the bank issues, and in case of insolvency in any branch, its di-
rectors are first held responsible in their personal and real pro-
perty, next the private stockholders, and last, the state, so that the
bill holder can sufier no loss, so long as he has such security, and
the funds of the state cannot be impaired without fraudulent con-
duct of officers.

The bill provides for the punishment of frauds, and fixes se-
vere penalties for violation of official oaths, and for embezzlii^
the funds, or otherwise wilfully attempting to defraud the institu-
tion.

The bill requires that the directors appointed by the legislature^
shall be ex-officio a board of loan Commissioners^ to make such
loans as the jtate may order^ and to manage all fund^ and stocks
belonging to the different interests of the state.

Any branch may be a depository of funds to be expended by
the state, subject to removal when required by the interest of the
public ; and all funds belonging to the state are to be kept and
disbursed by the different branches.

Your committee are aware, that a variety of opinions have
been entertained upon the details of a bill for a state bank, nor is
it to be denied but a discrepancy of sentiment has existed in com-
mittee upon the question before them. Some preferred an insti.
tutiop with the stock owned and controlled entirely by the state ;
and others believed that the system proposed in the bill would be
safer and more satisfactory to the public, for vyhom we were called
to legislate. The subject has been carefully and candidly exa-
mined, and your committee are now unanimous in reporting,
and pledging their cordial support to the charter herewith trans-
mitted.

Although many strong objections may present themselves to the
union of the state stock with private capital for banking pursuits,
still it is believed, that with the guards and checks which one in-
terest has upon the other, it will be safe to each.

It has been the object of the committee to establish a plan, that
should remove the bank as far from party political influence as
possible ; tttid it is believed that the system adopted for the man-
agement of the bank and its branches, is placed beyond the im-
mediate control of any interest, or any party. An institution,-
where all of the officers are to be elected by the people or their
immediate representatives, would soon become a matter of poli-
tical controversy, and thus expose the financial afiairs of the state
to the intrigue, cupidity, and management of aspiring and heart-
less demagogues. > But the plan proposed, divider the control and
71



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5Y8 fiOUSfi DOCgMSNTfiL

the bebefit^ between differebt interestsi Abd plAisM Mdi lis «
watchman over the other, and secures the guanfian cttt of alli
in protecting the rights of the community.

In the present institution tiiere must be entire safety^ as there
is a mutual interest of state and private capital, whife each
branch is obliged to redeem the bills of any othen

Upon mature deliberation, your committee aorde to the iM*i*
elusion that the system proposed would be most beneficial and
least objectbniGible to the commonwealth of Miditg^n. There
can be but little doubt in the minds of the observing, as to the
importance of establishms; a currency in this state that shall an-
swer as a medium of exchange in bushfiess pursuits. It is but io
, its infancy, the balance of trade is yet against it, the capital ib-
vested in banks cannot be used to advantage, credit is longiflftih
ing, and the Whole community are sufl^ring from the sad dilemma
into which they hate fallen I '

It is not to foe expected that a bank w II give permanent relief
to the state without cottateral aid, and that aid can only be found
in the productions of out prolific soil. Money is but the repre-
sentative of property, and is good for nothing only as a medium
of exchange, in the' transfer iand change of essential cotnmodi^
ties.

The estabfisHment of a state bank in Michigan, WiU be an
epoch in its history— it will restore credit, open the avenues
of commerce, unclc^ the Wheels of industry, and Invite the
mass of emigrants to settle Within her limits and cultrvnta ber
soil. The hundreds who now lie dormant for the want of
available funds to culture the soil, will feel the electric impulsd
and rouse to active pursuits. Her internal improvement syMem
will be aided, her rich resources will be developed, and the pros-
pects of hel* enterprising inhabitants will be more cheering.

THOMAS FITZGERALD,
DANIEL S. BACON.
ISAAC WIXOM.
NORMAN LITTLE,
ANDREW 6. HAMMONR
NOBLE H. FINNEY,
GEO. C. GIBBS,
ANDREW MACK,
CALEB N. ORMSBY.



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BOuaE DowMRNTa m



(No. 30.)

Message from the Governor, transmitting papers I'l^^
tive to the Bank of Macomb county.

;Gx9outivb Qspaktwnt, )

To the House of Representatima :

I enclose herewith a communication, with other papers, from
C. A. Emerson, cashier of the Bank of Macomb county, which I
am requested to lay before the l^siature.

