auditor's warrants. The State was then indebted to the bank $196,000. This debt was increased in the current year because the revenue was not equal to the expenditure. In stating these facts to the Legislature, the president of the bank closed his document with a declaration of the purity of the motives of the bank; but it was the general opinion then, and became the almost universal opinion afterwards, that the bank had intended to coerce the Legislature to authorize it to suspend again. In the February following, the bank presented a memorial to the Legislature, setting forth that it was exposed to danger and harm, finding itself the only bank in the western country which had resumed. From December 5th to February 1st, it had been forced to redeem $455,000 of its circulation. It pleaded for permission to suspend again and asked outright that the forfeiture of the charter as a penalty for suspension might be repealed, as impolitic and useless.
The refusal of the Bank of the State to redeem the auditor's warrants left the Legislature and the public officers unpaid. "The credit of the State at the same time had sunk so low that the public documents could not be obtained from the post office until the officers themselves became personally responsible for the postage."[1]
The minority of the Committee on Banks, reviewing, in 1841, the history of the Bank of the State, thus stated the result: "At the first suspension, in 1837, its circulation was only $1.7 millions, and other liabilities about $1 million more, and its resources were equal to its liabilities. At the second suspension, in 1839, its notes in circulation exceeded $2.5 millions and its liabilities exceeded its means by nearly $400,000. On the 7th of December, 1840, after the last suspension, its bills in circulation exceeded $3.2 millions and its liabilities exceeded the available means by about $1 million."
In July, the branch of the State Bank at Jacksonville was robbed, but every accommodation note, bill of exchange, and other evidence of debt in the bank was destroyed and the leaves were cut from the books containing all accounts since 1837. It was discovered that the perpetrator was the teller, who had been robbing the bank.[2]
The Bank of the State suspended again February 10, 1842. February 27th, an act was passed condoning this, but it was enacted that if it should suspend again for a longer time than the law allowed, it should forfeit its charter. At the same time it was given permission to issue ones, twos, and threes, until January 1, 1843. Both banks were required to resume with the other banks of the West and Southwest.
"To add to the general calamity and terror of the people, in February, 1842, the State Bank, with a circulation of $3 millions, finally exploded with a great crash, carrying widespread ruin all over the State, and into the neighboring States and Territories. In June following, the bank at Shawneetown 'followed in the footsteps of its illustrious predecessor,' leaving
