The Central Board of the Real Estate Bank passed resolutions, April 1, 1842, to assign and liquidate, appointing trustees.[1] A majority of the directors at Little Rock seized and held the papers and property, refusing to deliver them to the trustees. After some litigation, the Supreme Court maintained the assignment. The assignees were a majority of the Central Board. At first view it seems that the effect of this assignment was to save the wreck of the bank from being sacrificed by politics and jobbery, but the result was that the affairs of the bank were enclosed in secrecy and mystery. The assets at the time of the assignment were put at $2,404,966 and the liabilities, at $2,230,986.
Commenting on this assignment, the Governor said, in 1844: "The history of the bank already presents the most extraordinary picture ever exhibited to a free people. In the first place a public corporation is created by the solemn act of the legislative department of the government, involving the rights and privileges of individuals as well as the State. In the next place the act of incorporation giving existence to the bank is destroyed by an ex-parte operation of a few individuals, by which a deed of assignment was made to a few men, denominated residuary trustees, whereby the assets of the bank, of every description, were transferred into the hands of said residuary trustees and their officers. From that period the operation and management of the bank has been involved in profound mystery."
The Legislature passed an act for liquidating the bank, January 3, 1843, but it never superseded the assignment. On the same day they put the Bank of the State in liquidation, ordering that the gold and silver which it possessed should be paid out pro rata to the whole circulation, the amount paid on each note being stamped on it in red ink. The par funds, after paying the circulation, were to go to the interest on the State bonds. The arrangement about paying on the notes was repealed February 3d, and it was enacted that other notes should be given for the difference, which should be stamped "re-issued." The notes at this time were at thirty-three cents on $1.
The State sued out a quo warranto, in order to take into its hands the franchises of the Real Estate Bank.[2] It was held that the assignment was a forfeiture, and that the "corporate existence of the Real Estate Bank ceased."
The Legislature ordered, February 1, 1843, that out of any specie in the Bank of the State, $15,000 should be set over to the State as a reimbursement of the federal surplus revenue, and that this sum should be used to pay the members of the Legislature.
The Governor believed, in 1844, that under the management of active and judicious receivers, at least one-half of the debts to the Bank of the State might be collected at some of the branches, and at others even more. He commented on the banking system as follows: "The pursuits of our