S. T- MASON-



DOCUMENTS,

(No. 1.)

Letter to ihe Betnk Commissioner^ from the Governor.

ExBcuTtvB Depa&tmknt,
Feb. 26, 1839.

Dear Sir — I enclose you herewith a letter from the Cashier
of the Bank of Macomb county, accompanying which, is a state-
moat of the eendhion of the iMink on the 28d February ioitanty
lo whioh I beg leave to call yourattenden.
I am, sir, yours; &c.

S. T. MASON.
To EjN'riuiD pRiTciiBiTB, Esq.
Bank Cemmissiener.



(No, 3.)
BmA of Macomb Ckmrttffr

Mount Clemens, 28^ Feb. 1839.
Statement of the Affairs qfthis Bank, February 23, 18^9,

Loans and discountsJ76,619 10 Capitid paid jn, 9105429 00

Due from sw4ryper'^ 1,261 45 Circulatioo, 31,585 00

Real eftftiet 2,850 00 Discounts received,

and profit & loss, 6,137 01

Expenses, 3,503 75 Deposites, 2,029 99

Bwk furniture, 1,808 30 Due banks, 476 71

On exchange, 9,390 00 •* John Ward & Co. 2 25
Due from other banks, 3,704 73



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9m HOUSiB DOCtMENTS-

AgencvinBufialo, •29,800 56
Bilk of other banks, 3,600 00
Specie, 12,962 17



> 88.



#145,650 06

State of Michtoait,
County of Macomb.

I, C. A. Emerson, dashier of the Bank of Macomb county, be-
ing duly sworn, do depose and say, that the foregoing statement
b true, to the best of my knowle<k;e and belief.

C A. EMERSON,
Cashier*

Subscribed and swom> this the twenty-third day of February,
1838, before me. T. R. BROWN.

Notary Public



(Na 8.)

Letter from C. A* Emerson, Casfder, unth a Statement of the
condition of the Macomb County Bank.

Mount Clemens, 23d FA. 1839.
To Us Excellency Stkvehs T. Mason,

Gqv. State of Michigan:
Dear Sir — ^During my absence from home, I understood that
the legislature desired a statement of the condition of this institu-
tion, and that the Bank Commissioners were directed to make an
examipation- I have not been able to see the report made to the
legislature by them, but I am conscious that their repcHTt will mis-
1^ the public, as to the true situation of our bank. A portion
of the stock has been recently paid in by the stockholders, and
the circulation much reduced. Specie and other funds have been
placed in the vaults of the bank, to a greater amount than the
whole of their liabilities to the public We have also made a
movement to have the injunction now upon the bank dissolved, so
that those holding the bills of the bank can receive their pay for
the same, if they desire. It is to correct the public in this respect,
that I transmit the actual state of the bank, and request, that you
win lay the same before the legislature.

I am, dear sir, your obed't and humble serv%

C. A. EMERSON.
Cashier.



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HOUSE DOCUMENTa 6§1

(Na4.)
htiUrfrom ihe Bank Commi9skmei\

Detrcit, Fdfruary 27, 1839.
7b Us Excdkney Srarsiu T. Masov.

Sir — In reply to your communicaUoD> calling my attention
to a letter addressed to you by C. A. Emerson, cashier of the Ma-
comb county bank, covering a statement of the condition of that
institution, and expressing a consciousness that the report of the
Bank Commissioners "will mislead the public as to the true situa-
tion of the bank, I have the honor to state : that on the examina-
tion of the bank there 'was no person present to explain its afiairs,
but the president, A. Weeks. His ability to make the proper ex-
planation of the transactions of the bank, he stated, was limited,
and expressed a strong desire that the report should, if possible,
be delayed until the return of C. A. Emerson, the Cashier. He
promised that Mr. Emerson and himself, would wait upon the
Commissioners in Detroit, and explain the former transactions of
the bank, and the arrangements then in process of completion by
the cashier, to reinstate its affairs.

The former president and one of the direCtcH^ likewise, pro-
mised to furnish some information,' which they have since done.

With a view to a full and impartial report, its completion has
been dela}red.

From the course, however, which has been taken by the cash-
ier, it would appear, that he is not disposed to redeem the pledge
given by the president The report, therefore, will be prepared
without further delay, from the materials in my possession, and
transmitted to the le^slature.

With greit respect,

Your obed't serv*t.

