ble, being reckoned five years previously at only 551; in 1810, it was less than 5,000; the country was possessed mainly by the Indians, and the few French in the State were neither enterprising nor prosperous. No road pierced the forests of the interior; no manufactories existed; agriculture yielded nothing for market, and navigation had scarcely begun to plow our rivers and lakes. general commerce the fur trade was almost the only element.

In

The petition for a bank charter was presented, not by citizens of Detroit, but by capitalists of Boston, Russell Sturges and others, who were engaged in the fur trade. This petition was granted Sept. 15, 1806, incorporating the " Bank of Detroit," with a capital of $400,000. The great distance of this locality from New England gave those capitalists the advantage of circulating inland bills of credit against their Western banks for a long time before their redemption. Judge Woodward, one of the judges who granted the act of incorporation, was appointed its president, and the bank went into immediate operation; but imputations unfavorable to Judge Woodward in regard to this and other matters led to a Congressional investigation of the act incorporating the bank, and the act was disapproved by that body. The bank, however, continued to do business; but in September, 1808, the Governor and judges, in the absence of Woodward, passed an act making it punishable as a crime to carry on an unauthorized banking business, and this put an end to the brief existence of the institution. Its bills were quietly withdrawn from circulation the following year.

The next bank established in the Territory was the "Bank of Michigan," incorporated by the Board of Governor and Judges, Dec. 19, 1817, with a capital of $100,000. The validity of this act was fully established by the courts in 1830. By the terms of its charter, the corporation was to expire on the first Monday in June, 1839; but the Legislative Council, Feb. 25, 1831, extended its life twenty-five years longer, and subsequently it was allowed to increase its capital stock and establish a branch at Bronson, now Kalamazoo. The two above named are all the banks which derived their corporate existence from the Governor and judges.

"

The first bank charter granted by the Legislative Council" was to the Merchants' and Mechanics' Bank of Michigan," approved April 2, 1827. The bank was to be established at Detroit, with a capital of $200,000, with liberty to increase it to $500,000. This corporation was also made an insurance company; but it does not appear a company was ever organized under this charter. March 29, 1827, the "Bank of Monroe" was incorporated, its capital stock to be $100,000 to $500,000, and to continue in existence 20 years. The "Farmers' and Mechanics' Bank of Michigan" was chartered Nov. 5, 1829, and March 7, 1834, it was allowed to increase its capital stock, and establish a branch at St. Joseph. The "Bank of River Raisin" was chartered June 29, 1832, and allowed to have a branch at Pontiac. The "Bank of Wisconsin was chartered Jan. 23, 1835, and was to be located in the Green Bay country, but on

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the organization of the State of Michigan it was thrown outside of its jurisdiction.

March 26, 1835, there were incorporated four banks, namely: Michigan State Bank" at Detroit, " Bank of Washtenaw" at Ann Arbor, "Bank of Pontiac," and the "Erie and Kalamazoo Railroad Bank" at Adrian. The "Bank of Pontiac " was also a railroad bank, its establishment being an amendment to the charter of the "Detroit and Pontiac Railroad Company."

The nine banks last above named are all that were created by the "Legislative Council."

Next, the State Legislature in 1836 chartered the Bank of Manhattan, Calhoun County Bank, Bank of St. Clair, Bank of Clinton, Bank of Ypsilanti, Bank of Macomb, Bank of Tecumseh and Bank of Constantine. The same Legislature passed "an act to create a fund for the benefit of the creditors of certain moneyed corporations," which was in fact the famous safety-fund system of the State of New York. It required each bank to deposit with the State Treasurer, at the beginning of each year, a sum equal to one-half of one per cent. on the capital stock paid in; and the fund so created was to be held and used for the benefit of the creditors whenever any bank subject to its provisions should become insolvent; but this statute was destined to have but little practical effect. The system in New York proved inadequate for the security of the public interests, and it was practically abandoned here.

By this time, the financial affairs of the whole country had become sadly deranged, consequent upon a wild and reckless spirit of speculation. The currency became greatly inflated, fabulous prices given to property, and the masses of the people subjected to the cruel mercies of shrewd financiers. The session of 1837 was flooded with petitions for the creation of banks, and the Legislature met the emergency by adopting a system of free banking, under which were organized a great number of those institutions since known as "wild-cat banks." The statute authorized any 12 freeholders of any county who desired to do banking, to apply to the treasurer and clerk of the county for that purpose, and books were to be opened for subscriptions to the capital stock, $50,000 to $300,000. Ten per cent. on each share was required to be paid in specie at the time of subscribing, and 30 per cent. of the entire capital stock in like funds before the association should commence operations. The president and directors were also required to furnish securities for the payment of all debts and redemption of all notes issned by the association.

This new law was popularly received with great enthusiasm. On its final passage in the House, only four members were bold enough to vote against it, namely: Almy, of Kent; Monfore, of Macomb; Purdy, of Washtenaw, and Felch of Monroe. This Legislature closed its session March 22, 1837, by adjournment to Nov. 9, following; but the financial embarrassments of the country increased so rapidly that the Governor called an extra session of

the Legislature for June 12, and in his message he attributed these embarrassments, in a great measure, to the error of over-banking, over-trading, and a want of providence and economy. The banks east and south had already suspended specie payments, and Michigan was of necessity drawn into the vortex. The report, to this Legislature, by a special commissioner appointed by the Governor, held forth, however, that the banks of Michigan were solvent, but that a little time may be granted them as a defense against the results of suspensions in New York and elsewhere. The number of banks doing business in this State at that time was 13 in number, previously mentioned. The Legislature granted them time until May 16, 1838. The session of the winter following undertook to secure the public by appointing three bank commissioners to visit all the banks in the State at least once in every three months, to examine the specie held by them, inspect their books, and inform themselves generally of their affairs and transactions; monthly statements of the condition of the banks were required to be made and published, and no bills were to be issued without bearing the endorsement of a bank commissioner, etc. Under the general banking law, as already stated, every subscriber to the stock was to pay in 10 per cent. in specie on each share at the time of subscribing, and 10 every six months thereafter, and 30 per cent. of the whole capital stock was required to be paid in like manner before the bank should commence operations. The specie thus paid in was to be the capital of the bank and the basis of its business operations. The requirement of it involved the principle that banking could not be carried on without bona-fide capital, and without it no bank could be permitted to flood the country with its bills; but the investigations of the commissioners showed a very general violation of the law in this respect. In many cases, instead of specie, a kind of paper denominated "specie certificates" was used; in some cases, specie borrowed for the occasion was used and immediately returned to the owner; sometimes, even, a nail-keg filled with old iron, or gravel, or sand and covered over the top with specie, was employed to deceive the commissioners; and sometimes the notes of individual subscribers or others, usually denominated "stock notes," were received and counted as specie. The books of the banks were also kept in so imperfect a manner, sometimes through incompetency, sometimes with fraudulent design, as frequently to give little indication of the transactions of the bank or of the true condition of its affairs. By proprietorship of several banks in one company of men, by frequent sale and transfer of the stock, and by many other tricks and turns, a little specie was made to go a great way in flooding the country with worthless paper.

It is manifest that this conditon of things could not have existed without a fearful amount of fraud and perjury. In the excitement and recklessness of the times, amid ruined fortunes and blighted hopes, the moral sense had become callous. The general banking