildcat banks that were flooding some states with worthless paper currency, Governor Lilburn Boggs in November 1836 recommended creation of a state bank with limited ability to issue paper currency based on an adequate amount of gold and silver specie. Following the constitution, the General Assembly chartered the State Bank of Missouri, capitalized at $5 million, with the state owning half of the stock. The state elected the president and half of the board of directors. The bank was allowed to issue paper notes at denominations no lower than $10, and this and other conservative fiscal measures allowed the bank to survive the Panic of 1837. It remained the only currency-issuing bank in Missouri until that law was changed in 1857.

Missouri Const. of 1820, art. VIII; William E. Parrish, Missouri: The Heart of the Nation (St. Louis: Forum, 1980), 92-93; Perry McCandless, History of Missouri: Volume II 1820-1860 (Columbia: University of Missouri Press, 1972), 104; Mark W. Geiger, Financial Fraud and Guerrilla Violence in Missouri's Civil War, 1861-1865 (New Haven, CT: Yale University Press, 2010), Chapter 2, accessed August 6, 2018, https://books.google.com/books?id=hMsmiitOsZwC&printsec=frontcover&dq=bank+of+missouri&hl=en&sa=X&ved=0ahUKEwihnLH519jcAhVIbK0KHR7xBSc4FBDoAQgoMAA#v=onepage&q=bank%20of%20missouri&f=false.