K. PRITCHETTE,
Pmk Commissioner.



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m HOmU POCUJifiNTSL



(No. 31.)

Report of the majority of the committM appmnted to
inquire into the condition of the Michigan State
Bank.

The select committee of iovesti^tioQ» to whom was commKte4
the ex^tmination and inquiry ioto we coaditioa of the fuods of tbis
8tate» the ditbursements made by the officers and Agents of tb^
same» and also (o give tbeir opinion as to the safety of the money
belonging to the statOi and if the same is now available, have had
the subjects embraced within the inquiry under eoqsiderationf and
having, in the opinien of your oommittee, bestowed the attention
that so importaxit and deeply interesting subject demands, beg
leave to submit the following report and acoompanyiiig doco^
meotSf

To enable yoinr connnittee to proceed to the iuFestigatioa
without delay, they instructed their qhairmaa to communicate lo
the president of the Michigan Stale Bank, that a committee had
been appointed for the purposes above mentioned, and requesting
bim to name a day at his earliest convenience, to receive the
committee at the bank to proceed with their examination ; and ia
reply to that letter, your committee received for answer, that on
the following Monday, the bank would receive the committee at
its banking-house, and submit a statement of its aflairs and condi-
tion for ti^ir inspection. In the mean time, and with a view of
facilitating this inquiry, the committee instructed their chairman
to propound the following written interrogatories to the president
of the bank, and would respectfully refer the House to document
marked (A.) for a copy of the same. On Monday, the fourth of
February, your committee had their first meeting at the bank,
and received from F. H. Steevens, Esq. the president thereof, the
following statement, marked (B.) in the accompanying docu-
ments.

After an examination was had into the above mentioned state-
ment, your committee concluded, that further information was
necessary to enable them to arrive at just conclusions, either as to
the condition of the bank, or the safety of the funds belonging to
the stale deposited there ; and they consequently instructed their
chairman to propound further interrogatories, with a statement
annexed, contained in document marked (C.) After a delay of
several days, your committee received from the president of the
above mentioned bank, a statement, the correctness of which was
verified with his oath, purporting to be answers to the several in-
terrogatories, propounded in documents, marked (A. and &) and



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BOUaS DOOUMBNTa 5M

wMoh if hemwlth aDMXdd» imrked (D.) To thit ftptatament^
your committee felt culled upon to take btrong end decided ex*
ceptioiM« They could not resist the conviotioii that forced itself
upon their mifid> th&t their inquiry was sought to be evaded, or
themsalree treated with disrespect, and consequently the foliowinji;
correspondence took place between the committee and the presi*
dent of the bank ; their respective communications, nrwrked (B.
and F«) will be found iti the accompanying documents^ It wifl
also be seen from this correspondence, thai the committee propo>
sad to pursue a different course, in continuing this invescigaiioDt
and in pursuance of that determination, a meeting was had at tha
batik, and a particular inquiry instituted relating to that very sin-
gular item, in document Vnarked, (D.) *' Various other bank notes,
110,690," the result of which will be found in document marked
(6.) At the above meeting and With a view to prevent any ft>-
tore misunderstanding between the committee and the bank, they
submitted the following statement, marked (H.) in documents. In
their subsequent examinations at the bank, the committee have
been enabled to establish the following facts :

First, that within the past year, the Michigan state bank has
received from the State Treasurer, and in behalf of the state, and
principally to the credit of the general fund, $14,919 78, which
aum has been entered upod their books and marked *' special,''
not sealed up and placed into the vaults of the bank for safe keep-
ing, to be handed back to the depositor in kind, but left in a con-
dition tb be handled, used or appropriated, not only by the officers
of the bank, the State Treasurer, but the board of interoal in>-
provement, and various other persons under their direction, who
were desirous to make selections from the same.

Second, that these funds were so situated, that your committee
cannot for a moment believe, that any distinction was or could be
kept under the circumstances, between the funds of the state, and
similar kind of funds received by the bank ; and in support of
diis position, it the fact, that the officers^ of the bank were unable
to state to the committee the precise kind of funds received when
those entries wet« made upon the books of the bank. Neither
can they inform the committee of the specific kind of funds, that
have been paid to contractors and others, from the internal in>-

Etx>vement fund ; but testimony has been elicited to show that a
Lrge quantity of very worthl^ money has been paid from that
fund, and a portion of Which, at an advanced period of last sunv-
mer.

The officers of the bank testified before the committee, that
city funds or their equivalent, had jbeen paid in all cases to those
having claims upon the internal improvement fund, since the first
of Atigust last, and yet that is positively contradicted by other
lestioioBy. The president of the bank sets forth, in dooumeot (D.)



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68A HOUSE DOCUMENTS.

that the state has upon special depositeio the state bank* fSO^OWi
and yet the concurrent testimony of Hill, the teller, and the b^cka^
show that only $19,019 78 were ever received from the state
under such circumstances by the bank, except about 9300 of
Yp^lanti money, not entered on the books. And what is still
more unaccountable to your committee, if the testimony is all to
be believed, is the fact, that out of the 919,919 78 has been
loaned more than 924,000 by the commissioners of internal im-
jNTOvement; a lar^ amount has been paid to persons having
claims against the state, and yet more than thirty thousand dollars
remain on hand. This, surely, must be a most prolific fund.

Third, Your committee deemed it important to know the
amount of indebtedness on the part of the directors of said bank,
to that institution! to enable them to judge of its business opera*
tions generally, and particularly of their ability to meet a recent
liability that they have assumed to the state, as directors of that
bank, for the security and ultimate pajment of the state fund,
should the bank not meet its engagements. This information,
they are sorry to say, was denied them ; as was also the informa-
tion sought to be obtained in that very important item in their ex-
hibit, viz : *<Due from bank.'' This, it will readily be discovered,
was large, and the absolute importance to know the banks froai
"which it was due, greatly enhanced* Yet, as suggested above,
your committee was informed that the inquiry could not be an-
swered* How far the officers of the bank are justified in with-
holding the information thus sought, the committee leave the house
to judge. They caqnot, however, allow this occasion to pass,
without saying that the bank would probably have consulted its
own interest, and consequently those of the state, if they had ta«
ken a difierent course in this investigation. Shuffling evasion and
concealment, are not the companions of honesty. It will also be
discovered, by refe^nce to the exhibit of the bank on the first
inst., that their available assets are inadequate to meet their in«
debtedness to the state alone, without reference to their other li-
abilities. And in view of the above facts and conclusions, your
committee are not at any loss to arrive at others in connection
with this matter, with eaual facility. And the subject involving
the safety of the funds of the state, will next receive their atten-
tion* They believe the facts above stated to be sufficient to war-
rant them in coming to the conclusion, that the funds of the state
cannot be safe while entrusted to that institution. Its course for
the past year justifies the position taken. Its present condition is
conclusive, and its course throughout this examination would be
sufficient in the absence of all otner reasons. They would there-
fore respectfully suggest the necessity of withholding from that
bank any further deposite, and the withdrawal of the funck be-
longing to the state as soon as practicable. And in conaectio»



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whfa (hh tiSk^M, 4he eottmiHee bi^ leave to f^lt the irtteiitiMi df
the bmmb to die fcci, that a t)o&d has been exeeuted in the pedal
80m of 9500,000 by the directors of the Sute bank, (with the
etoeption of John Norton, Jr.,) for the security of this fund to the
state, now held by the State bank, and is filed with H; Howard,
State Yreasurer, who is one of the signers* This bond, it ap-
pears, was executed tfnd filed without its beid^ required try any
provision of existii^ taw, and it 'was so filed, it is said, at the sCig-
gtstion of the Governor, without expressing any opinion concern*
M^ its object Your eommittee cannot befiere that it can Ver^
materiality afi^Vie safety of the funds,- neither should it, in their
OfMiion, mftuenee the adtion of the legislature upon this import-
atit Sdfa^t ¥ovr committee deem it unnecessary, if it coutd be
thought to be- any part of their duty, which they suppose it is not,
ff> enter into an argument to conirinoe any member of this House,
^t a very large amount of pcr^nal security would ^be requisite
to secure so large a debt, and situated as are tliose signers, their
responsibility must be intimatelv connected with that of the bank,
and when fbo latter ceases to be a safe depository, the former
must'cease to be go<}d security ; neither will it be expected of the
committee to enter into ^'detailed statement upon this* subject
Thev have sought information upon a subject so very important,
and have so far succeeded as to render the mattet exceedingly
plain to their minds. There is yet another subject to which the
committee beg leave to advert How far it comes within th^
purview of the resolution under which your committee was ap-
pointed, to express an opinion upon the subject of loans made
oy the commissioners of internal improvement, the committee will
not stop to enquire ; as that subject has necessarily been brought
before them in this examination, they cannot well pass it without
briefly alluding to the circumstances. It appears from the testi-
mony that came before the committee, as welt as from the state-
ment of the commissioners themselves, that a laige sum of money
has been loaned to individuals and corporations called banks, with-
out any law' to warrant or reasonable excuse to jusrtify it, and in
some cases without taking any security for its repayment, and
little doubt exists in the minds of your committee, that much of it
win prove a total loss to the state, unless the bank of cx>mmis-
siooers or both should be held liable to the state for its retnrn into
the treasury. There cannot be any doubt of its haying been
drawn from the bank whhout even the appearance of the AaddW
of a law to justify it, and therefore your committee would recom-
mend that DGth the bank and commissioners be held responsible
for its repayment Your committee would also suggest, in view
of the facts that have been elicited upon the occasi6n, that the
bank be ordered to place to the credit of the state, the amount of
money that she pretended to hold upoa special deposite to her

72



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dM HOUW iX>GUMBNTa

Oifedili'in gfod tad ^railftble fuodsrMd iifKNi berreftMl solodo^
tbtt an aoticp: be ^ommeooed ogainsl ber for fraud aiMl eaJam^

In concluooot your eommittee btg leave to observe, that
throughout this protracted aod most uopleaaant examination, tbe
ffreetest harmooy and good feeling bas existed between tbe meoi-
bert df tbe entire qpromittee ; aokl the niajority would do violence
to their own iedings if thejr did not bare mo«t empbatioaliy de-
clare, that throQgt^ut this vepy exdliM ilod lafaonous inquiry,
^e jniaority bave obeerfully oo-open^t^a«id extended dieir mail
effioient aiq and very vaiqabie coansel ; and yet, at is very natu-
ralf tbe conanuttae cAsagree in coming to certain ooochifiODS , and
inasmuch as the majority claim nothiag for thenneelves that they
are not willing to extend to others,^ they here take the liberty lo
say^ that not- a 4o!ubt exists in their minds that the miDority ava
actuated (however they may err in judgment) by tbe same desiie
to subserve the beat interests of the state.
AD which is respectfully submitted^

HENRY ACKBR,

Chairman.
A. HOWLANDt
AMMOS DAVIS.



nOCUMENTS
AccompanyiTig the report of tAe select committee, cgspomted Uf the
House of tiepresentaiives^ to investigate the oondititm of the
funds (ftlie stale^ and also to report iheir-opmioH whefher or
910^ they consider them safe.

(A.)

F. H. Stebvbns, Ksg. . *

^ Dear Sib : The select committee upon state funds, d&c have
instructed me a^ their chairman, to propound to you the seiKeral
following interrogatories,. to which they respectfully request wrk-
ten. replies at your earliest convenience*

Detroit. Fek 4, 1839.

First The amount of money received into. your bank beloiig^
ing to the difierent funds of the states niMniog them, for the current
year ending January 9th, 1839 ; at what times received, and the
amount now remaixiing in bank to tbe credit of .the respective
funds.

Second. The disbursements made by the bank during tke'tiiae
above mentioned. From which of the funds 7 upon whose draft
or drafts T at what time or times ? and in what aind of SQOoey 7
whether city, country, chartered, or safety fund 1 and tbe relative
proportion of each.



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HOCnSK D08tfft£SNT8l

TIML Wlietber your bank hfts* received from the
elEeerb oT the state, within the time above upeciied* the iMlet ef
any baok or banks of this state^ chartered or otherwise^ or of other
sUates, upon special deposile ? If so, please name the banks, with
the amount receired from each, and the disposition, if aoyy Ibtt
has been made of it, «r if it cpntinues yet upon deposite.

Fourth Please stscte whether or not the bank hoUs hself liabte
to pay city funds where country funds have been received Iqr the
bank, and placed to t he cr edit of the respective funds of the state T
«nd if fiot, by what rule are you governed in making payment on
obeck* drawn for money 7

Fifth. Have payments been made to ofBcers of ihc government
or others, within the above named period, without a strict compli-
•oce wj^ tile law that governs that matter ? atd if so, lo wham
made, at what time or times, and to what anKHMit? if the lame
has iwone within your knowledge.

SixOu Has the check or drafi of the Treasurer of the Staite» df
any other officer entitled to draw the sonrn^ beeo prolQsted f^
non-payment at any time during the paet year? and if 00, how